MiX Telematics Ltd (Form: 20-F, Received: 07/26/2019 08:19:35)

March 31, 2019
R’000

March 31, 2018
R’000

Inventory – finished goods

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

o REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2019

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-36027

MIX TELEMATICS LIMITED

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s Name into English)

REPUBLIC OF SOUTH AFRICA

(Jurisdiction of incorporation or organization)

Howick Close

Waterfall Park, Midrand, South Africa, 1686

(Address of principal executive offices)

John Granara

Chief Financial Officer

Telephone +1 (561) 404-2938

john.granara@mixtelematics.com

Fax +1 (561) 405-9224

750 Park of Commerce Blvd, Suite 100

Boca Raton, Florida, 33487, USA

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
American Depositary Shares (“ADSs”), each representing 25 ordinary shares, no par value	MIXT	New York Stock Exchange
Ordinary Shares, no par value		New York Stock Exchange (for listing purposes only)

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

601,947,020 Ordinary Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

o Yes x No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

o Yes x No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer o	Accelerated filer x	Non-accelerated filer o
		Emerging growth company o

If an emerging growth company that prepares its financial statements in accordance with U.S GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:



U.S. GAAP o	International Financial Reporting Standards as issued by the International Accounting Standards Board x	Other o

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

o Item 17 o Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes x No

TABLE OF CONTENTS



		Page

Forward-Looking Statements		i
Presentation of Financial and Other Information		i
Part I
Item 1. Identity of Directors, Senior Management and Advisors		1
Item 2. Offer Statistics and Expected Timetable		1
Item 3. Key Information		1
Item 4. Information on the Company		33
Item 4A. Unresolved Staff Comments		50
Item 5. Operating and Financial Review and Prospects		51
Item 6. Directors, Senior Management and Employees		78
Item 7. Major Shareholders and Related Party Transactions		92
Item 8. Financial Information		94
Item 9. The Offer and Listing		95
Item 10. Additional Information		96
Item 11. Quantitative and Qualitative Disclosures About Market Risk		110
Item 12. Description of Securities Other Than Equity Securities		111
Part II
Item 13. Defaults, Dividend Arrearages and Delinquencies		112
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds		113
Item 15. Controls and Procedures		114
Item 16A. Audit Committee Financial Expert		117
Item 16B. Code of Ethics		117
Item 16C. Principal Accountant Fees and Services		117
Item 16D. Exemptions from the Listing Standards for Audit Committe e		118
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers		118
Item 16F. Change in Registrant’s Certifying Accountant		119
Item 16G. Corporate Governance		119
Item 16H. Mine Safety Disclosure		120
Part III
Item 17. Consolidated Financial Statements		121
Item 18. Consolidated Financial Statements		121
Item 19. Exhibits		124
SIGNATURES		126

FORWARD-LOOKING STATEMENTS

This annual report includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, statements regarding our position to execute on our growth strategy, and our ability to expand our leadership position. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements that are not historical facts and statements identified by words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates” or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in, or suggested by, these forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved.

Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, our ability to attract, sell to and retain customers; our ability to improve our growth strategies successfully, including our ability to increase sales to existing customers, the introduction of new solutions and international expansion; our ability to adapt to rapid technological change in our industry; competition from industry consolidation; loss of key personnel or our failure to attract, train and retain other highly qualified personnel; our ability to integrate any businesses we acquire; our dependence on our network of dealers and distributors to sell our solutions; our dependence on key suppliers and vendors to manufacture our hardware; businesses may not continue to adopt fleet management solutions; our future business and system development, results of operations and financial condition; expected changes in our profitability and certain cost or expense items as a percentage of our revenue; changes in the practices of insurance companies; the impact of laws and regulations relating to the Internet and data privacy; our ability to protect our intellectual property and proprietary technologies and address any infringement claims; our ability to defend ourselves from litigations or administrative proceedings relating to labor, regulatory, tax or similar issues; significant disruption in service on, or security breaches of, our websites or computer systems; our dependence on third-party technology; fluctuations in the value of the South African Rand; economic, social, political, labor and other conditions and developments in South Africa and globally; our ability to issue securities and access the capital markets in the future; and other risks set forth under “Item 3D. Risk Factors” or elsewhere in this annual report.

We assume no obligation to update any forward-looking statements contained in this annual report as a result of new information, future events or otherwise.

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

The consolidated financial statements contained in this annual report on Form 20-F have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (the “ IFRS ” ).

Unless the context requires otherwise, the terms “MiX”, the “Group”, “we”, “our” or “us” refer to MiX Telematics Limited and its consolidated subsidiaries. Unless the context requires otherwise, the “Company” means MiX Telematics Limited.

Our fiscal year ends on March 31 and all references to a fiscal year, refer to the fiscal year ended March 31. References to “R” are to South African Rand and references to “U.S. Dollars” and “$” are to United States Dollars. Unless otherwise indicated we have translated U.S. Dollar amounts from South African Rand for convenience at the exchange rate of R14.4789 per $1.00, which was the R/$ exchange rate reported by Oanda.com as of March 31, 2019. These translations should not be construed as representations that the South African Rand amounts represent, or have been or could be converted into, United States Dollars at that or any other rate.

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

3A. SELECTED FINANCIAL AND OPERATING DATA

The following tables set forth selected consolidated financial and operating data at and for the fiscal years ended March 31, 2019, 2018, 2017, 2016, and 2015. The selected financial data set forth below for the years ended as at March 31, 2019 and 2018 and for each of the years in the three-year period ended March 31, 2019 have been derived from our consolidated financial statements included in Item 18 of this annual report on Form 20-F. The financial data as at March 31, 2019 and 2018 and for each of the years in the three-year period ended March 31, 2019, should be read in conjunction with, and are qualified in their entirety by reference to, our consolidated financial statements. Financial data as at March 31, 2017, 2016 and 2015, and for the years ended March 31, 2016 and 2015 have been derived from our previously published consolidated financial statements, which are not included in this document. The selected financial data set forth below should be read together with “Item 5. Operating and Financial Review and Prospects”. The results of operations for the periods presented below are not necessarily indicative of the results to be expected for any future period.

Our consolidated financial statements included in this annual report and certain data derived therefrom are presented in South African Rand.

We prepare our consolidated financial statements in accordance with IFRS, which differ in certain significant respects from Generally Accepted Accounting Principles in the United States ( “ U.S. GAAP ” ).

The accounting policies applied in fiscal 2019 are consistent with those accounting policies applied in the preparation of the previous consolidated financial statements, except for the adoption of IFRS 9 Financial Instruments (“IFRS 9”), IFRS 15 Revenue from Contracts with Customers (“IFRS 15”) and IFRS 16 Leases (“IFRS 16”) from April 1, 2018. Refer to “Item 5A. Operating Results” for additional information. Based on the method of adoption applied we have not restated comparatives. The only material impact on the consolidated income statement for fiscal 2019 was a R7.9 million increase in finance costs. This was primarily as a result of IFRS 15 significant financing activity interest expense and IFRS 16 capitalized lease liability interest. The impact on every other line item in the condensed consolidated income statement for fiscal 2019 was not material.

Consolidated Income Statement Data



	For the year ended March 31,
	2019			2019			2018			2017			2016			2015
	(In thousands)
Revenue		$136,465			R1,975,863			R1,712,482			R1,540,058			R1,465,021			R1,389,380
Cost of sales	(45,297		)	(655,844		)	(586,963		)	(498,785		)	(439,305		)	(449,663		)
Gross profit	91,168			1,320,019			1,125,519			1,041,273			1,025,716			939,717
Sales and marketing	(13,759		)	(199,209		)	(184,978		)	(181,601		)	(203,767		)	(171,948		)
Administration and other charges ⁽¹⁾	(54,002		)	(781,898		)	(725,589		)	(721,810		)	(682,865		)	(617,908		)
Operating profit	23,407			338,912			214,952			137,862			139,084			149,861
Finance income/(costs) - net	96			1,386			(69		)	10,391			150,327			80,778
Profit before taxation	23,503			340,298			214,883			148,253			289,411			230,639
Taxation	(9,528		)	(137,962		)	(33,690		)	(26,812		)	(106,920		)	(81,623		)
Profit for the year		$13,975			R202,336			R181,193			R121,441			R182,491			R149,016
Attributable to:
Owners of the parent		$13,975		202,336			181,134			121,458			182,989			149,622
Non-controlling interest	#			#			59			(17		)	(498		)	(606		)
		$13,975			R202,336			R181,193			R121,441			R182,491			R149,016



	For the year ended March 31,
	2019	2019	2018	2017	2016	2015
Earnings per share ⁽²⁾
Basic ($/R)	$0.02	R0.36	R0.32	R0.19	R0.24	R0.19
Diluted ($/R)	$0.02	R0.35	R0.32	R0.19	R0.23	R0.19

Adjusted earnings per share ⁽³⁾
Basic ($/R)	$0.03	R0.45	R0.28	R0.17	R0.11	R0.13
Diluted ($/R)	$0.03	R0.44	R0.27	R0.17	R0.11	R0.13

Weighted average number of ordinary shares in issue
Basic (’000)	563,578	563,578	561,088	629,626	775,139	789,316
Diluted (’000)	583,647	583,647	573,981	631,819	783,414	804,385

Dividends per share (South African cents) ⁽⁴⁾		12.00	9.50	8.00	14.00	—
Dividends per share (United States cents) ⁽⁴⁾		0.83	0.80	0.68	1.18	—

# Amount less than $1,000/R1,000


⁽¹⁾	Includes other income/(expenses) - net.


⁽²⁾	See note 30 to our consolidated financial statements for further details on earnings per share.


⁽³⁾	Adjusted earnings per share is a non-IFRS financial measure. See “Adjusted earnings per share” as described on page 7 below.


⁽⁴⁾	See note 31 to our consolidated financial statements for further details on dividends.

Other Financial and Operating Data



	For the year ended March 31,
	2019		2019		2018		2017		2016		2015
	(In thousands, except subscribers)
Subscription revenue		$116,946		R1,693,245		R1,434,615		R1,239,914		R1,158,229		R998,335
Adjusted EBITDA ⁽¹⁾		$41,632		R602,785		R441,866		R301,613		R277,215		R282,994
Subscribers ⁽²⁾	750,455		750,455		676,866		622,062		566,177		512,344


⁽¹⁾	See “Adjusted EBITDA and Adjusted EBITDA margin” below for our definition of Adjusted EBITDA and Adjusted EBITDA margin and a reconciliation of Adjusted EBITDA and Adjusted EBITDA margin to profit for the year, the most directly comparable financial measure presented in accordance with IFRS.


⁽²⁾	As at March 31.

Consolidated Statement of Financial Position Data



	For the year ended March 31,
	2019	2019	2018	2017	2016	2015
	(In thousands)
Cash and cash equivalents	$26,483	R383,443	R308,258	R375,782	R877,136	R945,381
Total assets	165,163	2,391,369	1,993,325	1,906,689	2,378,281	2,228,608
Working capital	28,118	407,109	328,689	340,659	931,696	996,085
Total indebtedness ⁽¹⁾	2,090	30,262	17,720	19,449	17,477	20,469
Total equity ⁽²⁾	$120,981	R1,751,677	R1,517,181	R1,442,931	R1,919,808	R1,864,572


⁽¹⁾	Total indebtedness includes amounts outstanding at the balance sheet date for bank overdraft and borrowings.


⁽²⁾	Includes non-controlling interest.

Adjusted EBITDA and Adjusted EBITDA Margin

To provide investors with additional information regarding its financial results, we have disclosed Adjusted EBITDA and Adjusted EBITDA margin within this annual report. Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS financial measures; they do not represent cash flows from operations for the periods indicated and should not be considered an alternative to profit for the year as an indicator of the Group’s results of operations or as an alternative to cash flows from operations as an indicator of liquidity. Adjusted EBITDA is defined as the profit for the period before income taxes, net finance income/(costs) including foreign exchange gains/(losses), depreciation of property, plant and equipment including capitalized customer in-vehicle devices and right-of-use assets, amortization of intangible assets including capitalized in-house development costs and intangible assets identified as part of a business combination, share-based compensation costs, transaction costs arising from the acquisition of a business or investigating strategic alternatives, restructuring costs, profits/(losses) on the disposal or impairments/reversals of impairments of assets or subsidiaries, insurance reimbursements relating to impaired assets and certain litigation costs. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by total revenue.

We have included Adjusted EBITDA and Adjusted EBITDA margin in this annual report because they are key measures that the Group’s management and Board of Directors use to understand and evaluate its core operating performance and trends; to prepare and approve its annual budget; and to develop short and long-term operational plans. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA and Adjusted EBITDA margin can provide a useful measure for period-to-period comparisons of the Group’s core business. Accordingly, the Group believes that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and others in understanding and evaluating its operating results.

A reconciliation of Adjusted EBITDA to profit for the year, the most directly comparable financial measure presented in accordance with IFRS, is presented below.



Reconciliation of Adjusted EBITDA to profit for the year
	For the year ended March 31,
	2019			2019			2018			2017			2016			2015
	(In thousands)
Adjusted EBITDA		$41,632			R602,785			R441,866			R301,613			R277,215			R282,994
Add:
Net profit on sale of property, plant and equipment and intangible assets	40			586			1,264			—			—			—
Insurance reimbursement ⁽¹⁾	—			—			—			—			—			3,237
Decrease in restructuring costs provision	—			—			741			—			333			—
Reversal of impairment ⁽²⁾	—			—			—			791			—			—
Less:
Depreciation ⁽³⁾	(12,672		)	(183,478		)	(151,945		)	(98,508		)	(75,037		)	(61,099		)
Amortization ⁽⁴⁾	(4,481		)	(64,877		)	(63,926		)	(44,734		)	(47,586		)	(46,294		)
Impairment ⁽⁵⁾	(64		)	(930		)	(2,696		)	(3,166		)	(4,776		)	(1,646		)
Share-based compensation costs	(838		)	(12,140		)	(10,352		)	(3,311		)	(5,820		)	(7,578		)
Equity-settled share-based compensation costs	(838		)	(12,140		)	(9,000		)	(2,247		)	(7,838		)	(5,220		)
Cash-settled share-based compensation costs ⁽⁶⁾	—			—			(1,352		)	(1,064		)	2,018			(2,358		)
Net loss on sale of property, plant and equipment and intangible assets	—			—			—			(262		)	(208		)	(456		)
Increase in restructuring costs provision ⁽⁷⁾	(210		)	(3,034		)	—			(14,561		)	—			(11,267		)
Transaction costs arising from the acquisition of a business	—			—			—			—			—			(93		)
Transaction costs arising from investigating strategic alternatives ⁽⁸⁾	—			—			—			—			(5,037		)	—
Net litigation costs ⁽⁹⁾	—			—			—			—			—			(7,937		)
Operating profit	23,407			338,912			214,952			137,862			139,084			149,861
Finance income/(cost) - net	96			1,386			(69		)	10,391			150,327			80,778
Taxation	(9,528		)	(137,962		)	(33,690		)	(26,812		)	(106,920		)	(81,623		)
Profit for the year		$13,975			R202,336			R181,193			R121,441			R182,491			R149,016

⁽¹⁾ Insurance reimbursement related to the helicopter asset impaired during the second quarter of the fiscal year 2015 .

⁽²⁾ The reversal of impairment of R0.8 million in fiscal year 2017 relates to in-vehicle devices in the Brazil segment.

⁽³⁾ Includes depreciation of property, plant and equipment (including in-vehicle devices). The adoption of IFRS 16 during the year resulted in depreciation of right- of-use assets of R11.7 million ($0.8 million) being recorded in fiscal 2019.

⁽⁴⁾ Includes amortization of intangible assets (including capitalized in-house development costs and intangible assets identified as part of a business combination).

⁽⁵⁾ In fiscal year 2019, asset impairments relate to the impairment of capitalized product development costs of R0.9 million in the Central Services Organization (“CSO”) segment. In fiscal year 2018, asset impairments relate to the impairment of capitalized product development costs of R2.3 million in the Africa segment and R0.4 million in the CSO segment. In fiscal year 2017, asset impairments relate to the impairment of capitalized product development costs of R2.6 million in the Africa segment and R0.5 million in the CSO segment. In 2016, R2.9 million impairment of in-house software and R1.9 million related to in-vehicle devices is included. In fiscal year 2015, asset impairments included R0.5 million impairment of computer equipment and furniture and fittings, R0.6 million related to the helicopter asset and a R0.5 million impairment of capitalized product development costs.

⁽⁶⁾ Cash-settled share-based payments are described in note 21 to our consolidated financial statements.

⁽⁷⁾ Restructuring costs incurred in fiscal year 2019 are described in note 19 to our consolidated financial statements. During March 2017, restructuring plans were implemented by the Europe and Middle East and Australasia segments. The total cost of the restructuring plans was expected to approximate R15.0 million. These costs consisted of estimated staff costs in respect of affected employees. In respect of a restructuring plan implemented during the 2015 fiscal year, the Africa segment reversed the remaining balance of R0.4 million of the restructuring provision in fiscal year 2017. In fiscal year 2015, the Africa and the Middle East and Australasia segments implemented restructuring plans. The total cost of the restructuring plans was expected to be approximately R11.3 million.

⁽⁸⁾ Transaction costs incurred in fiscal year 2016 arising from investigating strategic alternatives relating to the Group. This extensive review, conducted with guidance from external advisers, included the optimization of capital structures and an evaluation of various ownership options.

⁽⁹⁾ Net costs relating to litigation and the related insurance proceeds in fiscal year 2015 are described below:

On June 6, 2014, Inthinc Technology Solutions, Inc. (“Inthinc”) commenced a lawsuit in the U.S. District Court, District of Utah, Central Division, against the Group's wholly owned subsidiary, MiX Telematics North America, Inc. (“MiX North America”) and Charles “Skip” Kinford, whom the Group hired in May 2014 as President and CEO of MiX North America. Inthinc is Mr. Kinford’s previous employer. The claims against MiX North America included misappropriation of trade secrets under Utah state law and tortious interference with contract. The claims against Mr. Kinford included breach of non-competition, non-solicitation and confidentiality provisions in his employment agreement with Inthinc, misappropriation of trade secrets under Utah state law and breach of contract. Inthinc voluntarily dismissed MiX North America without prejudice on June 12, 2014, due to its decision to file the lawsuit in Texas, as discussed below.

On June 12, 2014, Inthinc commenced a lawsuit in the 48th Judicial District of Tarrant County, Texas against MiX North America (“Texas Lawsuit”). Inthinc alleged that MiX North America tortuously interfered with Mr. Kinford’s employment agreement and post-employment restrictive covenants and misappropriated unidentified trade secrets when MiX North America hired Mr. Kinford.

On August 21, 2014, the parties agreed to consolidate the related lawsuits into the Texas Lawsuit. In both of the lawsuits discussed above, Inthinc sought injunctive relief and unspecified money damages.

On or about October 17, 2014, the parties entered into a confidential settlement and release agreement. Pursuant to the terms of the agreement, the parties filed an Agreed Motion to Dismiss to effectuate the dismissal of all claims, with prejudice, in the Texas Lawsuit as well as the dissolution of any injunctions as issued to Mr. Kinford and MiX North America. The settlement, net of insurance proceeds, had been paid in full by the end of fiscal year 2015.

A reconciliation of Adjusted EBITDA margin to profit for the year margin, the most directly comparable financial measure presented in accordance with IFRS, is presented below.



Reconciliation of Adjusted EBITDA margin to profit for the year margin
	For the year ended March 31,
	2019		2018		2017		2016		2015
	%
Adjusted EBITDA	30.5	%	25.8	%	19.6	%	18.9	%	20.4	%
Add:
Net profit on sale of property, plant and equipment and intangible assets	0.0	%	0.1	%	—		—		—
Insurance reimbursement	—		—		—		—		0.2	%
Decrease in restructuring costs provision	—		0.0	%	—		0.0	%	—
Reversal of impairment	—		—		0.1	%	—		—
Less:
Depreciation	(9.3	%)	(8.9	%)	(6.4	%)	(5.1	%)	(4.4	%)
Amortization	(3.2	%)	(3.6	%)	(3.0	%)	(3.3	%)	(3.3	%)
Impairment	(0.0	%)	(0.2	%)	(0.2	%)	(0.3	%)	(0.1	%)
Share-based compensation costs	(0.6	%)	(0.6	%)	(0.2	%)	(0.4	%)	(0.6	%)
Equity-settled share-based compensation costs	(0.6	%)	(0.5	%)	(0.1	%)	(0.5	%)	(0.4	%)
Cash-settled share-based compensation costs	—		(0.1	%)	(0.1	%)	0.1	%	(0.2	%)
Net loss on sale of property, plant and equipment and intangible assets	—		—		(0.0	%)	(0.0	%)	(0.0	%)
Increase in restructuring costs provision	(0.2	%)	—		(0.9	%)	—		(0.8	%)
Transaction costs arising from the acquisition of a business	—		—		—		—		(0.0	%)
Transaction costs arising from investigating strategic alternatives	—		—		—		(0.3	%)	—
Net litigation costs	—		—		—		—		(0.6	)%
Operating profit	17.2	%	12.6	%	9.0	%	9.5	%	10.8	%
Finance income/(cost) - net	0.1	%	(0.0	%)	0.7	%	10.3	%	5.8	%
Taxation	(7.1	%)	(2.0	%)	(1.8	%)	(7.3	%)	(5.9	%)
Profit for the year	10.2	%	10.6	%	7.9	%	12.5	%	10.7	%

Our use of Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, and you should not consider these performance measures in isolation from, or as a substitute for, analysis of our results as reported under IFRS.

Some of these limitations are:


•	although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;


•	Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;


•	Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;


•	Adjusted EBITDA does not reflect tax payments or the payments of lease liabilities that may represent a reduction in cash available to the Group; and


•	other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA margin alongside other financial performance measures, including operating profit, profit for the year and our other results.

Adjusted earnings per share

Adjusted earnings per share is defined as profit attributable to owners of the parent, MiX Telematics Limited, excluding net foreign exchange gains/(losses) net of tax and share based compensation costs related to Performance Share Awards net of tax, divided by the weighted average number of ordinary shares in issue during the year.

We have included adjusted earnings per share in this annual report because it provides a useful measure for period-to-period comparisons of our core business by excluding net foreign exchange gains/(losses) from earnings, as well as share based compensation costs related to Performance Share Awards. Performance Share Awards were awarded under the MiX Telematics Long-Term Incentive Plan for the first time in November 2018 and are aimed at incentivizing management to achieve cumulative subscription revenue and Adjusted EBITDA targets for the 2019 and 2020 fiscal years. Accordingly, we believe that adjusted earnings per share provides useful information to investors and others in understanding and evaluating our operating results.

A reconciliation of adjusted earnings attributable to owners of the parent to profit attributable to owners of the parent is presented below.



Reconciliation of adjusted earnings
	For the year ended March 31,
	2019			2019			2018			2017			2016			2015
	(In thousands)
Profit attributable to owners of the parent		$13,975			R202,336			R181,134			R121,458			R182,989			R149,622
Net foreign exchange (gains)/losses	(26		)	(383		)	5,073			(1,476		)	(144,038		)	(73,525		)
IFRS 2 charge on performance share awards	353			5,110			—			—			—			—
Income tax effect on the above components	3,272			47,382			(29,403		)	(15,307		)	48,647			25,873
Adjusted earnings attributable to owners of the parent		$17,574			R254,445			R156,804			R104,675			R87,598			R101,970

Weighted average number of ordinary shares in issue
Basic (’000)	563,578			563,578			561,088			629,626			775,139			789,316
Diluted (’000)	583,647			583,647			573,981			631,819			783,414			804,385

A reconciliation of basic and diluted earnings per share to adjusted earnings per share is presented below.



Reconciliation of earnings per share to adjusted earnings per share
	For the year ended March 31,
	2019	2019	2018	2017	2016	2015
Basic earnings per share ($/R)	$0.02	R0.36	R0.32	R0.19	R0.24	R0.19
Net foreign exchange (gains) /losses	#	#	0.01	#	(0.19)	(0.09)
IFRS 2 charge on performance share awards	#	0.01	—	—	—	—
Income tax effect on the above components	0.01	0.08	(0.05)	(0.02)	0.06	0.03
Basic adjusted earnings per share ($/R)	$0.03	R0.45	R0.28	R0.17	R0.11	R0.13

# Amount less than R0.01/$0.01



Reconciliation of diluted earnings per share to diluted adjusted earnings per share
	For the year ended March 31,
	2019	2019	2018	2017	2016	2015
Diluted earnings per share ($/R)	$0.02	R0.35	R0.32	R0.19	R0.23	R0.19
Net foreign exchange (gains) /losses	#	#	0.01	#	(0.18)	(0.09)
IFRS 2 charge on performance share awards	#	0.01	—	—	—	—
Income tax effect on the above components	0.01	0.08	(0.05)	(0.02)	0.06	0.03
Diluted adjusted earnings per share ($/R)	$0.03	R0.44	R0.27	R0.17	R0.11	R0.13

# Amount less than R0.01/$0.01 .

3B. CAPITALIZATION AND INDEBTEDNESS

Not applicable.

3C. REASONS FOR OFFER AND USE OF PROCEEDS

Not applicable.

3D. RISK FACTORS

Important factors that could cause actual financial, business or operating results to differ materially from expectations are disclosed in this annual report, including without limitation, the following risk factors. In addition to the risks listed below, we may be subject to other material risks that, as of the date of this report, are not currently known to us or that we deem immaterial at this time.

Risks Related to Our Business

We may be unable to maintain our relationships with our existing customers, which could result in a loss of subscription revenue.

We provide our solutions principally on a subscription basis, typically with an initial subscription term of three to five years and renewal terms varying from one to five years, or, for certain customers, on a month-to-month basis. However, our customers have no obligation to renew their subscriptions after the initial term or after any renewal term expires. We may be unable to retain existing customers and, as a result, our revenue would be adversely affected. Customers may choose not to renew their subscriptions for many reasons, including:


•	the belief that our solutions are not required for their needs or are not cost-effective;


•	a desire to reduce discretionary spending;


•	a belief that our competitors’ solutions provide a better value;


•	changes in our customers’ businesses, and regulations impacting our customers’ businesses that may decrease the need for our fleet and mobile asset management solutions;


•	economic downturn in our customers’ industries;


•	economic downturn in the geography in which our customers' operate;


•	a reduction in discounts offered by insurers to vehicle owners who have installed our products; or


•	a belief that a return on investment cannot be demonstrated.

Our enterprise fleet management customers may also not renew for reasons entirely out of their control, such as the dissolution of their businesses. Enterprise customers may also decrease the number of vehicles covered by subscription contracts if their fleet sizes decrease.

Our subscription contracts generally do not provide our customers with an early termination option without penalty. However, if customers do not honor subscriptions for the full term, our remedies may be limited to re-negotiation of contract terms or legal recourse through the courts, which may not be successful or cost-effective, and we may not be able to recoup all of our costs.

A significant loss of or failure to renew our subscription-based contracts could materially and adversely affect our business, results of operations and financial condition.

Our inability to adapt to rapid technological change in our industry could impair our ability to remain competitive and result in a decline in market acceptance of our products.

The industry in which we compete is characterized by rapid technological change, frequent introductions of new products and evolving industry standards. In addition to the mobile asset management industry, we are subject to changes in the automotive, mobile handset, Global Positioning System (“GPS”) navigation device, information technology, telecommunications and enterprise software industries. As the technology used in each of these industries evolves, we will face new integration and competition challenges. For example, as truck and automobile manufacturers continue to develop in-vehicle technology, GPS-based tracking solutions may become standard equipment and result in new sources of competition. If we are unable to adapt to rapid technological change, i t could impair our ability to remain competitive and result in a decline in market acceptance of our products.

The development of new or improved products, systems or technologies that compete with our products may render our products less competitive and we may not be able to enhance our technology in a timely manner. In addition to the competition resulting from new products, systems or technologies, our future product enhancements may not adequately meet the requirements of the developing marketplace, and may not achieve the broad market acceptance necessary to generate significant revenues. Any of the foregoing could materially and adversely affect our business, results of operations and financial condition.

Industry consolidation may result in increased competition, which could result in a loss of customers and/or a reduction in revenue.

Some of our competitors have made, or may make, acquisitions or enter into partnerships or other strategic relationships to offer more comprehensive services or achieve greater economies of scale. In addition, new entrants not currently considered competitors may enter our market through acquisitions, partnerships or strategic relationships. We expect these trends to continue as companies attempt to strengthen or maintain their market positions. Many potential entrants may have competitive advantages over us, such as greater name recognition, longer operating histories, more varied services and larger marketing budgets, as well as greater financial, technical and other resources. Industry consolidation may result in competitors with more compelling service offerings or greater pricing flexibility than we have, or business practices that make it more difficult for us to compete effectively, including on the basis of price, sales and marketing programs, technology or service functionality. These pressures could result in a loss of subscribers and/or a reduction in revenue.

The loss of one or more of our key personnel, or our failure to attract, train and retain other highly qualified personnel, could prevent us from executing our growth plan.

We depend on the continued service and performance of our key personnel. The loss of one or more key members of our senior management team could materially and adversely affect our operations. In addition, the loss of other key sales, product development or technology personnel could disrupt our operations and have a materially adverse effect on our ability to grow our business.

To execute our growth plan, we must continue to attract and retain highly qualified personnel. Competition for these employees is intense, and we may not be successful in attracting and retaining qualified personnel. We may experience difficulty in hiring and retaining highly skilled employees with appropriate qualifications. Our failure to attract and train new personnel, or our failure to retain, focus and motivate our current personnel, could materially and adversely affect our business, results of operations and financial condition.

We may expand by acquiring or investing in other companies, which may divert our management’s attention, result in dilution to our shareholders and consume resources that are necessary to sustain our business.

We may acquire complementary products, services, technologies or businesses. We also may enter into relationships with other businesses to expand our portfolio of solutions or to expand our ability to provide our solutions in foreign

jurisdictions. Negotiating these transactions can be time-consuming, difficult and expensive, and our ability to complete these transactions may be subject to conditions or approvals that are beyond our control, including anti-takeover and antitrust laws in various jurisdictions. We may seek to acquire other companies or businesses using our shares as consideration. Under the South African Companies Act, No. 71 of 2008 (the “Companies Act”), we are prohibited from issuing shares representing 30% or more of our outstanding equity in connection with an acquisition without shareholder approval by way of special resolution. In terms of Johannesburg Stock Exchange (“JSE”) Listings Requirements, an acquisition or disposal constituting 30% or more of the market capitalization of the acquiring entity, will require shareholder approval. Consequently, these transactions, even if undertaken and announced, may not close.

An acquisition, investment or new business relationship may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products, personnel or operations of acquired companies, particularly if the key personnel of the acquired company choose not to work for us, the acquired company’s technology is not easily compatible with ours or we have difficulty retaining the customers of any acquired business due to changes in management or otherwise. Acquisitions may also disrupt our business, divert our resources and require significant management attention that would otherwise be available for the development of our business. Moreover, the anticipated benefits of any acquisition, investment or business relationship may not be realized or we may be exposed to unknown liabilities, including litigation against the companies we may acquire. For one or more of those transactions, we may:


•	issue additional equity securities that would dilute our shareholders;


•	use cash that we may need in the future to operate our business;


•	incur debt on terms unfavorable to us or that we are unable to repay or that may place burdensome restrictions on our operations;


•	incur large charges or substantial liabilities; or


•	become subject to adverse tax consequences, or substantial depreciation or amortization, deferred compensation or other acquisition-related accounting charges.

Any of these risks could materially and adversely affect our business, results of operations and financial condition.

We may not be able to increase sales of our solutions, which could materially and adversely affect our ability to grow our business and increase revenue.

We intend to increase sales of our solutions by increasing penetration in our existing markets and by entering new markets that represent a large potential source of demand for these solutions. Our success in increasing sales may be tied to a wide variety of factors, including demand for our services, price and service competition, our relationships with third party distributors and dealers, the rate of new vehicle sales, the oil price, general economic conditions and, in the case of our safety and security solutions, the perceived threat of vehicle theft and discounts offered by insurers.

Some car and truck manufacturers have begun installing factory fitted substitute products and services, such as certain GPS-based products, in new vehicles prior to their initial sale, which may preclude us from increasing sales to subscribers purchasing such vehicles. Our inability to market and sell our solutions to new customers, at or prior to the initial sale by the manufacturer, could materially and adversely affect our ability to grow our business and increase revenue.

In the Middle East and Australasia segment and the Americas segment, we generate significant revenues from the oil and gas sector, and we may not be able to diversify and/or successfully enter into new verticals, which could materially and adversely affect our ability to grow our business and increase revenue.

We depend on certain key suppliers and vendors to manufacture our hardware, and an interruption in the supply of our hardware could impair our production capacity, which would impact our ability to supply hardware to customers.

We currently purchase key GSM (Global System for Mobile communications) module components of our hardware from two key suppliers. These modules, as well as other electronic components used in the manufacture of our products, have extended lead times on orders. We do not have volume commitments to or from these suppliers, and therefore cannot require them to deliver components to us. An interruption in the supply of components from suppliers or a failure to identify the need to re-order components in a timely manner would significantly impact our operations and require us to identify and integrate our manufacturing and supply logistics with an alternate supplier, or use a substitute component, which could materially and adversely affect our business, results of operations and financial condition.

In addition, we currently depend principally on two vendors in South Africa to manufacture our hardware on a contract basis. Each of these contracts is terminable on 12 months’ written notice. We have no financial control over, and limited operational influence on these suppliers and the conduct of their businesses. These suppliers could negatively impact our business by, among other things, extending delivery times, raising prices and limiting supply due to their own shortages and business requirements. Our two contract manufacturers produce different products for us and production capacities at these facilities are not interchangeable in the short term. If the facilities of one of our contract manufacturers were to suffer a major casualty event, it could take as much as three to five months, or longer, to replace production capacity. An extended interruption in the supply of hardware from our contract manufacturers could materially and adversely affect our production capacity and hence our ability to fulfill sales orders.

We depend on our network of dealers and distributors to sell our solutions and adverse changes in our relationships with significant dealers and distributors could cause a decline in sales.

We currently distribute our products to small fleet operators and consumers both directly and through various distribution channels, including automobile dealers, aftermarket automotive parts and service suppliers, and automobile insurers and retailers, which we collectively refer to as “distributors”.

We currently distribute our products to enterprise fleet customers, including large enterprise fleets and small fleet operators, both directly and through third parties, who are assigned specific geographic territories in which they can sell, which we refer to as “dealers.”

We are dependent on our dealers and distributors, who account for a substantial percentage of our total sales, and sales generated by certain dealers and distributors individually represent a meaningful percentage of our revenue. The terms of our agreements with our dealers do not usually include minimum purchase obligations, are specific to a geographic territory and are primarily non-exclusive. Our dealer agreements generally have a fixed initial term, after which they may be renewed or continue indefinitely if not terminated. This is subject to the right of either party to terminate on specified notice, generally ranging from 90 days to one year, or for breach. Similarly, our distributor agreements do not generally include minimum purchase obligations and consist principally of a commission agreement applicable to sales generated by the distributor. If our relationships with our dealers and distributors deteriorate, or if a dealer or distributor, or group of related dealers and distributors, accounting for a material portion of our sales elects not to do business with us in the future, our sales could decline materially, which could materially and adversely affect our business, results of operations and financial condition.

We depend on our cellular network providers for the transmission of data from installed in-vehicle devices to our data centers and we would incur significant costs if the services of these network providers became unavailable to us.

We contract with cellular network providers in each of our markets to provide cellular network services. These cellular networks transmit data from our customers’ in-vehicle devices to our data centers, where it is managed for the benefit of our customers. Certain of our installed in-vehicle devices contain a SIM card that is compatible with a specific cellular network provider. If a cellular network provider in one of our markets were to refuse to continue contracting with us for any reason, or were to go out of business, we could incur significant costs related to the replacement of SIM cards for our customers and could suffer damage to our reputation and customer relationships. Any of the foregoing could materially and adversely affect our business, results of operations and financial condition.

The markets in which we participate are highly fragmented and competitive, with relatively low barriers to entry, and such competition could result in reduced operating margins, increased sales and marketing expenses, and the loss of market share.

The market for our solutions is highly fragmented, consisting of a significant number of vendors, with relatively low barriers to entry. Competition in our market is based primarily on:


•	functionality and reliability;


•	total cost of ownership;


•	breadth and depth of application functionality for fleet deployments;


•	product performance;


•	interoperability;


•	brand and reputation;


•	customer service;


•	distribution channels, including a global footprint and ability to service multinationals;


•	regional geographic expertise, including localized language support, support for applicable government regulations and the ability to comply with local Internet and data privacy regulations;


•	size of customer base and reference accounts within key industry segments;


•	ability to deliver ongoing value and return on investment;


•	ease of deployment and use;


•	relevant industry domain expertise and functionality; and


•	the financial resources of the vendor.

We compete with a number of companies in each of the geographic markets in which we operate. Such competition could result in reduced operating margins, increased sales and marketing expenses and the loss of market share, any of which would harm our operating results. We expect competition to intensify in the future with the introduction of new technologies, the use of mobile devices and new market entrants from outside the telematics industry, such as enterprise software vendors.

The market for safety and security solutions is highly competitive. We compete in the safety and security solutions market primarily on the basis of the technological innovation, value-added services offered, brand recognition, rate of successful recoveries of mobile assets, and quality and price of our products and services. Our most competitive market is the vehicle and mobile asset tracking and recovery solutions market, due to the existence of a wide variety of competing products and services, and alternative technologies that offer various levels of protection and tracking capabilities. Some of these competing products and services, such as certain GPS-based products, are installed in new cars by vehicle manufacturers prior to their initial sale, which may make it more difficult to compete for such subscribers. Furthermore, providers of competing services or products may extend their offerings to the locations in which we operate, or new competitors may enter the safety and security solutions market.

We could be exposed to product liability claims, which could result in significant damage to our reputation and material economic loss.

Our products, and the batteries that many of them contain, could malfunction and cause damage to our customers’ property. In particular, the rechargeable batteries in our in-vehicle devices may be prone to leakage due to environmental factors, such as extreme weather conditions or overuse. Leaks in these batteries could damage our customers’ in-vehicle devices and vehicles. Our safety and security solutions may be disabled or prove to be ineffective as a result of techniques employed by car thieves, or the discovery of technological weaknesses by such persons. If there were a systematic failure of any of our products, we could suffer significant damage to our reputation, and any insurance we maintain might not be sufficient to prevent us from suffering a material economic loss.

Failure of businesses to adopt fleet management solutions could reduce the demand for our solutions.

We derive, and expect to continue to derive, substantial revenue from the sale of subscriptions for fleet management solutions to commercial customers. Widespread acceptance and use of fleet management solutions is critical to our future revenue growth and success. If the market for fleet management solutions fails to grow, or grows more slowly than we currently anticipate, demand for our solutions would be negatively affected.

The market for fleet management solutions is subject to changing customer demand and trends in preferences. Some of the potential factors that could affect interest in and demand for fleet management solutions include:


•	the effectiveness and reliability of solutions;


•	fluctuations in fuel and vehicle maintenance costs, which are significant drivers of customer demand for fleet management solutions;


•	assumptions regarding general mobile workforce inefficiency and the extent to which efficiency can be improved through fleet management solutions;


•	the level of governmental and regulatory burden on the fields of transportation and occupational health and safety;


•	the price, performance, features and availability of products and services that compete with ours;


•	our ability to maintain high levels of customer satisfaction; and


•	the rate of acceptance of web-based solutions generally.

Failure of businesses to adopt fleet management solutions could materially and adversely affect our business, results of operations and financial condition.

A decline in vehicle sales and/or an increase in the sales of factory-fitted GPS solutions in new vehicles in our markets could result in reduced demand for our solutions, which could materially and adversely affect our revenue.

A reduction in sales of new vehicles and/or an increase in factory-fitted GPS solutions in new vehicles could reduce our addressable market for solutions. New vehicle sales may decline for various reasons, including adverse changes in the general economic environment, a reduction in our customers’ discretionary spending, or an increase in new vehicle tariffs, taxes or gas prices. A decline in vehicle production levels or labor disputes affecting the automobile industry in the markets where we operate, may also impact the volume of new vehicle sales. A decline in sales of new vehicles in the markets in which we provide our solutions would result in reduced demand for such products and services, which could materially and adversely affect our business, results of operations and financial condition.

Demand for our fleet management solutions decreases when prices for crude oil and natural gas decrease, which could materially and adversely affect our revenue.

Demand for our fleet management solutions can fluctuate with the prices for crude oil and natural gas, which impact the attractiveness of our services and also directly affects our customers in the oil and gas industry, from whom we derive a significant portion of our revenues. Subscription revenues from oil and gas customers in fiscal year 2019 represented 26.6% of our total subscription revenue. Generally, lower oil and gas prices reduce the return on investment for many of our customers. Gains in fuel efficiency may lead to a relative decrease in the return on investment of our solutions perceived by our customers. The oil and gas industry is complex, and numerous geopolitical, economic, environmental and other factors affect pricing. Expectations for future crude oil and natural gas prices may affect our customers’ spending habits. Prolonged or substantial declines in crude oil and/or natural gas prices, or the perception that such prices will decrease in the future, could materially and adversely affect our business, results of operations and financial condition.

Changes in practices of insurance companies in the markets in which we provide our solutions could materially and adversely affect demand for products and services.

We depend in part on the practices of insurance companies in some of our markets to support demand for certain of our products and services. For example, in South Africa, which is currently the largest market for our products and services, insurance companies either mandate the installation of tracking devices as a prerequisite for providing insurance coverage to owners of certain vehicles, or provide discounts on insurance premiums to encourage vehicle owners to subscribe to vehicle tracking and mobile asset recovery solutions such as ours. We benefit from insurance companies’ continued practice in the South African and certain other markets:


•	accepting mobile asset location technologies such as ours as a preferred security product;


•	providing premium discounts for using location and recovery products and services such as ours; and


•	mandating the use of our products and services, or similar products and services, for certain vehicles.

If any of these policies or practices change, revenues from the sale of our products and services could decline, which would materially and adversely affect our business, results of operations and financial condition.

We face many risks associated with our existing and potential new international operations, which could prevent us from successfully expanding into new geographic markets, or operating successfully in existing geographic markets.

We are a global company with substantial assets located in a number of countries. We provide our services in more than 120 countries with 17 offices in 10 countries. In some international markets, customer preferences and buying behavior may be different, and we may use business or pricing models that are different from our traditional subscription model to provide fleet management solutions to customers in those markets, or we may be unsuccessful in implementing the appropriate business model. Our revenue from new foreign markets may not exceed the costs of establishing, marketing, and maintaining our international offerings.

In addition, expanding international operations into new territories may subject us to risks with which we have limited experience. These risks include:


•	lack of familiarity with local markets, including legal and regulatory requirements;


•	difficulties in finding and maintaining, or potentially replacing, local dealers and distributors;


•	competing with established local competitors;


•	laws favoring local competitors;


•	the cost and burden of monitoring and complying with legal and regulatory requirements in new territories, and/or changes to existing legal and regulatory requirements, including those relating to the Internet and data privacy and security;


•	fluctuations in currency exchange rates or restrictions on currency exchange;


•	potentially adverse tax consequences, including the complexities of transfer pricing, value added or other tax systems, double taxation and restrictions and/or taxes on the repatriation of earnings;


•	dependence on third parties, including some commercial partners with whom we may not have extensive experience;


•	increased financial accounting and reporting burdens and complexities;


•	political, social, and economic instability, terrorist attacks, and security concerns in general;


•	reduced or varied protection for intellectual property rights in some countries; and


•	increased exposure and vulnerability to claims that we have infringed on the intellectual property of third parties.

Operating in international markets requires significant management attention and financial resources. The investment and additional resources required to establish operations and manage growth in additional territories may not produce desired levels of revenue or profitability.

Our business and results of operations may be negatively impacted by the United Kingdom’s withdrawal from the European Union.

In June 2016, a referendum was held on the United Kingdom’s membership in the European Union, the outcome of which was a vote in favor of leaving the European Union (commonly referred to as “Brexit”). In March 2017, the U.K. government subsequently notified the European Union of the United Kingdom’s intention to withdraw, triggering under the treaties governing the European Union a two-year period of negotiation between the U.K. government and the other European Union member states, during which the terms of Brexit were to be agreed. Although the withdrawal of the United Kingdom from the European Union was scheduled to take effect on March 29, 2019, the withdrawal date was extended until April 12, 2019 and further extended until October 31, 2019, though it could occur earlier if the United Kingdom so determines.

There remains considerable uncertainty regarding the withdrawal. If no formal withdrawal agreement is reached between the United Kingdom and the European Union, then it is expected the United Kingdom's membership in the European Union will automatically terminate on October 31, 2019, unless all remaining European Union member states unanimously consent to an extension of this period.

Until the Brexit negotiation process is completed, it is difficult to anticipate the potential impact on our operations. Brexit, either with or without a withdrawal agreement in place, may affect our results of operations in a number of ways, including increasing currency exchange risk, generating instability in the global financial markets or negatively impacting the economies of the United Kingdom and Europe. The cost of servicing Europe from the United Kingdom may no longer be a viable option, and we may need to consider alternative options. The costs of having an U.K.-headquartered business may increase as a result of the potential weakening of the British Pound. Changes to existing trade agreements between Europe and the United Kingdom could lead to increased customs duties, tariffs and withholding taxes for the sale of our hardware and services from the United Kingdom into Europe, and may result in us being less profitable. As the process of Brexit evolves, we will continue to assess its impact on us.

Security or privacy breaches in our electronic transactions or data may expose us to additional liability or result in a loss of customers, either of which events could harm our business.

Any inability on our part to protect the information security of our platforms or the privacy of confidential information could have a material adverse effect on our profitability by exposing us to additional liability, increasing our expenses relating

to resolution of these breaches and deterring users from using our products and services. Our systems and operations are vulnerable to damage or interruption from human error, computer viruses, distributed denial of service attacks, spurious spam attacks, intentional acts of vandalism and similar events. We cannot assure you that our current security methods and measures will effectively counter evolving security risks, prevent future slowdowns or disruptions, protect against extraordinary attacks while addressing the security and privacy requirements of existing and future users. Any system failures, slowdowns or disruptions will likely result in unanticipated disruptions in service to our users, decreased levels of user satisfaction and significant negative effects on our reputation, which could materially and adversely affect our business.

We utilize third-party encryption and authentication technology providers to secure transmission of confidential information over the Internet, including private customer data such as bank account numbers. Advances in technological capabilities, new discoveries in the field of cryptography as well as other events or developments, could result in a compromise or breach of the technology we use to protect sensitive transaction data, including the technology provided by third-parties. If any such compromise of our data security, or the data security of our customers, were to occur, it could result in misappropriation of proprietary information or interruptions in operations, and have an adverse impact on our reputation or the reputation of our customers. If we are unable to detect and prevent unauthorized access to or use of confidential information including bank account numbers, our business, results of operations and financial condition could be materially and adversely affected.

Our operating results may be harmed if we are required to collect sales, use, services or other related taxes for our solutions in jurisdictions where we have not historically done so.

We do not believe that we are ordinarily required to collect sales, use, services or other similar taxes from our customers in certain jurisdictions. However, one or more countries or states may seek to impose sales, use, services, or other tax collection obligations on us, including for past sales. For example, in March 2018 the European Commission made two proposals for directives introducing special tax rules in the European Union for the digital economy which, if implemented, would require many European Union and non-European Union companies to pay taxes on their European Union revenues from digital services. These directives have not been implemented and are not supported by all European Union countries, therefore it is unclear whether they will become a part of European Union law (and if so, in what form). Individual European Union countries may enact similar measures on a unilateral basis if the European Commission directives fail to pass, and certain European Union countries have announced plans to do so. A successful assertion by one or more jurisdictions that we should collect sales or other taxes on the sale of our solutions, could result in substantial tax liabilities, including interest and penalty charges for past sales and decrease our ability to compete for future sales. We review applicable rules and regulations periodically and, when we believe sales and use taxes apply in a particular jurisdiction, we voluntarily engage tax authorities in order to determine how to comply with their rules and regulations. We cannot assure you that we will not be subject to sales and use taxes or related penalties for past sales in jurisdictions where we presently believe sales and use taxes are not due. Furthermore, we cannot be certain that we have recorded sufficient provisions on our consolidated financial statements to cover taxes.

Although our client contracts ordinarily provide that our clients must pay all applicable sales and similar taxes, they may be reluctant to pay back taxes, and may refuse responsibility for interest or penalties associated with those taxes. If we are unable to collect and pay back taxes and the associated interest and penalties, we will have incurred unplanned expenses that may be substantial.

The nature of our business results in our services being provided within multiple jurisdictions, including certain jurisdictions in which we may not have anticipated our services being provided or with which we may not have had prior dealings. Accordingly, there may be unforeseen obligations related to certain jurisdictions that were not identified or not adequately provided for in our contracts. These obligations could materially and adversely affect our financial position.

An actual or perceived reduction in vehicle theft and crime rates, may adversely impact demand for certain of our solutions, which could result in a loss of customers and a decline in growth.

Demand for our vehicle tracking and asset recovery solutions is influenced by prevailing or expected vehicle theft rates. Vehicle theft rates may decline as a result of various factors, such as the availability of improved security systems, implementation of improved or more effective law enforcement measures, and improved economic or political conditions in markets that have high theft rates. If vehicle theft rates in our markets decline significantly, or if vehicle owners or insurance companies believe that vehicle theft rates have declined or are expected to decline, demand for some of our products and services may decline, which could result in a loss of customers and a decline in growth.

We are subject to U.S. and other anti-corruption laws, trade controls, economic sanctions and similar laws and regulations, including those in the jurisdictions where we operate. Our failure to comply with these laws and regulations could subject us to civil, criminal and administrative penalties and harm our reputation.

Doing business on a worldwide basis requires us to comply with the laws and regulations of various foreign jurisdictions. These laws and regulations place restrictions on our operations, trade practices, partners and investment decisions. In particular, our operations are subject to U.S. and foreign anti-corruption and trade control laws and regulations, such as the Foreign Corrupt Practices Act (the “FCPA”), various export controls and economic sanctions programs, including those administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), as well as Australian and European sanctions. We monitor compliance in accordance with the ten principles as set out in the United Nations Global Compact Principles, the Organisation for Economic Co-operation and Development recommendations relating to corruption, and the International Labor Organization Protocol in terms of certain of the items to be monitored. As a result of doing business in foreign countries and with foreign partners, we are exposed to a heightened risk of violating anti-corruption and trade control laws as well as sanctions regulations.

The FCPA prohibits us from providing anything of value to foreign officials for the purposes of obtaining or retaining business, or securing any improper business advantage. It also requires us to keep books and records that accurately and fairly reflect our transactions. As part of our business, we may deal with state-owned business enterprises, the employees of which are considered foreign officials for purposes of the FCPA. In addition, the United Kingdom Bribery Act (the “Bribery Act”) which came into effect on July 1, 2011, extends beyond bribery of foreign public officials and also applies to transactions with individuals not employed by a government. The provisions of the Bribery Act are also more onerous than the FCPA in a number of other respects, including jurisdiction, non-exemption of facilitation payments and penalties. Some of the international locations in which we operate, lack a developed legal system and have higher than normal levels of corruption.

Economic sanctions programs restrict our business dealings with certain sanctioned countries, persons and entities. In addition, because we act through dealers and distributors, we face the risk that our dealers, distributors and customers might further distribute our products to a sanctioned person or entity, or an ultimate end-user in a sanctioned country, which might subject us to an investigation concerning compliance with OFAC or other sanctions regulations.

Violations of anti-corruption laws, trade control laws and sanctions regulations are punishable by civil penalties, including fines, denial of export privileges, injunctions, asset seizures, debarment from government contracts and revocations or restrictions of licenses, as well as criminal fines and imprisonment. We have developed policies and procedures as part of a company-wide compliance program that is designed to assist our compliance with applicable U.S. and international anti-corruption and trade control laws and regulations, including the FCPA, the Bribery Act and trade controls and sanctions programs administered by OFAC, and provide regular training to our employees to comply with these laws and regulations. However, there can be no assurance that all of our employees, consultants, partners, agents or other associated persons will not take actions in violation of our policies and these laws and regulations, or that our policies and procedures will effectively prevent us from violating these regulations in every transaction in which we may engage, or provide a defense to any alleged violation. In particular, we may be held liable for the actions that our local, strategic or joint venture partners take inside or outside of the United States, even though our partners may not be subject to these laws. Such a violation, even if our policies prohibit it, could materially and adversely affect our reputation, business, results of operations and financial condition. Our continued international expansion, including in developing countries, and our development of new partnerships and joint venture relationships worldwide, could increase the risk of FCPA, OFAC or Bribery Act violations in the future.

Operating in emerging markets subjects us to greater risks than those we would face if we only operated in more developed markets, which could increase our operating costs and inhibit our growth plan.

Emerging markets, including Africa, Eastern Europe, Mexico, the Middle East, Asia and South America, are subject to greater risks than more developed markets. The Middle East region is experiencing ongoing instability, which has affected and may continue to affect our growth in the region. Although there continue to be positive developments in Brazil, such as continued positive growth rates, due in part to rate cuts and policy reform supporting growth, the Brazilian market continues to experience political and economic issues such as high unemployment rates, high inflation rates and corruption allegations, which affect our growth in the region and our ability to introduce new services to the region. South Africa is experiencing political and economic issues which could affect our ability to maintain our existing customer base as well as our ability to grow our existing customer base. The political, economic and market conditions in many emerging markets present risks that could make it more difficult to operate our business successfully. These risks include:


•	political and economic instability, including higher rates of inflation and currency fluctuations;


•	higher levels of corruption, including bribery of public officials;


•	loss due to civil strife, acts of war or terrorism, guerrilla activities and insurrection;


•	a lack of well-developed legal systems which could make it difficult for us to enforce our intellectual property and contractual rights;


•	logistical and communications challenges;


•	potential adverse changes in laws and regulatory practices, including import and export license requirements and restrictions, tariffs, legal structures and tax laws;


•	difficulties in staffing and managing operations and ensuring the safety of our employees;


•	restrictions on the right to convert or repatriate currency or export assets;


•	greater risk of uncollectable accounts and longer collection cycles; and


•	introduction or changes to indigenization and empowerment programs.

Laws and regulations relating to the Internet and data privacy in the markets in which we operate are complex and continuously evolving, and compliance costs are high. As these laws and regulations continue to evolve, we may be required to increase our compliance-related expenditures, limit the manner in which we collect information, the types of information that we collect, or the solutions we offer, which may impede our ability to provide our solutions or reduce our profit margins in specific geographic regions.

Various laws and regulations associated with the Internet and data privacy are complex and increase our cost of doing business. Furthermore, these laws and regulations expose us to fines and penalties if we fail to comply with them. Although we have implemented procedures designed to comply with international practices and have established additional group policies, charters and procedures to assist in maintaining data privacy and data security, we have not undertaken a formal legal review to determine our compliance with data privacy and data security laws in jurisdictions outside of the U.K., the European Union and South Africa. For example, we will have to consider the potential implications of the new privacy law in California, the California Consumer Privacy Act (“CCPA”), which will take effect on January 1, 2020. We anticipate that the CCPA will create new rights for consumers and will be widely applicable to businesses (regardless of location) that collect personal information about California residents. The California Attorney General may bring enforcement actions under the CCPA resulting in financial penalties for violations.

Furthermore, there can be no assurance that our employees, contractors and agents will comply with the policies and procedures we establish regarding data privacy and data security, particularly as we expand our operations through organic growth and acquisitions. While our employees may violate our policies and procedures, the Company remains responsible for, and obligated to implement, policies and procedures and enter into contracts with service providers that require appropriate protection. Any violations could subject us to civil or criminal penalties, including substantial fines or prohibitions on our ability to offer our products in one or more countries, and could also materially damage our reputation, our brand, our international expansion efforts, our business, results of operations and financial condition.

The transmission of data over the Internet and cellular networks is a critical component of our software-as-a-service (“SaaS”) business model. Additionally, as cloud computing continues to evolve, increased regulation by federal, state or foreign agencies becomes more likely, particularly in the areas of data privacy and data security. In addition, taxation of services provided over the Internet or other charges imposed by government agencies, or by private organizations for accessing the Internet, may be imposed. Any regulation imposing greater fees for Internet use or restricting information exchange over the Internet, could result in a decline in the use of the Internet and the viability of Internet-based services, which could harm our business.

Our solutions and products enable us to collect, manage and store a wide range of data related to fleet management such as mobile asset location and fuel usage, speed and mileage. We obtain our data from a variety of sources, including our customers and third-party providers. The United States and various state governments have adopted or proposed limitations on the collection, distribution and use of personal data, as well as requirements that must be followed if a breach of such personal data occurs. The European Union and the United Kingdom have adopted legislation (including directives, national laws and regulations) that increase or change the requirements governing data collection, use, storage and disclosure of personal data in these jurisdictions. The current European Union legislation related to data protection is the General Data Protection Regulation (“GDPR”), which came into effect on May 25, 2018. We have updated and will continue to evaluate our group data protection and security policies, charters, and procedures to assist in maintaining data privacy and data security in line with international practices.

The Protection of Personal Information Act, No. 4 of 2013 (the “POPI Act”) was promulgated into law in November 2013 in South Africa. Certain sections of the POPI Act, came into effect on April 11, 2014. The remaining sections of the POPI Act will commence on a date to be determined by the South African President, the general assumption being that the remaining sections will commence before the end of the 2019 calendar year. The POPI Act allows for a one year transition period from its commencement for all persons to comply with its requirements. A failure to comply with the POPI Act may result in a fine not exceeding R10 million and/or imprisonment of up to 10 years, depending on the severity of the contravention.

We may also be subject to costly notification and remediation requirements if we, or a third party, determines that we have been the subject of a data breach involving personal data of individuals. Data breach notification regulations vary among the countries where we conduct business, and also vary among the states of the United States, and any breach of personal data could be subject to any number of these requirements.

As noted above, we have sought to implement internationally recognized practices regarding data privacy and data security. If our privacy or data security measures fail to comply, or are perceived to fail to comply, with current or future laws and regulations, we may be subject to litigation, regulatory investigations or other liabilities. Moreover, if future laws and regulations limit our customers’ ability to use and share this data or our ability to store, process and share data with our customers over the Internet, demand for our solutions could decrease and our costs could increase. We might also have to limit the manner in which we collect data, the types of personal data that we collect, or the solutions we offer. Any of these risks would materially and adversely affect our business, results of operations and financial condition.

A governmental challenge to our transfer pricing policies or practices could impose significant costs on us.

The group has intercompany transactions and consequently closely monitors the appropriateness of its transfer pricing policies and compliance therewith. The global transfer pricing environment, including with respect to operational and reporting requirements, is continuously evolving and subject to input from multiple sources and jurisdictions. These complexities require management to closely monitor new developments, which it does.

Many countries routinely examine transfer pricing policies of taxpayers subject to their jurisdiction, and authorities challenge transfer pricing policies aggressively where there is potential non-compliance and impose interest and penalties where non-compliance is determined. Although the documentation of and support for our transfer pricing policies has not been the subject of a governmental proceeding beyond examination to date, there can be no assurance that a governmental authority will not challenge these policies more aggressively in the future or, if challenged, that we will prevail. We could suffer costs related to one or more challenges to our transfer pricing.

Although South Africa signed the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country (“CbC”) Reports on January 27, 2016, and published its CbC Reporting Regulations on December 23, 2016 (“CbC Regulations”), the Group is not under any obligation to file a CbC Report as its turnover is below the required threshold. In terms of the CbC Regulations, the ultimate parent entity of Multinational Enterprise Groups (“MNE Group”) with total

consolidated group revenue of at least R10 billion (or €750 million should the MNE Group be headquartered outside of South Africa), must submit a CbC Report to the South African Revenue Service (“SARS”).

In addition to the CbC Regulations, any entity which has entered into cross-border related party transactions, which exceed or are reasonably expected to exceed R100 million per year in the aggregate, must submit a “Master File” and “Local File” to SARS.

This applies to fiscal years commencing on or after October 1, 2016, with the deadline for submission being 12 months after the company’s fiscal year end. MiX Telematics International meets this threshold and therefore is required to submit Master File and Local File returns in respect of fiscal year 2018 by the deadline of March 31, 2019. MiX International submitted a Master File and a Local File returns in respect of fiscal year 2018 by the deadline of March 31, 2019.

Reduction in regulation in certain markets may adversely impact demand for certain of our solutions by reducing the necessity for, or desirability of, our solutions.

Regulatory compliance and reporting is driven by legislation and requirements, which are often subject to change, from regulatory authorities in nearly every jurisdiction globally. For example, in the United States, fleet operators can face numerous complex regulatory requirements, including mandatory Compliance, Safety and Accountability driver safety scoring, hours of service, compliance and fuel tax reporting. The reduction in regulation in certain markets may adversely impact demand for certain of our solutions, which could materially and adversely affect our business, financial condition and results of operations.

Failure to correctly implement a new Enterprise Resource Planning (“ERP”), Customer Relationship Management System (“CRM”) and billing system could have a material and adverse effect on our operations.

We are currently in the process of implementing a new fully-integrated ERP, CRM and billing system, following the pilot implementation. The overall aim of these new systems is to enable management to achieve enhanced quality, reliability and timeliness of information; improve integration and visibility of information stemming from different management functions and countries; and optimize global management of corporate processes.

The adoption of a new ERP, CRM and billing system, which will replace the various accounting systems within our individual operations, poses several challenges relating to, among other things, migration of data, potential instability of the new system, communication of new rules and procedures and the training of personnel. We are aware of the potential risks associated with a global system implementation and intend to adopt mitigation plans and contingency plans, in order to ensure business continuity, this includes mitigating issues noted during the pilot implementation before embarking on the full roll-out. However, there can be no assurance that a new ERP, CRM and billing system will be successfully implemented and failure to do so could have a material adverse effect on our operations and ability to execute on our growth strategy.

If the accounting estimates we make, and the assumptions on which we rely, in preparing our consolidated financial statements prove inaccurate, our actual results may be adversely affected.

Our consolidated financial statements have been prepared in accordance with IFRS. The preparation of these consolidated financial statements requires us to make estimates and judgements about, among other things, maintenance provisions, current and deferred income taxes, impairment estimates, useful lives of customer relationships and product development costs, capitalization of development costs, the level of receivable allowances, the allocation between in-vehicle devices and inventory and the probability of the performance shares vesting. These estimates and judgements affect the reported amounts of our assets, liabilities, revenues and expenses, the amounts of charges accrued by us, and related disclosure of contingent liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances and at the time they are made. If our estimates or the assumptions underlying them are not correct, actual results may differ materially from our estimates and we may need to, among other things, accrue additional charges that could adversely affect our results of operations, which in turn could adversely affect our stock price. In addition, new accounting standards, amendments and interpretations of accounting standards have occurred and may occur in the future that could adversely affect our reported financial results.

We may be exposed to risks related to litigation and administrative proceedings that could materially and adversely affect our business, results of operations and financial condition.

Our business may expose us to litigation and administrative proceedings relating to labor, regulatory, tax proceedings, governmental investigations, tort claims, contractual disputes and criminal prosecution, among other matters, that could materially and adversely affect our business, results of operations, and financial condition. In the context of these proceedings, we may not only be required to pay fines or monetary damages but also be subject to sanctions or injunctions affecting our ability to continue our operations. While we may contest these matters vigorously and make insurance claims when appropriate, litigation and other proceedings are inherently costly and unpredictable, making it difficult to accurately estimate the outcome of actual or potential litigation or proceedings. Although we will establish provisions in accordance with the requirements of IFRS, the amounts that we reserve could vary significantly from any amounts we actually pay due to the inherent uncertainties in the estimation process. In addition, litigation and administrative proceedings can involve significant management time and attention and be expensive, regardless of outcome. During the course of any litigation and administrative proceedings, there may be announcements of the results of hearings and motions and other interim developments. If securities analysts or investors regard these announcements as negative, the trading price of our ordinary shares and ADSs may decline. For more information, see “Item 4. Information on the Company - 4B. Business Overview - Legal Proceedings.”

Risks Relating to Intellectual Property

We have not traditionally relied on patents to protect our intellectual property, and we rely on trade secrecy laws, confidentiality agreements, confidentiality procedures and contractual restrictions to establish and protect our intellectual property rights, which provide only limited protection and may subject us to litigation.

Our future success and competitive position depend in part on our ability to protect our intellectual property and proprietary technologies. We rely primarily on trade secrecy laws, confidentiality agreements, confidentiality procedures and contractual restrictions to establish and protect our intellectual property rights, all of which provide only limited protection and may not currently, or in the future, provide us with a competitive advantage. Our confidentiality agreements with our employees, licensees, independent contractors and other advisers may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade secrets or develop similar technologies and processes, and, in either event we would not be able to assert trade secret rights.

We also rely, to a limited extent, on patent, trademark and copyright law. A patent covering certain aspects of our Beam-e product was issued in South Africa during fiscal year 2014 and a patent covering a method for driver verification was issued during fiscal year 2015. A further patent application for an asset tracking system and method remains pending in Brazil. We have traditionally not sought patent protection over our intellectual property. As a result, we may not be able to successfully defend our intellectual property from third-party infringement.

We cannot assure you that any future trademark registrations will be issued for pending or future applications, or that any registered trademarks will be enforceable, or provide adequate protection of our proprietary rights, or that any such trademarks will not be challenged, invalidated, or circumvented.

Effective patent, trademark, copyright, and trade secret protection may not be available in every country in which our solutions are available, or where we have employees or independent contractors. In addition, the legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights in Internet-related industries are uncertain and continue to evolve. The steps we have taken, and will take, may not prevent unauthorized use, reverse engineering, or misappropriation of our technologies and we may not be able to detect any of the foregoing. Any of the foregoing events could materially and adversely affect our business, results of operations and financial condition.

An assertion by a third party that we are infringing on its intellectual property rights could subject us to costly and time-consuming litigation or expensive licenses.

The fleet management, mobile asset management and technology industries are characterized by the existence of a large number of patents, copyrights, trademarks and trade secrets and by frequent litigation based on allegations of infringement or other violations of intellectual property rights. Much of this litigation involves patent-holding companies or other adverse patent owners who have no relevant product revenues of their own, and against whom our own limited patent portfolio may provide little or no deterrence. We have been subject to such claims in the past and may face additional claims in the future.

We have not historically conducted comprehensive art searches to determine whether our solutions infringe the patent rights of third parties in our current markets, or those markets we may enter in the future. Third parties may assert that we are infringing on patents, of which we are currently unaware and that would have been disclosed by prior art searches if they had been conducted. Our status as a public company in the United States has raised our visibility and may invite holders of patents who have not previously sought to enforce them against us, to bring or threaten claims for infringement or seek to negotiate royalty or other payments from us. The fact that we have relatively few patents associated with our intellectual property means that we may not be able to successfully defend our intellectual property from third-party infringement. Any of the foregoing could materially and adversely affect our business, results of operations and financial condition.

We cannot assure you that we will prevail in any future intellectual property infringement litigation given the complex technical issues and inherent uncertainties in such litigation. Defending such claims, regardless of their merit, could be time-consuming and distracting to management, result in costly litigation or settlement, cause development delays, or require us to enter into royalty or licensing agreements. In addition, we are obligated to indemnify some of our customers and other contract counterparties against third parties’ claims of intellectual property infringement based on our solutions. If our solutions violate any third-party intellectual property rights, we could be required to withdraw those solutions from the market, re-develop those solutions or seek to obtain licenses from third parties, which might not be available on reasonable

terms, or at all. Any efforts to redevelop our solutions, obtain licenses from third parties on favorable terms or license a substitute technology might not be successful and, in any case, might substantially increase our costs and harm our business, financial condition and operating results. Withdrawal of any of our solutions from the market could harm our business, financial condition and operating results.

Our software may contain undetected defects or software errors, which could result in damage to our reputation or market rejection of our products.

We must update our solutions quickly to keep pace with the rapidly changing market, including the third-party software and devices with which our solutions integrate, and we have a history of frequently introducing new releases. Our solutions and/or updates to our solutions could contain errors or defects, which were not detected during our review processes, especially when first introduced or when new versions are released. Our software may not be free from errors or defects, which could result in damage to our reputation or harm to our operating results.

We warrant that our hardware will be free of defects for various periods of time. The operation of the hardware is controlled by the firmware loaded on the hardware. We generally provide firmware updates to our fleet customers by “over-the-air” wireless communication of the updated firmware directly to our customers’ in-vehicle devices. If the firmware does not function as expected and it prevents the uploading of updated firmware, then the problem could not be corrected by an over-the-air update and would require direct servicing of the installed on-board computer by trained personnel, which imposes a very significant cost on us. Variations among communications protocols in the markets in which we operate increase the risk of error in the remote installation of firmware. Although we attempt to manage this risk by introducing firmware updates in stages, so that the success of deployment can be assessed on a small number of in-vehicle devices before the deployment risk is expanded to a larger customer base, there can be no assurance that we will be successful in detecting firmware operation and integration problems or otherwise in managing our exposure to remediation expense related to the deployment of firmware updates.

Our “over-the-air” transmission of firmware updates could permit a third party to disable our customers’ in-vehicle devices or introduce malware into our customers’ in-vehicle devices, which could expose us to widespread loss of service and customer claims.

“Over-the-air” transmission of our firmware updates may provide the opportunity for a third party, who has deep inside knowledge of our systems, to modify or disable our customers’ in-vehicle systems or introduce malware into our customers’ in-vehicle systems. No such incidents have occurred to date, but there can be no assurance that they will not occur in the future. Damage to our customers’ in-vehicle devices as a result of such incidents could only be remedied through direct servicing of their installed in-vehicle devices by trained personnel, which would impose a very significant cost on us, particularly if the incidents are widespread. Moreover, such incidents could expose us to widespread loss of service and claims by our customers under various theories of liability, the outcome of which would be uncertain. Third party interference with our over-the-air transmission of firmware, or with our customers’ in-vehicle devices during such process, could materially and adversely affect our business, financial condition and results of operations.

Any significant disruption in service on, or security breaches of, our SaaS platform or computer systems, could compromise our information, damage our reputation and result in a loss of customers.

Our brand, reputation, and ability to attract, retain, and serve our customers depend upon the reliable performance of our service and our customers’ ability to access our solutions at all times. Our customers rely on our solutions to make operating decisions related to their fleet, as well as to measure, store and analyze valuable data regarding their businesses. We collect and store sensitive data, including data transmitted from our customers’ in-vehicle devices concerning the location of their mobile assets, as well as personally identifiable information concerning our customers and employees. Our solutions are vulnerable to interruption and our data centers are vulnerable to damage or interruption from human error, intentional malicious acts, computer viruses or hackers, earthquakes, hurricanes, floods, fires, war, terrorist attacks, power losses, hardware failures, systems failures, telecommunications failures and similar events, any of which could limit our customers’ ability to access our solutions. Prolonged delays or unforeseen difficulties in connection with adding capacity or upgrading our network architecture may cause our service quality to suffer. Any event that significantly disrupts our service or exposes our data to misuse could damage our reputation and harm our business and operating results, including causing us to issue credits to customers, subjecting us to potential liability, reducing our customer retention rates, or increasing our cost of acquiring new customers, any of which would have the effect of reducing our revenue and could materially and adversely affect our business, results of operations and financial condition.

Any breach of our data or system security could result in our customer data being accessed, publicly disclosed, lost or stolen, our business and operations being interrupted, a loss of confidence in our products and services and other negative consequences such as civil liability, including under laws that protect the privacy of personal information, and regulatory penalties, any or all of which could materially and adversely affect our business, financial condition and results of operations.

In addition, we store data, host our solutions and serve all of our customers from our servers, which are located at third-party data center facilities in Algiers in Algeria, Sydney in Australia, Muscat in Oman, Dublin in Ireland, and Virginia in the United States. While we control and have access to the servers and some of the physical components that are located in these external data centers, we do not control the operation of these facilities or certain equipment. Problems faced by our third-party data center locations, with the telecommunications network providers with whom they or we contract, or with the systems by which our telecommunications providers allocate capacity among their customers, including us, could adversely affect the experience of our customers. Third-party operators of our data centers could decide to close their facilities without adequate notice. In addition, any financial difficulties, such as bankruptcy, faced by our secure third-party data center operators or any of the service providers with whom they or we contract may have negative effects on our business, the nature and extent of which are difficult to predict.

In addition to data hosted at third party data centers, we have transitioned the vast majority of our data to cloud-based service platforms such as Amazon Web Services (“AWS”). The use of such service presents similar risks to the use of a conventional third party hosted environment, although at a level that is viewed internally as considerably lower. The use of cloud-based servicing may however present additional complexity which may be more easily managed using physical data centers, for example the jurisdiction of data and applicability of various laws and regulations denoting the transfer of data between jurisdictions is more complex in a cloud based environment.

Certain of our customer agreements currently, and may in the future, provide minimum service level commitments regarding items such as uptime, functionality or performance. If we are unable to meet the stated service level commitments for these customers, or suffer extended periods of service unavailability, we are or may be contractually obligated to provide these customers with credits for future subscriptions, provide services at no cost or pay other penalties, which could adversely impact our profitability. Additionally, if our contracted or physical capacity is unable to keep up with our growing needs, this could have an adverse effect on our business. Our disaster recovery systems are located at our third-party hosting facilities. We use a redundant architecture and regularly review and increase capacity. However, our systems have not been tested under all disaster conditions and may not have sufficient capacity to recover all data and services in the event of an outage. In the event of a disaster in which our disaster recovery systems are irreparably damaged or destroyed, we would experience interruptions in access to our services. Any changes in third-party service levels at our data centers or any errors, defects, disruptions, or other performance problems with our solutions could harm our reputation and may damage our data. Interruptions in our services could materially and adversely affect our business, results of operations and financial condition, cause us to issue refunds to customers, subject us to potential liability, or adversely affect our subscriber retention rates.

Our solutions rely on third-party software and any inability to license such software from third parties could render our solutions ineffectual.

We rely on software and other intellectual property licensed from third parties, including mapping software and data from Google and Here, to develop and provide solutions to our customers. In addition, we may need to obtain future licenses from third parties to use software or other intellectual property associated with our solutions. We cannot assure you that these licenses will be available to us on acceptable terms, without significant price increases or at all. Any loss of the right or inability to obtain the right to use any such software or other intellectual property required for the development and maintenance of our solutions could result in interruptions in the provision of our solutions until equivalent technology is either developed by us, or, if available from others, is identified, obtained, and integrated, which could harm our business.

In addition, we incorporate some open source software into our platform. The terms of many open source licenses to which we are subject have not been interpreted by U.S. courts or courts of other jurisdictions, and there is a risk that those licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to commercialize our solutions. In that event, we could be required to seek licenses from third parties in order to continue offering our solutions, to re-develop our solutions, to discontinue sales of our solutions, or to release our proprietary software source code under the terms of an open-source license, any of which could adversely affect our business.

We depend on third-party technology, including cellular and GPS networks, and any disruption, failure or increase in costs could impede the functionality of our solutions.

Two critical links in our current solutions are between in-vehicle devices and GPS satellites, and between in-vehicle devices and cellular networks, which allow us to obtain location data and transmit it to our system. Increases in the fees charged by cellular carriers for data transmission or changes in the cellular networks, such as a cellular carrier discontinuing support of the network currently used by our in-vehicle devices, requiring retrofitting of our in-vehicle devices, could increase our costs and impact our profitability. We have initiated activities to migrate new installations to the next generation of cellular network compatibility, in order to maximize expected useful life of our in-vehicle devices. However, cellular carriers could in the future discontinue support for our currently utilized cellular technologies. Also, while we have included the ability to store GPS data in our in-vehicle devices in case of temporary cellular network connectivity failure, widespread disruptions or extended failures of the cellular networks would adversely affect our solutions’ functionality and utility and harm our financial results.

GPS is a satellite-based navigation and positioning system consisting of a network of orbiting satellites. These satellites and their ground support systems are complex electronic systems, subject to electronic and mechanical failures and possible sabotage and it is not certain that the U.S. government will remain committed to the operation and maintenance of GPS satellites in the future. In addition, technologies that rely on GPS depend on the use of radio frequency bands and any modification of the permitted uses of these bands may adversely affect the functionality of GPS and, in turn, our solutions. The satellites and their ground control and monitoring stations are maintained and operated by the U.S. Department of Defense, which does not currently charge users for access to the satellite signals and does not impose on the ability to access location data. We cannot assure that it will not do so in the future. Any disruption, failure, increase in costs or regulatory hurdles could impede the functionality and/or cost of our solutions, which could adversely affect our business. The communication systems that we use to host and transmit data may be subject to security incidents, which may also subject the Company to regulatory enforcement and client pressures.

Our solutions integrate with third-party technologies and if our solutions become incompatible with these technologies, our solutions would lose functionality and our customer acquisition and retention could be adversely affected.

Our solutions integrate with third-party software and devices to allow our solutions to perform key functions. We cannot guarantee that this ease of integration will continue or that we will be able to integrate with other products at all or without additional cost. Additionally, previously unidentified errors, viruses or bugs may also be present in third-party software that our customers use in conjunction with our solutions. Changes to third-party software that our customers use in conjunction with our solutions could also render our solutions ineffective. Customers may conclude that our software is the cause of these errors, bugs or viruses and terminate their subscriptions. The inability to easily integrate with, or the presence of any defects in, any third-party software could result in increased costs, or in delays in software releases or updates to our products until such issues have been resolved, which could damage our reputation and materially and adversely affect our business, results of operations and financial condition.

Risks Related to South Africa

Fluctuations in the value of the South African Rand have had, and will continue to have, a significant impact on our results of operations, which may make it difficult to evaluate our business performance between reporting periods and may also adversely affect the price of our ADSs.

The South African Rand is the primary operating and financial reporting currency for our business operations. Depreciation in the South African Rand may negatively impact the prices at which our ADSs trade. The U.S. Dollar, Euro, Australian Dollar and British Pound, each as compared to the South African Rand exchange rates, have historically been volatile and we expect this volatility to continue. We provide detailed information about historical U.S. Dollar to South African Rand exchange rates in “Item 3A. Selected Financial and Operating Data”.

Due to the significant fluctuation in the value of the South African Rand and its impact on our results, you may find it difficult to compare our results of operations between financial reporting periods. This difficulty may have a negative impact on the price of our ADSs and/or increase their volatility. During fiscal year 2019, the South African Rand/U.S. Dollar exchange rate averaged R13.75 and fluctuated between a high of R15.43 and a low of R11.83. This compares to an average exchange rate of R12.90 during fiscal year 2018, which fluctuated between a high of R14.46 and a low of R11.55. The South African Rand exchange rate is affected by various international and South African economic and political factors. For further information on the South African Rand/U.S. Dollar exchange rate movements post the end of fiscal year 2019.

We also operate internationally and are exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the South African Rand, the U.S. Dollar, the Euro, the Australian Dollar, Brazilian Real and the British Pound. These exposures may change over time as business practices evolve and could have a material adverse impact

on our financial results and cash flows. Fluctuation in currency exchange rates impacts our operating results. We have implemented a foreign currency hedging policy to reduce our net exposure, on certain recognized assets and liabilities, to fluctuations in foreign currencies. Our policy is primarily based on economic hedging principles of managing certain of our on balance sheet risk, as opposed to using derivative financial instruments. We do not attempt to hedge currency translation risk. Our future attempts to hedge against foreign currency risk could be unsuccessful and expose us to losses. Please refer to “Item 11. Quantitative and Qualitative Disclosures about Market Risk” for more details on foreign currency exchange risk.

If we do not achieve applicable black economic empowerment objectives in our South African businesses, we risk not being able to renew certain of our existing contracts which service South African government and quasi-governmental customers, as well as not being awarded future corporate and governmental contracts which would result in the loss of revenue.

The South African government, through the Broad-Based Black Economic Empowerment Act, No. 53 of 2003 (as amended by the Broad-Based Black Economic Empowerment Amendment Act, No. 46 of 2013), the Generic Codes of Good Practice (“B-BBEE Codes”) and industry charters published pursuant thereto, collectively, the “B-BBEE”, has established a legislative framework for the promotion of Broad-Based Black Economic Empowerment. Achievement of B-BBEE objectives is measured by a scorecard which establishes a weighting for the various components of B-BBEE.

The B-BBEE Codes were reviewed by the South African Department of Trade and Industry and a new set of B-BBEE Codes were promulgated in October 2013. The new B-BBEE Codes came into effect on May 1, 2015 and have different requirements and emphasis than the previous codes. In addition to the B-BBEE Codes, industry charters apply to certain of our entities. The Department of Trade and Industry published proposed amendments to the B-BBEE Codes, which were made available for 60 days of public commentary, ending on May 29, 2018. The proposed amendments will primarily influence the skills development pillar in promoting job creation for specific targeted youth groups by enabling workplace experience.

In line with the published proposed amendments to the B-BBEE Codes reported on last year, Minister Davies gazetted the Youth Employment Service (“Y.E.S.”) Initiative on August 28, 2019 effective immediately. This initiative is part of the solution to address South Africa’s youth unemployment challenges. The Y.E.S. Initiative enables companies up to two B-BBEE levels of enhanced B-BBEE status recognition if certain youth job creation targets are met. Eligible candidates are between the ages of 18 and 35 and adhere to the definition of Black people as included in the B-BBEE codes (South African Coloured, Indian and African).

It is important for us to achieve applicable B-BBEE objectives. B-BBEE objectives are pursued, in significant part, by requiring parties who contract with corporate, governmental or state owned entities in South Africa to achieve B-BBEE compliance through satisfaction of an applicable scorecard. Parties improve their B-BBEE contributor level when contracting with businesses that have earned good B-BBEE contributor levels in relation to their scorecards.

We have three material end-customers, which previously required MiX Telematics Enterprise SA Proprietary Limited to maintain a B-BBEE contributor level 3 as measured under the new B-BBEE Codes. The value of these contracts represented 3.3% of our total revenue for fiscal year 2019. MiX Telematics Enterprise SA Proprietary Limited has attained the agreed compliance targets in fiscal year 2019. Failing to achieve applicable B-BBEE objectives could jeopardize our ability to maintain existing business or to secure future business from corporate, governmental or state owned customers that could materially and adversely affect our business, financial condition and results of operations.

We face the risk of disruption from labor disputes and changes to South African labor laws, which could result in significant additional operating costs or alter our relationship with our employees.

Our operations may be materially affected by changes to labor laws. South African laws relating to labor that regulate work time, provide for mandatory compensation in the event of termination of employment for operational reasons, and impose monetary penalties for non-compliance with administrative and reporting requirements in respect of affirmative action policies, could result in significant costs. In addition, future changes to South African legislation and regulations relating to labor may increase our costs or alter our relationship with our employees. The resulting disruptions could materially and adversely affect our business, results of operations and financial condition.

Socio-economic inequality in South Africa or regionally may subject us to political and economic risks which may affect the ownership or operation of our business.

We are incorporated and own significant operations in South Africa. As a result, we are subject to political and economic risks relating to South Africa. South Africa was transformed from a racially based government into a democracy in 1994, with successful rounds of democratic elections held under a modern constitution during 1994, 1999, 2004, 2009, 2014 and most recently, in May 2019. The next national elections are scheduled to be held in 2024. We fully support government policies aimed at redressing the disadvantages suffered by the majority of citizens under the previous non-democratic dispensation and recognize that in order to implement these policies, our operations and profits may be impacted. However, South Africa faces many challenges in overcoming substantial racial differences in levels of economic and social development among its people. While South Africa features highly developed and sophisticated business sectors and financial and legal infrastructure at the core of its economy, large parts of the country’s black population, particularly in rural areas, do not have access to adequate education, health care, housing and other services, including water and electricity. In addition, South Africa also has higher levels of crime and unemployment than the United States.

The ruling party which has controlled the South African government since democracy has committed itself to creating a stable, democratic, free market economy, which it has achieved to a great extent. It remains difficult however, to predict the future political, social and economic direction of South Africa or the manner in which any future government will attempt to address the country’s inequalities. It is also difficult to predict the impact that addressing these inequalities will have on our business. Furthermore, there has been regional, political and economic instability in countries neighboring South Africa, which could materially and adversely affect our business, results of operations and financial condition.

Although political conditions in South Africa are generally stable, changes may occur in the composition of its ruling party or in its political, fiscal and legal systems which might affect the ownership or operation of our business, which may, in turn, materially and adversely affect our business, financial condition and results of operations. These risks may include changes in legislation, arbitrary interference with private ownership of contract rights, and changes to exchange controls, taxation and other laws or policies affecting foreign trade or investment and could materially and adversely affect our business, financial condition and results of operations. Any changes in investment ratings, regulations and policies or a shift in political attitudes both within and towards South Africa are beyond our control and could materially and adversely affect our business, financial condition and results of operations.

A lack of growth, high inflation or increased interest rates in the South Africa economy could reduce our anticipated revenue and increase our operating costs.

On June 4, 2019, Statistics South Africa announced that the South African economy shrunk by 3.2% during the first quarter of 2019, following a prior announcement on March 5, 2019, that the growth rate during 2018 was 0.8%. Additionally, the economy of South Africa has in the past and may in the future continue to be characterized by rates of inflation and interest rates that are substantially higher than those prevailing in the United States and other highly developed economies. These characteristics may be exacerbated by the fact that two out of the three major ratings agencies maintained the South African credit ratings as sub-investment grade:

• Standard & Poor maintained a sub-investment grade with stable outlook on November 23, 2018;

• Fitch maintained a sub-investment grade with stable outlook on December 6, 2018; and

• Moody's maintained an investment grade with stable outlook on March 23, 2018.

Consequently, economic conditions in South Africa could reduce our anticipated revenue growth, increase our South African-based costs, decrease our operating margins and adversely affect our ability to obtain cost-effective debt financing in South Africa.

Our financial flexibility could be constrained by South African currency restrictions, which, in turn, could hinder our normal corporate functioning.

South African companies are subject to exchange control limitations, which could hinder our normal corporate functioning, particularly given our significant expansion outside of South Africa in recent years. Exchange controls have been relaxed in recent years and may continue to be relaxed (for example, we have established a domestic treasury management company which is discussed in “Item 10D. Exchange Controls”). However, South African companies remain subject to certain restrictions on their ability to raise and deploy capital outside of the Southern African Common Monetary Area, which

includes South Africa, Namibia, Lesotho and Swaziland. These restrictions have affected the manner in which we have financed our acquisitions outside South Africa. These restrictions or any adverse changes to these restrictions could materially and adversely affect our business, results of operations and financial condition.

Risks Relating to an Investment in our Ordinary Shares and ADSs

Sales of our ordinary shares may adversely affect the prices of our ordinary shares and ADSs.

Sales of substantial amounts of our ordinary shares in the public market, including sales by our officers, directors and principal shareholders, or the perception that such sales may occur, could adversely affect the prevailing market price of our ordinary shares or our ADSs as well as our ability to raise capital through an offering of our securities. In the future, we may also sponsor the sale of shares currently held by some of our shareholders, or issue new shares. We can make no prediction as to the timing of any such sales or the effect, if any, that future sales of our ordinary shares, or the availability of our ordinary shares for future sale, will have on the market price of our ordinary shares or ADSs prevailing from time to time.

The price of our ordinary shares or ADSs may be volatile and fluctuate significantly, which could result in substantial losses for investors.

Market prices for our securities may be volatile in response to various factors, some of which are beyond our control. Such volatility could negatively impact the perceived value and market prices of our ordinary shares or ADSs. In addition to the risks described in this ‘Risk Factors’ section of the annual report, some of the factors that may cause these market prices to fluctuate include:


•	actual or anticipated fluctuations in our financial results or the financial results of our competitors;


•	loss of existing customers or inability to attract new customers;


•	actual or anticipated changes in our growth rate;


•	our announcement of results for a financial reporting period that are lower than expected, whether caused by our results of operations or by currency fluctuations;


•	changes in estimates of our financial results or recommendations by securities analysts;


•	failure of any of our solutions to achieve or maintain market acceptance;


•	changes in market valuations of similar companies;


•	changes in our capital structure, including issuances or repurchases of securities or the incurrence of debt;


•	announcements by us or our competitors of significant products, technologies, services, contracts, acquisitions, or strategic alliances;


•	success of competitive products or services;


•	regulatory developments in South Africa, the United States or other countries;


•	actual or threatened litigation involving us or our industry;


•	additions or departures of key personnel;


•	breaches of security;


•	general perception of the future of the fleet and mobile asset management market or our solutions;


•	sales of ADSs or ordinary shares by our shareholders;


•	ADS price and volume fluctuations attributable to inconsistent trading volume levels of the ADSs; and


•	changes in general economic, industry, and market conditions.

We issue quarterly press releases and other disclosure of our financial results. Our quarterly operating results will fluctuate in the future as a result of a variety of factors, including, but not limited to, our ability to accurately forecast revenue and appropriately plan our expenses, long sales cycles for our enterprise fleet management solutions, service outages or security breaches and any related occurrences which could impact our reputation as well as fluctuations in currency exchange rates. If our quarterly operating results or guidance fall below the expectations of research analysts or investors, the price of our ordinary shares and the ADSs could decline substantially.

In addition, the stock market in general, and the market for technology companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. These broad market and industry factors may materially harm the market price of our ordinary shares and ADSs. Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market price of a company’s securities. This litigation, if instituted against us, could result in very substantial costs, divert our management’s attention and resources, and harm our business, operating results, and financial condition.

Exchange rate volatility may adversely affect the market price of the ADSs and any dividends payable to ADS holders.

As discussed above and further discussed below, there have been significant fluctuations in the exchange rate between the South African Rand and the U.S. Dollar. Unforeseen events in international markets, fluctuations in interest rates, changes in capital flows, political developments or inflation rates may cause exchange rate instability that could, in turn, depress the value of the South African Rand, thereby decreasing the U.S. Dollar value of the ADSs and any dividends or distributions paid on the ordinary shares underlying the ADSs.

Our shares trade on more than one market and this may result in price variations.

Our ordinary shares have been traded on the JSE since 2007, and the ADSs have been traded on the New York Stock Exchange (the “NYSE”) since August 2013. Trading in our ordinary shares and ADSs on these markets takes place in U.S. Dollars on the NYSE and South African Rand on the JSE, and at different times, resulting from different time zones, trading days and public holidays in the United States and South Africa. The trading prices of our ordinary shares and ADSs on these two markets may differ due to these and other factors. Any decrease in the price of our ordinary shares on the JSE could cause a corresponding decrease in the trading price of the ADSs on the NYSE.

The requirements of being a public company in the United States may strain our resources and distract our management, which could make it difficult to manage our business and could have a negative effect on our results of operations and financial condition.

We are required to comply with various regulatory and reporting requirements, including those required by the Securities and Exchange Commission (“SEC”). Complying with these reporting and regulatory requirements is time consuming, which may result in increased costs to us and could have a negative effect on our business, results of operations and financial condition.

As a public company in the United States, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), and the requirements of the Sarbanes-Oxley Act of 2002 (“SOX”). These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual reports and file or make public certain additional information, with respect to our business and financial condition in our home country. SOX requires that we maintain effective disclosure controls and procedures and internal control over financial reporting. Furthermore, as our business changes and if we expand either through acquisitions or by means of organic growth, our internal control over financial reporting may become more complex and we will require significantly more resources to ensure it is effective. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could adversely affect our operating results or cause us to fail to meet our reporting obligations.

We have identified a material weakness in our internal control over financial reporting. If we fail to remediate this material weakness and maintain proper and effective internal control, our ability to produce accurate and timely financial statements could be impaired, which could adversely affect our operating results, our ability to operate our business and investors’ and customers’ views of us.

In connection with our fiscal 2019 audit, we identified a material weakness related to access restrictions and segregation of duties within our Africa operating segment. For a discussion of the material weakness and our remediation efforts, see Item 15, Controls and Procedures, of this Annual Report on Form 20-F. We cannot assure you that our efforts to fully remediate this internal control weakness will be successful or that a similar material weakness will not recur.

If we fail to remediate this weakness and maintain proper and effective internal control, our ability to produce accurate and timely financial statements could be impaired, which could adversely affect our operating results, our ability to operate our business, and investors’ and customers’ views of us. In addition, If we identify any additional material

weaknesses in the future, the disclosure of that fact, even if quickly remediated, could reduce the market’s confidence in our financial statements and negatively affect the price of our ADSs.

Certain provisions of South African law may limit or otherwise discourage a takeover or business combination that could otherwise benefit our shareholders.

Various transactions including, without limitation, those which result in a person, or a group of persons acting in concert, holding shares entitled to exercise or cause to be exercised 35% or more of the voting rights at meetings of our shareholders will be subject to the Fundamental Transactions and Takeover Regulations (the “Takeover Regulations”), promulgated in terms of Section 196 of the Companies Act, which are regulated by the Takeover Regulation Panel. The Takeover Regulations impose various obligations in such circumstances including the requirement of an offer to minority shareholders.

A transaction will be subject to the approval of the competition authorities in terms of the Competition Act, No. 89 of 1998, as amended (the “Competition Act”), if it results in the acquisition of “control”, as defined in the Competition Act and otherwise falls within the scope of the Competition Act. The Competition Act prohibits a transaction within its scope from being implemented without the necessary approvals.

To the extent applicable, a transaction may be subject to JSE Listings Requirements as well as the approval of the Exchange Control Department of the South African Reserve Bank, and other applicable regulatory bodies. In addition, certain fundamental transactions such as mergers, amalgamations, schemes of arrangements and sales of a majority of a company’s assets, require the approval of shareholders exercising 75% of the voting rights at a shareholders meeting, and if 15% or more of a company’s shareholders vote against the transaction, any dissenting shareholder may, within five days, require the company, at its expense, to obtain court approval before implementing the resolution. Even if less than 15% of the shareholders vote against the resolution, any dissenting shareholder may apply to court for a review of the transaction. Such regulations, including the Takeover Regulations and the Competition Act, may have the effect of delaying, deferring or preventing a change in control of us including an extraordinary transaction (such as a merger, tender offer, scheme of arrangement or sale of all or substantially all of our assets) that might provide a premium price for our shareholders.

The concentration of ownership of our capital stock limits your ability to influence corporate matters.

At July 5, 2019, our executive officers, directors, current 5% or greater shareholders and entities affiliated with them, beneficially own 36.5% of our ordinary shares. This significant concentration of share ownership may adversely affect the trading price for our ordinary shares and the ADSs because investors often perceive disadvantages in owning stock in companies with concentrated share ownership. In addition, these shareholders, acting together, may be able to control our management and affairs and matters requiring shareholder approval, including the election of directors and the approval of significant corporate transactions, such as mergers, consolidations or the sale of substantially all of our assets. Shareholders owning greater than 25% of our outstanding ordinary shares will have the ability to block certain corporate actions, including the issuance of additional equity securities for cash. See “Certain provisions of South African law may limit our ability to issue securities and access the capital markets in the future, which could hinder our ability to raise capital in the future.” Consequently, this concentration of ownership may have the effect of exacerbating the delays and limitations on capital market transactions and could materially and adversely affect our business, results of operations and financial condition.

Certain provisions of South African law may limit our ability to issue securities and access the capital markets in the future, which could hinder our ability to raise capital in the future.

The authority of our Board of Directors to issue additional securities is limited by the JSE Listings Requirements and certain provisions of the Companies Act and our Memorandum of Incorporation, and as a result we may be unable to access the capital markets on a timely basis when it is opportune to do so. Under the JSE Listings Requirements, the issuance of equity securities, or securities convertible into equity securities, for cash by our Board of Directors requires shareholder approval, either by means of a specific authority for a specific transaction or by way of a general authority, for a limited time period. If a general authority is not in place, we may experience extended delays and uncertainty in seeking shareholder approval for financing transactions and as a result we may be unable to execute financing transactions with available investors, on advantageous terms or at all. Moreover, while a general authority could allow our Board of Directors to issue for cash additional ordinary shares representing up to 30% of the ordinary shares outstanding at the time of the general authorization, as a practical matter, shareholders in the South African market are often reluctant to grant general authorities up to the 30% threshold. The Company has sought a general authority to issue equity securities, or securities convertible into equity securities, for cash, limited to 5% of the ordinary shares outstanding at the time the general authorization is sought. A general authorization would not permit our Board of Directors to issue ordinary shares for cash with a greater than 10% discount to the 30-day

volume-weighted average price, as of the issuance date, which, if we were to experience significant financial difficulties in the future, could prevent us from obtaining funds when needed. Shareholders owning greater than 25% of our outstanding ordinary shares have the ability to block an issuance of ordinary shares for cash. The Company has sought a further limited authority approving the placement of 10% of the authorized but unissued shares of the Company under the control of directors who may issue such shares in their discretion. This authority, if approved by a majority of shareholders, is only valid until the Company’s next annual general meeting or until renewed; is in line with the Memorandum of Incorporation and provides limited flexibility to execute financing transactions or any approval of a general authorization to our Board of Directors. While we will be able to issue non-convertible debt securities without shareholder approval, we will not be able to grant any voting rights to debt holders, which would be likely to increase the cost of any such debt issuance to the Company.

The relative volatility and illiquidity of the South African securities markets may substantially limit your ability to sell the ordinary shares underlying the ADSs at the price and time you desire.

Our ordinary shares are listed for trading on the JSE. Investing in securities that trade in emerging markets, such as South Africa, often involves greater risk than investing in the securities of issuers in the United States, and such investments are generally considered to be more speculative in nature. The South African securities market is substantially smaller, less liquid, more concentrated and can be more volatile than major securities markets in the United States. There is also significantly greater concentration in the South African securities markets than in major securities markets in the United States. At June 7, 2019, total market capitalization amounted to R16,392 billion ($1,132.12 billion) and this market capitalization was represented by 360 companies. Accordingly, although you are entitled to withdraw the ordinary shares underlying the ADSs from the depositary at any time, your ability to sell such shares at a price and time you desire may be substantially limited. The Bank of New York Mellon (“BNYM”) serves as the depositary (the “depositary”) with respect to the ADSs.

Holders of our ADSs in the United States may have difficulty bringing actions, and enforcing judgements, against us, our directors and our executive officers based on the civil liabilities provisions of the federal securities laws or other laws of the United States or any state thereof.

We are incorporated in South Africa. The majority of our directors and senior management (and certain experts named herein) reside outside of the United States. A significant portion of the assets of these persons and substantially all of our assets are located outside of the United States. As a result, it may not be possible for investors to enforce against these persons or us a judgement obtained in a United States court predicated upon the civil liability provisions of the federal securities or other laws of the United States or any state thereof. A foreign judgement is not directly enforceable in South Africa, but constitutes a cause of action which will be enforced by South African courts provided that:


•	the court that pronounced the judgement had jurisdiction to entertain the case according to the principles recognized by South African law with reference to the jurisdiction of foreign courts;


•	the judgement is final and conclusive (that is, it cannot be altered by the court which pronounced it);


•	the judgement has not lapsed or been satisfied;

•

the recognition and enforcement of the judgement by South African courts would not be contrary to public policy, including observance of the rules of natural justice which require that the documents initiating the United States proceeding were properly served on the defendant and that the defendant was given the right to be heard and represented by counsel in a free and fair trial before an impartial tribunal;


•	the judgement was not obtained by fraudulent means;


•	the judgement does not involve the enforcement of a penal or revenue law of the foreign state; and


•	the enforcement of the judgement is not otherwise precluded by the provisions of the South African Protection of Businesses Act of 1978, as amended.

It is the policy of South African courts to award compensation for the loss or damage actually sustained by the person to whom the compensation is awarded. Although the award of punitive damages is generally unknown to the South African legal system that does not mean that such awards are necessarily contrary to public policy. Whether a judgement was contrary to public policy depends on the facts of each case. Exorbitant, unconscionable, or excessive awards will generally be contrary to public policy. South African courts cannot enter into the merits of a foreign judgement and cannot act as a court of appeal or review over the foreign court. South African courts will usually implement their own procedural laws and, where an action based on an international contract is brought before a South African court, the capacity of the parties to the contract will usually be determined in accordance with South African law.

It is doubtful whether an original action based on U.S. federal securities laws may be brought before South African courts. A plaintiff who is not a resident in South Africa may be required to provide security for costs in the event of proceedings being initiated in South Africa. Furthermore, the Rules of the High Court of South Africa require that documents executed outside South Africa must be notarially authenticated for the purpose of use in South Africa.

Because we are no longer an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, we must incur additional expenses and devote increased management time to compliance that are applicable to companies that are not emerging growth companies.

For as long as we qualified as an “ emerging growth company, ” we were permitted to take advantage of reduced regulatory requirements that are otherwise generally applicable to public companies. These included, without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act. However, because we ceased to be an emerging growth company as of March 31, 2019, we have incurred, and expect in the future to incur, additional expenses and to devote increased management time toward ensuring compliance with those requirements applicable to companies that are not emerging growth companies.

In particular, beginning with this Annual Report on Form 20-F, our independent registered public accounting firm is required to provide an annual attestation report regarding the effectiveness of our internal control over financial reporting. Testing and maintaining internal control over financial reporting can divert our management’s attention from other matters that are important to the operation of our business. If our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our ADSs could be negatively affected, and we could become subject to investigations by the SEC or other regulatory authorities or to investor litigation, which could have an adverse impact on the market price or our ADSs and cause us to incur additional expenses.

We are a foreign private issuer (“FPI”) and have disclosure obligations that are different from those of United States domestic listed companies, and are permitted in some cases to follow corporate governance standards applicable to South African companies, which may limit the protections afforded to investors.

We are an FPI for purposes of SEC rules and within the meaning of the NYSE corporate governance standards. As an FPI, we are not subject to the same requirements that are imposed upon United States domestic issuers by the SEC. Under the Exchange Act, we are subject to reporting obligations that are less frequent and in certain respects less detailed than those of United States domestic reporting companies. For example, we are not required to issue quarterly reports, proxy statements that comply with the requirements applicable to United States domestic reporting companies or individual executive compensation information that is as detailed as that required of United States domestic reporting companies. We have four months after the end of each fiscal year to file our annual reports with the SEC and will not be required to file current reports on the same basis as United States domestic reporting companies. Furthermore, our officers, directors and principal shareholders are exempt from the requirements to report short-swing profit recovery contained in Section 16 of the Exchange Act.

In addition, under the NYSE corporate governance standards, an FPI may elect to comply with the corporate governance principles and practices of its home country and not to comply with most corporate governance requirements applicable to United States companies with securities listed on the NYSE. We currently follow South African principles and practices concerning corporate governance and intend to continue to do so. Accordingly, you do not have the same protections afforded to shareholders of domestic companies that are subject to all NYSE corporate governance requirements. For example, NYSE-listed companies that are not foreign private issuers are required to have a board of directors a majority of which satisfy NYSE listing standards for independence and to have fully independent audit, compensation and nominating committees of the board of directors. Although our Audit and Risk Committee members are required to meet independence standards established by SEC rules, our independent directors are subject to applicable South African standards for independence, which are different. Our Nominations and Remuneration Committee members are also subject to applicable South African standards of independence.

We may lose our FPI status which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses.

We are an FPI and therefore we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to United States domestic issuers. In order to maintain our current status as an FPI, either (a) a majority of our ordinary shares must be either directly or indirectly owned of record by non-residents of the United States or any of the following, (b) (i) a majority of our executive officers or directors may not be United States citizens or residents, (ii) more than 50% of our assets cannot be located in the United States and (iii) our business must be administered principally outside the United States. If we lost this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to United States domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and NYSE rules. The regulatory and compliance costs to us under United States securities laws if we are required to comply with the reporting requirements applicable to a United States domestic issuer may be significantly higher than the cost we would incur as an FPI. As a result, we expect that a loss of FPI status would increase our legal and financial compliance costs and would make some activities highly time consuming and costly. We also expect that if we were required to comply with the rules and regulations applicable to United States domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our Board of Directors.

Holders of the ADSs may not receive dividend payments, which could cause you to lose some or all of the value of any dividend distribution.

Under the terms of our deposit agreement with the depositary for the ADSs, the depositary will convert any cash dividend or other cash distribution we pay on the ordinary shares underlying the ADSs into U.S. Dollars, if it can do so on a reasonable basis and can transfer the U.S. Dollars to the United States. If this conversion is not possible or if any government approval becomes necessary and cannot be obtained, the deposit agreement allows the depositary to distribute the foreign currency only to those ADS holders to whom it is permissible to do so. If the exchange rate fluctuates significantly during a time when the depositary cannot convert the foreign currency or distribute a payment to you, you may lose some or all of the value of any dividend distribution. We currently intend to pay regular dividends and will consider the issuance of such dividends on a quarter-by-quarter basis.

ADS holders may be subject to additional risks related to holding ADSs rather than ordinary shares.

ADS holders do not hold ordinary shares directly and thus are subject to, among others, the following additional risks:


•	as an ADS holder, we will not treat you as one of our shareholders and you will not be able to exercise shareholder rights, except through the depositary as permitted by the deposit agreement;

•

distributions on the ordinary shares represented by your ADSs will be paid to the depositary, and before the depositary makes a distribution to you on behalf of your ADSs, any withholding taxes that must be paid will be deducted. Additionally, if the exchange rate fluctuates during a time when the depositary cannot convert the foreign currency, you may lose some or all of the value of the distribution; and


•	we and the depositary may amend or terminate the deposit agreement without the ADS holders’ consent in a manner that could prejudice ADS holders.

You must act through the depositary to exercise your voting rights, as a result of which you may be unable to exercise your voting rights on a timely basis.

As a holder of ADSs, and not the ordinary shares underlying your ADSs, we will not treat you as one of our shareholders and you will not be able to exercise shareholder rights. The depositary will be the holder of the ordinary shares underlying your ADSs, and ADS holders will be able to exercise voting rights with respect to the ordinary shares represented by the ADSs only in accordance with the deposit agreement relating to the ADSs. There are practical limitations on the ability of ADS holders to exercise their voting rights due to the additional procedural steps involved in communicating with these holders. For example, holders of our ordinary shares will receive notice of shareholders’ meetings by mail and the securities exchange news service of the JSE, and will be able to exercise their voting rights by either attending the meeting in person or voting by proxy. ADS holders, by comparison, will not receive notice directly from us. Instead, in accordance with the deposit agreement, we will provide notice to the depositary as soon as practicable of any applicable meeting date. If we ask it to do so, the depositary will mail to holders of ADSs the notice of the meeting and a statement as to the manner in which

voting instructions may be given by holders as soon as practicable after receiving notice from us of any such meeting. Subject to satisfaction of the foregoing standard, there is no specified number of days within which the depositary must mail ADS holders the notice of meeting and voting instructions. To exercise their voting rights, ADS holders must then instruct the depositary as to voting the ordinary shares represented by their ADSs. Due to these procedural steps involving the depositary, the process for exercising voting rights may take longer for ADS holders than for holders of ordinary shares. The ordinary shares represented by ADSs for which the depositary fails to receive timely voting instructions may not be voted at all.

Judgements of South African courts with respect to the ADSs will be payable only in South African Rand, which could expose any prevailing party to exchange rate risk until the judgement is collected.

If proceedings are brought in a South African court seeking to enforce the rights of holders of the ADSs, any judgement made in favor of such holders, even if the judgement is on an obligation deemed to be denominated in U.S. Dollars, could only be made or awarded in South African Rand based on the exchange rate in effect at the time the judgement is entered. The prevailing party in such proceeding would therefore bear exchange rate risk until the judgement could be collected and converted into another currency.

By purchasing ADSs, holders will irrevocably submit to the jurisdiction of state or federal courts in New York, New York in connection with any legal suit, action or proceeding relating to the deposit agreement or the ADSs.

By purchasing ADSs or an interest therein, holders of ADSs irrevocably agree that any legal suit, action or proceeding against or involving us or the depositary, arising out of or based upon the deposit agreement or the ADSs, may only be instituted in a state or federal court in New York, New York, and by purchasing ADSs or an interest therein holders irrevocably waive any objection to the laying of venue of any such proceeding. We have agreed to indemnify the depositary and its agents under certain circumstances. Neither the depositary nor any of its agents will be liable to holders or beneficial owners of ADSs or interests in ADSs for any indirect, special, punitive or consequential damages (including, without limitation, lost profits) of any form incurred by any person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought.

There is a risk that we will be classified as a passive foreign investment company (“PFIC”), which could result in adverse U.S. federal income tax consequences to U.S. holders of ordinary shares or the ADSs.

We may be classified as a PFIC for U.S. federal income tax purposes, which could result in adverse U.S. federal income tax consequence to U.S. holders.

Based on the current price of our ADSs and the composition of our income and assets, we do not believe that we are a PFIC for U.S. federal income tax purposes for our current taxable year ended March 31, 2019. However, a separate determination must be made after the close of each taxable year as to whether we are a PFIC. We cannot assure you that we will not be a PFIC for any future taxable year. If we were treated as a PFIC for any taxable year during which a U.S. holder held an equity share or an ADS, certain adverse U.S. federal income tax consequences could apply to the U.S. holder. See “Item 10E. Taxation – PFIC Rules”.

ITEM 4. INFORMATION ON THE COMPANY

4A. HISTORY AND DEVELOPMENT OF THE COMPANY

MiX Telematics Limited is a public company incorporated in the Republic of South Africa. Our registered offices are located at Matrix Corner, Howick Close, Waterfall Park, Bekker Road, Midrand, South Africa, 1686. Our telephone number is +27-11-654-8000, and our web address is www.mixtelematics.com. We currently have our primary listing on the JSE and have a secondary listing of our ADSs on the NYSE.

We were founded in 1996 in Johannesburg, South Africa as Matrix Vehicle Tracking Proprietary Limited, and since that time, we have grown both organically and through acquisitions. Matrix Vehicle Tracking Proprietary Limited was renamed TeliMatrix Proprietary Limited in 2001, TeliMatrix Limited in 2007 and finally MiX Telematics Limited in 2008, subsequent to our listing on the JSE.

In 2007, we acquired Control Instruments OmniBridge Proprietary Limited and certain affiliated entities (collectively, “OmniBridge”), which provided fleet management services in both the South African and international markets. In November 2007, we listed our shares on the JSE, in order to facilitate the OmniBridge acquisition. In 2008, we acquired Tripmaster Corporation, located in the United States, Safe Drive (including Safe Drive International Proprietary Limited), located in Australia and Safe Drive FZE, located in the United Arab Emirates. These acquisitions extended our geographic reach, broadened our customer relationships and expanded our driver safety and training solution offerings. In May 2012, we acquired Intellichain, located in South Africa, as part of our strategy to broaden our transportation management software functionality. On August 9, 2013, following a successful United States IPO, the Company’s ADSs were listed on the NYSE and are traded under the symbol MIXT. In December 2013, we acquired a proprietary software development business from Roitech Proprietary Limited, located in South Africa. The acquisition enhanced and broadened our fleet management smart phone application offerings. On November 1, 2014, we acquired the operating business of Compass Fleet Management (“Compass”), a South Africa based provider of specialized fleet management solutions in Southern Africa, that are delivered using the Group’s hardware and software platforms. These specialized fleet management solutions complement the Group’s existing fleet management solutions, and the acquisition broadens the array of services offered to current and future fleet management customers.

We currently have offices in the following locations:



Country	Office location
South Africa	Midrand, Stellenbosch, Durban, Cape Town and Nelspruit
United States	Boca Raton, Florida and Houston, Texas
United Kingdom	Birmingham and Swindon
Australia	Perth and Brisbane
United Arab Emirates	Dubai
Brazil	S ã o Paulo
Thailand	Bangkok
Uganda	Kampala
Romania	Bucharest
Mexico	Mexico City*

* This office location is a shared space.

Our agent for service of process in the United States is MiX Telematics North America, Inc., 750 Park of Commerce Blvd., Suite 100, Boca Raton, Florida 33487.

For further information on our principal investments and capital expenditures, see the description of our business in “Item 4B. Business Overview” and “Item 5B. Liquidity and Capital Resources.”

4B. BUSINESS OVERVIEW

Overview

We are a leading global provider of fleet and mobile asset management solutions delivered as SaaS. Our solutions deliver a measurable return by enabling our customers to manage, optimize and protect their investments in commercial fleets, mobile assets or personal vehicles. We generate actionable intelligence that enables a wide range of customers, from large enterprise fleets to small fleet operators and consumers, to reduce fuel and other operating costs, improve efficiency, enhance regulatory compliance, promote driver safety, manage risk and mitigate theft. Our solutions mostly rely on our proprietary, highly scalable technology platforms, which allows us to collect, analyze and deliver information based on data from our customers’ vehicles. Using intuitive, web-based interfaces, reports or mobile applications, our fleet customers can access large volumes of real-time and historical data, monitor the location and status of their drivers and vehicles and analyze a wide number of key metrics across their fleet operations.

We have a large global presence, with vehicle subscriptions in over 120 countries across six continents. We currently serve a highly diverse customer base, including over 6,300 fleet operators, which represented over 73 % of our subscription revenue for fiscal year 2019. We target sales of our enterprise fleet management solutions to customers who desire a premium solution, generally for large fleets, which we define as fleets of 50 or more vehicles. Large fleets accounted for over 88 % of our fleet subscriptions at March 31, 2019. We believe we have a satisfied customer base and, among our more than 900 large fleet operator customers, we experienced an annual customer retention rate in excess of 92 % in fiscal year 2019. In addition, for large fleets with 500 or more vehicles, we experienced an annual customer retention rate of 100%. We have multinational enterprise fleet customer deployments with companies such as Baker Hughes, BP, Chevron, DHL, G4S, Halliburton, LafargeHolcim, Nestlé, PepsiCo, Praxair, Scania, Schlumberger, Shell, The Linde Group, Total and Weatherford. We also offer a range of subscription-based fleet and vehicle management solutions to meet the needs and price points of small fleet operators and consumers. Our safety and security features, including driver performance and vehicle monitoring, are important attributes of our solutions for these customers.

We have consistently grown our customer base. As evidence of this growth, subscribers, one of our key operating metrics and a factor influencing our rate of subscription revenue growth, increased at a compound annual growth rate of 13.1% from April 1, 2013, to March 31, 2019, and as of March 31, 2019, we tracked and managed over 750,000 subscribers. As a further indicator of our scale, in fiscal year 2019, we collected data on an average of approximately 172 million trips per month representing as many as 9.3 billion vehicle locations per month. The monthly price charged per subscriber varies among our customers depending on the services and features they require, hardware options, customer size, route to market and geographic location of the customer. Consequently, our rate of subscription revenue growth is influenced by not only the rate of growth in the number of subscribers but also by the evolving mix of our subscriber base.

Industry Overview

Challenges Facing Fleet Operators Worldwide

Fleet managers operate in an increasingly competitive and highly regulated global environment. Timely and accurate decision-making enabled by solutions that provide real-time visibility into vehicle location and driver performance is critical to managing a safe, efficient fleet. In some developing areas of the world, ensuring driver and vehicle safety and security is also particularly challenging given high crime rates, which have resulted in automotive insurance mandates and regulatory requirements for vehicle tracking. Consequently, fleet managers and consumers demand solutions that promote driver and passenger safety, mitigate risk, drive operational efficiencies, improve security and reduce automotive insurance costs. The business environment for fleet managers is further complicated by the large number of transportation-related regulatory and compliance requirements worldwide, and the frequency with which rules and regulations change.

Legacy fleet management solutions inadequately address industry needs as many businesses use discrete manual processes, such as spreadsheet and paper-based systems and telephones, to monitor vehicle and driver activity. These approaches are labor intensive, prone to error, do not provide continuous monitoring of fleets, make it difficult to optimize fleet utilization, manage operating costs and generate minimal business intelligence. Additionally, legacy fleet management technology frequently provides limited functionality beyond basic location-based tracking and makes it difficult for fleet operators to fully benefit from the cost savings and efficiency improvements associated with more robust fleet management offerings.

Fleet operators face many significant challenges, which can include:

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Significant operating costs . Fuel costs represent a significant cost for fleet operators. For example, the American Transportation Research Institute estimates that fuel and oil, driver wages and benefits, repair and maintenance and truck insurance premium costs collectively represented over 79% of total trucking operational costs per mile in 2017. Certain driving behaviors, such as speeding, harsh acceleration, harsh braking and excessive idling contribute to poor fuel efficiency as well as increased wear and tear and maintenance costs.

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Poor visibility into fleet operations . Fleet operators frequently maintain vehicles across multiple geographic regions and often lack visibility into their fleets and oversight of their drivers. Poor fleet visibility makes it challenging to optimize fleet utilization, vehicle fleet size and miles driven while still meeting core business and customer servicing requirements. Poor driver oversight makes it difficult for operators to validate hours worked or customers visited, incentivize greater efficiency and discourage unproductive, undesirable or dangerous worker behavior.

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Challenges in maintaining regulatory compliance . Internal compliance and reporting is driven by legislative and regulatory requirements, which are often subject to change, from regulatory authorities in nearly every jurisdiction globally. This can be particularly burdensome for fleet operators managing large vehicle fleets in multiple jurisdictions. For example, in the United States, fleet operators can face numerous complex regulatory requirements, including mandatory hours of service compliance and fuel tax reporting and more recently electronic logging devices (“ELD”) legislation that requires truck drivers to log their hours of service electronically.

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Challenges in managing risk . Fleet operators are responsible for hiring, training and identifying risks associated with their drivers. Vehicle crashes are a leading cause of workplace injury and lead to significant costs for fleet operators, including financial liability and increased insurance premiums. Fleet operators need visibility into driving behavior to proactively identify and remediate drivers with poor driving habits.

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Inefficient data management . Fleet operators receive operational information from many disparate sources, including communications from their technicians and customers, paper-based reports, third-party receipts for items such as fuel purchases, vehicle maintenance logs and customer invoices. While simply collecting this unstructured data is burdensome, organizing and analyzing the data to identify trends and other actionable business intelligence can be even more challenging.

Challenges Facing Fleet Operators and Consumers in Developing Markets

In certain developing regions of the world, driver safety and vehicle security are significant concerns given high crime rates and the impact these higher crime rates have on consumers, insurance costs and regulatory requirements. More specifically, fleet operators and consumers often need to address challenges including:


•	Managing the impact of crime . Vehicle crime rates in developing regions of the world often far exceed those in the United States and Western Europe, resulting in potentially significant costs for fleet operators and consumers. For example, we estimate that the rate of vehicle theft in South Africa is approximately double than that in the United States.

•

Reducing insurance costs . In developed and developing regions, insurers often provide incentives for fleet operators and consumers who subscribe to a safety and security mobile asset management solution. Some insurance providers will not insure vehicles that lack a tracking solution, or will make the insurance premium cost prohibitive without one. Furthermore, insurance provider interest in safety and security solutions has increased following the introduction of driver performance monitoring solutions, which can enable innovative usage-based insurance and claims management initiatives.


•	Complying with regulatory mandates . The growing introduction of stringent occupational health and safety legislation in developing markets is adding pressure to fleet operators, who need to fulfill their duty of care while also complying with laws regulating driving hours, rest time, fuel taxes, etc.

Industry Trends

There have been substantial advances in the capabilities, reliability and affordability of technologies that can be used to cost-effectively collect and disseminate large amounts of vehicle data and video footage. GPS positioning and advanced on-board systems generate valuable, objective real-time information, which provides the basis for driver and vehicle management solutions. Similarly, significant advances in the performance, reliability and affordability of fixed and wireless networks, computing power and data storage capabilities have supported the rise of cloud computing that enables the delivery

of SaaS. These technological advances and market shifts have helped to foster demand for subscription-based fleet and mobile asset management solutions like ours.

While fleet and mobile asset management solutions can offer a wide range of features and benefits, the reasons for adopting these solutions often vary by customer type and geography. In developed regions, including North America and Western Europe, many fleet operators adopt fleet management software solutions in order to obtain greater visibility over their vehicles and mobile workforces, to achieve cost savings through efficiency improvements, including reduced fuel consumption, and to reduce regulatory compliance burdens. In many developing regions, including Eastern Europe, Latin America, Africa, the Middle East and parts of Asia, the security of personnel and asset protection features afforded by vehicle tracking and monitoring, resulting in greater asset visibility and a lower impact of theft, are also important reasons for the adoption of fleet and mobile asset management solutions. In Australia and parts of Africa, Asia, Europe and the Middle East, compliance with health and safety standards and policies are a key reason for adoption of these systems. Recognizing the variety of motivations influencing our existing and potential customers is an important aspect of developing and marketing our solutions.

Global and multinational companies are increasingly looking to consolidate their fleet management systems by moving to providers that have global reach. This is primarily driven by the desire to have a secure centralized view across their fleets and impose set global standards specifically relating to driver management and safety. We believe that these companies also recognize the advantages of gathering vast quantities of data to draw new insights into their global fleet operations.

Market Opportunity

We believe that the addressable market for our fleet management solutions is large, growing and under-penetrated. According to a report by ABI Research (“ABI”), there were more than 206 million commercial vehicles registered globally by the end of December 2018. Global fleet management penetration was estimated to be approximately 19%. ABI forecasts that by 2023, the number of registered commercial vehicles will be approximately 260 million.

In addition to the growing market opportunity in commercial fleet vehicles, we believe there is a large and under-penetrated market to provide a tailored set of safety and security solutions to non-commercial passenger vehicles. Worldwide, the pool of motor vehicles is large and growing, particularly in developing markets. We estimate that there are approximately 7.5 million non-commercial passenger vehicles in operation in South Africa, as at March 2019, utilizing vehicle population information available from the National Traffic Information Systems. We believe the potential rate of consumer adoption of mobile asset management solutions is highest in developing regions where vehicle tracking and monitoring features can help to improve driver and passenger safety, reduce the impact of theft by improving stolen vehicle recovery rates and reduce consumer automotive insurance rates.

We believe there is a further opportunity to extend our asset tracking solutions beyond fleets to corporate assets and that there are opportunities outside of South Africa, specifically in developing countries and in areas or locations where there is a high density of vehicles fitted with our fleet management solutions and a need to track corporate assets. To take advantage of this opportunity, in 2017, we launched MiX Tabs, a highly effective asset tracking solution to keep track of valuable assets including generators, light towers, storage tanks and pumps.

Our Solutions

Our subscription-based solutions enable our customers to manage, optimize and protect their investments in their commercial fleets and personal vehicles efficiently. Our highly scalable multi-tenant architecture leverages GPS and other data transmitted from in-vehicle devices, primarily over cellular networks. In fiscal year 2019, we collected data on an average of approximately 172 million trips per month representing as many as 9.3 billion vehicle locations per month.

The key attributes of our solutions include:


•	Highly scalable solutions . Our software solutions are built to scale and support geographically distributed fleets of any size. As of March 31, 2019 we provided services to more than 750,000 subscribers, with customers ranging from small fleet operators and consumers to large enterprise fleets with more than 10,000 subscribers.


•	Robust portfolio of features addressing a full range of customer needs . We believe that we offer one of the broadest ranges of features for fleet and mobile asset management available. For example, for fleet efficiency, we offer vehicle tracking and analysis, fuel consumption and mileage analysis; for regulatory compliance, we offer

compliance monitoring, hours of service tracking and fuel tax reporting; for driver improvement, we offer in-vehicle video monitoring and in-cab real-time driver feedback; for risk management, we offer driver scoring and analysis and journey management; and for safety and security, we offer vehicle and asset tracking, crash notifications and vehicle theft recovery.

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Insightful business intelligence and reporting . Our fleet management software is designed to provide our customers with insightful, actionable business intelligence on demand. For example, our premium fleet solution, MiX Fleet Manager, includes data reporting and analysis tools with 110 standard reports and the ability for customers to request custom fleet, vehicle and driver reports. We also offer a premium web-based business intelligence engine with enhanced analytics, reporting and data visualization tools for those customers seeking to perform highly granular analyses of large quantities of historical and real-time data and make the data available to customers in the format of their choice.

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Easily accessible, intuitive applications . Our web-based solutions are accessible from fixed and mobile computing devices, and provide vehicle and fleet information, dashboard views and alerts and the ability to generate analytical reports from an office or a remote location. Our customers can choose to access our solution via an intuitive web-based interface or through our custom mobile applications developed for the Android and iOS mobile platforms. Fleet operators can also use our software development kits and application program interfaces to integrate our solution directly with their software systems, such as transportation management software, route planning systems, payroll systems and enterprise resource management software.

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Software-as-a-service powered by a proven, reliable infrastructure . Our use of a multi-tenant SaaS architecture allows us to deliver fleet management applications that are highly functional, flexible and fast while reducing the cost and complexity associated with customer adoption. We support our SaaS delivered solutions with a proven infrastructure of redundant servers and other hardware located in secure third-party data centers. We have continued to maintain overall system uptime of over 99.8%, calculated over a rolling period of 5 years.

Our Offerings

We offer a range of solutions to address the needs of diverse customer segments. Our primary subscription-based offerings are:

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MiX Fleet Manager . MiX Fleet Manager is our premier commercial fleet management solution. It is built on a modern, scalable software platform for managing vehicle fleets of all sizes. Fleet management systems provide a wide variety of complex data pertaining to driver behavior and the location, status and operational activity of vehicles and fleets. MiX Fleet Manager is an interactive, web-based system providing secure access to this complex data in a simple, intuitive manner. MiX Fleet Manager gives users live and historical views of driver and vehicle performance information, including vehicle tracking and status information as well as alerts and notifications. Together with our integrated MiX Insight Reports, the solution provides fleet managers with actionable business intelligence in the form of reports and fleet analytics. Customers can also subscribe to premium subscription-based applications supported on MiX Fleet Manager, such as:


◦	MiX Insight Agility, an extension to the MiX Insight Reports suite that allows for dynamic data interaction in Microsoft Excel. Unlike static reports, users have the power to create and shape customized reports in the format they prefer.


◦	MyMiX, an innovative driver engagement platform that provides professional drivers with easy 24-hour access, via the web or a mobile device, to key information about their performance. Driver scoring, a module available on MyMiX, boasts a sleek, engaging and user-friendly interface accessible from iOS or Android mobile devices.

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MiX Vision, an on-road and in-vehicle video recording solution , that allows fleet managers to record video footage related to driving behavior and events. We believe MiX Vision addresses an important market need for in-vehicle surveillance, and MiX Vision is fully integrated with our premium fleet management solutions to enable event-driven or time based video recording and supports two additional external cameras.

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MiX Rovi , an in-vehicle display and communications system allowing fleet operators to streamline their fleet operations through improved communication between drivers and their back offices. Customized data inputs are configured in MiX Fleet Manager and can be updated locally or remotely via the Internet. For example, a fleet operator of delivery vehicles can set custom data inputs for information relating to deliveries, such as quantities delivered and collected, times of arrival and departure or time spent at unscheduled stops. MiX Rovi is electronic logging devices legislation (“ELD”) compliant.


◦	MiX RIBAS , an in-cab driving aid that helps drivers improve their driving style. Using an unobtrusive system of symbols with red, amber and green status lights accompanied by audible warning tones, drivers receive feedback on their driving style in real-time, enabling customers to manage improvements in driver and vehicle performance and reductions in fuel consumption and accident rates.

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MiX Hours of Service (“Hours of Service”), allows for the real-time monitoring and compliance of legislated or regulated hours of work for the United States, Canada and Europe. Mandated ELD legislation in the United States requires truck drivers to log their hours of service electronically. European customers can also use our optional "MiX 3D" service to download and archive digital tachograph data as required by European law. This add-on also accommodates regions with non-regulated driving hours legislation, such as the Middle East and Africa, allowing fleet operators to easily set their own driving hours rules and measure activity to reduce fatigue related incidents. In fiscal year 2019, we further extended this module by introducing MiX Time Entry, enabling the integration of working hour data into payroll systems.

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MiX Journey Management, offers an easy-to-use electronic alternative to paper-based systems that ensures all risks relating to journeys are readily visible to decision makers when it matters most. MiX Journey Management suits fleet operators across diverse industries, and is ideal for those with large fleets of vehicles that travel long distances and carry passengers or cargo. During fiscal year 2019, we extended this module to cater for the execution management needs of transport and logistics companies seeking to improve operational efficiency.


◦	MiX Go, is a mobile phone based task management solution for effective communication and engagement with mobile fieldworkers, combining all the benefits of navigation, tracking and template-driven e-forms. Managers can create tasks for their employees via the MiX Fleet Manager platform, and track the progress of these tasks from start to finish.


•	MiX Asset Manager. Our portfolio of asset tracking products includes third party hardware products and products developed ourselves. By keeping track of valuable assets including generators, light towers, storage tanks and pumps, our asset management solution allows for increased visibility of corporate assets, resulting in improved asset utilization and reduced loss.

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Matrix . Our Matrix suite of mobile asset management solutions is designed for entry-level fleets and consumers. The Matrix range of solutions can provide real-time and historical vehicle tracking and positioning, unauthorized vehicle use alerts, panic emergency response, crash alerts, driver behavior alerts, fuel tax logbooks and vehicle maintenance notifications. Users can access their Matrix subscription functionality via a web-based interface or our mobile applications.

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Beam-e . Beam-e leverages our large network of subscribers as a crowdsourcing platform to locate vehicles without the expense of utilizing a traditional cellular network connection. Each Beam-e device communicates with other nearby devices in order to form a crowdsourced network that interfaces with our systems. Rental car companies, consumers and owners of high-value mobile assets can use Beam-e to provide entry-level tracking and recovery services at an upfront cost and monthly subscription price point that is well below the cost of traditional vehicle tracking solutions. We currently offer Beam-e in South Africa and are evaluating opportunities for expansion into other geographies which are similar to South Africa.

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MiX Now. Launched in December 2018, MiX Now is our self-service, plug and play offering for small fleet operators. This easy to use system helps companies monitor and manage the behavior and performance of their vehicles and drivers. Business owners can receive instant notifications or information on their mobile devices or log in from their computer from anywhere in the world, to get all the information they need to save money and improve their business operations. We currently offer MiX Now in the United States and are evaluating opportunities for expansion into other geographies.

Customers deploy our solutions to collect real-time data from their vehicles and transmit this information to our secure third-party data centers for processing. We generally design our own hardware and firmware in order to ensure their modularity, quality and interoperability with our core subscription offerings. We outsource the manufacturing of these devices and seek to drive device costs down over time in order to reduce the upfront investment required by our customers. In addition to sales of these devices to customers, we offer customers the option of bundling our devices as a full service option, further reducing the capital investment required to access our solutions.

We believe our modular, proprietary designs and control over the entire ecosystem gives us an advantage over competitors who rely on third-party commodity in-vehicle devices because we are able to provide more customized services and solutions through our proprietary devices. Currently we have three dominant in-vehicle platforms, namely one for

enterprise fleet management, one for consumer vehicle management and light fleet management and one for Beam-e or MiX Tabs for entry-level vehicle and asset tracking and recovery.

Principal features associated with our subscription-based offerings include the following:


•	Vehicle tracking . Our vehicle tracking functionality allows our customers to pinpoint the exact locations of vehicles using real-time data. Notifications about vehicle activity and status are accessed through a web-based interface or our mobile applications. Our customers also have the ability to access historical tracking data for analysis.


•	Location management . Our location management and geofencing features allow customers to easily designate geographic areas in which vehicles are allowed or not allowed to travel, or areas deemed dangerous or high risk. Customers receive notifications when a vehicle enters or exits unauthorized regions or locations.


•	Vehicle security . Our vehicle security solution provides our customers with security options tailored to individual requirements. We offer vehicle tracking and recovery features, providing safety and security for our customers and their vehicles and helping to reduce the costs associated with theft.


•	Reporting . We provide our customers with on-demand reports enabling access to a wide range of fleet data. Our reports contain detailed information about driver behavior, vehicle location, idle time, miles and hours driven, average speed, acceleration, crash analysis and vehicle diagnostics. We also offer premium data visualization and business intelligence tools.


•	Regulatory compliance . Customers can use our solutions to assist in regulatory compliance, for example hours of service and fuel tax reporting.


•	Vehicle and driver management . We provide functionality for customers to manage licenses, registrations, certifications, in-vehicle video monitoring and other vehicle and driver requirements.


•	Messaging . With MiX Rovi and MiX Go, fleet operators can communicate efficiently and effectively with their drivers. Custom menus direct driver workflow, jobs and navigation, ensuring drivers arrive at the correct destination and improving communication between fleet operators and their drivers.


•	Mobile access . We provide information to users via a variety of mobile platforms, including iOS and Android, and provide our customers with access to actionable business intelligence on their vehicles and mobile assets from the office or remotely.


•	Application integration . Our software development kits, MiX Integrate, allow our customers to integrate our applications with their existing enterprise software systems and allow for increased customization of our fleet reports, vehicle tracking alerts and location management features.


•	Real time monitoring. We offer active real time driver behavior monitoring and risk management services.

Our Key Competitive Strengths

The markets in which we operate are highly competitive and fragmented. We believe that the following attributes differentiate us from our competitors and are key factors to our success:

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Globalized sales, distribution and support capabilities . We currently maintain a direct and indirect sales and support presence, with localized application support in multiple languages, in countries across Africa, Australasia, Europe, the Middle East, North America and South America. We believe our global presence gives us an important advantage in competing for business from multinational enterprise fleet customers such as Baker Hughes, BP, Chevron, DHL, G4S, Halliburton, LafargeHolcim, Nestlé, PepsiCo, Praxair, Scania, Schlumberger, Shell, The Linde Group, Total and Weatherford, who often prefer to consolidate disparate fleet management systems.

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Solutions adaptable to multiple customer segments . We believe that by leveraging our common core technologies, personnel and systems, we can cost-effectively develop and sell a range of subscription-based fleet and mobile asset management solutions that are designed to meet the functionality and price needs of multiple customer segments, including fleet operators and consumers. Our fleet management solutions include targeted functionality to address the distinct needs of key industry segments, including oil and gas, transportation and logistics, government and municipal, bus and coach, and rental and leasing, as well as for the needs of consumers. We believe that offering a range of subscription-based solutions maximizes our ability to serve the addressable market and offers an appealing value proposition to our customers, while distinguishing ourselves from competitors that offer a single, one-size-fits-all solution.

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Focus on safety and security . Most of our solutions incorporate safety and security features that enable our customers to enhance their drivers’ and passengers’ personal safety, encourage safe driving behavior and protect vehicle investments. We also offer web-based driver training, proactive journey management and other related services to provide a turnkey safety and security solution to manage risk and fatigue-related incidents. Our differentiated safety and security features have particularly strong appeal to customers in regulated industries, such as oil and gas, customers in industries exposed to liability concerns, such as bus and coach, and customers operating in high crime regions. We perform training and land transport assessments for customers to assist them in establishing and maintaining safety levels. We believe our safety and security offerings also help our customers to reduce operating costs associated with the training of drivers.

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Track record of innovation . Our investment in software development is core to our business strategy. Our software teams employ an agile software development methodology. We have made a significant investment in product development, and we have routinely been among the first to market with innovative solutions and features that cater to the needs of our customers. For example, in fiscal year 2016, we released MiX Insight Agility, an Iridium alternative in addition to our traditional Inmarsat Satcomms solution, on-line Journey Management, extended our Hours of Service solution for non-regulated markets and MiX Go, a mobile phone based task management solution. In fiscal year 2017, we introduced MiX Tabs for non-powered asset management that leverages the underlying technology that powers Beam-e, we enhanced MiX Vision by adding support for two additional cameras, and we released a server-side events module. In fiscal year 2018, we extended our Hours of Service solution to support the requirements of the ELD legislation, revamped large parts of our back-end database system and completed the development of our new generation hardware platform. Our new generation hardware platforms, the MiX 4000 and MiX 6000, were launched in fiscal year 2019 along with MiX Now (self-service, plug and play offering for light fleet operators), MiX Time Entry (an extension to our MiX Hours of Service solution), MiX Execution Manager (an extension to MiX Journey Management, the MiX Tech Tool and MiX Integrate, our new generation integration platform. This was over and above the continued evolution of our existing products, such as MiX Fleet Manager, MiX Insight Reports, MiX Insight Agility, MiX Hours of Service and our mobile applications, which were all enhanced during the year.

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Longstanding, established market position . We have a 23-year history, a geographically diverse sales and marketing footprint, a large established network of distributors and dealers, and a large base of satisfied customers. Our robust and referenceable customer base, including numerous Forbes Global 2000 enterprises, is a critical selling point to both large enterprise fleets and small fleet operators.

Growth Strategy

We intend to expand our market leadership by:

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Acquiring new customers and increasing sales to existing customers . We believe the market for fleet and mobile asset management solutions is large and growing, creating a significant opportunity for us to expand our customer base. Additionally, we believe we have the opportunity to expand our fleet management market share among our existing customer base by demonstrating our value proposition, growing with the customer, introducing new and innovative value-added solutions and displacing legacy fleet management solutions.

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Expanding our geographic presence . We market and distribute our solutions directly and through a global network of approximately 120 channel partners outside of South Africa. We are expanding our penetration in attractive geographic regions, such as Brazil and the United States, and continue to expand our network of strategic and sales distribution partners in other regions of the world. In addition to our primary hosted data centers that serve multiple geographies, we also established two hosted data centers in specific countries where local conditions require that the data be retained in-country.

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Broadening our customer segment focus . We currently have customers across numerous industry segments, with the resources of our direct sales organization focused on premium customers in certain key segments, including oil and gas, transportation and logistics, government and municipal, bus and coach, and rental and leasing. We are currently increasing our product development initiatives and sales and distribution efforts in other industry segments, such as service fleets, and in other customer segments, such as small business fleets and as well as mobile asset management. We regularly evaluate opportunities to expand our target customer focus.

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Continuing to introduce new, innovative solutions to address market demand . In fiscal year 2016, we added Journey Management, MiX Insight Agility, MiX Go, an Iridium alternative in addition to our traditional Inmarsat Satcomms solution and extended our Hours of Service solution for non-regulated markets. In fiscal 2017, we introduced an innovative asset positioning system called MiX Tabs and extended our MiX Vision solution to support two additional

external cameras. In fiscal year 2018, we extended our Hours of Service solution to support the requirements of the ELD legislation, revamped large parts of our back-end database system and completed the development of our new generation hardware platform. In fiscal year 2019, we launched our new hardware platforms; the MiX 4000 and MiX 6000, along with MiX Now, MiX Time Entry, MiX Execution Manager and MiX Integrate. We are continually innovating and extending our solutions portfolio based on our assessment of market demand and trends.


•	Pursuing strategic acquisitions . Our industry is highly fragmented. Including the OmniBridge acquisition, we have consummated six acquisitions worldwide since our listing on the JSE in November 2007. We intend to selectively evaluate acquisition opportunities in certain geographic regions and industry segments.

Sales and Marketing

We offer our solutions in over 120 countries through a combination of our direct and indirect marketing efforts. Our sales and marketing strategy is segmented by geographic region and customer type in order to cost effectively target and acquire new customers. In certain regions, we sell subscriptions of our fleet management solutions to large enterprise fleets through our direct sales force. In other regions, and for sales to small fleet operators and consumers, we work with an extensive distribution network of regional partners and national distribution dealers. Through our central services organization headquartered in South Africa, we provide common marketing, product management, technical and distribution support to each of our regional sales and marketing operations.

The following is a brief description of the main categories of our sales and marketing efforts.

•

Direct Sales . We focus our direct selling efforts on targeting, acquiring, servicing and upselling our premium solutions to large enterprise fleet operators and small fleet operators. We maintain sales offices in Australia, Brazil, South Africa, Thailand, Uganda, the United Arab Emirates, the United Kingdom and the United States. These offices sell directly to large enterprise fleet operators and small fleet operators in their respective regions and are also responsible for channel management of fleet solution distribution partners throughout their regions. Our sales and marketing approach with fleet customers is generally based on a combination of return on investment and the improvements in safety and security delivered by our solutions. Our South African sales offices also sell directly to consumers.

•

Indirect Sales – Enterprise Fleet . We have more than 130 fleet dealers supporting customers with subscribers in over 120 countries worldwide. These dealers are responsible for sales, marketing, technical support, installation and training of customers in their regions. We operate a partner accreditation program in order to assure a consistent customer experience across our dealers worldwide. We also offer marketing and support services to our dealers in order to enhance their selling success. We believe our large network of dealers provides us with a geographically diverse, highly effective channel for reaching local customers in countries where we do not currently have a direct presence.

•

Indirect Sales – Small Fleet Operators and Consumers . We currently manage an extensive network of distribution partners for our small fleet operator and consumer customers. Our distribution partners include automobile dealers, aftermarket automotive parts and service suppliers, automobile insurers and retailers. We believe our indirect distribution strategy for the small fleet operator and consumer markets provides us with a differentiated, cost-effective customer acquisition and sales model.

Our global network of independent dealers and distributors is an important component of our sales strategy. Our dealers and distributors account for a substantial percentage of our total sales, and sales generated by certain dealers and distributors individually represent a meaningful percentage of our revenue. The terms of our agreements with our dealers do not usually include minimum purchase obligations, are specific to a geographic territory and are primarily non-exclusive. They generally have a fixed initial term, after which they may be renewed or continue indefinitely if not terminated. This is subject to the right of either party to terminate on specified notice generally ranging from 90 days to one year, or for breach. Similarly, our distributor agreements do not include minimum purchase obligations and consist principally of a commission agreement applicable to sales generated by the distributor.

Our revenue by geographic segment is set out in note 5 of the consolidated financial statements included in this annual report.

Customers

We currently serve a highly diverse customer base, including approximately 6,300 fleet operators which represented 73 % of our subscription revenue for fiscal year 2019, as well as individual consumers. We target sales of our enterprise fleet

management solutions to customers who desire a premium solution, generally for large fleets, which we define as being fleets of 50 or more vehicles. Large fleets comprised 88 % of our fleet customer subscriptions as of March 31, 2019. We also offer a range of subscription-based fleet and mobile asset management solutions optimized for the needs and price points demanded by small fleet operators and consumers.

Our current customer base spans numerous industry categories and customer segments, including oil and gas, transportation and logistics, government and municipal, bus and coach, and rental and leasing. No individual customer represented more than 7.0% of our subscription revenues for fiscal year 2019. For fiscal years 2019, 2018 and 2017, our top 10 customers represented 24.9 %, 24.5% , and 24.4% , respectively, of our total subscription revenue.

The following is a representative list of some of our largest customers:


•	Baker Hughes


•	Barloworld


•	Basic Energy


•	Bidvest Group


•	C&J Energy Services


•	Chevron


•	DHL


•	Eskom


•	Europcar


•	G4S


•	Go Ahead Group


•	Halliburton


•	LafargeHolcim


•	PepsiCo


•	Schlumberger


•	Total


•	Unitrans

We believe that we have a satisfied customer base as evidenced by our customer retention rate and the favorable results of our customer surveys. In fiscal year 2019, among our more than 900 large fleet operator customers, we experienced an annual customer retention rate in excess of 92 %. Across our entire subscriber base, including our range of smaller fleet and consumer subscribers, we experienced a subscriber retention rate in excess of 79% during fiscal year 2019. We maintain a strong focus on monitoring and continuously enhancing our customer satisfaction levels.

Service and Support

Installation of our solutions in our customers’ vehicles is generally provided by us or our third-party network, which includes dealers and distributors and installation partners. Customer care and technical support services are provided by our offices in Australia, Brazil, South Africa, the United Arab Emirates, the United Kingdom, Thailand, Romania, Mexico and the United States. In many cases, our dealers and distributors also provide customers with tier-one customer support services. Our regional offices and dealers and distributors are, in turn, supported by our central technical support team in South Africa that handles any escalated issues. Existing customers can also access customer and technical support directly through our web or mobile applications. Our technical support department is composed of a team of highly skilled staff who are familiar with all of our products, including our entire range of software and service solutions as well as our hardware. The MiX Learning Centre is used by staff and customers around the world to undertake online training to learn about new products and enhancements

We offer warranties of varying duration on our products. Product warranties are predominantly for a one-year period but periods of up to three years are provided in certain geographic locations. Our Beam-e product carries a lifetime warranty (to the extent that the unit remains in the vehicle into which it was installed for the original subscriber). Warranty expenses are not a significant portion of our total costs.

Research and Development

Our development group consists of 140 full-time staff responsible for software, hardware and firmware development and quality assurance. Our primary development group is based in Stellenbosch, South Africa, and we have additional development resources in Johannesburg, South Africa, as well as the United States. Our software development teams employ

an agile development methodology, while our engineering teams use traditional waterfall project management methods. During fiscal years 2019, 2018 and 2017, we invested R132.3 million, R130.2 million and R142.1 million, respectively, in research and development.

Our investment in development is core to our business strategy. Our research and development efforts principally involve software development, firmware development, hardware design and related test equipment. In addition, we have enhanced certain of our hardware components to extend their functionality and reduce component and manufacturing costs.

We have been successful in expanding our product offerings over time through internal development and select acquisitions. Highlights from the fiscal year 2019 internal development include:


•	A “Time Entry” extension to our Hours of Service solution to support the payroll integration requirements of large customers


•	The continued revamp of a large part of our back-end database system to reduce costs while supporting scalability and growth.


•	The release of our new hardware platforms, the MiX 4000 and MiX 6000


•	The launch of our self-service, plug and play light fleet offering: MiX Now


•	52 software updates were rolled out in the year, including 13 core web platform updates and 17 mobile application updates, with enhancements and extensions to all major product lines including MiX Fleet Manager, MiX Hours of Service, MiX Insight Reports, MiX Journey Management and our server side database and communications systems.

Our Research and Development business is ISO 9001 certified with a formalized quality policy and consistent monitoring of internal processes, supplier and solution performance. We outsource all hardware manufacturing to third parties.

Technology

Our solutions are offered using a multi-tenant SaaS architecture that scales rapidly to support additional new subscribers through the addition of incremental data processing and storage capacity. This architecture flexibility allows us to sustain high levels of uptime without degradation of system performance, despite significant subscriber growth. Our existing architecture and infrastructure has been designed with sufficient capacity to meet our current and anticipated future needs. Our subscription-based fleet and consumer service offerings are designed to be accessible via a standard web browser or mobile device application.

Our solutions typically include a proprietary in-vehicle device that incorporates off-the-shelf components, generally including a cellular modem, GPS receiver and memory capacity sufficient to run our firmware, which gathers vehicle location, time, speed, ignition status, miles driven and various vehicle and driver statistics. This information is collected at a predefined frequency and then sent to our receivers at secure third-party data centers, generally via a commercial cellular network. The information is then processed and delivered to our customers through our web-based and mobile device applications. Our solutions enable our fleet customers to access large volumes of historical and real-time data, monitor the location and status of their fleet vehicles and drivers, view a wide selection of reports and key performance indicator dashboards and generate valuable, actionable business intelligence.

We store data, host our solutions and serve all of our customers from third-party data centers located in Algiers in Algeria, Sydney in Australia, Muscat in Oman, Dublin in Ireland and Virginia in the United States. In addition to data hosted at third party data centers, we have transitioned the vast majority of our data to cloud-based hosting service platforms such as AWS. Our data management facilities provide us with both physical security, including manned security, biometric access controls and systems security, including firewalls, encryption, redundant power and environmental controls. We believe that our third-party hosting facilities are adequate for our current needs and that suitable additional capacity will be available as needed to accommodate planned expansion of our operations.

Intellectual Property

We rely primarily on trade secret laws, confidentiality agreements, confidentiality procedures and contractual restrictions to establish and protect our intellectual property rights. We also rely to a limited extent on patent, trademark and copyright law. A patent covering certain aspects of our Beam-e product was issued in South Africa during fiscal year 2014

and a patent covering a method for driver verification was issued during fiscal year 2015. A further application for an asset tracking system and method is pending in Brazil.

We typically enter into non-disclosure and confidentiality agreements with our employees, licensees and independent consultants and other advisors. We also seek these protective agreements from some of our suppliers and subcontractors who have access to sensitive information regarding our intellectual property.

Competition

The rapidly evolving market for our solutions is competitive and highly fragmented, particularly by geography and customer segment. We currently compete with numerous providers of fleet and mobile asset management solutions that range from small, regional providers to midsized multinational providers, such as Teletrac Navman and Geotab, to large global providers, such as Trimble and Omnitracs. While we currently only compete with Trimble and Omnitracs on a limited basis, these two competitors are well established companies with significantly greater financial and other resources than we have. Many of our competitors offer fleet or mobile asset management software solutions to particular industry segments or in limited geographic regions. For example, we compete with Bridgestone (previously TomTom) and Masternaut in Europe, we compete with Astrata for oil and gas fleet opportunities in the Middle East, and we compete with Netstar and Ctrack by Inseego, Tracker and Cartrack for consumer and small fleet mobile asset management deployments in South Africa, respectively.

We believe the principal competitive factors in our market include the following:

• functionality and reliability;

• total cost of ownership;

• breadth and depth of application functionality for fleet deployments;

• product performance;

• interoperability;

• brand and reputation;

• customer service;

• distribution channels, including a global footprint and the ability to service multinationals;


•	regional geographic expertise including localized language support and support for applicable government regulations;


•	size of customer base and reference accounts within key industry segments;


•	ability to deliver ongoing value and return on investment;


•	ease of deployment and ease of use;


•	relevant industry domain expertise and functionality; and


•	the financial resources of the vendor.

We believe that we compete favorably on the basis of these factors.

Employees

The following table presents the breakdown of our employees at the date indicated:



	As of March 31,
	2019	2018	2017
South Africa	853	840	833
United States	71	58	51
United Kingdom	56	53	56
United Arab Emirates	26	34	47
Australia	37	35	36
Brazil	23	22	17
Uganda	4	4	5
Romania	5	5	10
Thailand	3	3	1
Total	1,078	1,054	1,056

Full-time	989	983	1,032
Part-time	89	71	24
Total	1,078	1,054	1,056

Legal Proceedings

Section 11D Allowances Relating to Tax Assets Recognized

MiX Telematics International Proprietary Limited (“MiX International”), a subsidiary of the Group, historically claimed a 150% allowance for research and development spend in terms of section 11D (“S11D”) of the South African Income Tax Act No. 58 of 1962 (“the Act”). As of October 1, 2012, the legislation relating to the allowance was amended. The amendment requires pre-approval of development project expenditure on a project specific basis by the South African Department of Science and Technology (“DST”) in order to claim a deduction of the additional 50% over and above the expenditure incurred (150% allowance). Since the amendments to S11D of the Act, MiX International had been claiming the 150% deduction resulting in a recognized tax benefit. MiX International has complied with the amended legislation by submitting all required documentation to the DST in a timely manner, commencing in October 2012.

In June 2014, correspondence was received from the DST indicating that the research and development expenditure on certain projects for which the 150% allowance was claimed in fiscal 2013 and fiscal 2014 did not, in the DST’s opinion, constitute qualifying expenditure in terms of the Act. MiX International, through due legal process, had formally requested a review of the DST’s decision not to approve this expenditure. While approvals were obtained for a portion of this project expenditure as a result of a further review performed by the DST in February 2017, we continue to seek approval for the remaining projects and as such the legal process is ongoing. In addition to the approvals that were subject to the legal process, further approvals have been obtained for certain project expenditure, relating to both current and prior financial years. However, at period end, an uncertain tax position remains in relation to S11D deductions in respect of which approvals remain pending.

Since the introduction of the DST pre-approval process, MiX International has recognized in the income statement cumulative tax incentives in addition to the incurred cost of R24.3 million in respect of S11D deductions, of which R3.8 million was recognized in the current financial year. R21.5 million relates to deductions in respect of development project expenditure which has been approved by the DST. R2.8 million relates to an uncertain tax position in respect of projects where approvals have not yet been received from the DST. If MiX International is unsuccessful in this regard, MiX International will not recover the R2.8 million raised at March 31, 2019.

Competition Commission Matter

On April 15, 2019, the Competition Commission of South Africa (the “Commission”) referred a matter to the Competition Tribunal of South Africa (“Tribunal”). The Commission contends that the Group and a number of our channel partners have engaged in market division. Should the Tribunal rule against MiX Telematics, the Group may be liable for an administrative penalty under the Competition Act, No. 89 of 1998. The Group had cooperated fully with the Commission during its preliminary investigation. We cannot predict the timing of a resolution or the ultimate outcome of the matter, however, the Group and our external legal advisers continue to believe that we have consistently adhered to all applicable laws and regulations and that the referral from the Commission is without merit. We have therefore not made any provisions for this matter as yet.

The Ugandan Value Added Tax ("VAT") matter

The Ugandan Revenue Authorities (“URA”) have reviewed MiX Telematics’ cross-border services and assert that VAT is payable on these imported services in terms of the place of supply rules included within its local VAT legislation. MiX East Africa challenged this matter with the URA based on firstly, the interpretation of the law; and secondly, calculation errors by the URA. MiX East Africa appeared in front of the Tax Appeals Tribunal on a number of occasions to present its defense and will continue to do so. This matter is ongoing;

From time to time, we have been and may become involved in further legal proceedings arising in the ordinary course of our business.

Government Regulation

We are subject to laws and regulations relating to our business operations, including laws applicable to providers of Internet and mobile services both domestically and internationally, as we collect data, including personal data, disseminate data and, in some cases, sell data. The application of existing domestic and international laws and regulations relating to issues such as user privacy and data protection, marketing, advertising, inadvertent disclosure and consumer protection in many instances is unclear or unsettled.

The transmission of data over the Internet and cellular networks is a critical component of our SaaS business model. Additionally, as cloud computing continues to evolve, increased regulation by federal, state or foreign agencies becomes more likely, particularly in the areas of data privacy and data security. In particular, the dynamic regulatory environment in the European Union is resulting in additional and increasingly complex regulation in these areas and we believe that the similarly dynamic regulatory environment of the United States, will follow suit. New laws governing data privacy and data security will furthermore be enacted in many other regions. Laws governing the solicitation, collection, processing or use of data could impair our ability to manage and report on customer data, which is integral to the delivery of our SaaS solutions. Increased regulation and the expansion of our business and operations globally have required us to devote legal and other resources to address this regulation. We have updated and will continue to evaluate our group data protection and security policies, charters and procedures, to assist in maintaining data privacy and data security in line with international practices.

Data privacy regulations and applicable laws in the United States, the European Union or elsewhere will regulate our ability to use the data we gather from our customers and increase the cost of doing business and could result in claims being brought by our customers or third parties. As discussed below, South Africa, which is currently our largest market, is expected to adopt significant supplementary data privacy legislation in the near future.

South African Regulatory Environment

The Protection of Personal Information Act, No. 4 of 2013 (the “POPI Act”) was promulgated into law in November 2013 in South Africa. Certain sections of the POPI Act, came into effect on April 11, 2014. The remaining sections of the POPI Act will commence on a date to be determined by the South African President, with the general assumption being that such date will be before the end of 2019 calendar year. The POPI Act allows for a one year transition period from its commencement for all persons to comply with its requirements. We have evaluated the potential impact of the POPI Act, taking into account our existing and planned privacy and data security practices and procedures and we expect that the POPI Act's implementation will have an impact on our data security and business costs, practices and procedures in South Africa.

A number of existing South African statutes regulate electronic communications, including the Electronic Communications Act, No. 36 of 2005 as amended, and the Electronic Communications and Transactions Act, No. 25 of 2002 as amended, which apply to a number of aspects of our business. These statutes regulate the generation, communication, production, processing, sending, receiving, recording, retaining, storing, displaying and use of any information, document or signature by or in electronic form.

The Private Security Industry Regulation Act, No. 56 of 2001, as amended (the “PSIRA Act”) also applies to our South African business and governs the vehicle recovery industry in South Africa. The PSIRA Act was enacted for the purposes of, for example: (i) the achievement and maintenance of a trustworthy and legitimate private security industry which acts in terms of the principles contained in the Constitution of the Republic of South Africa, Act No. 108 of 1996, and other applicable law, and is aimed at ensuring that there is greater safety and security in the country and; (ii) to regulate the private security industry and to exercise effective control over the practice of the occupation of security service providers in the public and national interest and the interest of the private security industry itself.

Broad-Based Black Economic Empowerment

The South African government established a legislative framework for the promotion of Broad-Based Black Economic Empowerment (“B-BBEE”). Achievement of B-BBEE objectives is measured by a scorecard which establishes a weighting for the various components of B-BBEE which relates to aspects such as Skills Development and Preferential Procurement. The B-BBEE codes have a continuous review process which resulted in new B-BBEE Codes coming into effect on May 1, 2015, with more onerous compliance requirements, and proposed amendments, which were made available for 60 days of public commentary, ending on May 29, 2018. In line with these published proposed amendments to the B-BBEE Codes, the minister of the Department of Trade and Industry gazetted the Youth Employment Service (“YES”) Initiative on August 29, 2018, effective immediately. This initiative is part of a broader solution to address South Africa’s youth unemployment challenges. The YES Initiative enables companies to gain up to two B-BBEE levels of enhanced B-BBEE

status recognition if certain youth job creation targets are met. On May 31, 2019, additional changes contemplated in 2018 were effected to the B-BBEE Codes, for implementation within six months. These changes have an impact on the Skills Development and Enterprise and Supplier Development including Preferential Procurement aspects. In addition, companies also need to comply with criteria which will provide them with Empowering Supplier status, which was previously automatically granted.

It is important for us to achieve applicable B-BBEE objectives, not only as a compliance exercise, but to make an impactful, positive difference in South Africa. Furthermore, B-BBEE objectives are pursued, in significant part, by requiring parties who contract with corporate, governmental and State Owned Enterprises in South Africa to achieve B-BBEE compliance through satisfaction of an applicable scorecard. Parties improve their B-BBEE contributor level when contracting with businesses that have earned good B-BBEE contributor levels in relation to their scorecards.

We have three material end-customers, which require MiX Telematics Enterprise SA Proprietary Limited to maintain at least a B-BBEE contributor level 3 as measured under the new B-BBEE Codes in addition to at least one requiring additional commitments in terms of Skills Development and Sub-Contracting of at least 30% of the contract value to a Small Black Owned Supplier. The value of these contracts represented 3.3% of our total revenue for fiscal year 2019. MiX Telematics Enterprise SA Proprietary Limited has attained the agreed compliance targets in fiscal year 2019 and furthermore improved their position on the scorecard. Failing to achieve applicable B-BBEE objectives could jeopardize our ability to maintain existing business or to secure future business from corporate, governmental or State Owned Enterprises that could materially and adversely affect our business, financial condition and results of operations.

U.S. Regulatory Environment

In addition to its regulation of Internet and, by extension, many SaaS providers, the Federal Trade Commission (“FTC”), has been asked by consumer groups to identify practices that may compromise privacy and consumer welfare; examine opt-in procedures to ensure consumers are aware of the type of data being collected and how it will be used; and create policies to halt abusive practices. The FTC has expressed interest in particular in the mobile environment and services that collect sensitive data, such as location-based information, which could conceivably be expanded to include transceiver products such as our in-vehicle devices. Although much of the FTC’s focus is on consumer protection, to the extent that our clients use our systems to monitor employee movement, the FTC may assert jurisdiction. In addition to FTC scrutiny on the consumer side, many fleet drivers in the U.S. may belong to a union, which triggers some degree of oversight from the National Labor Relations Board (“NLRB”). The NLRB has taken increasing notice of the privacy rights on unionized employees, and future NLRB rules could affect our business model or the way in which our corporate clients use our solutions.

Our business is affected by U.S. federal and state laws and regulations governing the collection, use, retention, sharing and security of data that we receive from and about our users. In recent years, regulation has focused on the collection, use, disclosure and security of information that may be used to identify or that actually identifies an individual, such as a name, address and/or email address. In addition, several states are considering new privacy legislation which may affect our business. For example, California has been the first state to enact its own privacy law, the CCPA, which will take effect on January 1, 2020. We anticipate that the CCPA will be broadly applicable to businesses that collect personal information about California residents, requiring businesses to provide certain notices to consumers and enhanced individual rights (e.g., consumers may request deletion of, access to, or a copy of their personal information). The CCPA remains subject to potential amendments and California Attorney General regulations, which may impact the application of the CCPA to our business.

In addition, California was the first state to enact an Internet of Things (IoT) cybersecurity law, which will take effect on January 1, 2020. We anticipate that this new law will require manufacturers of any internet-connected devices to equip them with “reasonable” security features that are: appropriate for the nature and function of the device; appropriate for the information it may collect, contain, or transmit; and designed to protect the device and any information contained within the device from unauthorized access, destruction, use, modification or disclosure. While there is no private right of action, this law may subject us to potential governmental enforcement actions for noncompliance.

Although mobile and Internet advertising privacy practices are currently largely self-regulated in the United States, the FTC has conducted numerous discussions on this subject and suggested that more rigorous privacy regulation is appropriate, possibly including regulation of non-personally identifiable information which could, with other information, be used to identify an individual. The commercial use of our mobile technology may reduce exposure to FTC regulation and enforcement, but geo-location and similar services are receiving increased regulatory interest and as such may affect how we conduct our business in the future.

Finally, we use GPS satellites to obtain location data for our in-vehicle devices. The satellites and their ground control and monitoring stations are maintained and operated by the U.S. Department of Defense, which does not currently impose regulations on the ability to access location data. We cannot assure that it will not do so in the future. Any regulatory hurdles could impede the functionality and/or cost of our solutions, which could adversely affect our business. The communication systems that we use to host and transmit data may be subject to security incidents, which may also subject the Company to regulatory enforcement and client pressures.

European Union Regulatory Environment

We are subject to regulation under the laws of the European Union. Of particular relevance with regard to the regulation of our solutions are matters of data protection and privacy. More broadly, any processing of personal data in the course of the provision of services is governed by the European Union data protection regime. The framework legislation at a European Union level in respect of data protection, Directive 95/46/EC, was superseded by the General Data Protection Regulation (EU) 2016/679 (“GDPR”), effective May 25, 2018. In addition, local State data protection and privacy laws apply as well. Some of these place obligations additional to the GDPR on organizations operating in the EU, such as express suppression of positioning and speeding data when vehicles are used for private trips. The GDPR creates a single legal framework that applies across all EU member states, and in some circumstances, to processors in a state outside of the EU. The GDPR introduced direct compliance obligations for data controllers and data processors. National Data Protection Authorities (“NDPAs”) are now able to impose fines for violations ranging from 2% to 4% of annual worldwide turnover, or 10 million to 20 million Euro, whichever is greater. NDPAs have the power to carry out audits, request information, and obtain access to premises. Businesses must be able to demonstrate that the personal data of any data subject can be lawfully processed on one of the six specified grounds. Where the ground is that the data subjects gave consent to the processing, the processor bears the burden of proof that such consent was validly obtained. Additionally, where consent is the ground for processing the data, the data subject has the right to withdraw consent at any time. We believe that many businesses will rely on the specified ground of “legitimate interest” of that business or of a third-party as the basis of lawful data processing.

The GDPR adopts a risk-based approach to compliance, under which businesses bear responsibility for assessing the degree of risk that their processing activities pose to data subjects. Businesses are required to perform data protection impact assessments before any processing that uses new technology and is likely to result in a high risk to data subjects. The GDPR requires many businesses to maintain records of their processing activities. Clear rules around data breach notifications and the processing of personal data in such a manner that the personal data can no longer be attributed to a specific individual have been set out by the GDPR. In addition, under the GDPR, data subjects have new rights, for example, the right (save in specific circumstances) to request that businesses delete their personal data (the right to be forgotten); to object to their personal data being processed; and to obtain a copy of their personal data within a set time frame.

It is anticipated that, notwithstanding Brexit, GDPR will continue to apply to the U.K., as the U.K. parliament enacted the Data Protection Act 2018 on May 25, 2018, which enforces the provisions of GDPR independently of the U.K.'s membership of in the EU.

Australian Regulatory Environment

The Australian Privacy Principles contained in the Privacy Act of 1988 (the "Privacy Act") regulate the collection, use, retention, disclosure and security of personal information. Personal information is defined as “information or an opinion about an identified individual, or an individual who is reasonably identifiable, whether the information or opinion is true or not or is recorded in a material form or not”. Personal information includes location-based information where the information enables the location of an individual to be ascertained. Australian privacy laws in general prohibit the transfer of personal information outside Australia unless an exemption applies, such as the individual to whom the information relates has consented to the transfer. In some circumstances, the disclosure will be permissible if there is a data transfer agreement in place between the transferor and the transferee under which the transferee agrees to handle the information in accordance with the Australian Privacy Principles. Amendments to these laws imposing stricter regulation became effective in March 2014. Subject to a few exemptions, the amendments require the transferor to take such steps as are reasonable in the circumstances to ensure that an overseas recipient does not breach the Australian Privacy Principles and the transferor may be held responsible for any breaches of Australian privacy laws when personal information is transferred outside Australia, regardless of whether there is a data transfer agreement in place.

In February 2018, Part IIIC of the Privacy Act was amended and the Notifiable Data Breach (“NDB”) scheme enacted. The NDB scheme introduced obligations to notify individuals whose personal information is involved in a data

breach that is likely to result in serious harm and includes recommendations about steps individuals should take in response to the breach.

4C. ORGANIZATIONAL STRUCTURE

We are a holding company and conduct substantially all of our business through our operating subsidiaries. Note 40 to our consolidated financial statements contains our subsidiary names, principal activity, place of incorporation and legal ownership at March 31, 2019. Up until the filing date, there has been no change in our organizational structure since March 31, 2019.

4D. PROPERTY, PLANT AND EQUIPMENT

As of May 31, 2019, the following were the material properties that we owned or leased, used primarily for office space:



Property	Owned or Leased	Square Footage
South Africa
Howick Close, Waterfall Park, Midrand, South Africa	Leased	46,499
Howick Mews, Waterfall Park, Midrand, South Africa	Leased	11,364
Blaauwklip Office Development & Park, Stellenbosch, South Africa*	Owned	17,158
Blaauwklip Office Development & Park, Stellenbosch, South Africa	Leased	10,936
Unit C4, Heron Crescent, Century Square, Cape Town, South Africa	Leased	2,809
7/8 Holwood Crescent, La Lucia Ridge, South Africa	Leased	6,953
United States
Suite 100 and 310, 750 Park of Commerce Blvd., Boca Raton, Florida, USA	Leased	10,260
Suite 110, 16770 Imperial Valley Drive, Houston, Texas, USA	Leased	2,500
Suite 27, 1181 S Rogers Circle, Boca Raton, Florida, USA	Leased	2,326
United Kingdom
6170 & 6180, Birmingham Business Park, Solihull Parkway, Birmingham, UK	Leased	5,280
Suites 39-40 Cherry Orchard North, Kembrey Park, Swindon, Wiltshire, UK	Leased	2,906
Australia
Suite 3, 281 Hay Street, Subiaco, Australia	Leased	5,091
Suite 1, 28 Fortescue Street, Spring Hill, Brisbane, Queensland, Australia	Leased	1,679
United Arab Emirates
Building 6EA, Office 610, Dubai Airport, Freezone, Dubai, United Arab Emirates	Leased	3,592
Brazil
543 Doutor Costa Junior Street, Sao Paulo, Brazil	Leased	4,306

* This property is held for sale, see note 6 to our consolidated financial statements for further details.

We believe that our facilities are adequate for our current needs and that suitable additional space will be available as needed to accommodate any potential expansion.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

5. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements as at March 31, 2019 and 2018 and for the fiscal years ended March 31, 2019, 2018, and 2017, and the accompanying notes included in this annual report, and the financial information set forth under “Item 3A. Selected Financial and Operating Data” as at and for the fiscal years ended March 31, 2019, 2018, 2017, 2016 and 2015.

We prepare our consolidated financial statements in accordance with IFRS. The preparation of our consolidated financial statements requires us to make certain assumptions and estimates that affect the amounts we record as assets, liabilities, revenues and expenses in the years and periods addressed and these are subject to certain risks and uncertainties. Our future results may vary materially from those indicated as a result of the risks that affect our business, including, among others, those identified in “Forward-Looking Statements” and “Item 3D. Risk Factors”.

Overview

We are a leading global provider of fleet and mobile asset management solutions delivered as SaaS. Our solutions deliver a measurable return by enabling our customers to manage, optimize and protect their investments in commercial fleets, mobile assets or personal vehicles. We generate actionable intelligence that enables a wide range of customers, from large enterprise fleets to small fleet operators and consumers, to reduce fuel and other operating costs, improve efficiency, enhance regulatory compliance, promote driver safety, manage risk and mitigate theft. Our solutions mostly rely on our proprietary, highly scalable technology platforms, which allows us to collect, analyze and deliver information based on data from our customers’ vehicles. Using intuitive, web-based interface, reports or mobile applications, our fleet customers can access large volumes of real-time and historical data, monitor the location and status of their drivers and vehicles and analyze a wide number of key metrics across their fleet operations.

In fiscal year 2019, we collected data on an average of approximately 172 million trips per month representing as many as 9.3 billion vehicle locations per month. We have a global presence, with subscribers located in over 120 countries across six continents for whom we collectively tracked and managed over 750,000 subscribers at March 31, 2019.

We were founded in 1996 in Johannesburg, South Africa, as Matrix Vehicle Tracking Proprietary Limited, and since that time, we have grown both organically and through acquisitions. In 2007, we acquired OmniBridge, which provided fleet management services in both the South African and international markets. In November 2007, we listed our shares on the JSE, in order to facilitate the OmniBridge acquisition. In 2008, we acquired Tripmaster Corporation, located in the United States, Safe Drive (including Safe Drive International Proprietary Limited), located in Australia and Safe Drive FZE, located in the United Arab Emirates. These acquisitions extended our geographic reach, broadened our customer relationships and expanded our driver safety and training solution offerings. In May 2012, we acquired Intellichain, located in South Africa, as part of our strategy to broaden our transportation management software functionality. On August 9, 2013, following a successful United States IPO, the Company’s ADSs were listed on the NYSE and are traded under the symbol MIXT. In December 2013, we acquired a proprietary software development business from Roitech Proprietary Limited, located in South Africa. The acquisition enhanced and broadened our fleet management smart phone application offerings. On November 1, 2014, we acquired the operating business of Compass, a South Africa based provider of specialized fleet management solutions in Southern Africa that are delivered off the Group’s hardware and software platform. These specialized fleet management solutions complement the Group’s existing fleet management solutions and the acquisition broadens the array of services offered to current and future fleet management customers.

We derive the majority of our revenues from subscriptions to our fleet and mobile asset management solutions. Our subscriptions generally include access to our SaaS solutions, connectivity, and in many cases, use of an in-vehicle device. We also generate revenues from the sale of in-vehicle devices, which enable customers to use our subscription-based solutions, installation services of our in-vehicle-devices and driver training for fleet customers. We generate sales through the efforts of our direct sales teams, staffed in our regional sales offices, and through our global network of distributors and dealers. Our direct sales teams focus on marketing our fleet solutions to global and multinational enterprise accounts and to other large customer accounts located in regions of the world where we maintain a direct sales presence. Our direct sales teams have industry expertise across multiple industries, including oil and gas, transportation and logistics, government and municipal, bus and coach, rental and leasing, and utilities. In some markets, we rely on a network of distributors and dealers

to sell our solutions on our behalf. Our distributors and dealers also install our in-vehicle devices and provide training, technical support and ongoing maintenance for the customers they support.

The table below sets out our historic revenue and profitability indicators.



	Fiscal Year Ended March 31,
	2019		2019			2018		2017
	(In thousands, unless otherwise indicated)
Subscription revenue		$116,946	R1,693,245			R1,434,615		R1,239,914
Subscription revenue growth (%)			18.0		%	15.7	%	7.1	%
Hardware and other revenue	19,519		282,618			277,867		300,144
Hardware and other revenue growth/(decline) (%)			1.7		%	(7.4	%)	(2.2	%)
Total revenue	136,465		1,975,863			1,712,482		1,540,058
Total revenue growth (%)			15.4		%	11.2	%	5.1	%
Operating profit	23,407		338,912			214,952		137,862
Operating profit growth/(decline) (%)			57.7		%	55.9	%	(0.9	%)
Operating profit margin (%)			17.2		%	12.6	%	9.0	%
Adjusted EBITDA ⁽¹⁾	41,632			R602,785		441,866		301,613
Adjusted EBITDA growth (%)			36.4		%	46.5	%	8.8	%
Adjusted EBITDA margin (%) ⁽¹⁾			30.5		%	25.8	%	19.6	%
Profit for the year ⁽²⁾	13,975		202,336			181,193		121,441
Profit for the year growth/(decline) (%)			11.7		%	49.2	%	(33.5	%)
Profit for the year margin (%)			10.2		%	10.6	%	7.9	%


⁽¹⁾	Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS financial measures. See “Item 3A. Selected financial and operating data” for a description of this measure and a reconciliation to profit for the year.


⁽²⁾	Profit for the year includes net foreign exchange gains of R0.4 million, net foreign exchange losses of R5.1 million and net foreign exchange gains of R1.5 million in fiscal years 2019, 2018 and 2017, respectively.

Subscription revenue has increased as a percentage of total revenue. In fiscal years 2019, 2018 and 2017, subscription revenue represented 85.7% , 83.8% and 80.5% respectively, of our total revenue. In fiscal years 2019, 2018 and 2017, our top 10 customers represented 24.9 %, 24.5% and 24.4% respectively, of our subscription revenue.

We believe the large and growing market for fleet and mobile asset management solutions will provide us with significant growth opportunities going forward. We seek to capitalize on these growth opportunities and manage the factors affecting our performance, including subscription revenue accounting for a greater component of revenue, lower hardware revenues, improved economies of scale, fluctuations in the value of the South African Rand (our financial reporting currency), an evolving mix of subscribers with different revenue and cost economics, varying economic conditions in our markets (e.g., the oil and gas sector), changing customer needs and long sales cycles for our enterprise fleet management solutions. See “Factors Affecting Our Performance”, for more information on these factors.

We intend to grow our revenue by adding new customers, selling more subscriptions to existing customers, and expanding our customer base to include industry sectors, customer segments and geographic regions beyond those that we currently serve. We will also continue to evolve our portfolio of products and services by introducing new innovative solutions. We also intend to continue to expand our Adjusted EBITDA margin and unlock further economies of scale as a result of strict cost management and ongoing subscription revenue growth.

Key Financial Measures and Operating Metrics

In addition to financial measures based on our consolidated financial statements, we monitor our business operations using various financially and non-financially derived metrics. The following table presents these measures and metrics.



	Fiscal Year Ended March 31,
	2019		2019		2018		2017
	(In thousands, except basic adjusted earnings per share and subscriber data)
Subscription revenue		$116,946		R1,693,245		R1,434,615		R1,239,914
Profit for the year	13,975		202,336		181,193		121,441
Adjusted EBITDA	41,632		602,785		441,866		301,613
Basic earnings per share ($/R)		$0.02		R0.36		R0.32		R0.19
Basic adjusted earnings per share ($/R)		$0.03		R0.45		R0.28		R0.17
Diluted earnings per share ($/R)		$0.02		R0.35		R0.32		R0.19
Diluted adjusted earnings per share ($/R)		$0.03		R0.44		R0.27		R0.17
Subscribers	750,455		750,455		676,866		622,062

Subscription Revenue

Subscription revenue represents subscription fees for our solutions, which include the use of our SaaS fleet management solutions, connectivity, and in many cases, our in-vehicle devices. Our subscription revenue is driven primarily by the number of subscribers and the monthly price per subscriber, which varies depending on the services and features customers require, hardware options, customer size and geographic location.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and Adjusted EBITDA margin are two of the profit measures reviewed by the chief operating decision maker (“CODM”). We define Adjusted EBITDA as the profit for the period before income taxes, net finance income/(costs) including foreign exchange gains/(losses), depreciation of property, plant and equipment including capitalized customer in-vehicle devices and right-of-use assets, amortization of intangible assets including capitalized in-house development costs and intangible assets identified as part of a business combination, share-based compensation costs, transaction costs arising from the acquisition of a business or investigating strategic alternatives, restructuring costs, profits/(losses) on the disposal or impairments/reversals of impairments of assets or subsidiaries, insurance reimbursements relating to impaired assets and certain litigation costs. We define Adjusted EBITDA margin as Adjusted EBITDA divided by total revenue. A reconciliation of Adjusted EBITDA to profit for the year and Adjusted EBITDA margin to profit for the year margin is included in “Item 3A. Selected Financial and Operating Data.”

Basic and Diluted Adjusted Earnings per share

Adjusted earnings is defined as profit attributable to owners of the parent excluding net foreign exchange gains/(losses) net of tax and share based compensation costs related to Performance Share Awards net of tax. A reconciliation of basic adjusted earnings per share to basic earnings per share and diluted adjusted earnings per share to diluted earnings per share is included in “Item 3A. Selected Financial and Operating Data”.

Subscribers

Subscribers represent the total number of discrete services we provide to customers at the end of the period.

Factors Affecting Our Performance

Subscription Revenue Accounting for a Greater Component of Revenue

We are focused on growing our recurring subscription revenue base and entering into more fully bundled deals. As a result of an increase in the total subscriber base, and due to new and existing subscribers moving to fully-bundled

subscriptions, subscription revenue is increasing as a percentage of revenue. In fiscal year 2019, subscription-based revenues accounted for 85.7% of our total revenues, up from 83.8% in 2018 and 80.5% in 2017. We expect to see this trend continue as we grow our base of subscribers, increase the number of fully-bundled subscriptions and various add-on solutions that can drive incremental average revenue per user (“ARPU”) expansion over time, maintain our investment in sales and marketing and continue to attract new subscribers by reducing the upfront investment required by our customers and by introducing attractive new features and services. As we continue to strengthen our position as a leading global SaaS telematics provider, we expect the increasing shift towards fully bundled solutions, which do not require upfront hardware purchases, to continue and contribute to this trend going forward. For further information, refer to “5D. Trend Information”.

Lower hardware sales volumes

As mentioned above, we continue to see a shift toward fully bundled contracts, which do not require upfront hardware purchases.

The table below shows hardware revenue and hardware gross margin generated for fiscal years 2019, 2018 and 2017. Compared to an increase in total revenue of 15.4% , hardware revenue only increased by 6.2% from fiscal year 2018 to fiscal year 2019.

In fiscal year 2019, h ardware revenue accounted for 12.2% of our total revenues, down from 13.3% in 2018 and 14.4% in 2017. The trend toward fully bundled contracts initially has had a negative impact on our earnings growth due to the hardware revenue forfeited . In the long term, we believe that the shift to bundled contracts will enhance shareholder value as the contracts go through a renewal cycle.



	Fiscal Year Ended March 31,
	2019		2019			2018			2017
	(In thousands, except subscriber data)
Hardware revenue		$16,703		R241,837			R227,752			R222,315
% movement			6.2		%	2.4		%	0.5		%
% of total revenue			12.2		%	13.3		%	14.4		%
Hardware gross margin %			47.6		%	50.6		%	53.7		%

Improved economies of scale

We expect increased subscription revenue growth combined with ongoing cost management to improve our profitability going forward. Since our IPO, we have invested heavily in research and development, and sales and marketing, and have significantly increased the number of bundled solutions sold to customers, which had a short term muting effect on our revenues. In fiscal years 2019 and 2018, we saw a significant improvement in our Adjusted EBITDA margin as we started to benefit from these historical investments, strict cost management and improved economies of scale. We expect the improvement in our Adjusted EBITDA margin to continue.



	Fiscal Year Ended March 31,
	2019			2019		2018		2017
	(In thousands, unless otherwise indicated)
Subscription revenue		$116,946		R1,693,245		R1,434,615			R1,239,914
Subscription revenue growth (%)				18.0	%	15.7	%	7.1		%
Total revenue	136,465			1,975,863		1,712,482		1,540,058
Total revenue growth (%)				15.4	%	11.2	%	5.1		%
Operating expenses	(67,831		)	(982,116	)	(914,813	)	(903,837		)
Operating expenses growth (%)				7.4	%	1.2	%	1.8		%
Operating profit	23,407			338,912		214,952		137,862
Operating profit growth/(decline) (%)				57.7	%	55.9	%	(0.9		%)
Operating profit margin (%)				17.2	%	12.6	%	9.0		%
Adjusted EBITDA ⁽¹⁾	41,632			602,785		441,866		301,613
Adjusted EBITDA growth (%)				36.4	%	46.5	%	8.8		%
Adjusted EBITDA margin (%) ⁽¹⁾				30.5	%	25.8	%	19.6		%


⁽¹⁾	Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS financial measures. See “Item 3A. Selected financial and operating data” for a description of these measures and a reconciliation to operating profit, profit and profit margin for the year.

Fluctuations in the value of the South African Rand, our financial reporting currency

The South African Rand is the financial reporting currency for our business operations. Currency fluctuations in the South African Rand may positively or negatively impact our reported income and expenses due to the effects of translating the functional currency of our foreign subsidiaries into Rand at different average exchange rates. Accordingly, some of the changes in the reported operating results are attributable to fluctuations in exchange rates and do not necessarily reflect the underlying operating results. However, at an operating profit level, the impact of exchange rate fluctuations arising during the translation to South African Rand has not had a material impact in fiscal years 2019, 2018 and 2017.

In fiscal year 2019, the Rand weakened by 5.9% against the U.S. Dollar and by 4.8% against the British Pound, as shown in the table below.



	Average exchange rate for Fiscal Year Ended March 31,
	2019		2018		2017
South African Rand for U.S. Dollars (per $1.00)	13.75		12.99		14.06
% movement	5.9	%	(7.6	%)	2.0	%
South African Rand for British Pound (per £1.00)	18.03		17.21		18.42
% movement	4.8	%	(6.6	%)	(10.7	)%

We expect continued exchange rate volatility in the South African Rand against other major currencies. For more information regarding our foreign currency exchange risk refer to “Item 11. Qualitative and Quantitative Disclosures about Market Risk - Foreign Currency Exchange Risk.”

Mix of Subscribers with Different Revenue and Cost Economics

We offer services to a wide range of customers, from large enterprise vehicle fleets to small fleet operators and consumers. The subscription revenue and cost per subscriber and the subscriber retention pattern differ by type of subscriber. For example, our entry-level consumer solution, Beam-e, is characterized by lower revenue and lower cost per subscriber compared to our large enterprise solutions. Small fleet and consumer customers will enter into and terminate contracts much more frequently than our enterprise customers, thereby affecting subscriber retention. As the mix of our subscriber base evolves, the average revenue per subscriber and average cost per subscriber is likely to change.

Varying Economic Conditions in our Markets

We seek to capitalize on opportunities and manage risks in our key markets, which are geographically dispersed with subscribers located in more than 120 countries worldwide. Overall, we believe that our presence across multiple geographic markets and our exposure to multiple economies provides us with diversification from the risk of changing economic conditions in any one country or region. Other macroeconomic factors, such as expectations for future crude oil and natural gas prices, affect our customers’ spending habits. Prolonged or substantial declines in crude oil and/or natural gas prices, or the perception that such prices will decrease in the future, negatively impacts our net subscriber growth and hardware sales in this sector. In addition to macroeconomic changes, performance in any given region may vary due to multiple factors, including growth in subscribers, the overall profile of the customer base (for example, in Africa, we have a significant consumer subscriber base), the services and hardware options selected by particular subscribers and our distribution strategy in the region.

Changes in regional conditions require management to formulate strategic responses that safeguard our financial position and maintain our balanced approach to producing revenue growth, profitability and cash flow. For example, during fiscal year 2019, we implemented restructuring activities in the Africa and the Middle East and Australia segments and during fiscal year 2017, we implemented restructuring activities in the Europe and the Middle East and Australia segments. These restructuring activities adjusted the cost structures in these regions to levels appropriate for prevailing market conditions. The economy in South Africa continues to be challenging but our Africa segment reported solid results yet again in fiscal year 2019.

Changing Customer Needs

We continuously analyze market trends and opportunities in the various geographies in which we operate and have identified an opportunity to increase subscription revenue growth by the addition of new products and services in certain of the regions in which we operate. For example, in fiscal 2019 we launched MiX Now our self-service, plug and play offering for small fleet operators. This easy to use system helps companies monitor and manage the behavior and performance of their vehicles and drivers. In fiscal year 2018, we extended our U.S. Hours of Service solution to support the requirements of the ELD legislation. In the second half of fiscal year 2017, we also introduced a new MiX Tabs solution aimed at customers who wish to leverage their investment in our premium fleet solution to do cost effective asset tracking.

For a discussion of material changes in our segment revenue that have impacted our financial results for the periods presented, see “Item 5A. Operating Results.”

Long Sales Cycle for Our Enterprise Fleet Management Solutions

From period to period, our revenues may fluctuate depending upon the customer contracts we have secured. The typical sales cycle for large enterprise fleet management solutions contracts may be long, especially by comparison to the sales cycle for our consumer solutions. It may also be difficult for us to predict the timing of when we will enter into enterprise fleet management contracts.

Longer sales cycles for large contracts, for both customers who purchase in-vehicle devices and those who opt for the fully bundled option, may affect the comparability of financial results in certain segments. Our revenue may fluctuate from period to period depending on the level and timing of hardware sales, while subscription revenue growth is also impacted by the timing of the rollout of large enterprise fleets. We are focused on mitigating these long sales cycles and the associated volatility by enhancing our sales pipeline management process, by increasing our sales and marketing investment levels (due to investments in the Americas) and by diversifying our customer segment focus.

Basis of Presentation and Key Components of Our Results of Operations

In fiscal year 2019, we managed our business in six segments which include Africa, Americas, Brazil, Europe and the Middle East and Australasia (our regional sales offices (“RSOs”)), and our CSO. CSO is our central services organization that wholesales our products and services to our RSOs who, in turn, interface with our end-customers, distributors and dealers. CSO is also responsible for the development of our hardware and software platforms and provides common marketing, product management, technical and distribution support to each of our other operating segments.

The CODM reviews the segment results on an integral margin basis as defined by management. The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified collectively as the executive committee and the Chief Executive Officer who make strategic decisions. In respect of revenue, this method

of measurement entails reviewing the segment results based on external revenue only. In respect of Adjusted EBITDA (the profit measure identified by the CODM), the margin generated by CSO, net of any unrealized intercompany profit, is allocated to the geographic region where the external revenue is recorded by our RSOs. The costs remaining in CSO relate mainly to research and development of hardware and software platforms, common marketing, product management and technical and distribution support to each of the RSOs. CSO is a reportable segment of the Group because it produces discrete financial information which is reviewed by the CODM and has the ability to generate external revenues.

Each RSO’s results therefore reflect the external revenue earned, as well as the Adjusted EBITDA earned (or loss incurred) by each operating segment before the remaining CSO and corporate costs allocations. Segment assets are not disclosed because such segment information is not reviewed by the CODM.

Revenue

The majority of our revenue is subscription-based. Consequently, growth in subscribers influences our subscription revenue growth. However, other factors, including, but not limited to, the types of new subscribers we add and the timing of entry into subscription contracts also play a significant role. The price and terms of our customer subscription contracts vary based on a number of factors, including fleet size, hardware options, geographic region and distribution channel. In addition, we derive revenue from the sale of in-vehicle devices, which are used to collect, generate and transmit the data used to enable our SaaS solutions.

Our customer contracts typically have a three to five year initial term. Following the initial term, most fleet customers elect to renew for fixed terms ranging from one to five years. Our third party dealers are typically billed monthly based on active connections. Some of our customer agreements, including our consumer subscriptions, provide for automatic monthly or yearly renewals unless the customer elects not to renew its subscription. Our consumer customer contracts in South Africa are governed by the Consumer Protection Act, which allows customers to cancel without paying the full balance of the contract amount. Our fleet contracts and our customer contracts outside of South Africa are generally non-cancellable.

Cost of Sales

Cost of sales associated with our subscription revenue consists primarily of costs related to cellular communications, infrastructure hosting, third-party data providers, service contract maintenance costs, commission related to third party dealers or distributors (commission is capitalized and amortized unless the amortization period is 12 months or less), amortization of capitalized software development costs and depreciation of our capitalized installed in-vehicle devices. Cost of sales associated with our hardware revenue includes the cost of the in-vehicle devices, cost of hardware warranty, shipping costs, custom duties, commission paid to third party dealers or distributors, and amortization of capitalized hardware development costs. We capitalize the cost of in-vehicle devices utilized to service customers, for customers selecting our bundled option, and we depreciate these costs from the date of installation over their expected useful lives.

We expect that cost of sales as a percentage of revenue will vary from period to period depending on our revenue mix, including the proportion of our revenue attributable to our subscription-based services. The cost of sales related to the amortization of capitalized development costs are relatively fixed in nature and not directly related to the number of subscribers. However, the majority of the other components of our cost of sales are variable and are affected by the number of subscribers, the composition of our subscriber base, and the number of new subscriptions sold in the period.

Operating Expenses

Sales and Marketing

Sales and marketing expenses consist primarily of salaries and wages, commissions paid to employees, travel-related expenses, and advertising and promotional costs. We pay our sales employees commissions based on achieving subscription targets and we capitalize commission and amortize it (unless the amortization period is 12 months or less). Advertising costs consist primarily of costs for print, radio and television advertising, promotions, public relations, customer events, tradeshows and sponsorships. We expense advertising costs as incurred. We plan to continue to invest in sales and marketing in order to grow our sales and build brand and category awareness. We plan to increase sales and marketing expenses in absolute terms and expect sales and marketing expenses to be approximately 11% of revenue.

Administration and Other Charges

Administration and other charges consist primarily of salaries and wages for administrative staff, travel costs, professional fees (including audit and legal fees), real estate leasing costs, expensed research and development costs and depreciation of fixed assets including vehicles and office equipment and amortization of intangible assets. We expect that administration and other charges will increase in absolute terms as we continue to grow our business.

Taxes

In fiscal years 2019, 2018 and 2017 our effective tax rates were 40.5% , 15.7%, and 18.1% respectively, compared to a South African statutory rate of 28%. Taxation mainly consists of normal statutory income tax paid or payable and deferred tax on any temporary differences.

Our effective tax rate may vary primarily according to the mix of profits made in various jurisdictions and the impact of certain non-deductible/(non-taxable) foreign exchange movements. Further information on this is disclosed in note 29 to the consolidated financial statements. As a result, significant variances in future periods may occur.

Deferred tax assets are recognized for tax losses carried forward to the extent that the realization of the related tax benefit through future taxable profits is probable. We did not recognize deferred tax assets in respect of losses amounting to R67.0 million at March 31, 2019. These tax losses can be carried forward indefinitely except for tax losses of R4.3 million in Thailand which expire after 5 years. During fiscal 2019, we raised a further net deferred tax asset of R3.6 million after taking into account taxable temporary differences in respect of a portion of the tax losses available in the Europe, Americas and Brazil segments. These tax losses were incurred in prior years. Over the past years, the Europe, Americas and Brazil segments started returning to profitability resulting in a reassessment of their ability to utilize the tax losses and the recognition of a deferred tax asset for a portion thereof.

Constant Currency Information

Constant currency information has been presented in the sections below to illustrate the impact of changes in currency rates on the Group’s results. The constant currency information has been determined by adjusting the current financial reporting year’s results to the prior year’s average exchange rates, determined as the average of the monthly exchange rates applicable to the year. The measurement has been performed for each of the Group’s currencies, including the U.S. Dollar and British Pound. The constant currency growth percentage has been calculated by utilizing the constant currency results compared to the prior year results.

The constant currency information represents non-IFRS information. We believe this provides a useful basis to measure the performance of our business as it removes distortion from the effects of foreign currency movements during the period.

5A. OPERATING RESULTS

The following table sets forth certain consolidated income statement data:



	For the year ended March 31,
	2019			2019			2018			2017
	(In thousands, unless otherwise indicated)
Revenue		$136,465			R1,975,863			R1,712,482			R1,540,058
Cost of sales	(45,297		)	(655,844		)	(586,963		)	(498,785		)

Gross profit	91,168			1,320,019			1,125,519			1,041,273
Sales and marketing	(13,759		)	(199,209		)	(184,978		)	(181,601		)
Administration and other charges ⁽¹⁾	(54,002		)	(781,898		)	(725,589		)	(721,810		)

Operating profit	23,407			338,912			214,952			137,862
Finance income/(costs) - net	96			1,386			(69		)	10,391

Profit before taxation	23,503			340,298			214,883			148,253
Taxation	(9,528		)	(137,962		)	(33,690		)	(26,812		)

Profit for the year		$13,975			R202,336			R181,193			R121,441

Attributable to:
Owners of the parent		$13,975		202,336			181,134			121,458
Non-controlling interest	#			#			59			(17		)
		$13,975			R202,336			R181,193			R121,441

# Amount less than $1,000/R1,000


⁽¹⁾	Includes other income/(expenses) – net.

Results of Operations for Fiscal Year 2019 Compared to Fiscal Year 2018

Revenue



	For the year ended March 31,
	2019		2019		2018		% Change
	(In thousands, except for percentages)
Subscription revenue		$116,946		R1,693,245		R1,434,615	18.0	%
Hardware revenue	16,703		241,837		227,752		6.2	%
Driver training, installation and other revenue	2,816		40,781		50,115		(18.6	%)
		$136,465		R1,975,863		R1,712,482	15.4	%

Our total revenue increased by R263.4 million, or 15.4% , from fiscal year 2018 to fiscal year 2019. The principal factors affecting our revenue growth included:

•

Subscription revenue grew by R258.6 million, or 18.0% from fiscal year 2018 to fiscal year 2019. Subscription revenue represented 85.7% of our total revenue for fiscal year 2019 compared to 83.8% for the prior year. Our growth in subscription revenue is primarily attributable to both an increase in subscribers, which increased by 10.9% from 676,866 at March 31, 2018, to 750,455 at March 31, 2019 and an increase in ARPU. We again saw ARPU expansion in certain regions such as Brazil and the Americas, where our fleet ARPUs have continued to increase as a result of bundled deals. Further information in this regard is shown below as part of the discussion of third party revenue and subscription revenue by geography. The growth in subscription revenue also increased by R24.8 million or 1.7% as a result of the weaker South African Rand. On a constant currency basis, subscription revenue increased by 16.3% from fiscal year 2018 to fiscal year 2019.

•

Hardware revenue increased by R14.1 million, or 6.2% , from fiscal year 2018 to fiscal year 2019. The increase in hardware revenues in fiscal year 2019 mainly resulted from the Middle East and Australasia segment where hardware revenue was R16.6 million higher in fiscal year 2019 than in fiscal year 2018 and the Americas segment where hardware revenue was R13.4 million higher in fiscal year 2019 than in fiscal year 2018. This was offset by lower hardware revenue of R8.8 million from the Africa segment and R7.4 million from the European segment.


•	Driver training, installation and other revenue declined by R9.3 million, or 18.6% , from fiscal year 2018 to fiscal year 2019. The decrease is primarily related to a decline in driver training revenue of R10.4 million in the Americas segment.

The total revenue growth also benefited from an increase of R32.2 million, or 1.9% as a result of the weaker South African Rand. On a constant currency basis, total revenue increased by 13.5% from fiscal year 2018 to fiscal year 2019.

A breakdown of total third party revenue and subscription revenue is shown in the table below:



	For the Year Ended March 31,
	2019		2019		2018		2019		2019		2018
	(In thousands)
	Total Revenue						Subscription Revenue
Africa		$72,133		R1,044,406		R957,478		$66,951		R969,377		R872,646
Americas	22,720		328,963		227,605		20,207		292,577		194,890
Middle East and Australasia	22,342		323,494		278,665		15,610		226,020		200,241
Europe	14,487		209,757		193,260		9,706		140,539		115,199
Brazil	4,725		68,408		54,430		4,419		63,987		50,735
CSO	58		835		1,044		51		745		904
Total		$136,465		R1,975,863		R1,712,482		$116,944		R1,693,245		R1,434,615

In the Africa segment, subscription revenue increased by R96.7 million, or 11.1% as a result of a 10.4% increase in subscribers since April 1, 2018. Total revenue increased by R86.9 million or 9.1%. Hardware and other revenue declined by R9.8 million or 11.6%.

The Americas was the fastest growing geographical region during fiscal 2019 at a subscription revenue level. Subscription revenue growth was R97.7 million or 50.1%. On a constant currency basis the growth in subscription revenue was 41.9%. Subscribers increased by 15.7% since April 1, 2018. Subscription revenue continued to receive assistance from the market’s ongoing preference for bundled deals across new and existing customers. Total revenue improved by R101.4 million or 44.5%. On a constant currency basis, total revenue growth was 36.6%.

Subscription revenue in the Middle East and Australasia segment increased by R25.8 million or 12.9%. On a constant currency basis the increase in subscription revenue was 9.6%. Subscribers increased by 8.1% since April 1, 2018. Total revenue improved by R44.8 million or 16.1%. Hardware and other revenue increased by R19.1 million or 24.3%. Total revenue in constant currency improved by 13.0%.

In the Europe segment subscription revenue growth was R25.3 million or 22.0%. On a constant currency basis the growth in subscription revenue was 16.4%. However, total revenue only increased by R16.5 million or 8.5% due to R8.8 million lower hardware and other revenues compared to fiscal 2018. Total revenue increased by 3.6% on a constant currency basis. Subscribers increased by 9.0% since April 1, 2018.

In the Brazil segment subscription revenue increased by R13.3 million or 26.1%. On a constant currency basis the increase in subscription revenue was 40.1%. The increase was due to the market’s preference for bundled deals and an increase in subscribers of 28.2% since April 1, 2018. Total revenue increased by R14.0 million or 25.7%. On a constant currency basis, total revenue increased by 39.6%.

Cost of Sales



	For the year ended March 31,
	2019			2019			2018
	(In thousands, except for percentages)
Cost of sales		$45,297			R655,844			R586,963
Gross profit margin	66.8		%	66.8		%	65.7		%
Gross profit margin - subscription	70.9		%	70.9		%	70.1		%
Gross profit margin - hardware	47.6		%	47.6		%	50.6		%

Compared to an increase in total revenue of R263.4 million, or 15.4% , cost of sales increased by R68.9 million, or 11.7% , from fiscal year 2018 to fiscal year 2019. This resulted in a higher gross profit margin of 66.8% in fiscal year 2019 compared to 65.7% in fiscal year 2018.

Subscription revenue, which generates a higher gross profit margin than hardware and other revenue, contributed 85.7% of total revenue compared to 83.8% in fiscal year 2018. During fiscal 2019, subscription revenue gross profit margins were higher than in fiscal 2018.

Sales and Marketing

Sales and marketing costs increased by R14.2 million, or 7.7% , from fiscal year 2018 to fiscal year 2019 against a 15.4% increase in total revenue. This was as a result of strict cost management. The increase in fiscal year 2019 was as a result of a R8.5 million increase in employee costs, a R3.8 million increase in advertising spend and other increases of R1.9 million, none of which were individually significant. In fiscal year 2019, sales and marketing costs represented 10.1% of revenue compared to 10.8% of revenue in fiscal year 2018.

During fiscal year 2019, the increases in sales and marketing costs related primarily to our additional investments in the Americas segment, which were incurred to enhance our growth outside of the oil and gas vertical in such segment.

Administration and Other Expenses

Administration and other expenses (including other income/(expenses) - net) increased by R56.3 million, or 7.8% , from fiscal year 2018 to fiscal year 2019.

Employee costs increased by R16.8 million, while there were increases in IT costs of R7.8 million, expected credit loss provision of R5.1 million, travel costs of R3.8 million, restructuring costs of R3.7 million and professional fees of R5.9 million. The net impact of other smaller variances, none of which were individually material, contributed R1.9 million to the increase. The increase in employee costs was mainly as a result of R19.0 million due to cost of living adjustments and headcount movements, R2.3 million social security cost, R5.1 million related to performance share awards offset by a decrease of R9.6 million in bonus expenses. In fiscal 2018 a R2.5 million insurance reimbursement was received. The effect of the weaker South African Rand also resulted in an increase of R8.8 million.

Finance income/(costs)—Net

Our net finance income was R1.4 million in fiscal year 2019, compared to net finance costs of R0.1 million in fiscal year 2018.

Net finance costs in fiscal year 2019, included net foreign exchange gains of R0.4 million compared to net foreign exchange losses of R5.1 million in fiscal year 2018.

Finance income relating to cash and cash equivalents increased by R1.8 million, or 20.8%, from fiscal year 2018 to fiscal year 2019.

Finance costs increased by R7.9 million in fiscal year 2019 mainly due to the impact of adopting IFRS 15 and IFRS 16 as described below under Recent Accounting Pronouncements . This was primarily as a result of IFRS 15 significant

financing activity interest expense of R4.9 million, recurring commission liability interest expense of R0.8 million and IFRS 16 capitalized lease liability interest of R2.2 million.

We manage interest as a net cost and, when we have surplus cash available, we deposit cash in interest-bearing accounts.

Taxation



			For the year ended March 31,
	2019			2019		2018
	(In thousands, except for percentages)
Taxation	$9,528			R137,962		R33,690
Effective tax rate	40.5	%		40.5	%	15.7	%

Taxation expense increased by R104.3 million, or 309.5% , while our effective tax rate increased by 24.8% to 40.5% in fiscal year 2019. A reconciliation of our effective tax rate to the South African corporate tax rate of 28% for both fiscal years 2019 and 2018, is presented in note 29 to the consolidated financial statements. In fiscal year 2019 the effective tax rate increased by 13.9% as a result of certain non-deductible foreign exchange movements. In fiscal 2018 non-taxable foreign exchange differences decreased the tax rate by 13.1%. Further information is set out in note 29 to the consolidated financial statements. During fiscal 2019, the Group raised a further net deferred tax asset of R3.6 million after taking into account taxable temporary differences in respect of a portion of the tax losses available in the Europe, Americas and Brazil segments. These tax losses were incurred in prior years. Over the past years, the Europe, Americas and Brazil segments started returning to profitability resulting in a reassessment of their ability to utilize the tax losses and the recognition of a deferred tax asset for a portion thereof. Note that the deferred tax not recognized on assessed losses in fiscal year 2019, as disclosed in note 18 to the consolidated financial statements, relates primarily to the Europe and Brazil segments.

Results of Operations for Fiscal Year 2018 Compared to Fiscal Year 2017

Refer to our annual filing with the SEC in Form 20-F for fiscal year ended March 31, 2018

Inflation Risk

We do not believe that inflation had a material effect on our business, financial condition or results of operations in the last three fiscal years. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset these higher costs through price increases. Our inability to do so could harm our business, financial condition and results of operations.

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with IFRS. Certain of our significant accounting policies and critical accounting estimates are summarized below. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates.

Revenue from Contracts with Customers

Revenue is measured based on the consideration specified in a contract with a customer. We recognize revenue when we transfer control over a good or a service to a customer.

We provide fleet and mobile asset management solutions to our customers, which comprise the provision of hardware and the rendering of services. Some customers obtain control of the hardware (where legal title transfers to the customer); while other customers do not (where legal title remains with us).

In instances where the customer obtains control of the hardware, which is typically upon installation or delivery to the customer, the hardware, the installation thereof and the service are each accounted for as separate performance obligations. In instances where the customer does not obtain control of the hardware, there is only a single performance obligation, namely the service.

Where a contract contains multiple performance obligations, the total transaction price is allocated to each one based on their relative standalone selling prices. The amount so allocated is then recognized as revenue as follows:

• Hardware – when delivered to the customer

• Installation – as the installation is done

• Driver training and other services – at the contractual hourly/daily rate as the training/service is performed

• Service (subscriptions) – over time as the service is provided

Revenue is shown net of discounts, value added tax, returns and after eliminating sales within the Group.

We distribute products to certain small fleet operators and consumers through distributors. Distributors act as agents and hardware revenue is only recognized when the distributor sells the hardware unit to the end customer. Once a unit is sold to a customer, the customer enters into a service agreement directly with us for the product. The obligation to supply the service and the credit risk rests with us. The service revenue is recognized when the service is rendered (i.e. on a monthly basis).

We also sell hardware to motor vehicle dealerships for fitments into their vehicle trading stock. These dealerships purchase the hardware from us and are considered principals because they obtain title to the hardware, bear the risks and rewards of ownership and accordingly control the hardware purchased. The buyer of the vehicle then enters into a service-only contract with us. Revenue is recognized upon sale of the hardware to the dealership and subscription revenue is recognized as the services are provided to the customer.

We distribute products to enterprise fleet customers through dealers. Dealers are considered principals in respect of the sale of hardware and revenue is recognized upon sale of the hardware unit to the dealer. Revenue from services is recognized as and when the service is provided to the dealers.

Costs incurred in obtaining a contract

To the extent it is not commensurate, the commission capitalized that is attributable to service will be amortized over the expected life of the contract. Commission is considered commensurate with respect to a particular contract when equivalent/comparable commission is payable upon the extension or renewal of such a contract or upon the customer entering into a new contract. Typically, with regard to month-to-month contracts, commission payable is not considered commensurate for such contracts because no commission is payable as and when the customer extends each month by not giving notice. Accordingly, commission incurred on such contracts that is attributable to service is amortized over the expected life of the contract taking account of expected extensions/renewals.

Recurring commission is commission which is payable for each month the customer remains with us. Since the commission relates to acquiring a customer contract a recurring commission liability is recognized at the date on which the contract is acquired. The measurement reflects the total commission payable over the minimum contractual period or, if shorter, the expected life of the contract, together with the effect of the time value of money, where significant.

Amortization expense of external commissions capitalized is recognized in cost of sales, while that of internal commissions is recognized in sales and marketing costs. Commissions not capitalized under the 12-month practical expedient are also classified in the same manner.

Significant financing

In respect of contracts for which the Group receives payment more than 12 months in advance, interest expense is accrued on the income received in advance liability. This results in the revenue being measured at a higher amount when it is recognized.

Fixed escalations

Revenue recognition accounting policies applied until March 31, 2018

We recognize revenue at the fair value of the consideration received or receivable for the sale of goods or services in the ordinary course of our activities. Revenue mainly includes amounts earned on the sale of hardware, subscription sales and installation revenue. Revenue is shown net of discounts, value added tax, returns and after eliminating sales within the Group.

We offer certain arrangements whereby the customer can purchase a combination of the products and services as referred to above. Where such multiple element arrangements exist, the amount of revenue allocated to each element is based on the relative fair values of the various elements offered in the arrangement. When applying the relative fair value approach, the fair values of each element are determined based on the current market price of each of the elements when sold separately.

We recognize revenue when the amount of revenue can be measured reliably and it is probable that we will receive future economic benefits at the time when specific criteria have been met for each of our activities, as set forth below. We base our estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Subscription Revenue

Subscription revenue for our consumer products is invoiced in accordance with the terms of the respective contractual arrangements and is generally invoiced monthly in advance. Revenue is initially deferred and only recognized in the period in which the service is performed, which for the majority of contracts is the following month.

Subscription revenue for our fleet products is provided on a contracted price basis. Our customer contracts typically have a three to five year initial term. Following the initial term, most fleet customers elect to renew for fixed terms ranging from one to five years. Our third party dealers are primarily billed monthly based on active connections. Subscription revenue for fleet products is either billed in arrears or in advance. When billed in arrears, revenue is recognized in the month that the service is performed and when billed in advance, the revenue is initially deferred and only recognized in the period in which the service is provided. The majority of our subscription revenue for fleet products is billed in the month in which the service is performed.

Hardware Revenue

We recognize revenue from hardware sales once the risks and rewards of ownership have transferred to the purchaser. The risks and rewards of ownership typically transfer when legal title and possession is transferred to the buyer at receipt of the full purchase price of the hardware. Certain contractual arrangements require customer acceptance of the hardware after the hardware devices have been installed, and, in these cases, we recognize hardware revenue when customer acceptances have been received.

In addition to selling directly, we sell indirectly through our network of distributors and dealers. We distribute products to certain small fleet customers and individuals through distributors. Distributors act as agents and hardware revenue is only recognized when the distributor sells the hardware unit to the end customer. Once a unit is sold to a customer, the customer enters into a service agreement directly with us for the product. The obligation to supply the service rests with us and the credit risk rests with us. The service revenue is recognized when the service is rendered (i.e., on a monthly basis).

We also sell hardware to motor vehicle dealerships for installation into their vehicle trading stock. These dealerships purchase the hardware from us and are considered principals because they obtain title to the hardware and bear the risks and rewards of ownership. The buyer of the vehicle then enters into a service-only contract with us. Revenue is recognized upon sale of the hardware to the dealership and subscription revenue is recognized as the services are provided to the customer.

with small fleet customers originated through distributors, the responsibility for providing services rests with us and revenue is recognized as the service is rendered.

Driver Training and Other Services

We recognize revenue at the contractual hourly/daily rate in the period during which the training is performed. Customers are typically invoiced in the month in which the service has occurred.

Installation Revenue

We recognize revenue earned from the installation of hardware in customer vehicles and invoice it separately once the installation has been completed. Due to the short time frame between delivery and installation (installation may occur on the delivery date), invoicing of the hardware and installation elements may occur at the same time.

Repair Services

Revenue in respect of repair services, which forms part of the monthly subscription, is recognized on a monthly basis over the period of the service arrangement.

Foreign Currency Translation

Functional and Presentation Currency

Items included in the financial statements of each of our entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). Our consolidated financial statements are presented in South African Rand, which is the Group’s presentation currency.

Transactions and Balances

Foreign currency transactions are translated into the respective entity’s functional currency using the exchange rates prevailing at the transaction dates or valuation date where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from year-end currency translations of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Group Companies

The results and financial position of all of our entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into South African Rand as follows:


•	assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;


•	income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions);


•	all resulting exchange differences are recognized in other comprehensive income; and


•	equity items are measured in terms of historical cost at the time of recording, translated at the rate on the date of recording and are not retranslated to closing rates at reporting dates.

On consolidation, exchange differences arising from the translation of net investments in foreign operations are taken into other comprehensive income. When a foreign operation is fully disposed of or sold (i.e., control is lost), exchange differences that were recorded in equity are recognized in the income statement as part of the gain or loss on sale. A repayment/capitalization of a net investment loan therefore does not result in any exchange differences being transferred from equity to the income statement unless it is part of a transaction resulting in a loss of control.

Goodwill and fair value adjustments arising in connection with the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognized in other comprehensive income.

Property, Plant and Equipment

Property, plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes all expenditure directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to us and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. Repairs and maintenance are charged to the income statement in the reporting period in which they are incurred.

The cost of in-vehicle devices installed in vehicles (including installation and shipping costs) as well as the cost of uninstalled in-vehicle devices are capitalized as property, plant and equipment. We depreciate installed in-vehicle devices on a straight-line basis over their expected useful lives (one to five years), commencing upon installation whereas uninstalled in-vehicle devices are not depreciated until installation. The related depreciation expense is recorded as part of cost of sales in the income statement.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to reduce their cost to their residual values over their estimated useful life.

Right-of-use assets are included in property, plant and equipment on the statement of financial position. Refer to the Leases accounting policy below for the accounting policy related to right-of-use assets.

Intangible Assets

Goodwill

Goodwill arises on the acquisition of businesses and represents the excess of consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the acquirer’s interest in the net fair value of the net assets acquired. Goodwill on acquisition of businesses is included in intangible assets. Gains and losses on the disposal of an entity include the carrying amount of the goodwill relating to the entity sold.

Goodwill is not amortized but is tested annually for impairment or more frequently if events or changes in circumstances indicate a potential impairment, and is carried at cost less accumulated impairment losses. The carrying amount of the cash-generating unit (“CGU”) containing the goodwill is compared to the recoverable amount, which is the higher of value-in-use and the fair value less costs to sell. Impairment losses recognized as an expense in relation to goodwill are not subsequently reversed. Goodwill is allocated to CGUs for the purpose of impairment testing. The allocation is made to those CGUs or groups of CGUs that are expected to benefit from the business combination in which the goodwill arose. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

Computer Software, Technology, In-House Software, Product Development and Customer Relationships

Acquired computer software licenses are capitalized on the basis of costs incurred to acquire and bring the software into use. The acquired computer software licenses have a finite useful life and are subsequently carried at cost less accumulated amortization and accumulated impairment losses. These costs are amortized over their estimated useful lives (two to five years).

In-house software and product development costs that are directly attributable to the design, testing and development of identifiable and unique software and products controlled by us are capitalized as intangible assets when it is feasible to complete the software or product so that it will be available for use, management intends to complete the software or product and use it or sell it, there is an ability to use or sell the software or product, it can be demonstrated how the software or product will generate probable future economic benefits, adequate technical, financial and other resources to complete the development and use or sell the software or product are available and the expenditure attributable to the software product during its development can be reliably measured.

Directly attributable costs that are capitalized as part of intangible assets include software and product development employee costs and an appropriate portion of relevant overheads.

Other development expenditures that do not meet the criteria are recognized as an expense as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period if the criteria are subsequently met. Costs, including annual licenses, associated with maintaining computer software programs are recognized as an expense as incurred. Technology, in-house software and product development costs are capitalized on the basis of costs incurred to acquire and bring them into use. The recognized assets have a finite useful life and are subsequently carried at cost less accumulated amortization and accumulated impairment losses. In addition, they are amortized over their estimated useful lives (one to 17 years).

Customer relationships acquired in a business combination are recognized at fair value at the acquisition date. Customer relationships have a finite useful life and are subsequently carried at cost less accumulated amortization and accumulated impairment losses. Amortization is calculated over the expected useful life of the customer relationship (two to 15 years) and reflects the pattern in which future economic benefits of the customer relationship are expected to be consumed. The useful life principally reflects management’s view of the average economic life of the customer base and is assessed by reference to factors such as customer churn rates.

Impairment of Non-Financial Assets

Assets that have an indefinite useful life, goodwill and intangible assets that are not ready to use are not subject to amortization but are tested annually for impairment or whenever there is an indication of impairment. Assets subject to amortization or depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We recognize an impairment loss for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost to sell, and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value. For purposes of assessing impairment, we group assets at the operating segment level. At each reporting date, we review non-financial assets other than goodwill that have suffered an impairment for possible reversal of the impairment.

Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, and financial assets, which are specifically exempt from this requirement. An impairment loss is recognized for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognized for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognized. A gain or loss not previously recognized by the date of the sale of the non-current asset is recognized at the date of derecognition.

Non-current assets are not depreciated or amortized while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognized. Non-current assets classified as held for sale are presented separately from the other assets in the statement of financial position.

Impairment of financial assets

Impairment losses are recognized on an expected credit loss basis and are presented in administration and other charges in the income statement. Expected credit losses are probability-weighted estimates of credit losses. 12 month expected credit losses are recognized (other than for trade receivables for which lifetime expected credit losses are recognized – see below), until there has been a significant increase in credit risk, from which point, lifetime expected credit losses are recognized. 12 month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the entire expected life of the financial asset.

For impairment of trade and other receivables, we apply the simplified approach permitted by IFRS 9, which requires lifetime expected credit losses to be recognized from initial recognition of the trade and other receivables, refer to note 10 to the consolidated financial statements for further details. Probability-weighted estimates of lifetime expected credit losses are determined for appropriate groupings of customers based on their credit characteristics. Historical losses are used as a starting point and adjusted to take account of current expectations of losses over the remaining life of the trade and other receivable.

Accounting policies applied until March 31, 2018

We assess, at the end of each reporting period, whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Loans and receivables

Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicates that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For the loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate. The asset’s carrying amount is reduced and the amount of the loss is recognized in the income statement. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, we may measure impairment on the basis of an instrument’s fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the reversal of the previously recognized impairment loss is recognized in the income statement.

Trade Receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. If collection is expected in one year or less they are classified as current assets. If not, they are presented as non-current assets. Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment.

Trade and other payables

Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade and other payables are initially recognized at fair value and are subsequently measured at amortized cost using the effective interest method.

Net cash and cash equivalents

Net cash and cash equivalents included in the statement of cash flows include cash on hand, deposits held on call with banks and bank overdrafts; all of which are available for use by the Group and have an original maturity of less than three months. Bank overdrafts are included within current liabilities on the statement of financial position.

Provisions

Provisions are recognized when we have a present legal or constructive obligation as a result of a past event for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognized for future operating losses. Provisions which are expected to be settled in a period greater than 12 months are discounted to their present value. The increase in the provision due to the passage of time is recognized as an interest expense. Provision for the estimated liability on all products under warranty is made on the basis of claims experience. Provision for the estimated liability for maintenance costs is made on a per unit basis when the obligation to repair occurs. Provision for the anticipated costs associated with the restoration of leasehold property is based on our best estimate of those costs required to restore the property to its original condition. Restructuring provisions are recognized when we have developed a detailed formal plan for restructuring and have raised a valid expectation that we will carry out the restructuring. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring and is recorded in administration and other charges in our income statement.

Leases

We recognize a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the lessee’s incremental borrowing rate. We generally use the lessee’s incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:


•	Fixed payments, including in-substance fixed payments;


•	Variable lease payments that depend on an index or a rate, initially measured using the index or rate at the commencement date;


•	Amounts expected to be payable under a residual value guarantee; and


•	The exercise price under a purchase option that we are reasonably certain to exercise, lease payments in an optional renewal period if we are reasonably certain to exercise an extension option, and penalties for early termination of a lease unless we are reasonably certain not to terminate early.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in our estimate of the amount expected to be payable under a residual value guarantee, or if we change our assessment of whether we will exercise a purchase, extension or termination option.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. We present right-of-use assets in property, plant and equipment and lease liabilities in capitalized lease liabilities on the statement of financial position.

We have elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. We regard items that are below $5 000 to be low value assets. We recognize the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Accounting policies applied until March 31, 2018

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Payments made under operating leases are charged to the income statement on a straight-line basis over the term of the lease.

Critical Accounting Estimates and Judgements in Applying Accounting Policies

We continually evaluate estimates and judgements, which are based on historical experience and other factors, including expectations of future events that we believe reasonable under the circumstances. We make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. We outline below the estimates and assumptions that have significant risk of causing a material adjustment to the financial position and financial performance of the Group within the next 12 months are outlined below:

Maintenance Provision

In some instances, we offer maintenance services as part of our revenue contracts. Management estimates the related provision for maintenance costs per vehicle when the obligation to repair occurs.

Current and Deferred Income Taxes

We are subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes. Where applicable tax legislation is subject to interpretation, management makes assessments, based on expert tax advice, of the relevant tax that is likely to be paid and provides accordingly. When the final outcome is determined, any difference is recognized in the period in which the final outcome is determined.

Determining how much tax to recognize when an uncertain tax position exists requires judgement. The Group applies the measurement principle in IAS 12, ‘Income Taxes’, when measuring the amount of tax to recognize related to an uncertain tax position. Therefore we measure uncertain tax positions based on a weighted average estimate, taking into account all of the tax uncertainties related to the tax position taken.

Our interests in subsidiaries include certain loans denominated in foreign currencies which are repayable by agreement of both parties. Realization of such loans will result in taxable foreign exchange differences in accordance with prevailing legislation in South Africa. Although we control the timing of the reversal of these temporary differences, given the volatility of the South African Rand and based on our current assessment, it is considered probable that the temporary difference relating to a loan between us and a South African subsidiary will reverse in the foreseeable future. Hence, a deferred tax liability has been recognized in respect of these temporary differences.

We apply judgement when recognizing deferred tax assets in respect of tax losses. Deferred tax assets in respect of tax losses are recognized for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilized. In determining the level of future taxable profit that will be available, we consider both an entity’s historical profitability and estimates of future profitability and recognize deferred tax for the whole or the part of the temporary difference that is more likely than not to be recovered. Where an entity has incurred historical losses, deferred tax assets are only recognized when the particular entity has shown a reasonable period of starting to return to profitability.

Impairment Estimates

We test annually whether goodwill has suffered any impairment. Other assets are tested for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. For the purposes of assessing impairment, assets are grouped into CGUs at the lowest levels for which there are separately identifiable cash flows. The recoverable amount of CGUs has been based on value in use calculations that require the use of estimates. The calculation of each segment’s discounted net present value requires extensive use of estimates and assumptions about discount rates and forecasted cash flows. Actual results could be different. Future changes in assumptions or market conditions may negatively affect these discounted cash flows.

In note 7 to the consolidated financial statements we have disclosed the key assumptions used for the value in use calculations for all segments where impairment testing was performed. In the segments where goodwill impairment testing was performed, there was significant headroom between the recoverable amount per the value in use calculation and the carrying value of the segment. As a result, management believes that a reasonable change in assumptions would not trigger any impairments.

Customer Relationships

The useful life principally reflects management’s view of the average economic life of the customer base and is assessed by reference to factors such as customer churn rates. An increase in churn rates may lead to a reduction in the estimated useful life.

Product Development Cost

Product development cost directly attributable to the design and testing of identifiable and unique software products controlled by us are recorded as intangible assets when the criteria in note 2.6 to our consolidated financial statements have been met. The assessment as to when these criteria have been met is subjective and capitalization has been based on management’s best judgement of facts and circumstances in existence at year end.

The useful lives of development costs capitalized are reviewed on an at least an annual basis. The useful life estimates are based on historical experience with similar assets as well as anticipation of future events such as technological changes, which may impact the useful life. The residual values of product development costs are estimated to be zero.

Provision for Impairment of Trade Receivables

We apply the simplified approach permitted by IFRS 9, which requires lifetime expected losses to be recognized from initial recognition of the trade receivables. Probability-weighted estimates of lifetime credit losses are determined for appropriate groupings of customers based on their credit characteristics. Historical losses are used as a starting point and adjusted to take account of current expectations of losses over the remaining life of the trade receivable. Changes to the expected credit losses provided for may be required if the financial condition of our customers improves or deteriorates. An improvement in financial condition may result in lower actual write-offs. Historically, changes to the estimate of losses have not been material to our financial position and results.

Allocation between in-vehicle devices and inventory

The allocation between in-vehicle devices and inventory reflects our estimates of how units are expected to be sold, thereby it is a significant area of judgement for the Group.

Probability on the valuation of performance shares

The probability of the performance targets being met on the valuation of performance shares are based on management’s best estimate of achieving such stretch targets. Management considers whether past actual results on the performance targets were achieved compared to past budgets and considers the most recent budgeted results for the three year strategic plan to determine the probability. Refer to note 13 to the consolidated financial statements.

Recent Accounting Pronouncements

Certain new accounting standards and interpretations have been published that are not mandatory for March 31, 2019 reporting periods and except for IFRS 16 have not been early adopted. Although none of these new accounting standards and interpretations that have not been early adopted are expected to have a significant effect on our consolidated financial statements, more information about the effect of IFRIC 23 is provided below :

IFRIC 23 is an interpretation that is effective for us from April 1, 2019, which provides guidance on the accounting for uncertain tax treatments. An uncertain tax treatment is a tax treatment for which there is uncertainty over whether the relevant tax authority will accept the tax treatment under tax law. Where such uncertainty exists and it is probable that the tax authority will accept the uncertain tax treatment in an entity’s income tax filings, IFRIC 23 requires the calculation of taxable profit or loss, tax bases, unused tax loss, unused tax credits or tax rates to be determined consistently with the tax treatment used or planned to be used in its income tax filings. When it is not considered probable; the uncertainty should be reflected using the most likely amount or the expected value depending on which method is expected to better predict the resolution of the uncertainty.

IFRIC 23 can either be applied fully retrospectively (if possible without using hindsight) or retrospectively with a cumulative catch-up adjustment against opening retained earnings at the date of adoption. We have decided to apply the cumulative catch-up approach.

Uncertain tax positions are currently accounted for by the Group using a weighted average estimate regardless of whether it is probable that the tax treatment will be accepted. With regard to the uncertain tax positions as at March 31, 2019, it was not considered probable that the tax authority would accept the tax treatment. Accordingly, it is not expected that the adoption of IFRIC 23 will have a significant impact on opening retained earnings at April 1, 2019.

Adoption of IFRS 9, IFRS 15 & IFRS 16

Other than the effect of adopting IFRS 9, IFRS 15 and IFRS 16 as set out below, the other standards, amendments and interpretations which are effective for the financial year beginning on April 1, 2018 did not have a material impact on the Group.

IFRS 9 Financial Instruments (effective date: January 1, 2018)

IFRS 9, ‘Financial Instruments’, addresses classification and measurement of financial assets and replaces the multiple classification and measurement models in IAS 39, ‘Financial Instruments: Recognition and Measurement’ with a single model that has only two classification categories: amortized cost and fair value. IFRS 9 also introduces a new impairment model and aligns hedge accounting more closely with an entity’s risk management.

The standard is effective for us from April 1, 2018. We have elected not to restate comparatives and recognized the transitional adjustments in retained earnings on the date of initial application.

The most relevant change to the Group is the requirement to use an expected loss model, instead of the incurred loss model, which was previously used when assessing the recoverability of trade and other receivables. Based on the expected credit loss model contained in IFRS 9, the increase in the provision for doubtful debts at April 1, 2018 was R3.2 million.

IFRS 15 - Revenue from contracts with customers (effective date: January 1, 2018)

IFRS 15 ‘Revenue from contracts with customers’ replaces IAS 18 ‘Revenue’ and IAS 11 ‘Construction Contracts.’ It is a single, comprehensive revenue recognition model for all contracts with customers and has the objective of achieving greater consistency in the recognition and presentation of revenue. In terms of the new standard, revenue is recognized based on the satisfaction of performance obligations, which occurs when control of goods or services transfers to a customer.

The revenue standard is effective for annual periods beginning on or after January 1, 2018 and therefore is applicable for us from April 1, 2018.

The standard permits a modified retrospective cumulative catch-up approach for the adoption, which we have decided to apply. Under this approach we recognized transitional adjustments in retained earnings on the date of initial application (i.e. April 1, 2018), without restating the comparative period. Under the practical expedient, the new requirements only need to be applied to contracts that are not completed as of April 1, 2018.

The impact of applying IFRS 15 is as follows:

Costs incurred in obtaining a contract

Commissions incurred to acquire contracts need to be capitalized and amortized, unless the amortization period is 12 months or less. Previously, we expensed commissions. Under IFRS 15, the amortization expense reflects the settlement of the related performance obligations, which, depending on the specific contract, may include hardware, installation, training and/or service. To the extent commission capitalized is commensurate, the commission attributable to service will be amortized over the minimum contractual period or, if shorter, the expected life of the contract. To the extent it is not commensurate, the commission capitalized that is attributable to service will be amortized over the expected life of the contract.

The impact at April 1, 2018 was as follows:


–	Capitalized commission asset with a net book value of R45.3 million; and


–	Additional recurring commission liability of R6.9 million.

Recurring commission is commission which is payable for each month the customer remains with us. Since the commission relates to acquiring a customer contract, as part of the adoption of IFRS 15, a recurring commission liability is recognized at the date on which the contract is acquired. The measurement reflects the total commission payable over the minimum contractual period, or if shorter, the expected life of the contract, together with the effect of the time value of money, where significant. Under current accounting the recurring commissions were accrued for on a monthly basis.

Amortization expense of external commissions capitalized under IFRS 15 is recognized in cost of sales, while that of internal commissions is recognized in sales and marketing costs. Commissions not capitalized under the 12-month practical expedient are also classified in the same manner. This is in line with the current income statement presentation of the commission expense.

Significant financing

In respect of contracts for which we receive payment more than 12 months in advance, interest expense is accrued on the income received in advance liability. This results in the revenue being measured at a higher amount when it is recognized, compared to previous accounting.

At April 1, 2018, the income received in advance liability (which is disclosed as ‘liabilities related to contracts with customers’) was R1.8 million higher than the balance at March 31, 2018.

Fixed escalations

Fixed escalations are spread evenly over the contract period resulting in the related revenue being different to what is actually billed. In the earlier part of the contract, revenue will be higher than the amount billed, while in the latter part, it will be lower. Previously, we recognized the increase in revenue due to fixed escalations only once the escalations were effective.

A contract asset of R1.2 million was recognized on April 1, 2018 reflecting the amount by which revenue should have been higher under IFRS 15 in periods prior to March 31, 2018 as a result of straight-lining the fixed escalations.

IFRS 16 - Leases (effective date: January 1, 2019)

IFRS 16, ‘Leases’ replaces IAS 17, ‘Leases’, and addresses the accounting and disclosures of leases.

The standard provides a single lessee accounting model, requiring lessees to recognize right-of use assets and lease liabilities for all leases unless the lease term is 12 months or less or, the underlying asset is a low-value asset. Lessors continue to classify leases as operating or finance, with IFRS 16’s approach to lessor accounting remaining substantially unchanged from its predecessor, IAS 17.

IFRS 16 applies to annual reporting periods beginning on or after January 1, 2019, but can be early adopted. Given that we applied IFRS 15 from April 1, 2018, we decided to also adopt IFRS 16 from this date.

We have chosen to apply the ‘simplified approach’ on adoption of IFRS 16 that includes certain relief related to the measurement of the right-of-use asset and the lease liability at April 1, 2018, rather than full retrospective application. Furthermore, the ‘simplified approach’ does not require a restatement of comparatives. We lease land and buildings, office equipment and vehicles which were previously treated as operating leases.

The impact at April 1, 2018 was as follows:


–	Right-of-use asset with a net book value of R30.6 million; and


–	Lease liability (net of accruals/prepayments already recognized) of R32.6 million.

Summary of the impact at April 1, 2018 of adopting IFRS 9, IFRS 15 & IFRS 16



IFRS 9 Assets	(R3.2 million)
Trade and other receivables	(R3.2 million)

IFRS 15 Assets	R46.5 million
Capitalized commission assets	R45.3 million
Trade and other receivables ⁽¹⁾	R1.2 million

IFRS 16 Assets	R29.9 million
Property, plant and equipment	R30.6 million
Trade and other receivables ⁽²⁾	(R0.7 million)

Total Assets	R73.2 million

IFRS 15 Liabilities	R8.7 million
Recurring commission liability (non-current)	R4.0 million
Trade and other payables ⁽³⁾	R4.7 million

IFRS 16 Liabilities	R31.9 million
Capitalized lease liability (non-current)	R23.3 million
Capitalized lease liability (current)	R8.8 million
Trade and other payables ⁽²⁾	(R0.2 million)

Deferred tax liabilities	R7.9 million

Total liabilities	R48.5 million

Net increase in retained income	R24.7 million

⁽¹⁾ Contract assets related to fixed escalations.

⁽²⁾ Reversal of lease prepayment and lease accruals under IAS 17 Leases. These have been reflected in the measurement of the lease liability under IFRS 16.

⁽³⁾ Includes the current portion of additional recurring commission liability of R2.9 million and increase in liabilities related to contracts with customers due to significant financing adjustments of R1.8 million.

Summary of the impact on fiscal 2019 results of adopting IFRS 9, IFRS 15 & IFRS 16

The only material impact on the consolidated income statement for fiscal 2019 was a R7.9 million increase in finance costs.

This was primarily as a result of IFRS 15 significant financing activity interest expense and IFRS 16 capitalized lease liability

interest. The impact on every other line item in the condensed consolidated income statement for fiscal 2019 was not material.

The only adjustment to the statement of cash flows was an outflow of R11.4 million in respect of the capital portion of lease liability payments being recorded in cash flows from financing activities as a result of the adoption of IFRS 16. This outflow was previously accounted for as an operating lease expense and included under cash generated from operations.

5B. LIQUIDITY AND CAPITAL RESOURCES

We believe that our cash and borrowings available under our credit facilities will be sufficient to meet our liquidity requirements for the foreseeable future. Please refer to note 12 to the consolidated financial statements, which includes details of the credit worthiness of the financial institutions where cash and cash equivalents are held, as well as the currencies in which cash and cash equivalents were denominated in at March 31, 2019, 2018 and 2017.

The following tables provide a summary of our cash flows for each of the three years ended March 31, 2019, 2018 and 2017:



	Fiscal Year Ended March 31,
	2019			2019			2018			2017
	(In thousands)
Cash generated from operating activities		$32,036			R463,846			R353,208			R323,571
Cash used in investing activities	(19,511		)	(282,495		)	(342,135		)	(292,894		)
Cash used in financing activities	(9,577		)	(138,677		)	(62,494		)	(519,576		)
Effects of exchange rate gains/(losses) on cash	1,379			19,969			(14,374		)	(15,530		)
Net increase/(decrease) in cash and cash equivalents		$4,327			R62,643			(R65,795	)		(R504,429	)

The accounting policies applied in fiscal 2019 are consistent with those accounting policies applied in the preparation of the previous consolidated financial statements, except for the adoption of IFRS 9, IFRS 15 and IFRS 16 from April 1, 2018. Refer to “Item 5A. Operating Results” for additional information. The only adjustment to the statement of cash flows in fiscal 2019 was an outflow of R11.4 million in respect of the capital portion of lease liability payments being recorded in cash flows from financing activities as a result of the adoption of IFRS 16. This outflow was previously accounted for as an operating lease expense and included under cash generated from operations.

In fiscal year 2019, the cash used in financing activities includes share repurchases of R73.5 million, dividends paid of R67.5 million and the repayment of lease liabilities of R11.4 million, offset by proceeds from issuance of shares in respect of employee share options of R13.8 million. In fiscal year 2018, the cash used in financing activities consists of share repurchases of R18.7 million, dividends paid of R53.2 million and acquisition of non-controlling interest of R1.4 million, offset by proceeds from the issuance of shares in respect of employee share options of R10.7 million. In fiscal year 2017, the cash used in financing activities includes share repurchases of R473.7 million and dividends paid of R53.0 million, offset by proceeds from the issuance of shares in respect of employee share options of R7.0 million.

The Group has minimum liquidity risk due to the recurring nature of its income and the availability of the cash resources set out below:



	Fiscal Year Ended March 31,
	2019		2019		2018
	(In thousands)
Cash and cash equivalents, net of overdrafts		$24,393		R353,181		R290,538

We fund our operations, capital expenditure and acquisitions through cash generated from operating activities, cash on hand and our undrawn borrowing facilities.

Following the completion of our IPO of ADSs in fiscal year 2014, we discontinued our then policy of declaring regular dividends in order to increase the funds available to pursue opportunities for more rapid growth. During fiscal year 2016, after a strategic review, the Board decided to reintroduce the Company’s policy of paying regular dividends, which are considered on a quarter-by-quarter basis.

On May 23, 2017, the MiX Telematics Limited Board approved a share repurchase program of up to R270 million under which the Company may repurchase its ordinary shares, including ADSs. We expect any repurchases under this share repurchase program to be funded out of existing cash resources. Refer to “Item 7A. Major Shareholders” for information regarding our share repurchase program.

Operating Activities

Net cash generated from operating activities in fiscal year 2019 increased to R 463.8 million from R 353.2 million in the prior year, which is primarily attributable to improved cash generated from operations before working capital changes of R192.3 million offset by negative net working capital changes of R63.9 million, higher net interest received of R2.3 million and increased taxation paid of R20.1 million. Net cash generated from operating activities during fiscal year 2019

consisted of our operating profit (after excluding non-cash charges) of R686.9 million, a net investment in working capital of R145.5 million, net interest received of R7.2 million and taxes paid of R84.7 million.

Net cash generated from operating activities in fiscal year 2018 increased to R353.2 million from R323.6 million in fiscal year 2017, which is primarily attributable to improved cash generated from operations before working capital changes of R149.3 million offset by negative net working capital changes of R113.4 million, lower interest received of R4.2 million and increased taxation paid of R2.1 million. Net cash generated from operating activities during fiscal year 2018 consisted of our operating profit (after excluding non-cash charges) of R494.6 million, a net investment in working capital of R81.6 million, net interest received of R4.8 million and taxes paid of R64.7 million.

Net cash generated from operating activities in fiscal year 2017 increased to R323.6 million from R240.4 million in fiscal year 2016 which is primarily attributable to improved cash generated from operations before working capital changes of R22.1 million and positive net working capital changes of R61.2 million. Net cash generated from operating activities during fiscal year 2017 consisted of our operating profit (after excluding non-cash charges) of R345.3 million, a net reduction in working capital investments of R31.8 million, net interest received of R9.1 million and taxes paid of R62.6 million.

Investing Activities

Net cash used in investing activities in fiscal year 2019 decreased to R282.5 million from R342.1 million in fiscal year 2018. Net cash used in investing activities during fiscal year 2019 primarily consisted of capital expenditures of R286.5 million. Capital expenditures during the year included purchases of intangible assets of R85.6 million, which included capitalized development costs of R67.6 million, as well as computer software, technology, in-house software and other intangibles of R18.0 million, and cash paid to purchase property, plant, and equipment of R200.8 million, which included in-vehicle devices of R191.6 million. In addition, net cash used in investing activities also included a net decrease in restricted cash of R1.7 million and proceeds on sale of property, plant and equipment and intangible assets of R2.2 million.

Net cash used in investing activities in fiscal year 2018 increased to R342.1 million from R292.9 million in fiscal year 2017. Net cash used in investing activities during fiscal year 2018 primarily consisted of capital expenditures of R338.3 million. Capital expenditures during the year included purchases of intangible assets of R99.6 million, which included capitalized development costs of R67.2 million, customer relationships of R5.3 million, as well as computer software, technology, in-house software and other intangibles of R27.1 million, and cash paid to purchase property, plant, and equipment of R238.6 million, which included in-vehicle devices of R229.8 million. In addition, net cash used in investing activities also included a net increase in restricted cash of R8.3 million offset by proceeds on sale of property, plant and equipment and intangible assets of R4.4 million.

Net cash used in investing activities in fiscal year 2017 increased to R292.9 million from R249.7 million in fiscal year 2016. Net cash used in investing activities during fiscal year 2017 primarily consisted of capital expenditures of R295.5 million. Capital expenditures during the year included purchases of intangible assets of R115.3 million, which included capitalized development costs of R77.0 million as well as computer software, technology, in-house software and other intangibles of R38.2 million, and cash paid to purchase property, plant, and equipment of R180.2 million, which included in-vehicle devices of R169.0 million. In addition to the capital expenditure, net cash used in investing activities also included R1.1 million of deferred consideration paid as a result of fiscal year 2014 acquisitions. These were offset by a net decrease in restricted cash of R3.4 million.

Financing Activities

In fiscal year 2019, net cash used in financing activities was R138.7 million. The net cash used in financing activities in fiscal year 2019 included share repurchases of R73.5 million, dividends paid of R67.5 million and the repayment of lease liabilities of R11.4 million, offset by R13.8 million in proceeds received from the issuance of shares relating to share options exercised under the share option scheme.

In fiscal year 2018, net cash used in financing activities was R62.5 million. The net cash used in financing activities in fiscal year 2018 included share repurchases of R18.7 million, dividends paid of R53.2 million and the acquisition of non-controlling interest of R1.4 million, offset by R10.7 million in proceeds received from the issuance of shares relating to share options exercised under the share option scheme.

In fiscal year 2017, net cash used in financing activities was R519.6 million. The net cash used in financing activities in fiscal year 2017 included share repurchases of R473.7 million, dividends paid of R53.0 million offset by R7.0 million in proceeds received from the issuance of shares relating to share options exercised under the share option scheme.

Credit Facilities

At March 31, 2019, our principal sources of liquidity were net cash balances (consisting of cash and cash equivalents less bank overdraft) of R353.2 million ($24.4 million) and unutilized borrowing capacity of R58.2 million ($4.0 million) available through our credit facilities.

Our principal sources of credit are our facilities with Standard Bank Limited and Nedbank Limited. We have a R70.0 million overdraft facility and an unutilized vehicle and asset finance facility of R8.5 million with Standard Bank Limited that bear interest at South African Prime less 1.2% . The Standard Bank Limited facility letter was revised on July 23, 2018, please refer to section “Item 19. Exhibits” for the revised facility letter. At March 31, 2019, R30.3 million ($2.1 million) was utilized under the overdraft facility. We use this facility as part of our foreign currency hedging strategy. We draw down on this facility in the applicable foreign currency in order to fix the exchange rate on existing balance sheet foreign currency exposure that we anticipate settling in that foreign currency. Our obligations under the overdraft facility with Standard Bank Limited are guaranteed by the Company and our wholly-owned subsidiaries, MiX Telematics Africa Proprietary Limited and MiX Telematics International Proprietary Limited, and secured by a pledge of accounts receivable by the Company and MiX Telematics International Proprietary Limited.

During fiscal year 2014, we entered into a R10.0 million facility from Nedbank Limited that bears interest at South African Prime less 2% . As at March 31, 2019, the facility was undrawn. We use this facility for working capital purposes in our Africa operations.

Our credit facilities with Standard Bank Limited and Nedbank Limited contain certain restrictive clauses, including without limitation, those limiting our and our guarantor subsidiaries’, as applicable, ability to, among other things, incur indebtedness, incur liens, or sell or acquire assets or businesses.

Please refer to section “Item 5F. Tabular Disclosure of Contractual Obligations”, where the Group’s contractual cash obligations have been disclosed.

5C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

For our disclosures in respect of research and development, technology and intellectual property please refer to “Item 4B. Business Overview.”

5D. TREND INFORMATION

Subscription revenue is our largest and fastest growing component of total revenue. The table below sets out subscription revenue and total subscribers for each of the eight quarters in the period ending March 31, 2019.



	For the Quarter Ended,
	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018	Dec 31, 2017	Sep 30, 2017	Jun 30, 2017
Subscription Revenue (R’000)	443,791	438,913	420,152	390,389	373,623	376,364	349,262	335,367
Subscribers	750,455	736,085	714,011	691,922	676,866	664,816	640,158	625,602

Subscription revenue increased sequentially in each of the quarters presented except for the quarter ending March 31, 2018 where the decline in subscription revenue was as a result of the impact of the Rand strengthening primarily against the British Pound and U.S. Dollar.

Subscription revenue growth is primarily due to increases in the number of total subscribers in each quarter.

Historical trends in profitability may be affected by hardware revenue fluctuations, caused by long sales cycles for our enterprise fleet management solutions and a continued trend towards fully-bundled subscriptions as opposed to upfront hardware purchases.

In fiscal years 2019, 2018 and 2017, our subscription revenue derived from customers in the oil and gas industry was 26.6%, 23.3% and 20.8% of total subscription revenue respectively, which represents our single biggest vertical amongst our enterprise fleet management customers. Our oil and gas customers are primarily in the Americas and Middle East regions. The oil and gas industry is complex, and numerous geopolitical, economic, environmental and other factors affect pricing. Expectations for future crude oil and natural gas prices, product demand and supply affect our customers’ spending habits. We have seen subscriber growth in this market vertical throughout fiscal 2019, which can be attributed to increased industry activity as a result of rising crude oil prices and increased demand for natural gas.

5E. OFF-BALANCE SHEET ARRANGEMENTS

We do not engage in any off-balance sheet financing activities. We do not have any interest in entities referred to as variable interest entities, which include special purpose entities and other structured finance entities which are not consolidated.

5F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

Our contractual cash obligations at the end of fiscal year 2019 are summarized in the following table:

Total

Less than

1 Year

1 – 3

Years

3 – 5

Years

than 5

Years

(In thousands)

Approved and committed capital commitments

R58,341

R—

—

Outstanding purchase obligations

59,426

57,687

1,739

—

Total

R117,767

R116,028

R1,739

—

Total contractual obligations as of March 31, 2019, were R117.8 million ( $8.1 million).

We adopted IFRS 16 during fiscal year 2019. This resulted in operating leases being recognized as capitalized lease liabilities on the statement of financial position. Refer to notes 2.1.1.1, 20 and 35 to the consolidated financial statements for additional disclosure regarding the impact of adopting IFRS 16.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6A. DIRECTORS AND SENIOR MANAGEMENT

The names of the senior management and directors of MiX Telematics Limited, their ages at July 26, 2019 , and their positions, are set forth in the table below. The business address of each of our members of senior management and directors is c/o MiX Telematics Limited, Howick Close, Waterfall Park, Midrand, South Africa, 1686.



Name	Age	Position
Senior Management
Stefan Joselowitz	60	President and Chief Executive Officer / Director
Paul Dell ⁽¹⁾	37	Interim Chief Financial Officer / Director
John Granara ⁽²⁾	51	Chief Financial Officer / Executive Vice President / Director
Charles Tasker	55	Chief Operating Officer / Director
Catherine Lewis	44	Executive Vice President — Technology
Gert Pretorius	51	Executive Vice President — Africa

Non-Executive Directors
Robin Frew	59	Chairperson
Fikile Futwa	42	Director
Richard Bruyns	66	Director
Fundiswa Roji-Maplanka	43	Director
Ian Jacobs	42	Director
Anthony Welton	71	Director



₍₁₎	Paul Dell relinquished his position as Interim Chief Financial Officer and resigned as a Director of MiX upon the appointment of John Granara as Chief Financial Officer, Executive Vice President and Director on July 8, 2019.
₍₂₎	John Granara was appointed as Chief Financial Officer, Executive Vice President and Director of MiX on July 8, 2019. His appointment is to be confirmed by shareholders at our annual general meeting to be held on September 11, 2019.

Senior Management

Stefan Joselowitz has served as our Chief Executive Officer, and as a member of our Board of Directors, since he founded the Group in 1996. In 2008, he relocated to the United States as part of our global expansion strategy. Since founding MiX, Stefan Joselowitz has overseen six acquisitions. He successfully orchestrated the Company’s listing on the JSE in 2007 and in 2013 led the team that listed the Company on the NYSE, in the process concluding a $65 million capital raising to fund future growth. Prior to MiX, from 1984 to 1995, he served as Chief Executive Officer, and previously, Sales Director, of Shurlok Proprietary Limited, a developer of electronic systems for the automotive industry, helping to build the company into a leader in the field of vehicle safety and security.

Paul Dell has served as the Interim Chief Financial Officer and as a member of our Board of Directors from February 2017 until July 8, 2019. Prior to his appointment to this position, he was our Group Financial Controller from September 2012 and before that he served as Group Financial Manager from July 2010 when he joined the Group. From October 2007 to June 2010, Paul Dell served as Group Internal Audit Manager and then Group Accountant at Batemen Engineering, an international project management business based in South Africa. He was previously employed by PricewaterhouseCoopers Inc. from November 2003 to September 2007, during which time he completed two secondments to the United States. He is a registered chartered accountant in South Africa.

John Granara was appointed as our Chief Financial Officer, an Executive Vice President and as a member of our Board of Directors on July 8, 2019. Prior to his appointment to MiX, John Granara held the position of Chief Financial Officer at Ameresco Inc. where he held oversight of all corporate finance accounting, financial analysis, planning, M&A, internal audit, tax, treasury, investor relations and structured finance. Prior to that he was Vice President Finance and Chief Accounting Officer at GT Advanced Technologies Inc.. John Granara is a seasoned finance executive with over 20 years’ experience in both public and privately held corporations. John Granara holds a B.S.B.A from Suffolk University in Boston, and is a certified public accountant.

Charles Tasker has served as the Chief Operating Officer since June 2014 and has served as a member of our Board of Directors since August 2007. Prior to assuming the position of Chief Operating Officer, Charles Tasker served as the Executive responsible for Fleet Solutions worldwide since our acquisition of OmniBridge in 2007. Prior to MiX, Charles Tasker founded DataPro in 1986, an Internet service provider and software development company, which was acquired by Control Instruments Group Limited in 1996. As part of that acquisition, Charles Tasker joined Control Instruments to lead its fleet management business, which became OmniBridge. Charles Tasker has more than 25 years of entrepreneurial and management experience working with companies in the technology sector.

Catherine Lewis, our Executive Vice President for Technology, joined the business formerly known as OmniBridge in May 2001, and in November 2013 was promoted to Managing Director of MiX’s Central Services Organization. Catherine Lewis is the custodian of the MiX Telematics brand and is responsible for product management and development, the hosting and operations of the MiX SaaS platform, marketing, business systems, technical support and manufacturing. Catherine Lewis holds a Business Science degree with Honors in Information Systems from the University of Cape Town.

Gert Pretorius, an Executive Vice President, was appointed Managing Director of MiX Africa from October 2016, and served as the Executive Vice President for Information Systems from June 2014 to May 2017. He served as the Executive responsible for Africa Fleet Solutions from January 2012 to June 2014. Gert Pretorius has served in various other senior sales and operations roles at MiX before being appointed Chief Operating Officer for MiX Africa in 2010. Previously, Gert Pretorius served as Operations Manager for OmniBridge. From 1998 until joining OmniBridge, Gert Pretorius held senior executive roles at fleet management companies including Super Group and Daimler Fleet Management and in the security industry at Coin Security Group.

Non-Executive Directors

Robin Frew, a non-executive director (independent in terms of the NYSE Listing Standards, but not in terms of the JSE Listings Requirements), has served as a member of our Board of Directors since January 1996 and was appointed Chairperson of the Board of Directors in October 2016; he is also a member of the Nominations and Remuneration Committee. Robin Frew was a Founding Director and Chief Executive Officer of Radiospoor Telecommunications Limited, a specialist provider of mobile cellular services. Radiospoor was involved in the Cellular industry as a service provider to the Vodacom and MTN businesses from the outset in 1993. Radiospoor listed its business on the Johannesburg Stock Exchange in 1997. The business was sold in 2001. Robin Frew then co-founded a private equity investment business and currently manages a private investment partnership, Masalini Capital Proprietary Limited, in the role of Managing Director.

Richard Bruyns an independent non-executive director, has served on our Board of Directors from August 2007. In October 2016, he was appointed as the Lead Independent Non-Executive Director and Chairperson of the Nominations and Remuneration Committee. He is also a member of our Audit and Risk Committee, and our Social and Ethics Committee. Richard Bruyns has been managing listed companies since 1998, when he was with Hodgson and Darling, and has served as a member and/or chairman of board committees of various listed companies over the years.

Ian Jacobs an independent non-executive director, was elected as a member of our Board of Directors in June 2016, and serves as a member of our Nominations and Remuneration Committee. Ian Jacobs graduated from Yeshiva University, New York in 1997. He worked as a research analyst focused on small capitalization companies from 1997 to 2002 at Schroders, Sidoti & Co. and Goldman Sachs & Co., respectively. In 2003, after graduating from Columbia Business School, New York, Ian Jacobs joined Berkshire Hathaway Inc. where he worked on investment research and other projects as directed by the chairman/CEO. In 2009, Ian Jacobs left Berkshire Hathaway Inc. and founded 402 Capital LLC, a concentrated value focused manager that invests in businesses with structural competitive advantage.

Anthony Welton an independent non-executive director, has served as a member of our Board of Directors since February 2008. Anthony Welton is Chairperson of the Audit and Risk Committee and is a member of our Social and Ethics Committee. Anthony Welton has also served as a member of the Nominations and Remuneration Committee from March 2013 to May 2017. His qualifications and the experience gained during his career as a financial director of JSE listed companies, which spanned the years from 1986 to 2009, have provided him with the necessary expertise to undertake these key roles. He is a member of the South African Institute of Chartered Accountants.

As Anthony Welton informed us of his intention to retire on September 30, 2019, our expectation is that Fundiswa Roji-Maplanka will relinquish the Chairpersonship of the Social and Ethics Committee and will be elected as the Chairperson of the Audit and Risk Committee with effect from October 1, 2019.

Fundiswa Roji-Maplanka an independent non-executive director, was elected as a member of our Board of Directors in October 2017. She is currently the Chairperson of the Social and Ethics Committee and also serves as a member of our Audit and Risk Committee. Fundiswa Roji-Maplanka is a Chartered Accountant and is the founding partner of an investment holding company, Dlondlobala Capital, which she co-founded in 2015. Fundiswa Roji-Maplanka has professional experience in finance, audit, corporate governance, strategy, private equity, mergers & acquisitions, investment management, and investor relations. Fundiswa Roji-Maplanka was a senior manager responsible for strategy and investor relations at the Imperial Group until the end of 2014. Prior to joining the Imperial Group, she worked for over a decade at Kagiso Trust Investments, and later at Kagiso Tiso Holdings as a director of investments. During Fundiswa Roji-Maplanka’s tenure at Kagiso Trust Investments, she was a member of various boards across industries including Macsteel, Bytes Technology Group, Multotec, UTI Pharma and Universal Print Group. Fundiswa Roji-Maplanka was a member of the boards of radio assets of Kagiso Media, including Jacaranda FM and East Coast Radio, as part of managing the Media and ICT portfolio of the Kagiso Group. In the public arena, Fundiswa Roji-Maplanka has served on the board of Technology Innovation Agency and on the audit committee of the Commission for Gender Equality. Fundiswa Roji-Maplanka has also served as a non-executive director of the South African Venture Capital Association.

Fikile Futwa an independent non-executive director, was elected as a member of our Board of Directors in July 2018 and is a member of our Audit and Risk Committee. Fikile Futwa founded and manages an accounting firm, Your Financial Partner, which is registered with the South African Institute of Chartered Accountants. She has more than 18 years' corporate experience which includes external audit, accounting, payroll, financial management, corporate finance, corporate governance, taxation and Broad-Based Black Economic Empowerment regulations. Fikile Futwa started her accounting articles at Andersen and completed same with KPMG. Post articles, she worked in corporate finance for Eskom Holdings SOC Limited and Anglo-American Corporation Limited. She later joined Discovery Limited, where she headed up the Discovery CA(SA) training program and Group Accounting department. Fikile Futwa also served as a non-executive director on various boards.

6B. COMPENSATION

Compensation of Directors and Executive Officers

Non-Executive Director Compensation

Fees payable to non-executive directors are proposed and reviewed by the Committee and recommended to the Board, which in turn makes recommendations to shareholders with reference to the fees paid by comparable companies, responsibilities taken by the non-executive directors and the importance attached to the retention and attraction of high-caliber individuals. Historically fees payable to non-executive directors were reviewed biannually however prospectively, these fees will now be reviewed on an annual basis. At the annual meeting of shareholders held on September 19, 2017, our shareholders approved non-executive director fees for a period of two years from the passing of the resolution (i.e. September 2017) or until its renewal, whichever is the earliest. These fees are set out below:



	Annual Fee
Description	(In thousands)
Director’s fee		R330
Audit and Risk Committee member *	170
Nominations and Remuneration Committee member *	70
Social and Ethics Committee member *	55
Chairman of the Board *	360
Lead Independent Director *	240
Chairman of the Audit and Risk Committee **	240
Chairman of the Nominations and Remuneration Committee **	105
Chairman of the Social and Ethics Committee **	100

* In addition to the directors’ fee

** Includes committee membership fee

Non-executive directors do not participate in any incentive programs. Non-executive directors are not provided with bonuses or long-term incentive plans. We do not set aside or accrue any amounts to provide pension, retirement or

similar benefits for our non-executive directors. The aggregate compensation we have paid or accrued for payment to our non-executive directors in fiscal year 2019 was R4.1 million (2018: R3.9 million).

The following table sets forth the amounts paid to our non-executive directors for fiscal year 2019.



	Fiscal Year ended March 31,
	2019		2019
Non-Executive Directors	(In thousands)
Richard Bruyns ⁽¹⁾		$62		R900
Enos Banda ⁽²⁾	9		130
Fikile Futwa ^{(1) (3)}	26		371
Robin Frew ⁽¹⁾	52		760
Ian Jacobs	28		400
Anthony Welton	43		625
Fundiswa Roji-Maplanka	41		600
Sub-total	261		3,786
Value-added tax ⁽¹⁾	21		305
Total		$282		R4,091


⁽¹⁾	Value-added tax included as part of certain invoices received. Directors’ fees shown exclude value-added tax.


⁽²⁾	Resigned from the Board with effect from July 4, 2018.


⁽³⁾	Appointed to the Board with effect from July 4, 2018.

Executive Director and Other Senior Management Compensation

Our remuneration policy is formulated to attract and retain high-caliber executives and motivate them to develop and implement our business strategy in order to optimize long-term shareholder value. Our objective is to have our remuneration policy conform to best practice standards. Our remuneration policy is based on the following key principles:


•	total rewards are set at levels that are considered to be responsible and competitive within the relevant market;


•	total incentive-based rewards are earned through the achievement of demanding growth and return targets consistent with shareholder interests over the short, medium and long-term:


•	Incentive plans, performance measures and targets are structured to operate soundly throughout the business cycle; and


•	the design of long-term incentive plans is prudent and does not expose shareholders to unreasonable financial risk.

Executive compensation is comprised of the following four principal elements:


•	basic salary and travel allowances;


•	bi-annual incentive bonuses;


•	share incentive plans; and


•	retirement and other benefits including group life and health insurance.

The aggregate compensation, including benefits in kind, for our executive directors and other senior management for fiscal year 2019, was approximately R47.2 million.

The following table sets forth the amounts paid to our executive committee members for fiscal year 2019.



	Fiscal Year ended March 31, 2019
		Salary and Allowances ⁽²⁾		Other Benefits ⁽³⁾		Retirement Benefits		Performance Bonuses ⁽⁴⁾		Total
Executives ⁽¹⁾		(In thousands)
Stefan Joselowitz ⁽⁵⁾			R7,383	—		—			R9,276		R16,659
Charles Tasker ⁽⁵⁾		5,820		—		—		7,097		12,917
Paul Dell		1,950		180		77		2,774		4,981
Gert Pretorius		2,843		281		481		3,280		6,885
Catherine Lewis		2,808		67		117		2,786		5,778
Total			R20,804		R528		R675		R25,213		R47,220


⁽¹⁾	Each of the listed executives is party to an employment contract with us as described in “Executive Employment Contracts”.


⁽²⁾	Allowances include cost of living and travel allowances.


⁽³⁾	Other benefits represent group life, health insurance and other fringe benefits.


⁽⁴⁾	Performance bonuses are based on actual amounts paid during the financial year.


⁽⁵⁾	Individual paid in U.S. Dollars. The amounts paid to individuals in U.S. Dollars have been translated into South African Rand at the exchange rate applicable at the time of payment.

Basic Salary

The basic salary of each executive is subject to annual review and is set to be reasonable and competitive with reference to external market practice in similar companies, which are comparable in terms of size, market sector, business complexity and international scope. Company performance, individual performance and changes in responsibilities are also taken into account when determining annual basic salaries.

Bi-Annual Incentive Bonus

All executives are eligible to receive a performance-related bi-annual bonus. Our Nominations and Remuneration Committee reviews bonuses at the half-year and at year-end, and determines the bonus level based on performance criteria set at the start of the performance period. The criteria include targets relating to subscription revenue growth, operating profit, Adjusted EBITDA targets, cash generated by operations and certain discretionary elements. The short-term incentive program is available to executive directors, senior executives and selected employees. Cash bonuses to senior executives and executive directors are approved by our Nominations and Remuneration Committee.

Equity Incentive Plans

The Group has issued share incentives under two equity incentive plans, the TeliMatrix Group Executive Incentive Scheme and the MiX Telematics Long-Term Incentive Plan (“LTIP”), to directors and certain key employees within the Group. With the introduction of the LTIP, which was approved by shareholders in terms of an ordinary resolution during 2014, no further awards will be made in terms of the TeliMatrix Group Limited Executive Incentive Scheme going forward.

The LTIP is now being used to issue share incentives to employees and executive members within the Group. The LTIP provides for three types of grants to be issued, namely performance shares, retention shares or share appreciation rights (“SARs”). To date only SARs and performance shares have been issued.

As at March 31, 2019, executive committee members have been issued equity incentives under the TeliMatrix Group Executive Incentive Scheme and under the LTIP.

The TeliMatrix Group Executive Incentive Plan is a share option plan. The share option plan and the award of share options to executive directors and senior executives is controlled by the Nominations and Remuneration Committee. Historically, motivations for the award of share options were presented by the Chief Executive Officer to the Nominations and Remuneration Committee which, after review and consideration, recommended the award of such options as it deemed fit to the Board for approval. Selected participants received grants of share options which are conditional rights to receive MiX shares at prices equal to the exercise price. Vesting of options is subject to time and performance conditions. The

performance conditions and period were determined by the Board on a grant-by-grant basis in respect of each new grant of options.

The targets and measuring terms relating to each issue are detailed in the letter of grant. After vesting, the options will become exercisable. Upon exercise by a participant, the Company settles the value of options by delivering MiX shares that will be issued out of authorized unissued MiX shares. These options are treated as equity-settled instruments.

Any senior employee with significant managerial or other responsibility, including any director holding a salaried position with us, is eligible to participate in the share incentive plan. As of March 31, 2019, options to purchase 3,500,000 of our ordinary shares with a weighted average exercise price of R4.11 per share were outstanding, and options for the purchase of 2,625,000 such shares were fully vested.

LTIP SARs awards are controlled by the Nominations and Remuneration Committee. Motivations for the awards are presented by the Chief Executive Officer to the Nominations and Remuneration Committee which, after review and consideration, recommends the award as it deems fit to the Board for approval. The award price of the SARs granted are equal to the closing market value of ordinary shares on the day preceding the date of the grant.

LTIP performance share awards are controlled by the Nominations and Remuneration Committee. Motivations for the awards are presented by the Chief Executive Officer to the Nominations and Remuneration Committee which, after review and consideration, recommends the award as it deems fit to the Board for approval. The performance shares granted vest immediately once the service and performance conditions have been met. Settlement takes place by delivering ordinary shares equal to the number of performance shares that have vested, alternatively as a fall back provision only, by settling the value in cash. Because the Company intends to settle the performance share awards by delivering shares and has not established a past practice of settling in cash, the performance share awards are classified as equity-settled share-based payment awards.

Vesting of performance shares, retention shares and SARs are subject to time and performance conditions. The performance conditions and period are determined by the Board on a grant-by-grant basis in respect of each new grant. Only performance shares and SARs have been issued under the LTIP.

The targets and measuring terms relating to each issue are detailed in the letter of grant. After vesting, the retention and performance shares become immediately vested while the SARs will become exercisable.

The value of the difference between the exercise and grant price of the SARs may be settled at the Company’s option, by the Company by delivering shares or by settling the value in cash. Because the Company intends to settle the SARs by delivering shares and has not established a past practice of settling in cash, the SARs are classified as equity-settled share-based payment awards.

The following table sets forth the outstanding stock-based compensation benefits (share options, SARs and performance shares) for executives at March 31, 2019.



Share options	September 10, 2014		Total
	(In thousands)
Stefan Joselowitz ⁽¹⁾	—		—
Charles Tasker ⁽¹⁾	1,500		1,500
Gert Pretorius	1,000		1,000
Catherine Lewis	1,000		1,000
	3,500		3,500
Option strike price (cents per share)	411
JSE share price on grant date (cents per share)	411
Expiry date	September 10, 2020
Performance conditions
Minimum shareholder return of	10	%



SARs	August 31, 2015		May 30, 2016		November 24, 2016		May 30, 2017		Total
	(In thousands)
Stefan Joselowitz ⁽¹⁾	1,000		1,000		—		1,100		3,100
Charles Tasker ⁽¹⁾	750		750		875		1,100		3,475
Paul Dell ⁽¹⁾	200		200		875		1,100		2,375
Gert Pretorius	500		500		875		1,100		2,975
Catherine Lewis	500		500		875		1,100		2,975
	2,950		2,950		3,500		5,500		14,900
Award price (cents per share)	313		294		328		346
Expiry date	August 31, 2021		May 30, 2022		November 24, 2022		May 30, 2023
Performance conditions
Minimum shareholder return of	10	%	10	%	10	%	10	%



Performance shares	November 5, 2018	Total
	(In thousands)
Stefan Joselowitz ⁽¹⁾	400	400
Charles Tasker ⁽¹⁾	400	400
Paul Dell ⁽¹⁾	200	200
Gert Pretorius	400	400
Catherine Lewis	400	400
	1,800	1,800
JSE share price on grant date (cents per share)	1,000
Expiry date (estimated)	June 14, 2020
Performance conditions	R'million
The following two constant currency targets both need to be met for the performance share awards to vest:
Cumulative subscription revenue for fiscal years 2019 and 2020	3,588
Cumulative Adjusted EBITDA for fiscal years 2019 and 2020	1,322
The targets have been derived using an average forecast exchange rate of R13.8000 per $1.00

⁽¹⁾ Executive director at March 31, 2019.

Retirement Benefits

It is our policy to provide retirement benefits to all our South African, United Kingdom, United States, Brazilian, Romanian and Australian employees.

All these retirement benefits are defined contribution plans and are held in separate trustee-administered funds. These plans are funded by members as well as company contributions. The South African plan is subject to the Pension Funds Act of 1956, the U.K. plan is subject to the United Kingdom Pensions Act 2008, and the Australian plan is subject to the Superannuation Guarantee Administration Act of 1992. In Brazil, the Group contributes to a mandatory state social

contribution plan known as Regime Geral de Previdência Social. In Romania there is a mandatory social security contribution paid to the state budget, as defined by the Pension Law (Law 263/2010) and the Fiscal Code (Law 227/2015).

For the United States employees, a voluntary Internal Revenue Service section 401(k) tax-deferred defined contribution scheme is offered.

The full extent of the Group’s liability is the contributions made, which are charged to the income statement as they are incurred. For fiscal years 2019, 2018 and 2017, we contributed an aggregate of R29.2 million, R27.1 million and R29.4 million respectively, in respect of the retirement benefits.

Life Insurance

We offer group life insurance coverage up to nine times the basic annual salary for a number of employees, and absence cover for eligible employees who are long-term absentees for up to age 65 if the absence is due to illness or injury, or for up to three years if the absence is due to any other reason.

Health Care

We offer health care insurance for certain employees and their dependents. The health plan provides coverage for in-patient, day-patient and out-patient treatments and employees have the option of adding certain enhancements, such as additional hospital, dental and optical cover, to their plans.

Other Benefits

Executives are compensated on a cost-to-company basis and as part of their package, may be entitled to a car allowance, provident fund contributions, medical, and death and disability insurance. The provision of these benefits is considered to be market competitive for executive positions.

Executive Employment Contracts

Our executive employment contracts continue indefinitely until terminated by either party and provide for the following:

•

Executives are eligible to receive, in addition to their annual cost to company salary package, an annual performance bonus that will be paid out on a semi-annual basis. The amount of the annual bonus varies from year to year and is determined by our Nominations and Remuneration Committee. Executives are entitled to participate in our equity incentive plans, and are provided with a mobile phone for business use. Certain broadband costs are also paid by us.


•	Employment may be terminated at any time if executives are found guilty of misconduct or have committed a breach of a material obligation under the employment agreement. Contracts may also be terminated if executives consistently perform poorly, are incompatible with our culture or become incapacitated and unable to perform.


•	The inclusion of confidentiality, assignment of inventions and restraint of trade agreements.

The annual cost to company salary package of our executives is as follows:


•	Stefan Joselowitz. Stefan Joselowitz is paid an annual cost to company salary package of $536,954.


•	John Granara . John Granara is paid an annual cost to company salary package of $350,000.


•	Charles Tasker . Charles Tasker is paid an annual cost to company salary package of $423,300.


•	Gert Pretorius . Gert Pretorius is paid an annual cost to company salary package of R3,809,584 ($263,113).


•	Catherine Lewis . Catherine Lewis is paid an annual cost to company salary package of R3,161,117 ($218,326).


•	Paul Dell. Paul Dell is paid an annual cost to company salary package of $210,000.

External Appointments

Executive directors are not permitted to hold external directorships or offices, other than those of a personal nature, without the approval of our Board of Directors.

Indemnification Agreements and Policies; Insurance

Our Memorandum of Incorporation provides that we may:


•	advance expenses to a director, or directly or indirectly indemnify a director for expenses in respect of the defense of legal proceedings arising out of the director’s service to the company, as set forth in Section 78(4) of the Companies Act of South Africa;


•	indemnify a director in respect of liability arising from the conduct of the director as set forth in Section 78(5) of the Companies Act; and


•	purchase insurance to protect the company or a director as set forth in Section 78(7) of the Companies Act.

These indemnification provisions also apply to any former director, prescribed officer or member of any committee of our Board of Directors.

In addition, we have entered into agreements to indemnify our directors and executive officers to the maximum extent allowed under South African law. These agreements have, among other things, indemnified these individuals for certain expenses (including attorneys’ fees), judgements, fines and settlement amounts reasonably incurred by such person in any action or proceeding, including any action by or in our right, on account of any services undertaken by such person on our behalf or that person’s status as a member of our Board of Directors.

6C. BOARD PRACTICES

Board of Directors

Our Board of Directors is composed of six non-executive directors and three executive directors. Our Memorandum of Incorporation requires that our Board of Directors must be comprised of at least four directors. At least one-third of the non-executive directors retire by rotation each year and stand for re-election at each annual general meeting in accordance with our Memorandum of Incorporation. Director appointments during the year are ratified at the next annual general meeting. The expiration of our current non-executive directors’ terms of office is set forth in the table below.



Non-Executive Director	Initial appointment to the Board of Directors	Year Current Term Expires

Richard Bruyns	August 2007	2020
Anthony Welton ⁽¹⁾	February 2008	2019
Fikile Futwa ⁽²⁾	July 2018	2021
Fundiswa Roji-Maplanka ⁽³⁾	October 2017	2019*
Robin Frew	January 1996	2019*
Ian Jacobs	June 2016	2020

Executive Director
Stefan Joselowitz	January 1996	Indefinite
John Granara ⁽⁴⁾	July 2019	Indefinite
Charles Tasker	August 2007	Indefinite



*	Proposed re-election to be approved by shareholders at our annual general meeting to be held on September 11, 2019.
₍₁₎	As Anthony Welton, who was due to stand for re-election at our upcoming annual general meeting, informed us of his intention to retire from the Board and its committees as an independent non-executive director on September 30, 2019, he will not offer himself for re-election, but will remain a member of the Board and its committees until September 30, 2019.
₍₂₎	Appointment confirmed by shareholders at our annual general meeting held on September 26, 2018. As Anthony Welton, who was due to stand for re-election at our upcoming annual general meeting, informed us of his intention to retire on September 30, 2019, Fundiswa Roji-Maplanka has offered herself for re-election to ensure that the Company complies with the Memorandum of Incorporation's requirement that one-third of the non-executive directors be elected each year. Had Fundiswa Roji-Maplanka not offered herself for re-election, her original term would have expired in 2020. Upon the retirement of Anthony Welton, Fundiswa Roji-Maplanka is also expected to be elected as the Chairperson of the Audit and Risk Committee and to relinquish her Chairpersonship of the Social and Ethics Committee.
₍₃₎	Appointment confirmed by shareholders at our annual general meeting held on September 26, 2018. Upon the retirement of Anthony Welton, it is expected that Fikile Futwa will be appointed as the Chairperson of the Social and Ethics Committee in the event that Fundiswa Roji-Maplanka is appointed as the Chairperson of the Audit and Risk Committee and relinquishes her Chairpersonship of the Social and Ethics Committee.
₍₄₎	John Granara was appointed as Chief Financial Officer, Executive Vice President and Director of MiX on July 8, 2019. His appointment is to be confirmed by shareholders at our annual general meeting to be held on September 11, 2019.

Please refer to “Item 6B. Compensation – Executive Employment Contracts” for further details in respect of the termination of executive director contracts. There are no directors’ service contracts with the Company or any of its subsidiaries providing for benefits upon termination of employment.

Directors are appointed on the basis of skill, experience and their contribution and impact on the Group’s activities. MiX recognizes and embraces the benefits of having a diverse Board, and sees increasing diversity at Board level as an essential element in maintaining a competitive advantage. A truly diverse Board will include and make good use of differences in the skills, regional and industry experience, background, race, gender and other distinctions between directors. These differences will be considered in determining the optimum composition of the Board and when possible, will be balanced appropriately. The Board is satisfied that the current composition reflects the appropriate mix of knowledge, skill, experience, diversity and independence.

Apart from the statutory requirements relating to eligibility and qualification, no additional eligibility requirements or qualifications are stipulated in our Memorandum of Incorporation. In accordance with its annual meeting plan, our Board of Directors meets at least quarterly.

Our Board of Directors has established committees to assist in the execution of its responsibilities. Each committee operates in accordance with approved terms of reference (a charter) and the performance of each committee is reviewed annually by our Board of Directors. The following is a brief description of each of the committees and their respective duties:

Audit and Risk Committee

Our Audit and Risk Committee assists our Board of Directors in matters relating to internal controls, financial reporting, external audit, internal audit, risk management and regulatory compliance. The Audit and Risk Committee operates under written terms of reference (a charter) that satisfies the applicable standards of the JSE, Companies Act, SEC and the NYSE. Our Audit and Risk Committee’s responsibilities include:


•	reviewing internal control systems developed by management;


•	evaluating the effectiveness of the internal audit process in terms of its scope, execution, coverage, independence, skills, performance and position within the organization;


•	reviewing internal controls over financial reporting, which include disclosure controls and procedures;


•	evaluation of the effectiveness of the internal control frameworks and reviewing whether recommendations made by the external and internal auditors and advisers have been implemented;


•	considering the security of our computer systems and evaluating contingency plans in the event of systems breakdowns and disasters;


•	annually recommending the appointment of a registered and independent external auditor and determining the scope of engagement, fees and considering their independence;


•	overseeing the financial reporting process and reviewing the quarterly results announcements, interim financial statements, annual financial statements, the annual report, SEC filings including the Form 20-F, preliminary announcements and special documents prior to release;


•	reviewing, with management and the external auditor, the financial statements, key accounting policies, practices and estimates, any changes to accounting policies and estimates and judgements, significant adjustments, unadjusted differences and any disagreements;


•	reviewing processes to ensure that reliable and efficient risk management strategies (including a combined assurance model), policies and risk insurance programs are in place; and


•	reviewing the process for monitoring compliance with laws and regulations, including the King IV Report on Corporate Governance in South Africa.

Members of our Audit and Risk Committee consist only of non-executive directors, each of whom is expected to be financially literate and at least one member is required to have expertise in financial reporting. Since our listing on the NYSE our Audit and Risk Committee has been comprised solely of independent board members within the meaning of SEC and NYSE rules for purposes of the audit committee. This composition is also in accordance with the Companies Act and JSE Listings Requirements. A representative from both the outsourced internal audit function and the external auditors attend meetings. The Chief Financial Officer and the Chief Executive Officer attend all meetings. The Chairperson of our Social and Ethics Committee is also a member of the Audit and Risk Committee. The committee met eight times this year, with two meetings focused on risk management. As of March 31, 2019, the members of our Audit and Risk Committee were Anthony Welton (Chairperson), Fikile Futwa, Richard Bruyns and Fundiswa Roji-Maplanka. Anthony Welton is our audit committee financial expert as defined by SEC rules.

Nominations and Remuneration Committee

This committee is responsible for:


•	overseeing that the Company’s remuneration strategy is market-related, competitive and business relevant in order to attract, retain and motivate diverse talent required to drive the desired behavior;


•	reviewing and approving the Company’s Remuneration Policy and Implementation Report, based on principles of fair, responsible and transparent remuneration and as required by the King IV Report on Corporate Governance in South Africa;


•	attending to the remuneration and benefits of senior executives and executive directors;


•	advising on non-executive directors’ fees and fees for those directors who are members of Board committees, which are approved by shareholders at the annual general meeting;


•	advising on senior executive and executive director appointments;


•	reviewing succession planning at the executive level;


•	confirming the share incentive plan and the allocation of awards under the plan; and


•	selecting and recommending candidates for appointment to our Board of Directors.

The committee meets at least four times a year. As of March 31, 2019, the members of our Nominations and Remuneration Committee were Richard Bruyns (Chairperson), Robin Frew and Ian Jacobs. Our Nominations and Remuneration Committee is composed solely of independent directors within the meaning of SEC and NYSE rules of independence.

Social and Ethics Committee

In accordance with the Companies Act, we established this committee in fiscal year 2012. Our Social and Ethics Committee monitors our activities, particularly with respect to any relevant legislation, other legal requirements or prevailing codes of best practice, regarding matters relating to:


•	social and economic development, including our standing in terms of the goals and purposes of: (a) the ten principles set out in the United Nations Global Compact Principles; (b) the Organization for Economic Cooperation and Development recommendations regarding corruption; (c) the South African Employment Equity Act; and (d) the Broad-Based Black Economic Empowerment Act;


•	good corporate citizenship;


•	the environment, health and public safety, including the impact of our activities, products and services;


•	consumer relationships, including our advertising, public relations and compliance with consumer protection laws;


•	reviewing the process for monitoring compliance with laws, regulations and our Code of Ethics and Conduct; and


•	labor and employment, including our standing in terms of the International Labor Organization Protocol on decent work and working conditions, our employment relationships and our contribution toward the educational development of our employees.

The Chief Executive Officer and Chief Financial Officer are invited to attend all meetings. The committee meets at least three times a year. As of March 31, 2019, the members of our Social and Ethics Committee were Fundiswa Roji-Maplanka (Chairperson), Richard Bruyns and Anthony Welton.

As Anthony Welton informed us of his intention to retire on September 30, 2019, our expectation is that Fundiswa Roji-Maplanka will be elected as the Chairperson of the Audit and Risk Committee and will relinquish the Chairpersonship of the Social and Ethics Committee. Our expectation is that Fikile Futwa will be elected as the Chairperson of the Social and Ethics Committee with effect from October 1, 2019.

Executive Committee

We have also established an Executive Committee that is responsible for devising our strategy for recommendation to our Board of Directors and to implement the strategies and policies approved by our Board of Directors. Our Executive Committee is also responsible for our day-to-day business and affairs. As of March 31, 2019, the current members of our Executive Committee were Stefan Joselowitz, Charles Tasker, Paul Dell, Gert Pretorius and Catherine Lewis.

John Granara, appointed as Chief Financial Officer, Executive Vice President and Director of MiX on July 8, 2019, was appointed as a member of the Executive Committee on even date.

6D. EMPLOYEES

The following table presents the breakdown of our employees at the date indicated:



	As of March 31,
	2019	2018	2017
South Africa	853	840	833
United States	71	58	51
United Kingdom	56	53	56
United Arab Emirates	26	34	47
Australia	37	35	36
Brazil	23	22	17
Uganda	4	4	5
Romania	5	5	10
Thailand	3	3	1
Total	1,078	1,054	1,056

Full-time	989	983	1,032
Part-time	89	71	24
Total	1,078	1,054	1,056

6E. SHARE OWNERSHIP

The table below sets forth information with respect to the beneficial ownership of our shares as of July 5, 2019, by each of our directors and executive officers. The beneficial ownership of ordinary shares is determined in accordance with the rules of the SEC and generally includes any ordinary shares over which a person exercises sole or shared voting or investment power, or the right to receive the economic benefit of ownership. For purposes of the table below, we deem shares subject to certain options that are currently exercisable or that may become exercisable within 60 days of July 5, 2019, to be outstanding and to be beneficially owned by the person holding the options for the purposes of computing the percentage ownership of that person but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person. The percentage of shares beneficially owned is based on 562,470,584 ordinary shares outstanding at July 5, 2019 (excludes 40,000,000 treasury shares held by MiX Investments Proprietary Limited, a wholly owned subsidiary of the Company).



	July 5, 2019
	Number of ordinary shares beneficially owned (In thousands)	Percentage of beneficial ownership
Non-executive
Richard Bruyns ⁽¹⁾	3,697	*
Fikile Futwa	—	—
Robin Frew ⁽²⁾	87,268	15.5	%
Anthony Welton ⁽³⁾	—	—
Fundiswa Roji-Maplanka	—	—
Ian Jacobs ⁽⁴⁾	14,537	2.6	%
Executive
Stefan Joselowitz ⁽⁵⁾	18,092	3.2	%
Charles Tasker ⁽⁶⁾	4,032	*
Gert Pretorius ⁽⁷⁾	1,440	*
Catherine Lewis ⁽⁸⁾	2,275	*
Paul Dell	1	*
All directors and executive officers as a group ⁽⁹⁾	131,341	23.4	%

* Less than 1%.


⁽¹⁾	Includes 3,696,563 ordinary shares held by IS Wealth Creator SPI SR Bruyns. IS Wealth Creator SPI SR Bruyns is an endowment policy entity owned by Richard Bruyns. Voting and investment power over the ordinary shares held by IS Wealth Creator SPI SR Bruyns is exercised by Richard Bruyns.

⁽²⁾

Includes 60,410,880 ordinary shares held by Masalini Capital Proprietary Limited and 799,366 ordinary shares held by Masalini Investments No. 3 Proprietary Limited. Masalini Capital Proprietary Limited is 100% owned by the Masalini Trust (previously known as the Robin Frew Family Trust), of which Robin Frew is one of three trustees and a beneficiary. Voting and investment power over the ordinary shares held by Masalini Capital Proprietary Limited is exercised by majority consent of Robin Frew and the other trustees, Philip Kilroe and Juanita Lou Koster. Voting and investment power over the ordinary shares held by Masalini Investments No. 3 Proprietary Limited is exercised by Robin Frew. Includes 2,637,040 ordinary shares held by Thynk Capital Proprietary Limited (“Thynk”). Thynk is now wholly owned by Robin Frew and he is also the sole director and therefore has full voting and investment power over the shares owned by Thynk. Includes 23,420,480 ordinary shares previously held in GAF Trust, a long-time shareholder of the Company. The trustees decided to unwind the trust, in which Robin Frew previously disclaimed beneficial ownership as he was a discretionary beneficiary but not a trustee. As part of this process, on May 28, 2019 the GAF Trust distributed its ownership of MiX Telematics shares to its underlying beneficiaries. Robin Frew, is one of these beneficiaries and received 23,420,480 ordinary shares in this off-market distribution. Excludes 46,840,960 ordinary shares owned by Robin Frew's family members who were also beneficiaries of The GAF Trust's distribution, as to which he disclaims beneficial ownership.


⁽³⁾	Excludes 235,000 ordinary shares owned by Anthony Welton’s spouse, as to which he disclaims beneficial ownership.


⁽⁴⁾	Includes 571,837 ADSs translating to 14,295,925 ordinary shares held by 402 Fund LP, over which Ian Jacobs has voting power.

⁽⁵⁾

Stefan Joselowitz in terms of the previously announced Rule 10b5-1 Trading Plan under the Securities Exchange Act of 1934, as amended, sold the aggregate of 230,000 ADS (equivalent to 5,750,000 ordinary shares) on April 1, 2019, April 2, 2019, May 1, 2019, May 2, 2019, May 3, 2019, June 3, 2019, June 4, 2019, June 5, 2019 and July 1, 2019. This concludes the sale of the 350,000 ADSs under the plan.


⁽⁶⁾	Includes options to purchase 1,125,000 ordinary shares that are currently or will be exercisable within 60 days after July 5, 2019, provided that the performance conditions in respect of minimum shareholder return have been met. Excludes 2,428,154 shares held by his spouse, to which Charles Tasker disclaims beneficial ownership.


⁽⁷⁾	Includes options to purchase 750,000 ordinary shares that are currently or will be exercisable within 60 days after July 5, 2019, provided that the performance conditions in respect of minimum shareholder return have been met.


⁽⁸⁾	Includes options to purchase 750,000 ordinary shares that are currently or will be exercisable within 60 days after July 5, 2019, provided that the performance conditions in respect of minimum shareholder return have been met.


⁽⁹⁾	Includes options to purchase 2,625,000 ordinary shares that are currently or will be exercisable within 60 days after July 5, 2019, provided that the performance conditions in respect of minimum shareholder return have been met.

Please refer to “Item 6B. Compensation”, which sets forth details of the share incentive plan and the outstanding stock-based compensation benefits held by executives at March 31, 2019.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7A. MAJOR SHAREHOLDERS

As of July 5, 2019, our issued share capital consisted of 602,470,584 ordinary shares. To our knowledge, (A) we are not directly or indirectly owned or controlled: (i) by another corporation; or (ii) by any foreign government, and (B) there are no arrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.

The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.

The following table sets forth, as of July 5, 2019, certain information regarding the beneficial ownership by all shareholders known to us to own beneficially 5.0% or more of our ordinary shares:



Name of beneficial owner ⁽¹⁾	Total shareholding	% of shares in issue ⁽²⁾
Masalini Capital Proprietary Limited ⁽³⁾	60,410,880	10.0	%
MiX Telematics Investments Proprietary Limited ⁽⁴⁾	40,000,000	6.6	%


⁽¹⁾	Shares shown in the table above include shares held in the beneficial owner’s name or jointly with others, or in the name of a bank, nominee or trustee for the beneficial owner’s account.


⁽²⁾	The percentages shown are based on 602,470,584 ordinary shares issued and outstanding as of July 5, 2019.


⁽³⁾	Masalini Capital Proprietary Limited is 100% owned by the Masalini Trust (previously known as the Robin Frew Family Trust), of which Robin Frew is one of three trustees and a beneficiary. Voting and investment power over the ordinary shares held by Masalini Capital Proprietary Limited is exercised by majority consent of Robin Frew and the other trustees, Philip Kilroe and Juanita Lou Koster.

⁽⁴⁾ 40,000,000 treasury shares are held by MiX Telematics Investments Proprietary Limited, a wholly owned subsidiary of the Group.

As of July 5, 2019, we had 1,632 holders of record of our ordinary shares. This includes eight holders of record in the United States, who held approximately 68.42% of our total issued shares in the form of either ordinary shares or ADSs. The actual number of shareholders is greater than this number of record holders, and includes shareholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include shareholders whose shares may be held in trust by other entities.

Significant Changes in the Ownership of Major Shareholders

Change in Ownership of Major Shareholder

Fiscal Year 2019

The trustees of The GAF Trust, a long-time major shareholder of the Company decided to begin a process of unwinding the Trust. As part of this process, on May 28, 2019 the GAF Trust distributed its ownership of MiX Telematics shares to its underlying beneficiaries. Robin Frew (Non-executive director and Chairman), is one of these beneficiaries and received 23,420,480 shares in this off-market distribution. This equates to 3.9% of shares in issue. Refer to “Item 6E. Share Ownership” for details of Robin Frew's direct and indirect beneficial ownership in the Company.

Share Repurchase Program

On May 23, 2017, the MiX Telematics Board of Directors approved a share repurchase program of up to R270 million under which the Company may repurchase its ordinary shares, including ADSs. The Company may repurchase its shares from time to time at its discretion through open market transactions and block trades, based on ongoing assessments of the capital needs of the Company, the market price of its securities and general market conditions. This share repurchase program may be discontinued at any time by the Board of Directors, and the Company has no obligation to repurchase any amount of its securities under the program. The repurchase program will be funded out of existing cash resources. See note 13 to our consolidated financial statements for further details about the share repurchase program.

Fiscal Year 2019

Share Repurchase Program

During fiscal 2019, 9,157,695 shares were repurchased for an aggregate repurchase consideration of R73.5 million or $5.1 million under the share repurchase program. Subsequent to the repurchase, the shares were delisted and now form part of the authorized unissued share capital of the Company. Refer to “ Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers ” for further information on shares repurchased during the 2019 fiscal year.

Fiscal Year 2018

Share Repurchase Program

During fiscal 2018, 5,015,660 shares were repurchased for an aggregate repurchase consideration of R18.7 million or $1.6 million under the share repurchase program. Subsequent to the repurchase, the shares were delisted and now form part of the authorized unissued share capital of the Company. Refer to “ Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers ” for further information on shares repurchased during the 2018 fiscal year.

Fiscal Year 2017

Specific Repurchase of Shares from Related Party

On April 29, 2016, the Company entered into a share repurchase agreement with Imperial Holdings Limited and Imperial Corporate Services Proprietary Limited, a wholly owned subsidiary of Imperial Holdings Limited, to repurchase all 200,828,260 of the Company’s shares held by Imperial Corporate Services Proprietary Limited at R2.36 ($0.18) per repurchase share, for an aggregate repurchase consideration of R474.0 million or $35.3 million. At the general meeting held on August 1, 2016, shareholders of the Company approved the repurchase in terms of the JSE Listings Requirements and the South African Companies Act, No.71 of 2008, at which point the transaction was accounted for in terms of IFRS. Subsequent to the repurchase, the shares were delisted and now form part of the authorized unissued share capital of the Company.

7B. RELATED PARTY TRANSACTIONS

The following is a description of the material transactions we entered into with related parties since the beginning of fiscal year 2019. We believe that we have executed all of our transactions with related parties on terms no less favorable to us than those we could have obtained from unaffiliated third parties.

TPF Investments Proprietary Limited (formerly Thynk Property Fund Proprietary Limited, formerly Thynk Industrial One Proprietary Limited)

In November 2007, we entered into a lease agreement with TPF Investments Proprietary Limited (“TPF Investments”) for our Midrand, South Africa, office. Robin Frew, a non-executive director and chairperson of the Board of Directors, is a director on the board of TPF Investments. The GAF Trust, of which an immediate family member of Robin Frew’s is a trustee, owns all the equity interests in TPF Investments. From April 1, 2019, through May 31, 2019, and for fiscal year 2019 we paid TPF Investments R1.3 million ($0.1 million) and R7.4 million ($0.5 million), respectively.

On December 5, 2018, MiX Telematics Enterprise SA Proprietary Limited (“MiX Enterprise”), a 85.1% held subsidiary of the Company, entered into a number of transaction documents under a Broad-Based Black Economic Empowerment (“B-BBEE”) property transaction, including an agreement in terms of which TPF Investments sold the office premises in Midrand, South Africa, to MiX Enterprise. MiX Enterprise similarly acquired MiX Telematics International Proprietary Limited’s office premises in Stellenbosch, South Africa. Concurrently with the aforementioned acquisitions, MiX Enterprise sold the said office premises in Midrand and Stellenbosch to Black Industrialists Group Property Management Company Proprietary Limited (“BIG”) and the aforementioned lease with TPF Investments will be canceled on the day on which the property transfers into the name of BIG. The conditions precedent to the transaction agreements were fulfilled on May 17, 2019, and we are currently only awaiting transfer of the Midrand property into the name of BIG, after which MiX Enterprise will, similarly to the Stellenbosch property, conclude a lease agreement with BIG and will lease the premises in Midrand for an initial period of five years with an option to renew the lease for a further five-year period. The rationale behind the implementation of the acquisition of the Stellenbosch premises and subsequent disposal of both the Midrand and Stellenbosch premises to BIG is to enhance MiX Enterprise’s B-BBEE credentials, specifically in relation to ownership and enterprise and supplier development (preferential procurement) in terms of the South African Broad-Based Black Economic Empowerment Act, No 53 of 2003, given that BIG is a 100% black women owned company.

As TPF Investments is an associate of Robin Frew, the above mentioned transactions constitute a small related party transaction in terms of paragraph 10.7 of the JSE Listings Requirements.

7C. INTERESTS OF EXPERTS AND COUNSEL

Not applicable.

ITEM 8. FINANCIAL INFORMATION

8A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

The consolidated financial statements are attached hereto within “Item 19. Exhibits”.

Legal proceedings

Refer to “Item 4B. Business overview” for information regarding our legal proceedings.

Dividend policy

Following the completion of our initial public offering of ADSs in fiscal year 2014, we discontinued our policy of declaring regular dividends in order to increase the funds available to pursue opportunities for more rapid growth.

During fiscal year 2016, the board of directors reintroduced the Company’s policy of paying regular dividends. Dividend payments are currently considered on a quarter-by-quarter basis.

8B. SIGNIFICANT CHANGES

See note 36 in the notes to the consolidated financial statements attached to this Annual Report in “Item 19. Exhibits” for discussion of subsequent events.

ITEM 9. THE OFFER AND LISTING

9A. OFFER AND LISTING DETAILS

Our ordinary shares are traded on the JSE under the symbol “MIX” and our ADSs are traded on the NYSE under the symbol “MIXT”.

9B. PLAN OF DISTRIBUTION

Not applicable.

9C. MARKETS

The principal market for the ordinary shares of MiX Telematics Limited is the JSE and are traded under the symbol “MIX.” The Company’s ADSs are listed on the NYSE and are traded under the symbol “MIXT.” BNYM serves as depositary with respect to the ADSs.

9D. SELLING SHAREHOLDERS

Not applicable.

9E. DILUTION

Not applicable.

9F. EXPENSES OF THE ISSUE

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

10A. SHARE CAPITAL

Not applicable.

10B. MEMORANDUM AND ARTICLES OF ASSOCIATION

Information regarding MiX Telematics Limited’s Memorandum of Incorporation, as amended, is hereby incorporated by reference to our annual report on Form 20-F as filed with the Securities and Exchange Commission on July 30, 2014 (File No. 001-36027).

10C. MATERIAL CONTRACTS

The following sets forth a summary of our material contracts other than those entered into in the ordinary course of business:

Lease Agreement


•	Agreement of Lease, dated October 2, 2007, between Thynk Industrial One Proprietary Limited and Matrix Vehicle Tracking Proprietary Limited (now MiX Telematics Africa Proprietary Limited) and the addendums thereto, the last of which took effect on April 1, 2017 (Exhibit numbers 4.3 and 4.12)

Refer to “Item 7B. Related Party Transactions –TPF Investments Proprietary Limited (formerly Thynk Property Fund Proprietary Limited, formerly Thynk Industrial One Proprietary Limited)” for a summary of this agreement.

Employment Contracts


•	Updated Terms and Conditions of Employment of Stefan Joselowitz, dated November 18, 2008 (Exhibit number 4.4)


•	Standard Terms and Conditions of Employment, effective October 1, 2016, between the Company and Gert Pretorius (Exhibit number 4.5)


•	Restraint of Trade, dated January 1, 2012, between the Company and Gert Pretorius (Exhibit number 4.6)


•	Standard Terms and Conditions of Employment, dated December 1, 2013, between the Company and Catherine Lewis (Exhibit number 4.11)


•	Executive Employment Agreement entered into between the Company and Paul Dell, dated February 22, 2017 (Exhibit number 4.14)


•	Restraint of Trade entered into between the Company and Paul Dell, dated February 22, 2017 (Exhibit number 4.15)


•	Updated Terms and Conditions of Employment, effective April 1, 2017, between the Company and Charles Tasker (Exhibit number 4.16)


•	Executive Employment Agreement entered into between the Company and John Granara, effective July 8, 2019 (Exhibit number 4.19)

Refer to “Item 6B. Compensation – Compensation of Directors and Executive Officers – Executive Employment Contracts” for a summary of the above agreements.

Banking Facility Letters


•	Facility Letter, effective July 23, 2018, between The Standard Bank of South Africa Limited and the Company (Exhibit number 4.7)

Refer to “Item 5B. Liquidity and Capital Resources” for a summary of this agreement.


•	Facility Letter, dated March 25, 2013, between Nedbank Limited and MiX Telematics Africa Proprietary Limited (Exhibit number 4.8)

Refer to “Item 5B. Liquidity and Capital Resources” for a summary of this agreement.

Network Services Agreement


•	Provision of Cellular Telephony Network Services Agreement, effective August 1, 2000, between Mobile Telephone Networks Proprietary Limited (“MTN”) and MiX Telematics Africa Proprietary Limited (“MiX Africa”), as amended by an addendum effective July 10, 2012 (Exhibit number 4.9)

On July 10, 2012, MiX Africa, a wholly-owned subsidiary of the Company, entered into an amended agreement for MTN to supply cellular telephony network services to MiX Africa. Under the terms of the agreement, MTN will use its cellular network to transmit data from our customers’ in-vehicle devices to the Company’s data centers to position, track and/or recover vehicles.

Under the terms of the agreement, MTN is entitled to claw back payments from MiX Africa in the event of early cancellation of the agreement or certain base connections not being maintained over the term of the agreement. The maximum potential liability under the arrangement is R39.1 million at March 31, 2019. Portions of this agreement have been granted confidential treatment.

Recovery Services Agreement


•	Agreement, effective October 1, 2017, between MiX Telematics Africa Proprietary Limited (“MiX Africa”) and Super Group Trading Proprietary Limited (“Super Group”) (Exhibit number 4.10).

Effective October 1, 2017, MiX Africa entered into an agreement with the Super Group for vehicle recovery services in respect of stolen vehicles fitted with MiX Africa tracking devices. These services are rendered in South Africa.

The agreement stipulates that it will continue indefinitely until terminated by either party in terms of the breach provisions or upon 90 days’ written notice to the other party.

Under the terms of the agreement MiX Africa receives a monthly invoice which consists of a fixed monthly cost. Additional variable charges in respect of actual vehicle recovery services performed by the Super Group are invoiced monthly in arrears. Portions of this agreement have been granted confidential treatment.

With effect from November 1, 2018, certain confidential locations of recovery teams, other operating details relating to the recovery teams and pricing terms contained in the agreement and in the annexures to the agreement were amended.

Web Services Agreement


•	AWS Customer Agreement, effective October 1, 2014, between Amazon Web Services, Inc. (“AWS”) and MiX Telematics International Proprietary Limited (“MiX International”) (Exhibit number 4.17).

On October 1, 2014, MiX International, a wholly-owned subsidiary of the Company, entered into an agreement for AWS to provide managed infrastructure and hosting services to the MiX Group. Under the terms of the agreement, AWS will, inter alia , ultimately host the majority of the MiX Group’s SaaS platform, underlying software and data.

The agreement stipulates that it will continue indefinitely until terminated by either party in accordance with the terms of the agreement. MiX International may terminate the agreement for any reason by providing AWS with notice and closing the account for all services for which AWS provides an account closing mechanism. Under the terms of the agreement, service fees and charges are billed monthly.

Sale of Property Agreement


•	Sale of Property Agreement, signed on December 5, 2018, between MiX Telematics Enterprise SA Proprietary Limited ("MiX Enterprise") and TPF Investments Proprietary Limited ("TPF Investments") (Exhibit number 4.18).

On December 5, 2018, MiX Enterprise and TPF Investments entered into a sale agreement in term of which the office premises leased by MiX Telematics Africa Proprietary Limited in Midrand, Johannesburg, were sold by TPF Investments to MiX Enterprise.

10D. EXCHANGE CONTROLS

South African exchange control regulations are administered by the Financial Surveillance Department (“FSD”) of the South African Reserve Bank and are applied throughout the Common Monetary Area (“CMA”) (this CMA includes the Republics of South Africa and Namibia, and the Kingdoms of Lesotho and Swaziland). The FSD regulates transactions involving South African residents, as defined in the Currency and Exchanges Manual for Authorized Dealers, including natural persons and legal entities.

Day to day interaction with the FSD on exchange control matters is facilitated through Authorized Dealers who are persons authorized by National Treasury to deal in foreign exchange, in so far as transactions in respect of foreign exchange are concerned.

The South African government has from time to time stated its intention to relax South Africa’s exchange control regulations when economic conditions permit such action. In recent years, the South African government has incrementally relaxed aspects of exchange control.

Applicants who are resident outside the CMA seek advice as to whether any governmental and/or other legal consent is required and/or whether any other formality must be observed to enable an acquisition to be made.

The following summary is intended as a guide and is therefore not comprehensive. If investors are in any doubt regarding South African exchange control regulations, they should consult their professional advisors.

Non-resident holders of securities outside the CMA

A person who is not resident in the CMA, including an emigrant not using emigrant blocked funds, should obtain advice as to whether any governmental and/or other legal consent is required and/or whether any other formality must be observed to enable an acquisition of ADSs.

In the case of a dematerialized share held by a shareholder, all shares issued will be credited directly to the ordinary shareholder’s non-resident share account held by his duly appointed Central Securities Depository Participant (“CSDP”). The CSDP or broker through whom the Company’s shareholders have dematerialized their shares will ensure that they adhere to the South African exchange control regulations.

Applicants resident outside the CMA should note that, where shares are subsequently re-materialized and issued in certificated form, such share certificates will be endorsed “Non-Resident” in terms of the South African exchange control regulations.

Repatriation of IPO proceeds

The South African Reserve Bank (“SARB”) required the net proceeds from the IPO to be maintained in South Africa. We have obtained approval from the FSD to use MiX Telematics Investments Proprietary Limited (“MiX Investments”) as a domestic treasury management company in South Africa. The IPO proceeds have been transferred to and held by MiX Investments. MiX Investments has discretion as to the denomination of the funds but is required to report details of the functional currency used to SARB on an annual basis.

Domestic treasury management company

From an exchange control perspective, MiX Investments enjoys the following benefits:


•	Transfers of up to R3 billion per annum from the parent company (MiX Telematics Limited) to MiX Investments will be allowed without prior approval being required from the FSD. These amounts may be freely deployed to fund our foreign operations. Additional amounts will be subject to prior approval from the FSD;

•

MiX Investments will be allowed to freely raise and deploy capital offshore, provided these funds are without recourse to South Africa. Additional domestic capital (i.e. in excess of the R3 billion per annum referred to above) and guarantees will be allowed to fund foreign direct investments in accordance with the current foreign direct investment allowance. This allowance is discussed in the foreign investments section;


•	MiX Investments will be allowed to operate as our cash management center and cash pooling will be allowed without limitations;


•	Local income generated from cash management will be freely transferable; and


•	MiX Investments may operate foreign currency accounts as well as South African Rand-denominated accounts.

Foreign financing

We, and our South African subsidiaries (with the exception of MiX Investments which is not subject to foreign financing restrictions), require approval by the FSD to obtain foreign loans. Funds raised outside the CMA by our non-resident subsidiaries, i.e. a non-resident for exchange control purposes, are not restricted under South African exchange control regulations and may be used for any purpose including foreign investment, as long as such use is without recourse to South Africa. We would, however, require approval by the FSD in order to provide guarantees for the obligations of any of our subsidiaries with regard to funds obtained from non-residents of the CMA.

Debt raised outside the CMA by our non-resident subsidiaries must be repaid or serviced by those foreign subsidiaries. Without approval by the FSD, we can neither use cash we earn in South Africa to repay or service such foreign debts nor can we provide security on behalf of our non-resident subsidiaries.

We may retain dividends declared by our foreign subsidiaries offshore which we may use for any purpose, without any recourse to South Africa. These funds may, subject to certain conditions, also be invested back into the CMA in the form of equity investments or loans.

Under South African exchange control regulations, we must obtain approval from the FSD regarding any capital raising activity involving a currency other than the South African Rand. In granting its approval, the FSD may impose conditions on our use of the proceeds of the capital raising activity outside South Africa, including limits on our ability to retain the proceeds of this capital raising activity outside South Africa or a requirement that we seek further approval by the FSD prior to applying any of these funds to any specific use. Any limitations imposed by the FSD on our use of the proceeds of a capital raising activity could adversely affect our flexibility in financing our investments.

Foreign investments

Under current exchange control regulations we, and our South African subsidiaries (with the exclusion of MiX Investments which has been discussed above), can invest overseas without prior approval by the FSD, where the investment is below R1 billion per calendar year per company provided that the proposed investment meets certain criteria. Although no prior approval by the FSD is required for these investments, prior approval from the relevant Authorized Dealer, who will evaluate the investment on the same principles applied by the FSD, is required. Where the investment does not meet certain criteria, the Authorized Dealer will refer the matter to the FSD for consideration.

Should the foreign direct investment be more than R1 billion per calendar year per company, or where the Authorized Dealer refers the matter to the FSD in the circumstances described above, prior approval by the FSD is required and such foreign investments will only be allowed if the investment meets certain criteria including one of national interest, as determined by the FSD. There is no limitation placed on us with regard to the amount of funds that we can transfer from South Africa for an approved foreign investment. The FSD may, however, request us to stagger the capital outflows relating to large foreign investments in order to limit the impact of such outflows on the South African economy and the foreign exchange market.

Investments in South African Companies

A non-resident investor may invest freely in ordinary shares (including ADSs) in a South African company, provided that such transactions are concluded at arm’s length, at fair market-related prices and are financed in an approved manner. In this regard, such financing must be in the form of the introduction of foreign currency, South African Rand from a non-resident account or in terms of approved local borrowings that comply with exchange control regulations. The creation of any loan account between a resident and a non-resident would require prior exchange control approval.

Acquisitions of shares or assets of South African companies by non-South African purchasers are not generally subject to review by the South African Reserve Bank when the consideration is in cash, but may require the South African Reserve Bank review in certain circumstances, including when the consideration is equity in a non-South African company or when the acquisition is financed by a loan from a South African lender. Any foreign investor may also sell shares in a

South African company and transfer the proceeds out of South Africa without restriction, provided that such transactions are concluded at arm’s length and at market-related prices and that the share certificates have been endorsed as “Non-resident”, where the shares have been issued in a certificated form.

Dividends

Dividends declared to non-resident shareholders are not subject to approval by the South African Reserve Bank and are freely transferable to non-resident shareholders by publicly listed companies (provided shares which are issued in a certificated form are endorsed as “Non-resident”). The transfer of funds abroad in respect of the declaration of a dividend in specie or special dividend by a publicly listed company requires prior South African Reserve Bank approval.

Interest

Interest on foreign loans is freely transferable abroad, provided the introduction of the loans received prior South African Reserve Bank approval.

Voting Rights

There are no limitations imposed by South African law or by our Memorandum of Incorporation on the rights of non-South African shareholders to vote in respect of ordinary shares held.

10E. TAXATION

South African Tax Considerations

The following summary provides relevant tax information in relation to the South African tax landscape and describes the material South African tax consequences of the purchase, ownership and disposal of shares and ADSs. It is not a complete description of all the tax issues and of all possible tax consequences of such purchase, ownership or disposal. This summary is based on the laws as in force and as applied in practice on the date of this annual report and is subject to changes to those laws and practices subsequent to the date of this annual report. Investors should consult their own tax advisors as to the tax consequences of the purchase, ownership and disposal of the ADSs and shares in light of their particular circumstances, including, in particular, the effect of any state, regional, local or other tax laws.

Residence-based System of Taxation

Residents of South Africa are taxed on their worldwide income and capital gains, whereas non-residents are taxed only on income and certain capital gains arising from a South African source. Shares held by a non-resident would generally not be subject to capital gains tax (“CGT”), provided that the shareholder holds less than 20% of the listed shares if the company is not considered ‘land rich’.

Individuals

An individual will be a resident of South Africa for tax purposes if either of the following applies:

•

Such individual is “ordinarily resident” in South Africa. This expression is not defined in the Income Tax Act, No. 58 of 1962, or the “Income Tax Act”, and therefore its meaning is determined according to guidelines established by the courts. Generally, a person’s ordinary residence will be “the country to which he would naturally and as a matter of course return from his wandering; as contrasted with other lands it might be called his usual or principal residence and it would be described more aptly than other countries as his real home”.


•	The requirements of the physical presence test are met. If not ordinarily resident in South Africa, an individual is considered a South African resident if the individual is physically present in South Africa for more than 91 days, in aggregate, in the relevant tax year and each of the preceding five tax years, and also for more than 915 days, in aggregate, in the preceding five tax years.

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Legal Persons (Company, Close Corporation and Trust)

As regards legal persons (and for these purposes, a trust is deemed to be a person), a resident is defined in the Income Tax Act as any person which is incorporated, established or formed in South Africa or which has its place of effective management in South Africa.

General Proviso Regarding Treaty Resident Persons

The Income Tax Act excludes from the definition of “resident” any person (legal or natural) that is deemed to be exclusively resident in another country in terms of an agreement for the avoidance of double taxation to which South Africa and that other country are parties. Such a treaty exists between the United States and South Africa effective December 28, 1997.

Dividend Income

Dividends declared by a South African resident company are exempt from income tax in the hands of the South African recipients. A withholding tax, known as dividends tax, is levied at 20% on dividends distributed by a South African resident company to its shareholders, whether those shareholders are South African residents or non-residents, subject to certain exemptions that may be available to the shareholder.

Dividends tax is a final tax withheld by the company declaring the dividend, and applies to any distribution that is made by the company other than a distribution out of contributed tax capital (a defined term which generally means the share capital of a company). The definition of “dividend” is very broad and means any amount transferred or applied by a company for the benefit or on behalf of any person in respect of any share in that company. Because the definition is so broad, and therefore is likely to cover any transaction which represents a distribution of profits to a shareholder, there is only one deemed dividend rule which applies where a company makes a loan at less than a market-related rate of interest to any South African resident connected persons (not a company). There are also other deemed dividends which apply where there are attempts to avoid the tax by means of: dividend swaps; scrip loans; repo arrangements or on certain hybrid debt instruments.

Where a company repurchases its own shares, the proceeds, to the extent that they are not out of contributed tax capital, are treated as a dividend. The exception to this rule is where a listed company repurchases its own shares on the market (i.e. effectively only off-market deals are treated as potentially giving rise to dividends).

Certain shareholders are exempt from the dividends tax, including South African resident companies, public benefit organizations and other tax-exempt bodies, such as a pension fund. Except where a corporate shareholder forms part of the same group (for tax purposes) as the company declaring a dividend, the aforementioned exemptions are only available if the shareholder has timely submitted to the company (or the regulated intermediary) a prescribed declaration and undertaking confirming its entitlement to the exemption.

A similar declaration and undertaking must be submitted by a non-resident who finds that a lower rate of withholding tax is applicable in terms of any relevant double tax agreement entered into between South Africa and the shareholder’s country of residence, considering the relevant definitions of dividends therein.

If dividends tax is withheld in circumstances where it need not have been (e.g. the required declaration and undertaking was not submitted timeously), it is possible for the shareholder to obtain a refund, either from the company or from the regulated intermediary within three years after the payment of the dividend.

It should be noted that certain types of shares could be categorized as either hybrid equity instruments or third-party backed shares (though these usually occur in the case of certain redeemable preference shares), and if they are so classified, the dividends are no longer exempt from income tax (i.e. they remain fully taxable at ordinary income tax rates), and in such case, not being dividends exempt from income tax, they will not be subject to dividends tax.

Disposal of Shares

The disposal of shares will give rise either to a capital or revenue receipt or accrual in the hands of a taxpayer. In determining whether the income derived from the disposal of such shares is of a capital or revenue nature, the South African tax authorities and courts look at, among other things, the intention of the holder of the shares to determine whether the disposal gives rise to a capital or revenue profit. Profits derived from the disposal of South African shares held as long-term investments are generally regarded as profits of a capital nature and are not subject to South African income tax according to standard tax tables, but rather to capital gains tax at a specified lower inclusion rate. The burden of proof of a capital intent is on the taxpayer.

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Where, however, the shares have been held for more than three years and such shares qualify as equity shares, the proceeds from the disposal will most likely be deemed to be capital if the provisions of section 9C of the Income Tax Act are met.

If a non-resident shareholder trades (that is, conducts business or speculates) in South African shares, such non-resident shareholder’s disposal of shares will be considered revenue in nature and subject to the higher standard tax rate tables if the proceeds from the disposal are considered to be from a South African source.

Capital Gains Tax

Residents of South Africa are subject to CGT in respect of gains made on the disposal of their world-wide assets. Non-residents are generally not liable for CGT on disposals of South African assets, but there are two exceptions to this rule: (a) the gain on the disposal of a direct or indirect interest in immovable property in South Africa; and (b) any gain on disposal of an asset attributable to a permanent establishment which the non-resident has in South Africa.

CGT was introduced into the Income Tax Act with effect from October 1, 2001, by way of the incorporation of the Eighth Schedule thereto. In terms of this Eighth Schedule, all South African tax residents are liable to pay CGT on the gains realized from the disposal of capital assets (including a share held for more than three years, as described above). An asset is widely defined and includes movable and immovable property, corporeal and incorporeal property, and rights or interests in such property, but excludes certain limited currency items.

For the current year, natural persons and special trusts enjoy an annual exclusion in respect of capital gains or losses of R40,000. In the year of a person’s death, the annual exclusion is increased to R300,000 for the current year.

The following table sets out the inclusion rate at which a capital gain would be included in a taxpayer’s taxable income, the normal tax rates applicable to certain taxpayers and, consequently, the effective rate at which capital gains are taxed.



Type of Taxpayer	Inclusion Rate of the Capital Gain to be Included in Taxable Income	Statutory Income Tax Rate	Effective CGT rate
	(%)	(%)	(%)
Individuals	40.0	0 – 45.0	0 – 18.0
Trusts
Special	40.0	0 – 45.0	0 – 18.0
Other	80.0	45.0	36.0
Life assurers
Individual policyholder fund	40.0	30.0	12.0
Company policyholder fund	80.0	28.0	22.4
Risk policy or Corporate fund	80.0	28.0	22.4
Untaxed policyholder fund	—	—	—
Most companies	80.0	28.0	22.4
Permanent establishments (branches) of non-resident companies	80.0	28.0	22.4
Collective investment schemes	—	—	—

A natural person’s death triggers a deemed sale at market value for CGT purposes. Giving up South African residence by any type of person also triggers such a deemed sale.

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As discussed above, non-residents would generally not be liable for CGT in South Africa on disposal of shares in a South African company.

The zero rate as noted with regards to Collective Investment Schemes assumes that all income received by the Collective Investment Scheme during any single year is distributed to the Unit Holder in that same year.

Corporate Tax

For fiscal years 2019, 2018 and 2017 the corporate tax rate is 28% of taxable income.

Securities Transfer Tax

Securities Transfer Tax is levied in respect of any transfer of securities (except where there is no change in beneficial ownership) at the rate of 0.25% of the taxable amount of such securities being the value or consideration given for the securities or (effectively) the market value, whichever is the higher, determined according to the Securities Transfer Tax Act, No. 25 of 2007. The company (if the securities are unlisted) or the central securities depositary participant (if the securities are listed) is liable for the Securities Transfer Tax, but it has a right of recovery against the transferee. A security is defined as any share in a company, member’s interest in a close corporation, or right or entitlement to receive any distribution from a company or close corporation.

Estate Duty

Estate duty is levied in terms of the Estate Duty Act, No. 45 of 1955, and constitutes a tax which is levied on the dutiable value of a deceased estate at a rate of 20% on the first R30.0 million and at a rate of 25% on the dutiable value above R30.0 million.

Estate duty is levied in respect of a natural person who dies and who was -


•	ordinarily resident in South Africa at the time of death, in respect of his or her worldwide estate;


•	not ordinarily resident in South Africa at the time of death, in respect of his or her assets situated in South Africa.

There are certain exemptions and deductions available when determining the dutiable value of a deceased estate. The most important deductions are bequests to a surviving spouse, certain foreign property (such as foreign assets acquired by the deceased by way of donation or inheritance from a person (other than a company) not ordinarily resident in South Africa at the date of the donation or inheritance); and bequests to public benefit organizations.

Any CGT triggered by death will also be allowed as a deduction. Thereafter, and after deducting liabilities of the estate, a standard deduction of R3.5 million (approximately $0.2 million) is applied and the result will constitute the dutiable value of the estate. To the extent that the estate of a first-dying spouse has not availed of the R3.5 million exemption, the unutilized portion may be added to the exemption available to the estate of the surviving spouse on the latter’s death.

Value-Added Tax

Value-Added Tax is an indirect tax on the consumption of goods and services in the South African economy, levied in terms of the Value-Added Tax Act No. 89 of 1991, on the consideration of taxable supplies of goods and services, with exports being zero-rated (0%). Financial services (including transfers of shares and debt instruments and the making available of credit) are exempt from value added taxes.

The Value-Added Tax rate has increased from 14% to 15% as of April 1, 2018.

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U.S. Federal Income Tax Considerations

The following is a description of the material U.S. federal income tax consequences to U.S. Holders (as defined below) of owning and disposing of ordinary shares or ADSs. It applies only to a U.S. Holder that owns ordinary shares or ADSs as capital assets for U.S. federal income tax purposes. In addition, it does not describe all of the tax consequences that may be relevant in light of a U.S. Holder’s particular circumstances, including alternative minimum tax consequences and tax consequences applicable to U.S. Holders, subject to special rules, such as, but not limited to:


•	certain financial institutions;


•	insurance companies;


•	dealers or traders in securities who use a mark-to-market method of tax accounting;


•	persons holding ordinary shares or ADSs as part of a hedging transaction, straddle, wash sale, conversion transaction or integrated transaction or persons entering into a constructive sale with respect to the ordinary shares or ADSs;


•	persons whose functional currency for U.S. federal income tax purposes is not the U.S. Dollar;


•	entities classified as partnerships for U.S. federal income tax purposes;


•	tax-exempt entities, including “individual retirement accounts” or “Roth IRAs”;


•	persons holding ordinary shares or ADSs in connection with a trade or business conducted outside of the United States; or


•	persons who own directly, indirectly, or constructively, 10% or more of the total combined voting power of all classes of our ordinary shares and/or ADSs.

If an entity that is classified as a partnership for U.S. federal income tax purposes holds ordinary shares or ADSs, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding ordinary shares or ADSs, and partners in such partnerships, should consult their tax advisers as to the U.S. federal income tax consequences of acquiring, holding and disposing of the ordinary shares or ADSs. This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), administrative pronouncements, judicial decisions, final, temporary and proposed Treasury regulations and the Convention Between the Republic of South Africa and the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital Gains (the “Treaty”), all as of the date hereof, any of which is subject to change, possibly with retroactive effect. It is also based in part on the provisions of the deposit agreement entered into with the depositary and assumes that each obligation under the deposit agreement and any related agreement will be performed in accordance with its terms.

A “U.S. Holder” is a person who is a beneficial owner of ordinary shares or ADSs that is, for U.S. federal income tax purposes:

• an individual citizen or resident of the United States;


•	a corporation, or other entity taxable as a corporation for U.S federal income tax purposes, created or organized in or under the laws of the United States, any state therein or the District of Columbia;


•	a trust if (1) a court within the United States is able to exercise primary supervision for the administration of the trust, and one or more United States persons have the authority to control all substantial decisions of the trust; or (2) the trust has validly elected under applicable Treasury regulations to be treated as a United States person; or


•	an estate the income of which is subject to U.S. federal income taxation regardless of its source.

In general, a U.S. Holder who owns ADSs will be treated as the owner of the underlying ordinary shares represented by those ADSs for U.S. federal income tax purposes. Accordingly, no gain or loss will be recognized if a U.S. Holder exchanges ADSs for the underlying ordinary shares represented by those ADSs.

The United States Treasury has expressed concerns that parties to whom ADSs are released before the underlying shares are delivered to the depositary, or intermediaries in the chain of ownership between holders of ADSs and the issuer of the security underlying the ADSs, may be taking actions that are inconsistent with the claiming of foreign tax credits by

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holders of ADSs. These actions would also be inconsistent with the claiming of the reduced rate of tax, described below, applicable to dividends received by certain non-corporate holders. Accordingly, the creditability of South African taxes, if any, and the availability of the reduced tax rate for dividends received by certain non-corporate U.S. Holders (each of which is described below) could be affected by actions taken by such parties or intermediaries.

U.S. Holders should consult their own tax advisers concerning the U.S. federal, state, local and foreign tax consequences of acquiring, owning and disposing of ordinary shares or ADSs in their particular circumstances.

Taxation of Distributions

Subject to the PFIC rules, described below (i.e., if we are not a PFIC during a U.S. Holder’s holding period or we cease to be a PFIC and a “purging election” is made, as discussed below), distributions paid on our ordinary shares or ADSs (including amounts withheld to reflect South African withholding taxes), other than certain pro rata distributions of ordinary shares, will be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). To the extent that the amount of any distribution exceeds our current and accumulated earnings and profits for a taxable year, as determined under U.S. federal income tax principles, the distribution will first be treated as a tax-free return of capital, causing a reduction in the adjusted basis of the ADSs or ordinary shares (thereby increasing the amount of gain, or decreasing the amount of loss, to be recognized by a U.S. Holder on a subsequent disposition of the ADSs or ordinary shares), and the balance in excess of adjusted basis will be taxed as capital gain recognized on a sale or exchange. Consequently, such distributions in excess of our current and accumulated earnings and profits would generally not give rise to foreign source income and you would generally not be able to use the foreign tax credit arising from any withholding tax imposed on such distributions unless such credit can be applied (subject to applicable limitations) against U.S. federal income tax due on other foreign source income in the appropriate category for foreign tax credit purposes. However, because we do not maintain calculations of earnings and profits under U.S. federal income tax principles, it is expected that distributions generally will be reported to U.S. Holders as dividends. Dividends will be treated as foreign-source dividend income to U.S. Holders and will not be eligible for the dividends received deduction generally available to United States corporations under the Code. Dividends will be included in a U.S. Holder’s income on the date of the U.S. Holder’s receipt, or in the case of ADSs, the depositary’s receipt, of the dividend. In addition, certain U.S. Holders, including individuals, estates and trusts, are subject to an additional 3.8% Medicare tax on unearned income. For individual U.S. Holders, the additional Medicare tax applies to the lesser of (i) “net investment income” or (ii) the excess of “modified adjusted gross income” over $200,000 ($250,000 if married and filing jointly or $125,000 if married and filing separately). “Net investment income” generally equals the taxpayer’s gross investment income reduced by the deductions that are allocable to such income. Investment income generally includes passive income such as interest, dividends, annuities, royalties, rents and capital gains. U.S. Holders are urged to consult their own tax advisers regarding the implications of the additional Medicare tax resulting from an investment in the ADSs.

Subject to applicable limitations (including a minimum holding period requirement), the PFIC rules, described below, and the discussion above regarding concerns expressed by the U.S. Treasury, dividends paid by qualified foreign corporations to certain non-corporate U.S. Holders may be taxable at rates lower than the rates applicable to ordinary income. Under these rules, a foreign corporation is treated as a qualified foreign corporation with respect to dividends paid on stock (or ADSs backed by stock) that is readily tradable on an established securities market in the United States, such as the NYSE, where the ADSs are listed. However, there can be no assurance that the ADSs will be considered readily tradable on an established securities market in later years. A qualified foreign corporation also includes a foreign corporation that is eligible for the benefits of certain income tax treaties with the United States. It is unclear whether we are eligible for the benefits of the Treaty because eligibility for each year is dependent on the trading volume of our ordinary shares and ADSs for such year. If we are eligible for such benefits, dividends we pay on our ordinary shares or ADSs will generally be eligible for the reduced tax rates regardless of whether such shares or ADSs are readily tradable on an established securities market in the United States. U.S. Holders should consult their tax advisers to determine whether a preferential rate will apply to dividends they receive in respect of our ordinary shares or ADSs and whether they are subject to any special rules that limit their ability to be taxed at this favorable rate. The amount of any dividend paid in South African Rand will equal the U.S. Dollar value of the South African Rand received, calculated by reference to the exchange rate in effect on the date the dividend is received by the U.S. Holder, in the case of ordinary shares, or by the depositary, in the case of ADSs, regardless of whether the South African Rand are converted into U.S. Dollars. If the South African Rand received as a dividend are converted into U.S. Dollars on the date they are received, a U.S. Holder generally will not be required to recognize foreign currency gain or loss in respect of the dividend income. If the South African Rand received as a dividend are not converted into U.S. Dollars on the date of receipt (by the U.S. Holder or the depositary, respectively), the U.S. Holder will have a basis in the South African Rand equal to their U.S. Dollar value on the date of receipt. Any gain or loss realized on a subsequent conversion or other disposition of the South African Rand will be treated as United States -source ordinary income or loss.

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As described above, dividends paid with respect to our ordinary shares or ADSs are generally subject to South African withholding taxes. For U.S. federal income tax purposes, the amount of a dividend would include any amounts withheld by us in respect of South African taxes. Subject to applicable limitations, the PFIC rules, described below, and in the case of ADSs subject to the discussion above regarding concerns expressed by the United States Treasury, any South African income taxes withheld from dividends at a rate not exceeding any applicable Treaty rate would be creditable against the U.S. Holder’s U.S. federal income tax liability. For purposes of calculating the foreign tax credit, dividends paid on our ordinary shares or ADSs will generally constitute foreign source income and will generally constitute passive category income. Instead of claiming a credit, a U.S. Holder may, at the U.S. Holder’s election, deduct such creditable South African taxes, if any, in computing taxable income. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all taxes paid or accrued in the taxable year to foreign countries and possessions of the United States. Special rules limiting foreign tax credits apply to non-corporate U.S. Holders who receive dividends eligible for the reduced rates discussed above, and to U.S. Holders of equity in a PFIC. Furthermore, in certain circumstances, a U.S. Holder will not be allowed a foreign tax credit for any foreign taxes imposed on dividends if such U.S. Holder has held its ordinary shares or ADSs for less than a specified minimum period during which it is not protected from risk or loss, or if such U.S. Holder is obligated to make payments related to the dividends. The rules governing foreign tax credits are complex, and U.S. Holders should consult their tax advisers regarding the creditability or deductibility of foreign taxes and their eligibility for benefits under the Treaty in their particular circumstances.

Sale or Other Disposition of Ordinary Shares or ADSs

Subject to the PFIC rules described below, for U.S. federal income tax purposes, gain or loss realized on the sale or other disposition of ordinary shares or ADSs will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held the ordinary shares or ADSs for more than one year. The amount of the gain or loss will be equal to the difference between the U.S. Holder’s tax basis in the relevant ordinary shares or ADSs and the amount realized on the disposition, each as determined in U.S. Dollars. This gain or loss will generally be United States -source gain or loss for foreign tax credit purposes. Consequently, a U.S. Holder may not be able to use the foreign tax credit arising from any South African tax imposed on the disposition of the ordinary shares or ADSs unless such credit can be applied (subject to applicable limitations) against tax due on other income treated as derived from foreign sources. The deductibility of capital losses is subject to limitations. Long-term capital gains earned by non-corporate U.S. Holders may be taxable at rates lower than the rates applicable to ordinary income and, with respect to individuals with modified adjusted gross income above certain thresholds, an additional Medicare tax will apply to certain types of income, including long-term and short-term capital gains arising from the sale of stock, as described above.

PFIC Rules

Based on the market price of the ADSs and ordinary shares, the value of our assets, and the composition of our income and assets, although not free from doubt, we do not believe that we were a PFIC for U.S. federal income tax purposes for our taxable year ended March 31, 2019. The application of the PFIC rules is subject to uncertainty in several respects, and we cannot assure you that the United States Internal Revenue Service, or the “IRS”, will not assert that we are a PFIC. A non- United States corporation will be a PFIC for U.S. federal income tax purposes for any taxable year if either:


•	at least 75% of its gross income for such year is passive income; or


•	at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income.

For this purpose, we will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock.

We must make a separate determination after the close of each taxable year as to whether we were a PFIC for that year. Because the value of our assets (including goodwill and unbooked intangibles) for purposes of the PFIC test will generally be determined by reference to the market price of the ADSs and ordinary shares, fluctuations in the market price of the ADSs and ordinary shares may cause us to become a PFIC. In addition, changes in the composition of our income or assets may cause us to become a PFIC.

If we are a PFIC for any taxable year during which a U.S. Holder holds ADSs or ordinary shares, we generally will continue to be treated as a PFIC with respect to such U.S. Holder for all succeeding years during which the U.S. Holder holds the ADSs or ordinary shares, unless we cease to be a PFIC and the U.S. Holder makes a “deemed sale” election with

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respect to the ADSs or ordinary shares, as applicable. If such election is made, the U.S. Holder will be deemed to have sold the ADSs or ordinary shares such U.S. Holder holds at their fair market value and any gain from such deemed sale would be subject to the rules described below. After the deemed sale election, the U.S. Holder’s ADSs or ordinary shares with respect to which the deemed sale election was made will not be treated as shares in a PFIC unless we subsequently become a PFIC.

For each taxable year that we are treated as a PFIC with respect to a U.S. Holder, such U.S. Holder will be subject to special tax rules with respect to any “excess distribution” the U.S. Holder receives and any gain such U.S. Holder recognizes from a sale or other disposition (including a pledge) of the ADSs or ordinary shares, unless such U.S. Holder makes a “mark-to-market” election as discussed below. Distributions the U.S. Holder receives in a taxable year that are greater than 125% of the average annual distributions such U.S. Holder received during the shorter of the three preceding taxable years or such U.S. Holder’s holding period for the ADSs or ordinary shares will be treated as an excess distribution.

Under these special tax rules:


•	the excess distribution or recognized gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs or ordinary shares;


•	the amount allocated to the current taxable year, and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we were a PFIC, will be treated as ordinary income; and


•	the amount allocated to each other taxable year will be subject to the highest tax rate in effect for individuals or corporations, as applicable, for each such year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to taxable years prior to the year of disposition or excess distribution cannot be offset by any net operating losses for such years, and gains (but not losses) from a sale or other disposition of the ADSs or ordinary shares cannot be treated as capital, even if the U.S. Holder holds the ADSs or ordinary shares as capital assets.

If we are treated as a PFIC with respect to a U.S. Holder for any taxable year, to the extent any of our subsidiaries are also PFICs or we make direct or indirect equity investments in other entities that are PFICs, such U.S. Holder may be deemed to own shares in such lower-tier PFICs that are directly or indirectly owned by us in that proportion which the value of the ADSs or ordinary shares such U.S. Holder owns bears to the value of all of the ADSs and ordinary shares, and such U.S. Holder may be subject to the rules described in the preceding two paragraphs with respect to the shares of such lower-tier PFICs that such U.S. Holder would be deemed to own. Potential investors should consult their tax advisers regarding the application of the PFIC rules to any of our subsidiaries.

If we are a PFIC and if the ordinary shares or ADSs are “regularly traded” on a “qualified exchange”, a U.S. Holder could make a mark-to-market election with respect to its ordinary shares or ADSs, as applicable, that would result in tax treatment different from the general tax treatment for PFICs described above. The ordinary shares or ADSs would be treated as “regularly traded” in any calendar year in which more than a de minimis quantity of the ordinary shares or ADSs, as the case may be, were traded on a qualified exchange on at least 15 days during each calendar quarter. The NYSE, where the ADSs have been authorized to be listed, is a qualified exchange for this purpose. Further, our ordinary shares are listed on the JSE. Such exchange will be treated as a “qualified exchange” if: (a) it is regulated or supervised by a governmental authority in its country, (b) the exchange is subject to requirements (which requirements are actually enforced) designed to prevent fraud, remove impediments to a free and open market, and protect investors, and (c) the rules of the exchange promote active trading of listed stocks. In addition, no assurance can be given that the ordinary shares or ADSs will be “regularly traded” on their respective exchanges for purposes of the mark-to-market election. U.S. Holders will not be able to make a mark-to-market election with respect to any lower-tier PFICs (discussed above).

A U.S. Holder generally makes a mark-to-market election by attaching a completed IRS Form 8621 to a timely filed U.S. federal income tax return for the tax year to which the election first relates. The mark-to-market election cannot be made unless a U.S. Holder owns ordinary shares or ADSs on the last day of the U.S. Holder’s taxable year during which we are a PFIC. A timely mark-to-market election will apply to the tax year for which such election is made and to all subsequent tax years, unless the ordinary shares or ADSs, as the case may be, are no longer “regularly traded” on a “qualified exchange” or the IRS consents to revocation of such election.

If the mark-to-market election is available, and a U.S. Holder makes such election, the U.S. Holder generally will recognize as ordinary income any excess of the fair market value of the ordinary shares or ADSs at the end of each taxable year over their adjusted tax basis, and will recognize an ordinary loss in respect of any excess of the adjusted tax basis of

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the ordinary shares or ADSs over their fair market value at the end of the taxable year (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). If a U.S. Holder makes the election, the holder’s tax basis in the ordinary shares or ADSs will be adjusted to reflect these income or loss amounts. In addition, if a U.S. Holder makes the mark-to-market election, any gain that the U.S. Holder recognizes on the sale or other disposition of ordinary shares or ADSs in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as an ordinary loss (but only to the extent of the net amount of income previously included as a result of the mark-to-market election).

U.S. Holders of ordinary shares or ADSs should consult their own advisers about the availability and advisability of the mark-to-market election.

Alternatively, a U.S. Holder of stock of a PFIC may make a “qualified electing fund” election with respect to such corporation to elect out of the PFIC rules described above regarding excess distributions and recognized gains. A U.S. Holder that makes a qualified electing fund election with respect to a PFIC will generally include in income for a taxable year such holder’s pro rata share of the corporation’s income for the taxable year. However, you may make a qualified electing fund election with respect to your ADSs or ordinary shares only if we agree to furnish you annually with certain tax information, and we currently do not intend to prepare or provide such information.

United States shareholders of PFICs are required to file certain information with United States taxing authorities relating to their PFIC investments for years in which they receive distributions from the PFIC, recognized gain on a disposition of the PFIC stock, or make certain elections. If we are classified as a PFIC, a U.S. Holder should consult such U.S. Holder’s tax advisers regarding any reporting requirements that may apply.

The PFIC rules are complex, and each U.S. Holder should consult its own tax adviser regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of ordinary shares or ADSs.

Information Reporting and Backup Withholding

Payments of dividends with respect to our ordinary shares or ADSs and proceeds from the sale, exchange or redemption of our ordinary shares or ADSs that are made within the United States or through certain United States -related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (1) the U.S. Holder is an exempt recipient, or (2) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding. U.S. Holders that are required to establish their exempt status generally must provide such certification on IRS Form W-9, Request for Taxpayer Identification Number and Certification.

Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability, if any, and may entitle it to a refund, provided that the required information is timely furnished to the IRS.

Certain U.S. Holders are also required to file IRS Form 926, Return by U.S. Transferor of Property to a Foreign Corporation, and certain U.S. Holders may be required to file IRS Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, reporting transfers of cash or other property to us and information relating to the U.S. Holder and us.

Substantial penalties may be imposed upon a U.S. Holder that fails to comply. Each U.S. Holder should consult its own tax adviser regarding these requirements.

Additionally, a U.S. Holder holding our ordinary shares should consider their possible obligation to file FinCEN Report 114 - Report of Foreign Bank and Financial Accounts, with respect to the ordinary shares.

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Furthermore, certain U.S. Holders of “specified foreign financial assets” with an aggregate value in excess of $50,000 (and in some circumstances, a higher threshold) may be required to file IRS Form 8938, Statement of Specified Foreign Financial Assets, with respect to such assets with their tax returns. “Specified foreign financial assets” generally include any financial accounts maintained by foreign financial institutions, as well as any of the following, but only if they are not held in accounts maintained by financial institutions: (i) stocks and securities issued by non-United States persons, which may include the ADSs or ordinary shares, (ii) financial instruments and contracts held for investment that have non-United States issuers or counterparties and, (iii) interests in foreign entities. The IRS has issued guidance exempting “specified foreign financial assets” held in a financial account from reporting under this provision (although the financial account itself, if maintained by a foreign financial institution, may remain subject to this reporting requirement). U.S. Holders are urged to consult their tax advisers regarding the application of this legislation to their ownership of the ADSs or ordinary shares.

10F. DIVIDENDS AND PAYING AGENTS

Not applicable.

10G. STATEMENTS BY EXPERTS

Not applicable.

10H. DOCUMENTS ON DISPLAY

We are subject to the reporting requirements of the Exchange Act applicable to foreign private issuers. Because we are a FPI, the SEC’s rules do not require us to file quarterly reports on Form 10-Q, among other things. We do produce quarterly financial reports and furnish them to the SEC on a 6-K form not later than two months after the end of each of the first three quarters of our fiscal year and file our annual report on Form 20-F no later than 4 months after the end of our fiscal year.

You may inspect and copy reports and other information filed by us with the SEC at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the SEC’s Public Reference Room by calling the SEC in the United States at 1-800-SEC-0330. In addition, the SEC maintains an Internet website at http://www.sec.gov, from which you can electronically access our filings. In addition, all the statutory records of the Company and its subsidiaries may be viewed at our registered address in South Africa.

We will continue to send the depositary a copy of all notices that we give relating to meetings of our shareholders or to distributions to shareholders or the offering of rights and a copy of any other report or communication that we make

generally available to our shareholders. The depositary will make all these notices, reports and communications that it receives from us available for inspection by registered holders of ADSs at its office. The depositary will mail copies of those notices, reports and communications to you if we ask the depositary to do so and furnish sufficient copies of materials for that purpose.

10I. SUBSIDIARY INFORMATION

Not applicable.

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ITEM 11. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

We face exposure to the risk of adverse movements in foreign currency exchange rates and changes in interest rates. Portions of our revenues, expenses, assets and liabilities are denominated in currencies other than the South African Rand, primarily the U.S. Dollar, the Australian Dollar, the Euro, the British Pound and the Brazilian Real. These exposures may change over time as business practices evolve.

In addition to the disclosures below, notes 3.1(a) and 37 of the consolidated financial statements (which can be found on “Item 19. Exhibits”) also contain disclosure of our exposures to market risk.

Foreign Currency Exchange Risk

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or date of re-measurements where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. Foreign currency transaction exposure has historically resulted primarily from intercompany transactions and customer and vendor transactions denominated in currencies other than the functional currency of the legal entity entering into the transaction. Foreign exchange gains and losses arising from exchange rate movements, which can be volatile, are recorded in the income statement.

Currently, our significant foreign currency exposures are those with respect to the U.S. Dollar, the Australian Dollar, the Euro, the British Pound and the Brazilian Real. An unfavorable exchange rate movement with respect to any of these currencies against the South African Rand would expose us to losses. For fiscal year 2019, based on our financial position at March 31, 2019, we estimated that a 5% strengthening in the functional versus the denominated currency would have resulted in a decline of R1.5 million in pre-tax income. For purposes of this sensitivity analysis, we assume that all currencies move in the same direction at the same time. Foreign currency translation exposure also results from the translation of the financial statements of our subsidiaries, whose functional currency is not the South African Rand, into the South African Rand for consolidated reporting purposes. Assets and liabilities of these subsidiaries are translated into South African Rand using period-end exchange rates and their income statements are translated into South African Rand using the weighted average exchange rate over the period. We record resulting currency translation adjustments in the consolidated statement of comprehensive income and as part of reserves on the consolidated statement of financial position. We recorded exchange differences on translating foreign operations of R114.6 million in the statement of comprehensive income for fiscal year 2019.

For fiscal year 2019, approximately 51.3% of our revenues were denominated in a currency other than the South African Rand, and 40.4% of our operating expenses were generated by subsidiaries whose functional currency is not the South African Rand and, therefore, are subject to foreign currency translation exposure. We have experienced and expect to experience fluctuations in our net profit as a result of revaluing monetary assets and liabilities that are not denominated in the functional currency of the entity that recorded the asset or liability. We do not hedge our foreign currency translation risk and we also have not hedged the exposure from the U.S. Dollar cash reserves held in MiX Investments. Currently, we have a policy in place to hedge the remaining significant transaction risks that take into account foreign currency debits, credits and determines a net on balance sheet position. This net position is then offset by a foreign currency bank account in anticipation of the expenditure or receipt of cash. Our policy is in effect primarily in our South African, European, Middle East and Australasian operations. We do not plan to implement this policy in our United States and Brazilian operations as all significant trading income and expenses and resulting debits and credits are denominated in U.S. Dollars.

Interest Rate Fluctuation Risk

We are exposed to interest rate risk in respect of our net cash balances that earn interest at variable rates. Amounts outstanding under our credit facilities accrue interest at variable rates linked to the South African prime rate and expose us to interest rate risk. An increase in the interest rate as at March 31, 2019 of 100 basis points for South African Rand denominated instruments would have increased profit or loss before tax by R1.8 million.

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ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

12A. DEBT SECURITIES

Not applicable.

12B. WARRANTS AND RIGHTS

Not applicable.

12C. OTHER SECURITIES

Not applicable.

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12D. AMERICAN DEPOSITARY SHARES

BNYM serves as the depositary for MiX Telematics’ ADSs. MiX Telematics’ ADSs, each representing twenty five MiX Telematics ordinary shares, of no par value, are traded on the New York Stock Exchange under the symbol “MIXT”. The ADSs are evidenced by American Depositary Receipts, or ADRs, issued by BNYM, as Depositary, under the Deposit Agreement (dated as of August 8, 2013) among BNYM, MiX Telematics Limited and its registered ADR holders.

Holders of ADSs or ADRs are required to pay various fees and charges to the depositary which have been detailed in the table below:



Persons depositing or withdrawing shares or ADS holders must pay the following fees:		In respect of the following services:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)		Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates

$0.05 (or less) per ADS		Any cash distribution to ADS holders

A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs		Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders

$0.05 (or less) per ADSs per calendar year		Depositary services

Registration or transfer fees		Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares

Expenses of the depositary		Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) Converting foreign currency to U.S. Dollars

Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes		As necessary

Any charges incurred by the depositary or its agents for servicing the deposited securities		As necessary

The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may collect any of its fees by deduction from any cash distribution payable to ADS holders that are obligated to pay those fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

From time to time, the depositary may make payments to us to reimburse and/or share revenue from the fees collected from ADS holders, or waive fees and expenses for services provided, generally relating to costs and expenses arising out of establishment and maintenance of the ADS program. In performing its duties under the deposit agreement, the depositary may use brokers, dealers or other service providers that are affiliates of the depositary and that may earn or share fees or commissions.

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

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ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable.

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ITEM 15. CONTROLS AND PROCEDURES

15A. DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a – 15(e) and 15d – 15(e) under the Exchange Act) as of March 31, 2019. Based on that evaluation, we concluded that, as of such date, our disclosure controls and procedures were not effective as a result of a material weakness in our internal control over financial reporting.

Notwithstanding the conclusion by our CEO and CFO that our disclosure controls and procedures as of March 31, 2019 were not effective, and notwithstanding the material weakness in our internal control over financial reporting described below in Item 15B, management believes that the consolidated financial statements and related financial information included in this Annual Report on Form 20-F present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with IFRS.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls or the procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

15B. MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a – 15(f) under the Exchange Act of 1934, as amended. Under section 404 of SOX, management is required to assess the effectiveness of MiX’s internal control over financial reporting as of the end of each financial year and report, based on that assessment, whether our internal control over financial reporting was effective.

Our internal control over financial reporting is designed under the supervision of the Chief Executive Officer and Chief Financial Officer to provide reasonable assurance as to the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with IFRS as issued by the IASB.

Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS as issued by the IASB, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Management assessed the effectiveness of our internal control over financial reporting as of March 31, 2019. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organisations of the Treadway Commission in “Internal Control – Integrated Framework (2013)”. Based on this assessment, our management has determined that, as of March 31, 2019, our internal control over financial reporting was not effective due to the identification of the material weakness set out below.

During the course of completing this evaluation, we identified deficiencies related to:

• restricting access to certain financial systems, records, and data in the Africa operating segment to appropriate users; and

• the maintenance of appropriate segregation of duties in the same operating segment, predominantly resulting in inappropriate access being granted to certain IT and finance end-user personnel on those same systems without appropriate monitoring controls in place.

In spite of the fact that management performed considerable investigation into whether these risks have been exploited, and can confirm that they have not identified any instance of exploitation during the period under review, these deficiencies have been assessed as a material weakness in aggregate. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement to the annual or interim financial statements will not be prevented or detected on a timely basis.

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We are currently in the process of implementing additional internal controls to remediate this weakness and the actions we have already taken, as well those we plan to implement will be subject to continued review supported by confirmation and testing by management as well as audit committee oversight.

Our independent registered public accounting firm, in its report on the effectiveness of our internal control over financial reporting, expressed an adverse opinion on the effectiveness of our internal control over financial reporting as of March 31, 2019. This report is included in this Annual Report on Form 20-F.

15C. ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTANCY FIRM

To the shareholders and the Board of Directors of MiX Telematics Limited

Johannesburg, South Africa

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of MiX Telematics Limited and subsidiaries (the “Company”) as of March 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, because of the effect of the material weakness identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of March 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended March 31, 2019, of the Company and our report dated July 26, 2019 , expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying management’s report on internal control over financial reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management's assessment:

A material weakness in internal control over financial reporting related to:


•	restricting access to certain financial systems, records, and data in the Africa operating segment to appropriate users; and


•	the maintenance of appropriate segregation of duties in the same operating segment, predominantly resulting in inappropriate access being granted to certain information technology (“IT”) and finance end-user personnel on those same systems without appropriate monitoring controls in place.

This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the year ended March 31, 2019 of the Company and this report does not affect our report on such financial statements.

/s/ Deloitte & Touche

Registered Auditors

Johannesburg, South Africa

July 26, 2019

National Executive: *LL Bam Chief Executive Officer *TMM Jordan Deputy Chief Executive Officer; Clients & Industries *MJ Jarvis Chief Operating Officer *AF Mackie Audit & Assurance *N Sing Risk Advisory DP Ndlovu Tax & Legal TP Pillay Consulting *JK Mazzocco Talent & Transformation MG Dicks Risk Independence & Legal *KL Hodson Corporate Finance *TJ Brown Chairman of the Board

A full list of partners and directors is available on request *Partner and Registered Auditor

15D. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

As required by Rule 13a-15(d), under the Securities Exchange Act of 1934, as amended, our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of our internal control over financial reporting to determine whether any change occurred during the period covered since the last annual report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Based on this evaluation, management determined that there has been no change during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, except as otherwise described below.

Following the identification of the material weakness noted under Item 15B, management identified various remedial actions and has implemented additional internal controls over financial reporting relating primarily to information technology general controls in the areas of user access, including;


•	Improving the design, operation and monitoring of control activities and procedures associated with user, restricted user and administrator access and appropriate segregation of duties to the affected IT systems, including both preventive and detective control activities; and


•	Removing segregation of duties conflicts within financial systems, or where removal is impossible or impractical, implementing additional internal controls to prevent and detect misuse of incompatible duties.

For additional information related to risks associated with the remediation of the material weakness, see “Risk Factors - In connection with the audit of our consolidated financial statements for fiscal 2019, we identified a material weakness in our internal control over financial reporting. If we fail to remediate this weakness and maintain proper and effective internal control, our ability to produce accurate and timely financial statements could be impaired.”.

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16A. AUDIT COMMITTEE FINANCIAL EXPERT

The Board of Directors has determined that Anthony Welton, independent non-executive chairperson of the Audit and Risk Committee, is an “audit committee financial expert” as defined by the rules of the SEC and is independent both under the NYSE Listing Standards and the JSE Listings Requirements. The Board has also determined that the combined knowledge, skills and experience of the Audit and Risk Committee as well as their authority to engage outside experts as they deem appropriate to provide them with advice on matters related to their responsibilities, enable them, as a group and under the guidance of Anthony Welton, to discharge the responsibilities of the Audit and Risk Committee.

16B. CODE OF ETHICS

We have a Code of Ethics and Conduct which applies to all of our directors, officers and employees, and is underpinned by MiX’s philosophy of honesty, equity, respect and dignity. The Code of Ethics and Conduct has been communicated to employees, suppliers, service providers and is available on our website at http://www.mixtelematics.com/about-us/corporate-governance. This website is not incorporated by reference in this annual report. Any amendment or waiver of the code as it relates to our Chief Executive Officer, Chief Financial Officer, principal accounting officer or controller will be posted on our website within five business days following such amendment or waiver. No such amendments or waivers are anticipated.

We have been successfully operating an ethics reporting telephone line and email address for a number of years. This confidential and anonymous ethics hotline provides an impartial facility for all stakeholders to report deviations from ethical behavior, including fraud and unsafe behavior or environment. These calls and emails are monitored, and the occurrence of relevant reports and progress toward their resolution are reported to the Audit and Risk Committee on a regular basis.

16C. PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table sets forth the aggregate audit and audit-related fees, tax fees and all other fees billed by our principal accountants Deloitte & Touche (previously PricewaterhouseCoopers Inc.) for each of fiscal years 2019 and 2018:



	2019		2019		2018
	(In thousands)
Audit fees ⁽¹⁾		$778		R11,259		R12,076
Tax fees ⁽²⁾	83		1,206		730
All other fees ⁽³⁾	1		20		167
Total ⁽⁴⁾		$862		R12,485		R12,973


⁽¹⁾	In fiscal year 2019, audit fees include R0.3 million (2018: R2.2 million) in respect of fees paid to PricewaterhouseCoopers Inc. and the balance relates to Deloitte & Touche.


(2)	In fiscal year 2018, tax fees includes R0.2 million in respect of fees paid to PricewaterhouseCoopers Inc. and the balance relates to Deloitte & Touche.


(3)	In fiscal year 2018, other fees includes R0.1 million in respect of fees paid to PricewaterhouseCoopers Inc. and the balance relates to Deloitte & Touche.


(4)	In respect of our Audit and Risk Committee approval process, all of the non-audit and audit fees paid to Deloitte & Touche and PricewaterhouseCoopers Inc. have been pre-approved by the Audit and Risk Committee.

Audit fees consist of fees billed for the annual audit of our consolidated financial statements and the audit of statutory financial statements of our subsidiaries, including fees billed for assurance and related services that are reasonably related to the performance of the audit or reviews of our financial statements or internal controls that are services that only an external auditor can reasonably provide.

Tax fees include fees billed for tax compliance and consulting services, including assistance in the preparation of original and amended tax returns; tax advice relating to VAT, tax incentives and transfer pricing, and requests for rulings on technical advice from tax or other governmental authorities; assistance in tax audits and consultation and planning services.

All other fees consist of fees billed which are not included under audit fees, audit related fees or tax fees for example, the review of management's assessment of the impact of IFRS 15 ‘Revenue’ in fiscal 2018 and staff training in fiscal 2019.

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Audit committee approval policy

In accordance with our non-audit services policy, non-audit services performed for us by our independent accountants were approved by the Audit and Risk Committee, which concluded that the provision of such services by the independent accountants was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions.

In terms of our non-audit services policy, non-audit services less than R100,000 and up to R1,000,000 cumulatively per annum that fall into the permissible non-audit services categories set out in the policy, do not require pre-approval by the Audit and Risk Committee, but are pre-approved by the chairman of the Audit and Risk Committee. All non-audit services exceeding R100,000 and all non-audit services fees after the above R1,000,000 cumulative annual limit is reached, are subject to pre-approval by the Audit and Risk Committee. On a quarterly basis the Audit and Risk Committee review and ratify all non-audit services.

Our non-audit services policy also contains a list of prohibited services which may not be performed by our independent accountants as these services could impair their independence status.

Requests or applications for services that require specific separate approval by the Audit and Risk Committee or its chairman, are required to be submitted by both the Chief Financial Officer and the independent accountants, and must include a detailed description of the services to be provided and a statement by the independent auditors confirming that the provision of the proposed services does not impair their independence.

In accordance with the Audit and Risk Committee charter, the Audit and Risk Committee approves the audit fee payable to the independent accountants.

16D. EXEMPTIONS FROM THE LISTINGS STANDARDS FOR AUDIT COMMITTEES

Not applicable.

16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

On May 23, 2017, our Board of Directors approved a share repurchase program of up to R270 million under which we may repurchase our ordinary shares, including those represented by ADSs. We may repurchase our shares or ADSs from time to time at our discretion through open market transactions and block trades, based on ongoing assessments of our capital needs, the market prices of our securities and general market conditions. This share repurchase program may be discontinued at any time by our Board of Directors, and we have no obligation to repurchase any amount of our securities under the program. The repurchase program will be funded out of existing cash resources.

Fiscal 2018 purchase

During fiscal 2018 the following purchases had been made under the share repurchase program:



Period	Total number of shares repurchased	Average price paid per share ⁽¹⁾ R	Shares canceled under the share repurchase program	Total value of shares purchased as part of publicly announced program R	Maximum value of shares that may yet be purchased under the program R
Month
June 2017	5,015,660	3.72	5,015,660	18,666,376	251,333,624
	5,015,660		5,015,660	18,666,376	251,333,624

⁽¹⁾ Including transaction costs.

Subsequent to the repurchase, the shares were delisted and now form part of the authorized unissued share capital of the Company.

Fiscal 2019 purchase

During fiscal 2019 the following purchases had been made under the share repurchase program:

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Period	Total number of shares repurchased	Average price paid per share ⁽¹⁾ R	Shares canceled under the share repurchase program	Total value of shares purchased as part of publicly announced program R	Maximum value of shares that may yet be purchased under the program R
Month
October 2018	9,157,695	8.03	9,157,695	73,548,290	177,786,334
	9,157,695		9,157,695	73,548,290	177,786,334

⁽¹⁾ Including transaction costs.

Subsequent to the repurchase, the shares were delisted and now form part of the authorized unissued share capital of the Company.

16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

There were no changes in our certifying accountant during the fiscal year ended March 31, 2019. For the fiscal year ended March 31, 2018, refer to Item 16F of our Annual Report on Form 20-F for such fiscal year.

16G. CORPORATE GOVERNANCE

We maintain a primary listing of ordinary shares on the exchange operated by the Johannesburg Stock Exchange Limited (“JSE”) and a listing of ADSs on the NYSE. Accordingly, we are subject to the on-going disclosure, corporate governance and other requirements imposed by legislation in both jurisdictions, the JSE, the SEC and the NYSE. We have implemented controls to provide reasonable assurance of our compliance with all relevant requirements in respect of our listings. These include the South African Companies Act, No. 71 of 2008 (“the Companies Act”), the JSE Listings Requirements, the SEC, the NYSE and United States legislation such as SOX, insofar as it applies to foreign companies listed on the NYSE. We also endorse the principles and recommendations of the King Report on Corporate Governance, which sets out the guidelines for the governance structures and operation of companies in South Africa which was compiled when the Institute of Directors in South Africa asked retired Supreme Court of South Africa judge Mervyn E. King to chair a committee, the King Committee on Corporate Governance. Four reports have been issued, in 1994 (King I), 2002 (King II), 2009 (King III), and a fourth revision (King IV) in 2016. King IV replaced King III in its entirety. King IV is principle and outcome based instead of rule based, consequently, while King III called on companies to apply or explain, King IV assumes application of all principles, and requires entities to explain how the principles are applied. Compliance with King IV is a mandatory requirement for companies listed on the JSE. Unlike the requirements of SOX, King IV is non-legislative and is based on principles and recommended practices. The underpinning philosophies of King IV consist of integrated thinking, seeing the organization as an integral part of society, stakeholder inclusivity and corporate citizenship. It views good corporate governance as the exercise of ethical and effective leadership by the Board towards the achievement of the following governance outcomes: ethical culture, good performance, effective control and legitimacy.

As an FPI with ADSs listed on the NYSE, we are subject to corporate governance requirements imposed by the NYSE. Under section 303A.11 of the NYSE Listing Standards, a FPI, such as us, may follow its home country corporate governance practices in lieu of certain of the NYSE Listing Standards on corporate governance, which we have elected to do. The following is a summary of the significant ways in which our home country corporate governance standards and its corporate governance practices differ from those followed by domestic companies under the NYSE Listing Standards:


•	The NYSE Listing Standards require that the non-management directors of United States listed companies meet at regularly scheduled executive sessions without management. Although the JSE Listings Requirements do not require such meetings, the board ordinarily meets without executives on a biannual basis as it is a requirement of King IV.

•

The NYSE Listing Standards require United States listed companies to have an audit committee composed of at least three independent directors. An FPI may be exempted from the requirement that all members of the audit committee qualify as independent under the NYSE Listing Standards provided, among other requirements, that the members of the audit committee are independent under Exchange Act Rule 10A-3. All of our Audit and Risk Committee members are independent, both under the NYSE Listing Standards and the JSE Listings Requirements.

•

The NYSE Listing Standards require United States listed companies to have a nominating/corporate governance committee composed entirely of independent directors. The NYSE Listing Standards also require United States listed companies to have a compensation committee composed entirely of independent directors. The JSE Listings Requirements require the appointment of a remuneration committee, and stipulate that all members of this committee

119

must be non-executive directors, the majority of whom must be independent. We have a combined Nominations and Remuneration Committee which currently comprises three non-executive directors, all of whom are independent under the NYSE Listings Requirements. One of these directors is not considered independent in terms of the JSE Listings Requirements due to his significant shareholding in the Company.

•

Under NYSE Listing Standards, shareholders of United States companies must be given the opportunity to vote for the establishment of and material amendments to equity compensation plans, transactions involving below market price issuances in private placements of more than 20% of outstanding shares, or issuances that result in a change in control, with limited exceptions set forth in the NYSE Listing Standards. The JSE Listings Requirements provides that a share incentive plan and material amendments thereto must be approved by shareholders passing an ordinary resolution (requiring a 75% majority of the votes cast in favor of such a resolution). The JSE Listings Requirements further specifies the information that must be included in the share incentive plan and includes inter alia provisions relating to who is an eligible participant, the aggregate number of shares that may be utilized for the purposes of the share incentive plan, the maximum number of shares for any one participant, the amount that is payable upon acceptance and conditions for awarding of shares. The JSE Listings Requirements requires any issue of shares for cash (both general or specific) to be approved by shareholders passing an ordinary resolution (requiring a 75% majority of the votes cast in favor of such a resolution) and limits the number of shares that may be issued and the discount at which the shares are issued. The JSE Listings Requirements and King IV require the Company’s remuneration policy and remuneration implementation report to be tabled every year for separate non-binding advisory votes by shareholders at the annual general meeting. In the event that either the remuneration policy or remuneration implementation report is voted against by shareholders exercising 25% or more of the voting rights exercised, the Company must engage with dissenting shareholders in order to ascertain the reasons therefor and to address all legitimate and reasonable objections and concerns.

•

Under NYSE Listing Standards, each related party transaction is to be reviewed and evaluated by an appropriate group within the listed company involved. While the NYSE does not specify who should review related party transactions, the NYSE believes that the audit committee or another comparable body might be considered as an appropriate forum for this task. The NYSE Listing Standards state that, following the aforementioned review, the Company should determine whether or not a particular relationship serves the best interest of the Company and its shareholders and whether the relationship should be continued or eliminated. The NYSE’s related party guidance applies to listed companies acquiring their own shares or conducting repurchases through affiliates. In general, the NYSE Listing Standards are not otherwise implicated with respect to share repurchases. The JSE Listings Requirements allow for the acquisition by a company of its own securities or the acquisition by a subsidiary of securities in its holding company, in accordance with the Companies Act. The JSE Listings Requirements requires any repurchase of shares (both general or specific) to be approved by shareholders passing a special resolution (requiring a 75% majority of the votes cast in favor of such a resolution). The requirements for a repurchase differ depending upon whether the repurchase takes the form of a general authority to repurchase securities, or a specific authority to repurchase securities.

Repurchases under a general authority may only be done without any prior understanding or arrangement between the Company and the seller and may only be effected following the passing by the board of a solvency and liquidity test. No more than 20% of the total share capital of the Company may be repurchased in aggregate in any one financial year (or a total of 10% where the repurchase is effected by a subsidiary) and the maximum premium at which the repurchase may be undertaken is 10% of the weighted average of the market value on the JSE over the five business days immediately preceding the repurchase of such securities.

Repurchases under a specific authority are effected where the offer is made to holders of securities specifically named and may only be effected following the passing by the board of a solvency and liquidity test. Where a specific repurchase of securities is from a related party (being, for example, a shareholder holding more than 10% of the issued share capital of the Company) and the price is at a premium to the 30 day weighted average of the market value on the JSE, a fairness opinion from an independent expert is required to be obtained prior to effecting the repurchase. A related party is also excluded from voting on the special resolution.

16H. MINE SAFETY DISCLOSURE

Not applicable.

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ITEM 17. FINANCIAL STATEMENTS

We are furnishing financial statements pursuant to the instructions of Item 18 of Form 20-F.

ITEM 18. FINANCIAL STATEMENTS

The following consolidated financial statements, together with the auditors' reports of Deloitte & Touche (“Deloitte”) and PricewaterhouseCoopers Inc. (“PwC”), are filed as part of this annual report on Form 20-F:

Index to the Consolidated Financial Statements



		Page
Report of Independent Registered Public Accounting Firm: Deloitte & Touche		122
Report of Independent Registered Public Accounting Firm: PricewaterhouseCoopers Inc.		123
Statement of Financial Position at March 31, 2019 and March 31, 2018		*
Income Statement for the years ended March 31, 2019, March 31, 2018 and March 31, 2017		*
Statement of Comprehensive Income for the years ended March 31, 2019, March 31, 2018 and March 31, 2017		*
Statement of Changes in Equity for the years ended March 31, 2019, March 31, 2018 and March 31, 2017		*
Statement of Cash Flows for the years ended March 31, 2019, March 31, 2018 and March 31, 2017		*
Notes to the Financial Statements		*

* Refer to our consolidated financial statements filed as Exhibit 99.1 which have been incorporated by reference.

121

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of MiX Telematics Limited

Johannesburg, South Africa

Opinion on the Financial Statements

We have audited the accompanying consolidated statement of financial position of MiX Telematics Limited and subsidiaries (the “Company”) as of March 31, 2019 and 2018, the related consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows, for each of the two years in the period ended March 31, 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2019 and 2018, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2019, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated July 26, 2019 as to the effects of the material weakness described in Management’s Report on Internal Control over Financial Reporting, expressed an adverse opinion on the Company’s internal control over financial reporting because of a material weakness.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche

Registered Auditor

Johannesburg, South Africa

July 26, 2019

We have served as the Company’s auditor since 2017.

A full list of partners and directors is available on request *Partner and Registered Auditor

122

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of MiX Telematics Limited:

In our opinion, the consolidated income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended March 31, 2017 present fairly, in all material respects, the results of operations and cash flows of MiX Telematics Limited and its subsidiaries for the year ended March 31, 2017, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers Inc.

Johannesburg, South Africa

July 14, 2017

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ITEM 19. EXHIBITS



Exhibit number		Description
1.1*		Memorandum of Incorporation of the Company as amended
4.1**		Form of Deposit Agreement among the Company, The Bank of New York Mellon, as depositary, and the holders from time to time of American depositary shares issued thereunder, including the form of American depositary receipts
4.2**		TeliMatrix Group Executive Incentive Scheme, adopted by TeliMatrix Limited, dated October 8, 2007, including the Deed of Amendment, dated January 31, 2011, and the Second Deed of Amendment, dated September 13, 2011
4.3**		Agreement of Lease, dated October 2, 2007, between Thynk Industrial One Proprietary Limited and Matrix Vehicle Tracking Proprietary Limited and addendum thereto
4.4**		Updated Terms and Conditions of Employment of Stefan Joselowitz, dated November 18, 2008
4.5††		Standard Terms and Conditions of Employment, effective October 1, 2016, between the Company and Gert Pretorius
4.6**		Restraint of Trade, dated January 1, 2012, between the Company and Gert Pretorius
4.7		Facility Letter, effective July 23, 2018, between The Standard Bank of South Africa Limited and the Company
4.8**		Facility Letter, dated March 25, 2013, between Nedbank Limited and MiX Telematics Africa Proprietary Limited
4.9†***		Provision of Cellular Telephony Network Services Agreement, effective August 1, 2000, between Mobile Telephone Networks Proprietary Limited and the Company, as amended by Addendum effective July 10, 2012
4.10†#†††		Agreement, effective October 1, 2017, between MiX Telematics Africa Proprietary Limited and Super Group Trading Proprietary Limited
4.11**		Standard Terms and Conditions of Employment, dated December 1, 2013, between the Company and Catherine Lewis
4.12†††		Addendum to Agreement of Lease, effective April 1, 2017, between Thynk Property Fund Proprietary Limited and MiX Telematics Africa Proprietary Limited
4.13****		MiX Telematics Limited Long-Term Incentive Plan
4.14††		Executive Employment Agreement, dated February 22, 2017, between the Company and Paul Dell
4.15††		Restraint of Trade Agreement, dated February 22, 2017, between the Company and Paul Dell
4.16††		Updated Terms and Conditions of Employment, effective April 1, 2017, between the Company and Charles Tasker
4.17††		AWS Customer Agreement, effective October 1, 2014, between Amazon Web Services, Inc. and MiX Telematics International Proprietary Limited
4.18		Sale of Property Agreement, signed on December 5, 2018, between MiX Telematics Enterprise SA Proprietary Limited and TPF Investments Proprietary Limited
4.19		Executive Employment Agreement entered into between the Company and John Granara, effective July 8, 2019
8.1		List of subsidiaries of the Company
12.1		Certification of Stefan Joselowitz, Chief Executive Officer of MiX Telematics Limited pursuant of Section 302 of the Sarbanes-Oxley Act of 2002
12.2		Certification of John Granara, Chief Financial Officer of MiX Telematics Limited pursuant of Section 302 of the Sarbanes-Oxley Act of 2002
13.1		Certification of Stefan Joselowitz, Chief Executive Officer of MiX Telematics Limited and John Granara, Chief Financial Officer of MiX Telematics Limited, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1		Consent of Deloitte & Touche
15.2		Consent of PricewaterhouseCoopers Inc.
99.1		MiX Telematics Limited Consolidated Financial Statements
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

124



*	Incorporated by reference to the Registrant’s Annual Report on Form 20-F for the year ended March 31, 2014 filed on July 30, 2014 (File No. 001-36027).
**	Previously filed with the Registration Statement on Form F-1 (Registration No. 333-189799) filed by the Registrant on July 3, 2013.
***	Previously filed with Amendment No. 1 to the Registration Statement filed by the Registrant on July 22, 2013.
****	Previously filed with Registration Statement on Form S-8 (Registration No. 333-199908) filed by the Registrant on November 6, 2014.
†	Portions of this exhibit have been omitted pursuant to a request for confidential treatment.
††	Incorporated by reference to the Registrant’s Annual Report on Form 20-F for the year ended March 31, 2017 filed on July 14, 2017 (File No. 001-36027).
†††	Incorporated by reference to the Registrant’s Annual Report on Form 20-F for the year ended March 31, 2018 filed on July 2, 2018 (File No. 001-36027).
#	Certain locations of recovery teams, other operating details relating to the recovery teams and pricing terms contained in the agreement and within Annexure A (Services to be provided by the Contractor), Annexure D (Permitted clients of the Contractor) and Annexure E.1 (Helicopter Services) have been amended since the original execution of this agreement. The amended agreement and annexures do not contain information material to an investment or voting decision and such information is not otherwise disclosed in this exhibit or the Form 20-F. Accordingly, the amended agreement and annexures have been omitted. The Registrant hereby undertakes to furnish supplemental copies of the omitted agreement and annexures to the Securities and Exchange Commission or its staff upon request.

125

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

MiX Telematics Limited

(Registrant)

By: /s/ John Granara

John Granara

Chief Financial Officer

Date: July 26, 2019

126



PRIVATE AND CONFIDENTIAL The Directors Mix Telematics Limited P O Box 12326 Vorna Valley 1686			Exhibit 4.7
Attention: Paul Dell
Date	Direct telephone number	In reply please quote our reference	Your reference
21 February 2018	(011) 721 7277	K Gundani/ S Sookal/ S Chikepe/ st

Dear Sirs

BANKING FACILITIES

The Standard Bank of South Africa Limited (" the Bank ") confirms having granted the banking facilities set out and individually defined in paragraph 1 below (" the Facility/Facilities ") to Mix Telematics Limited (" the Customer "). The Facilities shall upon signature of this offer letter (" the/this Offer Letter ") by the Customer and any other signatories, and subject to paragraph 2 below, be subject to the revised terms and conditions contained in this Offer Letter and in all appendices hereto (collectively " the/this Facility Letter "), in addition to any separate terms and conditions referred to in paragraph 7.1 of Appendix B hereto.


1.	The Facilities



Nature of Facility	" Maximum Aggregate Limit " / " Limit/s "
Working Capital Facility Customer Foreign Currency Account Overdraft Facility** (subject to paragraph 4.5 below)	R 6 000 000 R 64 000 000
Vehicle and Asset Finance	R 8 000 000
Fleet Management Services	R 500 000
Guarantees by Bank ¨ Performance Guarantees ¨ Financial Guarantees	R 9 000 000 R 1 000 000
Derivative Products Trading Facility	R 50 000


2.	Conditions Precedent


2.1.	Any new terms contained in this Facility Letter which are, in the opinion of the Bank, for the benefit of the Customer (including but not limited to any increased or new Limits), shall only become of force and effect upon fulfilment, to the satisfaction of the Bank:


2.1.1.	that together with this Facility Letter, the Bank is furnished with a certified copy/ies of the supporting resolution/s in relation to this Facility Letter along the lines of the enclosed specimen/s or in a format otherwise acceptable to the Bank;

2.1.2.

that the Bank is satisfied that the borrowing powers of the Customer, each of the security providers and Additional Parties as provided for in their memoranda of incorporation or equivalent constitutional documents, are unlimited, or alternatively that the Facilities or the relevant security, as the case may be, are within the amount authorised by the Customer, the security providers and each of the Additional Parties, in terms of their respective borrowing powers;


2.1.3.	that Mix Telematics International (Proprietary) Limited (Registration Number: 1963/006970/07) (“ Mix Telematics International ”) signs the acknowledgement at the foot of this offer letter.

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2.2.	To the extent that the Bank allows the Customer to utilise the Facilities prior to the fulfilment of any or all the conditions precedent, the Customer shall be obliged to ensure the same are fulfilled upon the Bank requiring the Customer to do so (" the Deferred Conditions ").


2.3.	The above conditions precedent are inserted for the benefit of the Bank, which may waive any of the said conditions precedent in its sole discretion.


2.4.	Subject to paragraph 2.2, with respect to any increase to Limit/s, the limit/s and terms previously in place shall be applicable until such time as the said conditions precedent have been fulfilled, been waived or become Deferred Conditions.


3.	Security

Any security currently held by the Bank in relation to the Customer and/or the Additional Parties shall also constitute security for the Facilities.


4.	Additional Terms


4.1.	Additional Parties


4.1.1.	For the purposes of this Facility Letter:


4.1.1.1.	" Documentary Credit/s " shall bear the same meaning as the term " Credit " in UCP (as such term is defined in Appendix B).


4.1.1.2.	" Instruments " shall mean Documentary Credits, guarantees, standby letters of credit, indemnities, undertakings issued by the Bank and/or any other manner in which the Bank binds itself on behalf of the Customer or Additional Parties in favour of certain named beneficiaries.


4.1.1.3.	" Control " shall mean, with respect to any party, the possession directly or indirectly of the power to direct or cause the direction of the management, or policies of such party, whether through the ownership of voting securities (or other ownership interest), by contract or otherwise.


4.1.1.4.	“Customer’s Group” shall mean Subsidiaries, associates and managed entities of the Customer and/or any other parties over which the Customer has ultimate Control.

4.1.2.

Members of the Customer's Group, any parties which from time to time participate in the cash management service provided by the Bank to the Customer (the “Service” ), and any other parties requested by the Customer from time to time, as agreed to by the Bank in its sole discretion (" the Additional Parties ") are hereby expressly authorised by the Customer to utilise the Facilities together with the Customer, should the Bank in its sole discretion, so allow. Any amounts outstanding at any time by any Additional Party and not discharged on due date by such Additional Party, shall be discharged in full by the Customer, immediately on demand by the Bank. Any such utilisation by an Additional Party shall be subject to all the terms and conditions contained in this Facility Letter and an Additional Party shall have no more right to utilise the Facilities than the Customer. The Customer shall ensure that the aggregate amount of the utilisation of each of the Facilities by the Customer and the Additional Parties shall not at any time exceed the relevant Limit/s.


4.1.3.	Without prejudice to the Bank’s rights in terms of any other provisions of this paragraph 4.1, the Customer hereby indemnifies and holds the Bank harmless, against any costs, loss or damage of whatsoever nature, which the Bank may suffer or sustain, arising from, or relating to:


4.1.3.1.	the utilisation of the Facilities by any Additional Party in terms of this Facility Letter;


4.1.3.2.	the issuance, payment or settlement of any claim(s) under or in terms of the Instruments or any payment made by the Bank as a consequence of the Bank exercising any of its rights under or in terms of the Instruments:


4.1.3.3.	the Customer and/or Additional Parties use of a third party to take delivery on the Customer and/or Additional Parties behalf of the Instruments and/or any document(s) relating to the Instruments; and/or


4.1.3.4.	the Customer and/or Additional Parties use of a third party for presentation of any documents relating to the Instruments; and/or


4.1.3.5.	the Customer and/or Additional Parties request for the Bank to deliver Instruments and/or documents relating to the Instruments to the beneficiary(ies), and

in all such instances the Customer agrees that the Bank shall not be held liable for the late delivery, loss or misplacement of any such document(s) and/or Instruments.


4.1.4.	Further to the above and in relation to the Guarantee by Bank Facility, the Customer hereby requests and authorises the Bank to issue Instrument/s on its and/or the relevant Additional Parties’ behalf for certain amounts as set out in the relevant underlying application form(s).


4.1.5.	The Customer agrees that its obligations and liabilities under the indemnity incorporated in paragraph 4.1.3 are continuing covering obligations and shall remain in full force and effect irrespective of any temporary extinction thereof.


4.2.	Provision of Information


4.2.1.	The Customer undertakes to furnish the Bank with:

INITIALS


4.2.1.1.	the Customer’s consolidated bi-annual management accounts which are to be delivered to the Bank by no later than the 75 ^th day following the end of the period to which such accounts relate;


4.2.1.2.	signed copies of the consolidated audited financial statements of the Customer as soon as those financial statements are ready and available, but in any event within a period of 210 days from the end of the financial year to which they relate;

4.2.1.3.

signed copies of the audited financial statements of Mix Telematics Africa (Proprietary) Limited (Registration Number: 2004/019797/07) (“ Mix Telematics Africa ”) and Mix Telematics International (Proprietary) Limited (Registration Number: 1963/006970/07) (“ Mix Telematics International ”) as soon as those financial statements are ready and available, but in any event within a period of 210 days from the end of the financial year to which they relate;


4.2.1.4.	a quarterly schedule of all Mix Telematics International’s outstanding book debts and other debts, to be delivered to the Bank by no later than the 25 ^th day following the end of the period to which such schedule relates.

The said schedule is to incorporate an age analysis of such debts with full details being disclosed of each debt (including but not limited to the identity of the debtor and amount outstanding);


4.2.1.5.	signed copies of the annual audited financial statements in respect of such parties as the Bank may require, as soon as those financial statements are available, but in any event within a period of 180 days from the end of the financial year to which they relate;


4.2.1.6.	such further information as the Bank may require, from time to time.


4.2.2.	The Customer will notify the Bank in writing at least 7 days in advance of any change of the Customer’s name during the currency of the Facilities and will on demand, provide the Bank with such information and/or documentation in support thereof as the Bank may request.


4.3.	Matters Requiring the Bank’s Consent


4.3.1.	The Customer undertakes to the Bank that it will not and it will procure that its Subsidiaries/the Additional Parties do not, without the Bank’s prior written consent:


4.3.1.1.	pledge, cede, mortgage, hypothecate or otherwise encumber or further encumber any of their movable or immovable assets to secure any liability of any nature provided that the Customer and any of its subsidiaries shall be entitled to do so up to a maximum aggregate amount of R10 000 000.00 (ten million Rand);


4.3.1.2.	incur any further borrowings in excess of a maximum aggregate amount of R10 000 000.00 (ten million Rand).


4.4.	Further Undertakings

The Customer undertakes to the Bank that within each calendar month there will be wide fluctuations in the overall utilisation of the Working Capital Facility.


4.5.	**Customer Foreign Currency Account Overdraft Facility

4.5.1.

Without prejudice to any of the Bank’s rights under paragraph 2 of Appendix A, the Customer shall be entitled to utilise a maximum amount of R64 000 000.00 (sixty four million Rand) of the Maximum Aggregate Limit of the Working Capital Facility in the form of a customer foreign currency account overdraft facility ( “CFC Overdraft Facility” ), provided that the Bank shall receive any and all receipts of monies from the Customer’s debtors and/or other members of the Customer’s group (being subsidiaries of the Customer and/or any other parties over which the Customer has ultimate Control) for an amount equal to or exceeding the amount to be utilised under the CFC Overdraft Facility by the Customer, which is due and owing to the Bank.


4.5.2.	The Customer acknowledges that the utilisation of the CFC Overdraft Facility referred to in paragraph 4.5.1 above, must at all times be in accordance with the provisions of section E(B)(ii) and I.3 (C) of the Currency and Exchange Manual for Authorised Dealers of the South African Reserve Bank, as amended from time to time, and/or any applicable law, regulation and or policy pertaining thereto.

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5.	Conflict

5.1.

The terms and conditions of this Offer Letter, any appendices to this Offer Letter and any separate written terms and conditions or written agreements relating to a Facility or to the Service, shall be read together, provided that should a conflict exist or arise the order of precedence for the interpretation or clarification thereof will be as follows (and should the " Precedence " provisions or any other clause of the below mentioned agreements or any other agreement provide otherwise, then such clause will be superseded by the provisions of this paragraph):


5.1.1.	the Instrument; followed by


5.1.2.	the separate terms and conditions relating to a particular Facility or to the Service; followed by


5.1.3.	the contents of this Offer Letter; followed by


5.1.4.	any appendices hereto.


6.	Acceptance

To indicate your acceptance of the aforegoing, kindly initial each page of the attached duplicate of this Offer Letter (including Appendices A and B and any other appendices hereto), sign the acknowledgement on the final page of the Offer Letter and return same to the Bank on or before, 31 July 2018 , when the offer contained in the Facility Letter expires. This Facility Letter shall be of no force or effect unless and until it is signed by both the Bank and the Customer.

Yours faithfully

____________________________

KUMBIRAI GUNDANI

MANAGER: CLIENT COVERAGE

ACKNOWLEDGEMENT BY CUSTOMER

TERMS AND CONDITIONS ACCEPTED

SIGNED AT _________________________________ ON _____________________________ 2018.

For: Mix Telematics Limited (Registration Number: 1995/013858/06)

Signature: __________________________________ _____________________________

Physical Address: __________________________________

___________________________________

Telephone No.: ___________________________________

Facsimile No.: ____________________________________

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APPENDIX A

GENERAL TERMS AND CONDITIONS


1.	Definitions

In this Facility Letter:


1.1.	where a term is defined in either the Offer Letter or the appendices thereto, it shall bear the meaning assigned to it throughout the Facility Letter;


1.2.	" Bank Account " shall mean any bank account held by the Customer with the Bank from time to time;


1.3.	" Business Day " shall mean any day which is not a Saturday, Sunday or official public holiday in South Africa and, in the case of an offshore loan, not an official public holiday in the country of the currency in which the loan has been or is requested to be granted, or in the Isle of Man (in the case where the loan has been or is requested to be granted out of the Isle of Man);


1.4.	" Code " means the United States Internal Revenue Code of 1986;


1.5.	" Companies Act " shall mean the Companies Act 71 of 2008, as amended from time to time;


1.6.	" Event of Default " shall mean the occurrence of any event detailed in paragraph 11 of this Appendix A;


1.7.	" FATCA " shall mean –


1.7.1.	sections 1471 to 1474 of the Code or any associated regulations or other official guidance;


1.7.2.	any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the United States of America and any other jurisdiction, which (in either case) facilitates the implementation of paragraph 1.7.1above; or


1.7.3.	any agreement, pursuant to the implementation of paragraph 1.7.1 and 1.7.2 above, with the United States Internal Revenue Service, the United States government or any governmental or taxation authority in any other jurisdiction;


1.8.	" FATCA Deduction " means a deduction or withholding from a payment under the Facility Letter as required by FATCA;


1.9.	" Increased Costs " shall mean any and all additional costs to, or reduction in the amount payable to, or a reduction in the overall return which would have been achieved by the Bank on its capital or regulatory capital but for the Bank having entered into, or which is attributable to the Bank entering into, performing its obligations,

maintaining a commitment or funding its obligations under the Facility Letter;


1.10.	" Laws " shall mean laws, ordinances, Regulations, judgements and orders of any competent court, central bank or governmental agency or authority having the force of law in any relevant jurisdiction;


1.11.	" Old Companies Act " shall mean the Companies Act 61 of 1973 (as amended);


1.12.	" Regulation " shall mean any regulation, rule, official directive, request or guideline (whether or

not having force of law) or any such directive analogous to the aforegoing, which the Bank has elected and/or is obliged to comply with and/or which is in accordance with the practice of a responsible banker (in its sole, absolute and unfettered discretion) of any governmental, intergovernmental, supranational body, agency, department or of any regulator, self-regulating body or other authority or organisation;

1.13.

" Personal Information " shall mean information relating to an identifiable, natural or juristic person, including but not limited to, information relating to race, gender, sex, marital status, nationality, ethnic or social origin, colour, sexual orientation, age, physical or mental health, religion, belief, disability, language, birth, education, identity number, telephone number, email, postal or street address, biometric information and financial, criminal or employment history as well as correspondence sent by the person that is implicitly or explicitly of a private or confidential nature or further correspondence that would reveal the contents of the original correspondence;


1.14.	" Prime " shall mean the publicly quoted basic rate of interest per annum ruling from time to time (as certified by any manager or divisional executive of the Bank, whose appointment it shall not be necessary to prove) at which the Bank lends on overdraft;


1.15.	" Sanctioned Entity " shall mean a person or entity sanctioned by a Sanctioning Body;

1.16.

" Sanctioning Body " shall mean any one or a combination of the following: the Office of Foreign Assets Control of the Department of Treasury of the United States of America, the United Nations Security Council, the European Union’s Common Foreign and Security Policy, Her Majesty’s Treasury of the United Kingdom, the French Ministry of Economy, Finance and Industry and any other sanctioning body recognised by the Bank from time to time;


1.17.	" Signature Date " shall mean the date of signature of the Facility Letter by the Customer;


1.18.	" Subsidiary " shall bear the meaning assigned thereto in the Companies Act;


1.19.	" Use " shall mean utilise, draw down under, request the issuance of any Instrument/s under

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or in terms of or otherwise avail of the Facilities. " Used " will have a similar meaning;


1.20.	words importing the singular shall include the plural, and vice versa and words importing natural persons shall include legal persons, and vice versa ;


1.21.	when any number of days is prescribed in this Facility Letter, same shall be reckoned exclusively of the first and inclusively of the last day;


1.22.	no provision herein shall be construed against or interpreted to the disadvantage of any party by reason of such party having or being deemed to have structured, drafted or introduced such provision.


2.	Duration and Repayment of Facilities

Notwithstanding any other provision of the Facility Letter:


2.1.	the Maximum Aggregate Limit for each Facility may be terminated by the Bank by notice to the Customer to that effect in which event the relevant Facility/ies shall either be cancelled immediately or from any subsequent date stated in that notice and all amounts outstanding under the cancelled Facility/ies shall become immediately repayable; and/or

2.2.

the Bank may, by notice to the Customer, require all amounts outstanding under all or a particular Facility/ies to be repaid immediately or by any later date stated in such notice, or cash collateral or other security to be provided to the Bank for any contingent liabilities to the Bank under the Facility Letter, including any contingent liabilities under guarantees or letters of credit and/or the Instruments (" the Collateral "); and/or


2.3.	the Maximum Aggregate Limit for each Facility may be reduced by the Bank by notice to that effect to the Customer, in which event all amounts in excess of the limit/s so reduced shall become immediately repayable;


2.4.	If a payment in terms of a Facility falls due on a day which is not a Business Day, then such payment shall be made on the following Business Day, or if such day falls in the next calendar month and the Bank so requires, the immediately preceding Business Day, and the relevant interest period shall be adjusted accordingly;


2.5.	All amounts outstanding under each Facility shall be repayable in the currency in which such Facility was advanced, unless otherwise agreed in writing by the Bank.


3.	Excess Use and Penalty Interest


3.1.	Without prejudice to any other rights the Bank may have:


3.1.1.	any excess Use above the Maximum Aggregate Limit of a Facility shall attract additional interest

at a rate of 5% per annum above the rate applicable to such Facility.

3.1.2.

at any time after the occurrence of an Event of Default, the Bank shall be entitled to levy penalty interest on any amounts owing under the Facilities and/or the Facility Letter at the rate of 5% per annum above Prime, compounded monthly in arrears, from the date of the occurrence of an Event of Default up to and including the date of remedy of the Event of Default or date of permanent repayment of all amounts owing under the Facilities and/or the Facility Letter, whichever is the earlier.


4.	Free of Deduction/Allocation of Payments

4.1.

All amounts paid to the Bank under the Facility Letter shall be made free of deduction and without any withholding or set-off whatsoever in immediately available funds. Should the Customer (or any Additional Party) be compelled by law to withhold or deduct any taxes or other charges from any amounts payable to the Bank, the amounts payable to the Bank shall be increased to the extent necessary to ensure that the Bank receives the amounts payable, free of such withholding or deduction.


4.2.	The Bank will be entitled to allocate any payments received under the Facility Letter to any indebtedness of the Customer (or any Additional Party) to the Bank.


5.	Warranties and Representations

The Customer warrants and represents to the Bank on the Signature Date and on each date which a Facility is Used, that:


5.1.	it and each Additional Party has full power to enter into and perform in terms of the Facility Letter and has taken all necessary corporate and other actions to enter into the Facility Letter and to Use the Facilities;


5.2.	it and each Additional Party has complied, and will continue to comply, with all Laws to which such party is subject including, without limitation, to Laws, Regulations and practices relating to the protection of the environment applicable to each of them in each jurisdiction in which the Customer and/or the Additional Parties conduct business (its/their " Environmental Responsibility ");


5.2.1.	it is not aware of any circumstances which may prevent full compliance by both the Customer and the Additional Parties with its/their Environmental Responsibility in future;


5.3.	the Facilities constitute legal, valid, binding and enforceable obligations of the Customer and/or the Additional Parties;


5.4.	all information provided by the Customer and/or Additional Parties to the Bank is true and correct;


5.5.	no Event of Default has occurred or is continuing;


5.6.	it and the Additional Parties have read and understood the Bank’s privacy statement, which

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statement is available on the Bank’s website (" the Privacy Statement ") and agree to be bound thereby and further acknowledge that the Bank may change this Privacy Statement. Such changes will be placed on the website and the latest version of the Bank’s Privacy Statement will replace all earlier versions of it, unless expressly stated otherwise;


5.7.	it hereby provides the necessary consents required (as detailed in the Privacy Statement), and confirms all consents from any person or entity to whom the Personal Information relates have been obtained, to ensure compliance by the Customer, the Additional Parties and the Bank with all relevant Laws;


5.8.	should it (or any Additional Party) become subject to the provisions of Exchange Control Regulation 3(1)(f), the Facilities will be duly reported in the Exchange Control questionnaire (Form MP79(a)) submitted annually by the Customer (or Additional Party, as the case may be);


5.9.	it will file all Annual Returns in the prescribed form and prescribed manner together with the prescribed fee in accordance with section 33 of the Companies Act and furthermore will provide the Bank with a copy of the Registrar of Companies’ certificate confirming submission of such Annual Returns as soon as they are due, for each year in question, for the duration of the Facilities;


5.10.	it and the Additional Parties will not Use or otherwise make available the proceeds of any of the Facilities and/or Instruments for the purposes of benefitting and/or financing, directly or indirectly, the activities of any person or entity which is a Sanctioned Entity or in a country which is subject to any sanctions imposed by a Sanctioning Body;


5.11.	it and the Additional Parties are not involved in any illegal or terrorist activities;


5.12.	it is not (and no Additional Party is) and will ensure that it will not be (and no Additional Party will be):


5.12.1.	subject to FATCA.


5.12.2.	required to make any FATCA Deduction on account of any payment made or to be made by it under this Facility Letter.


6.	Change in Circumstances and Commitment Fee


6.1.	Notwithstanding anything contained in the Facility Letter to the contrary, if any change in or introduction of any Law, and/or, without derogating from the generality of the aforegoing, if:


6.1.1.	any change in banking practice, as it affects or is applied generally by any financial institution in the Republic of South Africa; and/or


6.1.2.	a requirement or a request by any authority, to pay taxes or other amounts whatsoever or to maintain special deposits or reserve assets; and/or


6.1.3.	any compliance by the Bank with any reserve, cash ratio, special deposit or liquidity requirements (or any other similar requirements) in respect of the Facility Letter; and/or

6.1.4.

any compliance with and/or application of (whether mandatory or not) any capital adequacy or similar requirements, including but not limited to the provisions of the International Convergence of Capital Measurement and Capital Standards (a revised framework) (i.e. BASEL II) or any other standards or guidelines published by the Basel Committee on Banking Supervision (including BASEL III), by the Bank or any of its divisions, or any interpretation or administration thereof,

results in any Increased Costs, the Bank reserves the right to recover such additional costs from the Customer on demand.


6.2.	To the extent that the Bank is required to observe reserving requirements for maintaining unused facilities, the Bank reserves the right to levy a commitment fee at its usual rates prevailing from time to time and in accordance with normal banking practice, for keeping any unused portion of the Facilities at the Customer’s disposal.


7.	Security Valuation


7.1.	The Bank and the Customer agree that, should the Customer provide security over certain assets to the Bank, then these assets may be valued by external valuators acceptable to the Bank and/or such assets may be valued by the Bank itself for so long as the Facilities are made available to the Customer.


7.2.	The Customer agrees that the costs of any valuation shall be borne by the Customer and payable on demand. Where such valuation is performed by the Bank, the Bank shall determine the costs payable by the Customer in the calculation thereof.


8.	Switching between Facilities

8.1.

The Customer shall be entitled to request that all or part of any unused portions of the Maximum Aggregate Limit for a particular Facility be allocated to another Facility. Should the Bank agree to such request and whether such agreement is notified to the Customer or not, the Maximum Aggregate Limits for the Facilities in question shall be deemed to be amended accordingly. If a re-allocation is made in terms of this paragraph to a type of facility not previously granted, such new facility will be deemed to have been incorporated in the Offer Letter and accordingly in the definition of the " Facilities ",

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and the Maximum Aggregate Limit for such Facility shall be the amount allocated thereto.

The Bank reserves the right to recover such fees from the Customer on demand.

8.2.

In the event of the Maximum Aggregate Limit of any of the Facilities being exceeded at any time, the Bank may without notice and without prejudice to any of its other rights as a result of such breach, in its sole discretion elect to eliminate such excess by appropriating the whole or any portion of the Maximum Aggregate Limit/s allocated to the remaining Facilities which are unused to increase the Maximum Aggregate Limit of the Facility which is in excess. The Bank shall also be entitled, but not obliged, to reallocate Limits in terms of this paragraph to the extent a request from the Customer or an Additional Party to Use a particular Facility would cause the Maximum Aggregate Limit in respect of such Facility to be exceeded.


9.	Indemnity


9.1.	The Customer hereby indemnifies the Bank against any loss, damage, claims, costs or any other liability, which may arise as a result of:


9.1.1.	the Bank’s compliance with Laws;


9.1.2.	the Bank acting or declining to act on an Instruction (as such term is defined in paragraph 10 below);


9.1.3.	any excess Use in respect of the Facilities;


9.1.4.	the Bank exercising its rights or performing its obligations under or in terms of this Facility Letter (including, without limitation, paragraph 10 below);


9.1.5.	the Customer exercising its rights or performing its obligations under or in terms of this Facility Letter;


9.1.6.	the seizure, blocking or withholding of any funds by any Sanctioning Body;


9.1.7.	the breach of any representations, warranties and/or undertakings set out in this Facility Letter;


9.1.8.	payment or settlement of any claim(s) in terms of the Instrument(s) should the beneficiary (ies), its/their parent company or its/their substantial shareholder/s become the subject of sanctions established by a Sanctioning Body; and/or


9.1.9.	any amounts owing by the Customer and/or the Additional Party to the Bank under the Bank Accounts from time to time due to the establishment of an increase or decrease to the amount of the intraday electronic payment

processing limit in respect of the Bank Accounts and/or the relevant electronic banking profile or an Instruction received by the Bank to process payments regardless of whether or not there are sufficient funds in the Bank Accounts or a sufficient limit in respect thereof,

(hereinafter collectively referred to as " the Owing Amounts ").


9.2.	The Owing Amounts shall be repaid to the Bank immediately together with any costs or expenses related thereto.


9.3.	The indemnity detailed in paragraph 9.1 will not be affected by any act or omission of the Bank and/or its employees.


9.4.	The Bank will not be liable for any loss, damage, claims, costs or any other liability, which may arise as a result of:


9.4.1.	the Bank not detecting that a party is subject to sanctions imposed by a Sanctioning Body unless the Bank is required by Law to do so;


9.4.2.	the Customer and/or any Additional Party becoming subject to sanctions imposed by any Sanctioning Body;


9.4.3.	the Customer and/or any Additional Party attempting to Use (or otherwise make available the proceeds of) any of the Facilities and/or Instruments for the purpose of benefitting and/or financing, directly or indirectly, the activities of any person or entity which is a Sanctioned Entity or in a country which is subject to any sanctions imposed by any Sanctioning Body; or


9.4.4.	the seizure, blocking, or withholding of any funds in relation to the Customer and/or the Additional Party (as the case may be) by any Sanctioning Body.


10.	Facsimile and Email Indemnity

10.1.

Notwithstanding anything to the contrary contained in this Facility Letter, a written instruction which purports to emanate from the Customer and is transmitted by the Customer, or by any purportedly duly authorised third party on behalf of the Customer, to the Bank by facsimile transmissions or by means of email messages (" Instruction/s ") shall be adequate written notice to the Bank in terms of this Facility Letter.


10.2.	The Customer hereby authorises the Bank to accept and act on any Instructions which the Bank would ordinarily accept if the Instruction/s was/were presented in an original written format.

10.3.

The Bank will not accept responsibility for any loss (consequential or otherwise) incurred by the Customer as a result of the Bank acting or declining to act (wholly or in part) on Instruction/s which the Bank believes to have emanated from the Customer, and the Customer hereby waives any and all claims it may have now or in future against the Bank arising directly or indirectly from any losses or damages which the Customer may

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suffer as a result of the Bank acting or declining to act (wholly or in part) on any Instruction.


10.4.	The fact that any Instruction (including facsimile Instructions) may later be shown to be in any way false, inaccurate, unauthorised or otherwise not authentic, will not be an impediment to the Bank's rights in terms of this Facility Letter.


11.	Events of Default


11.1.	For the purposes of the Facility Letter each of the following events shall be regarded as an Event of Default:


11.1.1.	if the Customer fails to pay any sum due by it to the Bank or to Standard Bank Group Limited or any other Subsidiary or associate company of Standard Bank Group Limited, on the due date therefor;


11.1.2.	if the Customer defaults in the due and punctual performance of any other obligation under the Facility Letter or under any other agreement between the Customer and the Bank or between the Customer and Standard Bank Group Limited or any other Subsidiary or associate company of Standard Bank Group Limited;

11.1.3.

should the Bank become aware, at any time of a fact or circumstance (whether same was present at the date of signature of the Facility Letter or arose thereafter) which leads the Bank to believe or suspect that any representation or warranty or undertaking made or represented either in respect of the Customer in or pursuant to the Facility Letter or in any documents delivered under the Facility Letter, is not complied with or is incorrect (or becomes incorrect at any time) in any respect;

11.1.4.

if the Customer is deemed to be unable to pay its debts in accordance with the provisions of section 345 of the Old Companies Act, becomes financially distressed (as such term is defined in section 128 of the Companies Act), fails to satisfy the solvency and liquidity test as set out in section 4 of the Companies Act, defaults in the payment of any of its debts (of whatsoever nature or amount) when due, or defaults generally in the payment of its liabilities;


11.1.5.	if any process issued on a judgment, decree or order of any court in favour of a creditor of the Customer is returned by the sheriff or the messenger with an endorsement that he has not found sufficient disposable property to satisfy the judgment, decree or order or that any disposable property found did not upon sale satisfy such process;


11.1.6.	if a resolution is taken by the members or shareholders of the Customer or the members or

shareholders of any surety or guarantor for the Customer’s indebtedness to the Bank, to voluntarily wind-up any of the said parties or if any of the said parties or any of their assets become subject to any sequestration, liquidation or business rescue, whether provisional or final, or if any trustee, liquidator, business rescue practitioner or any similar officer is appointed in respect of any of the said parties or any of their assets;

11.1.7.

if the Customer or any surety or guarantor for the Customer's indebtedness to the Bank, is unable to pay its debts, suspends or threatens to suspend payment of all or a material part of (or of a particular type of) its indebtedness to any other creditors, commences negotiations or takes any other step with the view to the deferral, rescheduling or other re-adjustment of all of (or all of a particular type of) its indebtedness to creditors (or of any part of such indebtedness which it will or might otherwise be unable to pay when due), proposes or makes a general assignment or an arrangement or composition with or for the benefit of its creditors or a moratorium is agreed or declared in respect of or affecting all or a part of the indebtedness of the Customer or of any surety or guarantor for the Customer’s indebtedness to the Bank (as the case may be);


11.1.8.	if an attachment, execution or other legal process is levied, enforced, issued or sued out on or against any assets of the Customer or of any surety or guarantor for the Customer’s indebtedness to the Bank, and is not discharged or stayed within 30 days;

11.1.9.

if the board of directors of the Customer and/or board of directors of any surety or guarantor for the Customer’s indebtedness to the Bank, resolve that the said party voluntarily begins business rescue proceedings and be placed under supervision under section 129(1) of the Companies Act or if any steps of whatsoever nature are taken by the board of directors of any of the aforementioned parties with the objective of commencing business rescue proceedings;


11.1.10.	if the Customer and/or any surety or guarantor for the Customer’s indebtedness to the Bank, at any time and for whatever reason becomes deregistered or dissolved or otherwise loses its corporate existence;

11.1.11.

if an application is made by any person to place the Customer and/or any surety or guarantor for the Customer’s indebtedness to the Bank under, or an order is granted by a court of competent jurisdiction placing it under, supervision and commencing business rescue proceedings under section 131(1) of the Companies Act or if any steps of whatsoever nature are taken by any person in respect of any of the aforementioned

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parties with the objective of commencing business rescue proceedings;


11.1.12.	if at any time, the amount outstanding under a Facility granted to the Customer exceeds the Maximum Aggregate Limit for that Facility, or the total amounts outstanding under all of the Facilities exceed the total of the Maximum Aggregate Limits for each Facility);


11.1.13.	if the performance of any rights or obligations under the Facility Letter (including, without limitation, under the Instruments) becomes illegal, invalid or unenforceable for whatever reason or any security given to the Bank in respect of the Customer’s indebtedness to the Bank becomes illegal, invalid or unenforceable for whatever reason;


11.1.14.	if any other party which owes any obligations to the Bank in connection with the Facilities (including but not limited to obligations in terms of negative pledges, undertakings, security or subordinations), breaches any of such obligations;

11.1.15.

if the auditors of the Customer in any financial statements of the Customer published after the date of the last set of audited financial statements furnished to the Bank or if none have been so furnished, after the Signature Date, materially qualifies that annual statement in any respects or inserts a note in the supporting documents to that financial statement relating to any material irregularity;


11.1.16.	if there is a Material Deterioration in the Customer’s financial position.

" Material Deterioration " shall mean material deterioration in the Bank’s reasonable opinion;


11.1.17.	if the Customer embarks on any process or concludes any transaction in terms of which the Customer assists, or proposes to assist its holding company to acquire its own (i.e. the holding company’s) shares or where the Customer acquires shares in its holding company;

11.1.18.

should the Bank become aware, at any time, of a fact or circumstance (whether same was present at or before the time of acceptance of this Facility Letter by the Customer or arose thereafter), which in the reasonably exercised opinion of the Bank has, or could in the future have, a material adverse effect on the business, operations, performance, assets or prospects and financial condition of the Customer or any of its affiliates or an adverse effect on the Customer’s ability to perform any of its obligations to the Bank in terms of the Facility Letter, or which could prejudice the Bank’s position with respect to the Facilities in any other way;


11.1.19.	if the Customer embarks on any process or concludes any transaction in terms of which the Customer assists or proposes to assist a third

party to acquire shares in the Customer or in a related or inter-related company (as such term is defined in the Companies Act) of the Customer in contravention of the provisions of section 44 of the Companies Act;


11.1.20.	should the Customer generally do or omit to do anything which may cause the Bank to suffer any loss or damage, including any reputational loss or damage;


11.1.21.	if the Customer becomes the subject of (or is any way associated with) any adverse information in respect of the Prevention of Organised Crime Act, the Financial Intelligence Centre Act and the Protection of Constitutional Democracy Against Terrorism and Related Activities Act which, in the Bank’s sole, absolute and unfettered discretion, cause or may cause the Bank any reputational harm;

11.1.22.

should the ultimate beneficial Control of the Customer change, without the Bank's prior written consent, during the subsistence of the Facilities, to the extent that the Control of the Customer vests in persons other than those who Control the Customer on the date that the Facilities are accepted by the Customer and/or should the shareholders of the Customer as at date of acceptance hereof by the Customer change;


11.1.23.	if performance under the Instrument(s) is rendered impossible de jure or de facto for whatever reason;


11.1.24.	if the country in which the Customer resides or has its principal office or is incorporated in is involved in war, whether declared or not;

11.1.25.

should the Bank believe, suspect or be notified that the Customer, Additional Party, any surety, guarantor or other security provider for the Customer's indebtedness to the Bank, or any person or entity that owns, holds or controls (directly or indirectly), or derives any benefit (in any manner whatsoever) from, one or more of the aforesaid entities (each an " Entity ") or the country in which an Entity is incorporated, becomes a Sanctioned Entity;

11.1.26.

should the Bank become aware, at any time, of a fact or circumstance (whether same was present at or before the Signature Date or arose thereafter), which leads the Bank to believe or suspect that any bank accounts of any Entity held with the Bank are being used fraudulently, negligently, for money laundering activities, for illegal or terrorist activities, or for any purpose that does not comply with any law;


11.1.27.	if any other indebtedness of any of the Customer’s Group (being the Customer, and its Subsidiary, associate and managed entities) is or is declared to be or is capable of being rendered due and payable before its agreed or normal maturity by reason of any actual or potential default, event of default or the like (however described) or is not paid when due or within any applicable grace

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period in any agreement relating to that indebtedness or, as a result of any actual or potential default, event of default or the like (however described), any Facility relating to any such indebtedness is or is declared to be or is capable of being cancelled or terminated before its agreed or normal expiry date, or any person otherwise entitled to use any such Facility is not entitled to do so;


11.1.28.	should the Customer and/or the Additional Parties fail to comply with any provision of the Currency and Exchange Manual for Authorised Dealers of the South African Reserve Bank, as amended from time to time, and/or any applicable law, regulation and/or policy pertaining thereto;


11.1.29.	if any of the above paragraphs apply to any Additional Party;


11.2.	The Bank may without prejudice to any other rights hereunder or at law, at any time after the happening of an Event of Default, by written notice to the Customer:


11.2.1.	decline any request by the Customer (or any Additional Party) to draw down any further monies under the Facilities (or any one or more of them) and/or to further Use or avail of any of the Facilities (or any one or more of them) including but not limited to any request by the Customer (or any Additional Party) to issue further Instruments, and/or terminate the Facilities forthwith; and/or


11.2.2.	require on demand payment of all indebtedness under the Facilities (or any one or more of them) which is then outstanding and whether or not it is then due for payment, and upon any such demand all that indebtedness shall immediately become due and payable; and/or

11.2.3.

require on demand payment of all breakage costs the Bank may have incurred or sustained or those to be incurred or sustained, being all costs, losses and/or reduced receipts which the Bank may have sustained or incurred (or those to be incurred or sustained) in relation to the termination or modification of any arrangements the Bank may have made on account of or in respect of funds borrowed, contracted for or Used to fund any amount payable or advanced under the Facilities; and/or


11.2.4.	terminate the Facilities forthwith and/or withdraw from any Instruments with immediate effect in accordance with the terms thereof;


11.2.5.	require on demand cash or other security for any contingent liabilities under the Facility Letter to the Bank which includes, without limitation, any contingent liabilities under the Instruments.


11.3.	The Bank’s rights under this paragraph shall not be exhaustive but shall be in addition to and without prejudice to any other rights which it may have under the Facility Letter or the law.


11.4.	The contents of this paragraph shall not derogate from the Bank’s rights in relation to any Facilities

which are repayable and/or terminable on demand.


12.	Certificate

A certificate signed by any manager or divisional executive of the Bank (whose appointment or authority need not be proved) as to any amount owing to the Bank under the Facility Letter, the rates of interest and any other fact stated therein, shall, on its mere production, be prima facie proof of the content of such certificate.


13.	Cession

Neither the Customer nor any Additional Parties shall be entitled to cede or delegate their rights and/or obligations in terms of the Facility Letter to any party without the prior written consent of the Bank which consent shall be granted or withheld in the sole, absolute and unfettered discretion of the Bank.


14.	Disclosure of Information


14.1.	The Customer authorises the Bank to:


14.1.1.	use any information provided to the Bank by the Customer for any purpose that the Bank may require from time to time;

14.1.2.

furnish Standard Bank Group Limited, any other Subsidiary or associate company of Standard Bank Group Limited, and any cessionary of the Bank’s rights in terms hereof, with any information and documentation they may request regarding the Facilities, including (without limitation) any security or any "know your customer" information provided in respect of the Facilities, the Additional Parties or the Customer.


15.	Counterparts

The Facility Letter may be signed by the signatories hereto in counterparts and each signed copy shall together constitute one document.


16.	Legal Charges

All legal costs and fees (on the attorney and client scale) and other charges and expenses in connection with the Facilities including but not limited to all costs incurred or to be incurred by the Bank in the enforcement of any of its rights under the Facility Letter, the registration and eventual cancellation of any bonds referred to in the Facility Letter, and any stamp duty due on the required security documents, will be for the account of the Customer and payable on demand.

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17.	Whole Agreement, Variation of Terms, No Indulgence


17.1.	The Facility Letter constitutes the whole agreement between the Bank and the Customer relating to the subject matter of the Facility Letter.

17.2.

Save for an amendment referred to in paragraph 8 of this Appendix A to the Facility Letter headed " Switching between Facilities ", any increase and/or amendment referred to in paragraph 6.11 of Appendix B to the Facility Letter, or any alteration of the interest rate, no addition to, variation, or amendment, or consensual cancellation of any of the terms contained in the Facility Letter shall be of any force or effect unless it is recorded in writing and is signed on behalf of the Bank by one of its authorised officials and accepted by the Customer.


17.3.	No indulgence shown or extension of time given by the Bank shall operate as an estoppel against the Bank or waiver of any of the Bank’s rights unless recorded in writing and signed by the Bank.


17.4.	The Bank shall not be bound by any express or implied term, representation, warranty, promise or the like not recorded herein, whether it induced the conclusion of any agreement and/or whether it was negligent or not.

17.5.

This Facility Letter supersedes and replaces all previous facility letters entered into between the Bank and the Customer ( “Previous Facility Letters” ) in its entirety with effect from the date that this Facility Letter is signed by both parties, is returned to the Bank in form and substance satisfactory to the Bank and becomes unconditional in accordance with its terms. In the event that separate agreement or terms and conditions regulating any specific Facility has been entered into with the Customer, this Facility Letter shall not supersede any such separate facility letter and/or separate agreement or terms and conditions.


17.6.	Upon Signature Date, the Customer agrees and acknowledges that:


17.6.1.	its indebtedness to the Bank in respect of any Use of the Working Capital Facility under any Previous Facility Letters is in existence and it remains liable to the Bank for such indebtedness ( “Existing Indebtedness” );

17.6.2.

the Working Capital Facility is a revolving facility in that, the Customer shall be entitled to Use the Facility and if it thereafter repays an amount in respect of such Use to the Bank, the amount repaid shall again be available to be Used by the Customer for the duration of the Facility (subject to the terms and conditions of this Facility Letter). Accordingly, any payment and/or allocation of payment made in respect of the Working Capital Facility is made to both interest and capital repayments (whether in whole or part) rendering such Existing Indebtedness due on the Signature Date and consequently, consolidated with any

further indebtedness in respect of any Use under this Facility Letter ( “the New Indebtedness” );


17.6.3.	the Existing Indebtedness has not prescribed due to, inter alia, the payment referred to in paragraph 17.6.2 above, reporting of such indebtedness in the Customer’s annual financial statements, any amendments to the Facility Letter, continued Use of the Facilities and/or this acknowledgement by the Customer with the intention of interrupting prescription ( “the Interruption Events” );


17.6.4.	each Interruption Event following the Signature Date will be an acknowledgment by the Customer of its New Indebtedness and/or liability to pay the Bank under or in respect of the Facilities and accordingly, will interrupt prescription of such New Indebtedness at the time of each Interruption Event.


18.	Severability

Each provision of the Facility Letter is severable, the one from the other and, if at any time any provision is or becomes or is found to be illegal, invalid, defective or unenforceable for any reason by any competent court, the remaining provisions shall be of full force and effect and shall continue to be of full force and effect.


19.	Governing Law and Jurisdiction

19.1.

Any dispute in connection with this Facility Letter, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of the Arbitration Foundation of Southern Africa (" AFSA ") for Commercial Arbitrations (" the Rules "), including the right to appeal, which Rules are deemed to be incorporated by reference into this paragraph.

19.2.

The number of arbitrators shall be one, his/her identity shall be agreed in writing between the Bank and the Customer within 5 Business Days following the declaration of a dispute between such parties, failing which the arbitrator shall be appointed by AFSA from the senior legal practitioners on its panel in terms of the Rules, taking into account the value and complexity of the dispute under referral.


19.3.	The seat, or legal place, of the arbitration shall be South Africa and any hearing shall be held in Johannesburg. The language to be used in the arbitral proceedings shall be English. Unless the parties agree otherwise, the arbitration shall be conducted on an urgent basis in terms of the Rules.


19.4.	Nothing contained in this paragraph shall preclude any party from approaching a court of competent jurisdiction within the Republic of South Africa for interim relief on an urgent basis

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pending the final outcome of an arbitration referral under this paragraph.

19.5.

The Bank and the Customer agree and irrevocably undertake to keep the arbitration and all matters related thereto strictly confidential. Each party (i) acknowledges and agrees that it shall not disclose any such information to any person other than its own employees who need to know such information for the purposes of this paragraph (" Permitted Recipient "); or to third parties where it is required to do so under law or in terms of regulatory process (ii) shall procure that each Permitted Recipient is made aware of and complies with its obligations of confidentiality in terms of this paragraph and (iii) give reasonable notice to the other party as and when any obligation for third party disclosure arises.


19.6.	The terms of this Facility Letter shall be governed by and interpreted in accordance with the laws of the Republic of South Africa.


19.7.	Each party shall bear its own costs involved in the arbitration proceedings.


20.	Domicilium and Notices


20.1.	The Customer chooses as its domicilium citandi et executandi for all purposes in connection with the Facility Letter at the address set out under its acceptance of the Facility Letter.


20.2.	The Bank chooses the following address as its domicilium citandi et executandi for all purposes in connection with the Facility Letter:

Address: 30 Baker Street, Rosebank, 2196

Attention: Head - Transactional Products and Services South Africa.


20.3.	Such domicilium may be changed to another physical address within the Republic of South Africa upon 14 days written notice to the Bank and/or the Customer.


20.4.	Any notices sent or delivered to the Customer shall be deemed to have been received, if sent or delivered to the address nominated by the Customer in terms of this paragraph:


20.4.1.	by hand, on the date of delivery;


20.4.2.	by prepaid registered post, 7 days after the date of posting.

20.5.

The Bank and the Customer agree that whilst they may correspond via email during the currency of the Facilities for operational reasons, no formal notice required in terms of the Facility Letter, nor any amendment of or variation to the Facility Letter may be given or concluded via email or via any other data message, as such term is defined in the Electronic Communications and Transactions Act 25 of 2002

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APPENDIX B

TERMS AND CONDITIONS OF SPECIFIC FACILITIES


1.	Definitions

The provisions of paragraph 1 of Appendix A to the Facility Letter headed " Definitions " are repeated.


2.	Use of Specific Facilities

2.1.

The Customer shall, unless the Bank agrees otherwise, only be entitled to Use those Facilities referred to in the Offer Letter, which Facilities shall in addition to the terms and conditions contained in the Offer Letter and any other appendices thereto and any separate agreement pertaining to such Facilities, be subject to the relevant terms and conditions for each Facility as set out in this Appendix B to the Facility Letter.


2.2.	For the purposes of this Appendix B, " the Customer " shall mean the Customer and/or any Additional Parties to the extent either the Customer and/or the Additional Parties are allowed to Use the Facilities.


3.	Working Capital Facility


3.1.	Availability

3.1.1.

Subject to the availability at a particular time and any contrary indication in the Offer Letter or thereafter, the Customer may Use the Working Capital Facility in the manner below and any other manner the Bank may from time to time offer to the Customer as part of the Working Capital Facility; provided that the aggregate amount outstanding at any point in time, under the Working Capital Facility, together with any limit afforded to the Customer for a Revolving Credit Facility, shall not exceed the Maximum Aggregate Limit granted to the Customer for the Working Capital Facility and, neither the Customer nor any of the Additional Parties shall be entitled to Use the Working Capital Facility to the extent that such Use would result in the said Maximum Aggregate Limit being exceeded.


3.2.	The Working Capital Facility can be Used in the following ways:


3.2.1.	Overdraft

Interest

The initial rate of interest on the overdraft shall be Prime less 1.2 (one point two) %.

Such interest will be payable monthly in arrears and be debited to the relevant Bank Account on a day convenient to the Bank, once in each calendar month in arrears.


3.2.2.	**Customer Foreign Currency Account Overdraft Facility (“CFC Overdraft Facility”)


3.2.4.1	Interest

The rate of interest on the CFC Overdraft Facility shall be:


3.2.2.1.1.	2.85% (two point eight five) plus Libor (EURO). “ LIBOR ” for the purposes of this paragraph 3.2.2.1.1 is the London Inter Bank Offer Rate denominated in Euro as quoted by Reuters Screen LIBOR 01 Page, or any successor or replacement page, at or about 11:00am London time on eh date upon which interest is payable; or


3.2.2.1.2.	2.9% (two point nine) plus LIBOR (USD). “ LIBOR ” for the purposes of this paragraph 3.2.2.1.2 is the United States Dollar London Inter Bank Offer Rate as quoted by Reuters Screen LIBOR 01 Page, or any successor or replacement page, at or amount 11:00am London time on the date upon which interest is payable;


3.2.2.1.3.	2.85% (two point eight five) plus Libor (AUD). “ LIBOR ” for purposes of this paragraph 3.2.2.1.3 is the London Inter Bank Offer Rate denominated in Australian Dollar as quoted by Reuters Screen LIBOR 01 Page, or any successor;


3.2.3.	For the purposes of paragraphs 3.2.2.1.1 to 3.2.2.1.3, interest will be payable in arrears and be debited respectively from the relevant CFC Overdraft facility account on a day convenient to the Bank, once in facility each calendar month in arrears.


3.2.4.	Call Loans

Interest

The rate applicable to each call loan, shall be the rate quoted to the Customer (or an Additional Party) by the Bank prior to the Use of each such call loan and the Bank shall be entitled to adjust the rate at its discretion on a daily basis. Interest shall be payable monthly in arrears on dates convenient to the Bank in each calendar month and on the date of repayment of a call loan. Upon agreement by the Bank and the Customer to enter the call loan (whether orally or otherwise) the Bank shall promptly deliver to the Customer written confirmation of such transaction. Such confirmation relating to the transaction shall constitute prima facie evidence of the terms agreed between the Bank and the Customer for that transaction. The Customer agrees that the Bank may electronically record all telephone conversations between them.


3.2.5.	Short Term Loans

Interest

The rate applicable to each short term loan shall be the rate quoted by the Bank to the Customer (or an Additional Party) prior to the Use of each such short term loan. Interest shall be payable on the due date for repayment of a short term loan unless otherwise agreed between the Bank and the Customer (or an Additional Party).

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Repayment

Subject to the Bank’s rights in terms of paragraph 2 of Appendix A to the Facility Letter headed " Duration and Repayment of Facilities ", all amounts outstanding under each short term loan shall be repayable at the end of a period as stated by the Bank to the Customer (or any Additional Party) for each short term loan prior to the advance of each short term loan.


3.2.6.	Offshore Trade and Working Capital Loans


3.2.4.2	Offshore Loans provided by Standard Finance (Isle of Man) Limited ( " SFL " ):

The Use of this Facility shall be subject to SFL or SBL having agreed to grant the Customer (or Additional Party) such Facility and the Customer (or the Additional Party, as the case may be) having accepted SFL’s separate terms and conditions pertaining to such Facility.

For the purposes of calculating the amount outstanding under the Working Capital Facility, amounts owed to SFL under this Facility shall also be taken into account and the equivalent Rand amount Used under this Facility shall be calculated by notionally converting the balance outstanding under this Facility on a daily basis, to the Rand equivalent using the Bank’s daily spot rate of exchange or the rate specified in an applicable forward exchange contract, as the Bank may in its sole discretion decide.


3.2.4.3	Offshore Loans provided by the Bank :

Interest

The rate applicable to each loan advanced by the Bank under this Facility, shall be the rate quoted by the Bank to the Customer (or any Additional Party) prior to the advance of each such loan. Interest will be calculated on each loan on the basis of actual days elapsed on a 360 day period (or 365 days for certain currencies determined by the Bank, such as ZAR or GBP) and will be payable in arrears at the end of each consecutive interest period (the duration of which will be the period agreed upon by the Bank and the Customer (or any Additional Party) prior to the advance of each loan) and on the date of repayment of the loan, unless otherwise agreed by the Bank.

Use

A request for a draw down under this Facility must be made no later than 2 Business Days prior to the date of the proposed draw down and will be irrevocable once made.

Repayment

Subject to the Bank’s rights in terms of paragraph 2 of Appendix A to the Facility Letter headed " Duration and Repayment of Facilities ", all amounts outstanding under each loan shall be repayable at the end of a period as stated by the Bank to the Customer for each loan prior to the advance of each loan.

All amounts outstanding under each loan granted under this Facility shall be repayable in the currency in which such loan was made.

Should the Bank terminate this Facility and require repayment of all amounts outstanding thereunder, or should amounts otherwise fall due under a loan, the Bank shall be entitled, but not obliged, in its sole discretion, to advance funds under the Working Capital Facility and to Use the funds so advanced to settle or reduce the amounts owed to the Bank under this Facility. Any funds advanced by the Bank in terms of this paragraph will be converted to the currency in which the offshore loans were made available, at the Bank’s spot rate of exchange on the day on which the funds are used to settle or reduce the amounts outstanding under this Facility or in the Bank’s sole discretion the forward exchange rate provided for in any forward exchange contract which may be in force at the relevant point in time.

Calculation of Rand Amount Used

For the purposes of calculating the total Rand amount Used under the Working Capital Facility, the balance outstanding under this Facility shall be notionally converted on a daily basis to the Rand equivalent using the Bank’s daily spot rate of exchange.

Exchange Control Approval

This Facility may only be Used to the extent that such exchange control approval as may be required, has been obtained (proof of which has been furnished to the Bank).


4.	Derivative Products Trading Facility

4.1.

Subject to any restrictions which the Bank, in its sole discretion, may impose on the maximum tenor of any Derivative Transaction(s) and subject further to paragraph 4.4 below, the Customer may enter into Derivative Transaction(s) with the Bank on terms and conditions acceptable to the Customer and the Bank. For the purposes of this Facility Letter, " Derivative Transaction(s) " shall mean one or more of the following transactions:

4.1.1.

any over the counter transaction (including an agreement with respect thereto) which is a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transactions, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, weather index transaction or forward purchase or sale of a security, commodity or other financial instrument or interest (including any option with respect to any of these transactions);


4.1.2.	any type of transaction which is similar to any transaction which is referred to in paragraph 4.1.1 above that is currently, or in the future becomes,

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recurrently entered into in the financial markets; and


4.1.3.	any combination of these transactions.

4.2.

The Maximum Aggregate Limit of the Derivative Products Trading Facility represents the maximum aggregate exposure that the Bank is willing to make available to the Customer in respect of all Derivative Transactions which the Customer may enter into with the Bank at any time, taking into account, where applicable, any netting and/or margining arrangements which may be in place between the Bank and the Customer in terms of or pursuant to the 1992 or 2002 ISDA Master Agreement as published by the International Swaps and Derivatives Association (" ISDA "), together with the schedule and any relevant addenda thereto (collectively an " ISDA Agreement "). The Customer’s Use of the Derivative Products Trading Facility at any one time shall be equivalent to the Potential Future Exposure of all unmatured Derivative Transactions between the Customer and the Bank at such time, calculated in accordance with paragraph 4.3 below and taking into account any applicable netting and/or margining arrangements as described above.

4.3.

For the purposes of this Facility Letter, " Potential Future Exposure " or " PFE " means the Bank's estimate at such time, in its sole, absolute and unfettered discretion and using the methods of calculation outlined in this paragraph 4.3, of what the Customer could, in a moderately adverse environment, owe to the Bank at a point of time in the future in respect of any unmatured Derivative Transaction(s) between the Bank and the Customer at the time of estimation. The Bank will calculate the PFE of each Derivative Transaction by using its internal and proprietary risk management models (which models have been developed in accordance with generally accepted risk management principles and may be updated and/or modified from time to time by the Bank in its sole discretion) which, in the calculation of the PFE of each Derivative Transaction, take into account the mark-to-market value thereof (calculated as the difference between the current market value of the transaction and the contract price), adjusted for various credit risk factors including, but not limited to, the tenor of the relevant transaction and the volatility of the market factor which, depending on the nature of the transaction, may have the greatest impact on the future market value thereof. Accordingly, the PFE of all unmatured Derivative Transactions between the Bank and the Customer may fluctuate in line with the movement of underlying market factors, which may result in a reduction of the amount of the Derivative Products Trading Facility available for further Derivative Transactions and may also

cause the Maximum Aggregate Limit of such Facility to be exceeded.

4.4.

Should the Maximum Aggregate Limit of the Derivative Products Trading Facility be exceeded for any reason whatsoever, including but not limited to adverse market movements, the Bank may refuse to enter into any further Derivative Transactions with the Customer until such time as the Customer’s Use of the Derivative Products Trading Facility falls below the Maximum Aggregate Limit for such Facility.


5.	Trade Finance Facility


5.1.	For the purposes of this Facility Letter:


5.1.1.	" ICC " shall mean the International Chamber of Commerce;


5.1.2.	" ISP " shall mean the latest version of the International Standby Practices published by the ICC;


5.1.3.	" Trade Transaction(s) " shall mean any transaction or related transaction which is the subject of any trade-related service provided by the Bank to the Customer and includes, without limitation, financing, discounting, lending or other financial accommodation of whatsoever nature made available by the Bank to the Customer in relation to any such transaction; and


5.1.3.1.	any Documentary Credits and standby letters of credit, bills of exchange, documentary collections, bonds, guarantees, shipping indemnities, trade finance loans, promissory notes, receivables financing;


5.1.3.2.	any type of transaction which is similar to any transaction which is referred to in paragraph 5.1.3.1 above that is currently, or in the future becomes, recurrently entered into in the trade markets; and


5.1.3.3.	any combination of these transactions.


5.1.4.	" Trade Document " shall mean:


5.1.4.1.	any Documentary Credit;


5.1.4.2.	any bill of exchange;


5.1.4.3.	any written payment instruction by one person to another to pay a third person;


5.1.4.4.	any invoice or receivable, being the documents evidencing the suppliers’ rights to receive amounts denominated in the currency of such document from the Customer;


5.1.4.5.	any sale and purchase agreement (however described);


5.1.4.6.	any purchase order, being the commercial document issued by the Customer to its supplier, indicating types, quantities and agreed prices for goods the supplier will supply to the Customer, or

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any document to the same effect, which shall be evidenced by Invoices or Receivables;


5.1.4.7.	any documentation relating to the underlying Trade Transaction;


5.1.5.	" UCP " shall mean the latest version of the Uniform Customs and Practice for Documentary Credits, published by the ICC;


5.1.6.	" URDG " shall mean the latest version of the Uniform Rules for Demand Guarantees published by the ICC;


5.1.7.	" URR " shall mean the latest version of ICC’s Uniform Rules for Bank-to-Bank Reimbursement under Documentary Credits published by the ICC.


5.2.	The Trade Finance Facility:

The Trade Finance Facility can be Used by way of Supplier Financing Facilities, Receivables Discounting Facilities, Pre-shipment Financing, Invoice Financing Facilities and Refinancing Facilities and/or in any other manner offered by the Bank.

The Use of this Facility shall be subject to the Customer (and/or the Additional Party) having accepted the Bank’s separate terms and conditions pertaining to the types of trade finance detailed in the paragraph above.


6.	Guarantee/Avalisation of Bills of Exchange, / Standby Letters of Credit and/or Documentary Credit Facilities


6.1.	Subject to the terms of this Facility Letter, the aggregate amount of any and all guarantees, avalised bills of exchange and Documentary Credits issued or indorsed (as the case may be) by the Bank under the Guarantee/Avalisation of Bills of Exchange and/or Documentary Credit Facilities respectively shall at no time exceed the Maximum Aggregate Limits for the respective Facilities.


6.2.	Any Use under the Facilities in respect of:


6.2.1.	Documentary Credits will be subject to UCP, unless stated otherwise in such Documentary Credit;


6.2.2.	irrevocable reimbursement will be subject to the ICC’s URR;


6.2.3.	guarantees will be subject to the URDG; and


6.2.4.	standby letters of credit will be subject to the ISP 98 or the latest version of the Uniform Customs and Practice for Standby Letters of Credit, published by the ICC.


6.3.	The rate of commission applicable to each guarantee and Documentary Credit issued and/or avalised bill of exchange indorsed (" the GBB Rate ") shall be agreed upon at the time the request to issue and/or indorse is made, or alternatively, in the absence of such agreement, the Bank’s usual rates of commission shall apply and shall be paid on demand by the Customer.


6.4.	Guarantees/Avalised Bills of Exchange/ Standby Letters of Credit, promissory notes and Documentary Credits will only be issued or

indorsed (as the case may be) by the Bank under the Guarantee by Bank/Avalisation of Bills of Exchange Facility or Documentary Credit Facility (as the case may be) in the Bank’s sole, absolute and unfettered discretion, in formats which are approved of by the Bank and in the case of the issue of a guarantee and/or Documentary Credit upon the signature on behalf of the Customer of the Bank’s usual form of application for the issue of a guarantee or Documentary Credit (as the case may be).


6.5.	The Customer acknowledges that the Bank shall have the right to review the Instruments and/or the Facilities and impose such additional conditions and/or requirements as the Bank may in its sole, absolute and unfettered discretion deem fit.

6.6.

The Bank may debit Bank Account number 421055499 (" the Nominated Bank Account "), or any Bank Account, with all fees, charges and commission payable in respect of the Instruments at the Bank’s ruling rates from time to time, together with interest thereon (where applicable), calculated at the Bank’s Prime rate, from the date any such sum becomes due and payable until the date final payment is received by the Bank. The Customer understands that any such fees, charges and commission payable in terms of the Instruments will be reviewed annually and any amendments thereto will be reflected in the Bank’s annual pricing letter.


6.7.	The Customer hereby requests and irrevocably authorises the Bank:


6.7.1.	to pay, or settle any claim which may be made against the Bank in terms of the Instruments against presentation of documentation in accordance with the provisions of the underlying Instrument by the beneficiary(ies), unless prevented by court order;


6.7.2.	to debit the Nominated Bank Account, or any Bank Account or charge against any other cover held for the Customer’s account, any sum(s) (or the Rand equivalent if payment under the Instruments is to be made in a foreign currency) detailed in paragraph 6.7.1 above and any expenses related to the payment


6.8.	The Customer acknowledges that the Bank will pay, or settle the claim(s) on demand without regard to any allegation or dispute of any nature which the Customer or the beneficiary(ies) may allege and without verifying:


6.8.1.	the validity and authenticity of the claim(s); or


6.8.2.	any alleged non-compliance; or


6.8.3.	the correctness of the amount(s) claimed.


6.9.	The Customer agrees that in the event of the Nominated Bank Account closing, changing or having insufficient funds and/or whether or not the Maximum Aggregate Limit in relation to any Facility granted by the Bank to the Customer has been (i) fully Used and/or (ii) cancelled and/or (iii)

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reduced to an amount which is, on any day, less than the sum claimed in paragraph 6.7 above, the Bank may, without reference to the Customer, debit any other account in the Customer’s name with a Standard Bank Group member, or any other account held by the Customer with any other financial institution.

6.10.

For the avoidance of doubt, it is recorded that the Customer and, where applicable, the Additional Parties shall remain liable for all and any amounts owing by the Customer and/or the Additional Parties (as the case may be) to the Bank howsoever arising, including without limitation, (i) amounts arising in respect of this Facility Letter or not and/or (ii) arising from or relating from the issuance, payment or settlement of any claim/s under or in terms of any guarantee issued by the Bank to any third party under the Guarantee by Bank Facility and/or (iii) any loss or damage which the Bank has incurred, (" the Indebtedness ") at the request of the Customer and/or the Additional Parties (as the case may be), irrespective of whether or not:


6.10.1.	the Customer and/or any Additional Parties (as the case may be) hold any Bank Accounts, or have any facilities, with the Bank, and/or


6.10.2.	the Maximum Aggregate Limit in relation to any Facility has been fully Used, cancelled, repaid and/or reduced to any amount which is, on any day, less than the amount of the Indebtedness.

6.11.

In the circumstances contemplated in 6.10.2 above, the Customer hereby irrevocably and unconditionally authorises the Bank (in its sole, absolute and unfettered discretion, and without notice to the Customer) to increase and/or re-instate (as the case may be) the Maximum Aggregate Limit applicable to any Facility by an amount which, on any day, results in the Maximum Aggregate Limit available on such Facility being equal to the Indebtedness on such day. Should the Bank exercise its rights under or in accordance with the provisions of this paragraph and whether notified to the Customer or not, the Maximum Aggregate Limits for the Facilities in question shall be deemed to be amended accordingly. If the type of Facility in question was not previously granted to the Customer, such new Facility will be deemed incorporated into the Offer Letter and accordingly in the definition of " the Facilities ", and the Maximum Aggregate Limit for such Facility shall be the amount allocated thereto. The provisions of this clause 6.11 shall be without prejudice to any of the Bank’s rights and/or remedies as a result of the Indebtedness.

Furthermore, any security currently held by the Bank for the debts of the Customer and/or any Additional Parties shall also constitute security for the Indebtedness.


6.12.	The Customer agrees that, in the event that:


6.12.1.	the Bank exercises its rights under any of the Instrument/s (including, without limitation, the right to withdraw from an Instrument in accordance with its terms); and/or


6.12.2.	the Customer’s applicable internal credit rating, as determined by the Bank at the time of granting the Facilities in accordance with the internal policies and processes, changes in the Bank’s sole, absolute and unfettered discretion,

the Bank shall be entitled to exercise its rights under the provisions of paragraph 11.2.5 of Appendix A regardless of whether or not any of the Events of Default have occurred.

6.13.

If the Customer fails to provide the Bank with the Collateral to the satisfaction of the Bank, the Bank shall be entitled to adjust the applicable GBB Rate on the occurrence of the events detailed in paragraph 6.12 and/or an Event of Default up to and including the date of remedy of such event or date of termination of the Guarantee by Bank Facility, whichever is earlier, to 3% per annum above each applicable GBB Rate.


7.	Credit Card, Structured Loan, Preference Share Facility, Vehicle and Asset Finance, Fleet Management Services, Documentary Credit Facility, Trade Finance Facility, Derivative Product Trading Facility, any facility not specifically referred to in this Appendix B to the Facility Letter and which is offered by the Bank to the Customer now or in the future


7.1.	Use of the above Facilities is subject to the Bank’s usual terms and conditions pertaining thereto read together with the Facility Letter or, if so required by the Bank, to the Customer (or such Additional Parties, as the Bank may require) having accepted the Bank’s, or other entity’s that makes such facility available, separate terms and conditions pertaining to the Facility in question.

7.2.

In the event that any of the above Facilities are partially or fully repaid in terms of the separate terms and conditions pertaining to the Facility in question, and the Customer (or the relevant Additional Party, as the case may be) does not have a right to redraw such repayment/s in terms of the said terms and conditions, then the Maximum Aggregate Limit of such Facility/ies shall automatically reduce in line with such repayment.

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Exhibit 4.18

SALE OF PROPERTY AGREEMENT

between

TPF INVESTMENTS PROPRIETARY LIMITED

and

MiX TELEMATICS ENTERPRISE SA PROPRIETARY LIMITED

TABLE OF CONTENTS



1	PARTIES	1
2	INTERPRETATION	1
3	INTRODUCTION	4
4	CONDITIONS PRECEDENT	4
5	SALE	5
6	VOETSTOOTS SALE	6
7	WARRANTIES BY SELLER	6
8	ELECTRICAL COMPLIANCE CERTIFICATE	7
9	GAS INSTALLATION CONFORMITY CERTIFICATE (IF APPLICABLE)	8
10	WATER INSTALLATION COMPLIANCE CERTIFICATE	8
11	PURCHASE PRICE	8
12	VALUE-ADDED TAX	8
13	POSSESSION AND RISK	8
14	TRANSFER AND COSTS	9
15	GENERAL WARRANTIES	9
16	PUBLICITY	10
17	BREACH	11
18	DISPUTE RESOLUTION	11
19	Notices and Domicilia	12
20	BENEFIT OF THE AGREEMENT	13
21	APPLICABLE LAW AND JURISDICTION	13
22	NEW LAWS AND INABILITY TO PERFORM	13
23	INDEPENDENT ADVICE	14
24	GENERAL	14
25	COSTS	16
26	SIGNATURE	16


1	PARTIES


1.1	The Parties to this Agreement are -


1.1.1	TPF Investments Proprietary Limited; and


1.1.2	MiX Telematics Enterprise SA Proprietary Limited.


1.2	The Parties agree as set out below.


2	INTERPRETATION


2.1	In this Agreement, unless the context indicates a contrary intention, the following words and expressions bear the meanings assigned to them and cognate expressions bear corresponding meanings -


2.1.1	" Agreement " means this agreement of sale;


2.1.2	" BIG " means Black Industrialists Group Property Management Company Proprietary Limited, registration number 2016/290277/07, a limited liability private company duly incorporated in the Republic of South Africa;


2.1.3	" Conditions Precedent " means the conditions precedent set out in clause 4;


2.1.4	" Fixtures and Fittings " means all fixtures and fittings of a permanent nature;


2.1.5	" Lease Agreement " means the lease agreement concluded between the Seller and MiX Telematics Africa on 2 October 2007 as amended by an addendum dated 17 September 2008 and a further addendum concluded on or about March or April 2012, and an addendum concluded on or about November 2017, effective from 1 April 2017, in respect of the Property;


2.1.6	" MiX Limited " means MiX Telematics Limited, registration number 1995/013858/06, a public company duly incorporated in the Republic of South Africa;


2.1.7	" MiX Telematics Africa " means MiX Telematics Africa Proprietary Limited (formerly known as Matrix Vehicle Tracking Proprietary Limited), registration number 2004/019797/07, a limited liability private company duly incorporated in the Republic of South Africa;


2.1.8	" Parties " means the parties to this Agreement;


2.1.9	" Property " means Erf 1335 Vorna Valley Extension 12 Township, Registration Division IR, Province of Gauteng, measuring 1 (one) hectare together with all improvements thereon and includes the Fixtures and Fittings;


2.1.10	" Purchaser " means MiX Telematics Enterprise SA Proprietary Limited, registration number 2008/008530/07, a limited liability private company duly incorporated in the Republic of South Africa;


2.1.11	" Seller " means TPF Investments Proprietary Limited (formerly known as Thynk Property Fund Proprietary Limited), registration number 2005/029033/07, a limited liability private company duly incorporated in the Republic of South Africa;


2.1.12	" Seller's Conveyancers " means Cliffe Dekker Hofmeyr Inc;


2.1.13	" Signature Date " means the date of signature of this Agreement by the Party last signing;


2.1.14	" Transfer Date " means date of registration of transfer of the Property into the name of the Purchaser;


2.1.15	" VAT " means value-added tax as contemplated in the VAT Act;


2.1.16	" VAT Act " means the Value-added Tax Act, No 89 of 1991; and


2.1.17	"VAT Vendor" means a vendor as contemplated in the VAT Act.


2.2	In this Agreement -


2.2.1	clause headings and the heading of the Agreement are for convenience only and are not to be used in its interpretation;


2.2.2	an expression which denotes -


2.2.2.1	any gender includes the other genders;


2.2.2.2	a natural person includes a juristic person and vice versa ;


2.2.2.3	the singular includes the plural and vice versa ;


2.2.2.4	a Party includes a reference to that Party's successors in title and assigns allowed at law; and


2.2.2.5	a reference to a consecutive series of two or more clauses is deemed to be inclusive of both the first and last mentioned clauses.


2.3	Any reference in this Agreement to -


2.3.1	" business hours " shall be construed as being the hours between 08h00 and 17h00 on any business day. Any reference to time shall be based upon South African Standard Time;


2.3.2	" days " shall be construed as calendar days unless qualified by the word "business", in which instance a "business day" will be any day other than a Saturday, Sunday or public holiday from time to time;

2.3.3

" laws " means all constitutions; statutes; regulations; by-laws; codes; ordinances; decrees; rules; judicial, arbitral, administrative, ministerial, departmental or regulatory judgements, orders, decisions, rulings, or awards; policies; voluntary restraints; guidelines; directives; compliance notices; abatement notices; agreements with, requirements of, or instructions by any governmental body; and the common law, and " law " shall have a corresponding meaning;


2.3.4	" person " means any person, company, close corporation, trust, partnership or other entity whether or not having separate legal personality; and


2.3.5	" public holiday " means a public holiday contemplated in the Public Holidays Act, No 36 of 1994.


2.4	The words " include " and " including " mean " include without limitation " and " including without limitation ". The use of the words " include " and " including " followed by a specific example or examples shall not be construed as limiting the meaning of the general wording preceding it.


2.5	Any substantive provision, conferring rights or imposing obligations on a Party and appearing in any of the definitions in this clause 2 or elsewhere in this Agreement, shall be given effect to as if it were a substantive provision in the body of the Agreement.


2.6	Words and expressions defined in any clause shall, unless the application of any such word or expression is specifically limited to that clause, bear the meaning assigned to such word or expression throughout this Agreement.


2.7	Unless otherwise provided, defined terms appearing in this Agreement in title case shall be given their meaning as defined, while the same terms appearing in lower case shall be interpreted in accordance with their plain English meaning.


2.8	A reference to any statutory enactment shall be construed as a reference to that enactment as at the Signature Date and as amended or substituted from time to time.


2.9	Unless specifically otherwise provided, any number of days prescribed shall be determined by excluding the first and including the last day or, where the last day falls on a day that is not a business day, the next succeeding business day.


2.10	If the due date for performance of any obligation in terms of this Agreement is a day which is not a business day then (unless otherwise stipulated) the due date for performance of the relevant obligation shall be the immediately preceding business day.


2.11	The rule of construction that this Agreement shall be interpreted against the Party responsible for the drafting of this Agreement, shall not apply.


2.12	No provision of this Agreement shall (unless otherwise stipulated) constitute a stipulation for the benefit of any person who is not a Party to this Agreement.


2.13	The use of any expression in this Agreement covering a process available under South African law, such as winding-up, shall, if either of the Parties to this Agreement is subject to the law of any other jurisdiction, be construed as including any equivalent or analogous proceedings under the law of such other jurisdiction.


2.14	Any reference in this Agreement to " this Agreement " or any other agreement or document shall be construed as a reference to this Agreement or, as the case may be, such other agreement or document, as amended, varied, novated or supplemented from time to time.


2.15	In this Agreement the words " clause " or " clauses " and " annexure " or " annexures " refer to clauses of and annexures to this Agreement.


3	INTRODUCTION


3.1	The Seller desires to sell the Property to the Purchaser and the Purchaser desires to purchase the Property from the Seller, subject to certain terms and conditions.


3.2	The Parties wish to record in writing their agreement in respect of the above and matters ancillary thereto.


4	CONDITIONs PRECEDENT


4.1	Save for clauses 1 to 4, and clauses 15 to 26 all of which will become effective immediately, this Agreement is subject to the fulfilment of the Conditions Precedent that -


4.1.1	within 15 (fifteen) days of Signature Date, the Purchaser and BIG enter into a sale agreement in respect of the Property;


4.1.2	within 60 (sixty) days of Signature Date -


4.1.2.1	the shareholders of the Purchaser approve the entering into of this Agreement; and


4.1.2.2	the board of directors of the Purchaser approves the entering into of this Agreement;


4.1.3	within 60 (sixty) days of Signature Date -


4.1.3.1	the shareholders of the Seller approve the entering into of this Agreement; and


4.1.3.2	the board of directors of the Seller approves the entering into of this Agreement;


4.1.4	within 60 (sixty) days of Signature Date, the independent non-executive directors of MiX Limited approve the entering into of this Agreement;


4.1.5	within 60 (sixty) days of Signature Date, the Johannesburg Stock Exchange accepts the independent fair and reasonable opinion regarding the related party transaction pertaining to the entering into of this Agreement; and


4.1.6	within 60 (sixty) days of signature of the sale agreement referred to in clause 4.1.1 such agreement becomes unconditional in accordance with its terms save for any condition relating to this Agreement.


4.2	The Purchaser shall use reasonable endeavours to procure the fulfilment of the Conditions Precedent contained in clauses 4.1.1, 4.1.2, 4.1.4, 4.1.5 and 4.1.6 as soon as reasonably possible after the Signature Date.


4.3	The Seller shall use reasonable endeavours to procure the fulfilment of the Condition Precedent contained in clause 4.1.3 as soon as reasonably possible after the Signature Date.


4.4	The Conditions Precedent contained in clauses 4.1.1, 4.1.2 and 4.1.6 have been inserted for the benefit of the Purchaser which will be entitled to waive fulfilment of any of the said Conditions Precedent, in whole or in part, on written notice to the Seller prior to the expiry of the relevant time periods set out in those clauses.


4.5	The Condition Precedent contained in clause 4.1.3 has been inserted for the benefit of the Seller which will be entitled to waive fulfilment of the said Condition Precedent, in whole or in part, on written notice to the Purchaser prior to the expiry of the relevant time period set out in that clause.


4.6	The Conditions Precedent contained in clauses 4.1.4 and 4.1.5 are not capable of being waived.

4.7

Unless the Conditions Precedent have been fulfilled by not later than the relevant date for fulfilment thereof set out in clause 4.1 (or such later date or dates as may be agreed in writing between the Parties) the provisions of this Agreement, save for clauses 1 to 4, and clauses 15 to 26, which remain of full force and effect, will never become of any force or effect and the status quo ante will be restored as near as may be and neither of the Parties will have any claim against the other in terms hereof or arising from the failure of the Conditions Precedent.


5	SALE

The Seller sells to the Purchaser, and the Purchaser purchases the Property, subject to the conditions and servitudes mentioned or referred to in the current and/or prior title deeds of the Property and to all such other conditions and servitudes as may exist in regard thereto, including the provisions of any applicable town planning scheme.


6	VOETSTOOTS SALE


6.1	Subject to clause 7, the Property is sold voetstoots as it stands and in the condition in which it now is. The Seller has no claim in respect of any excess over the measurements appearing in the title deeds, nor is the Seller answerable in damages or otherwise to the Purchaser should the area of the Property be less than such measurements.


6.2	The Purchaser acknowledges having inspected the Property.


6.3	The Seller is not obliged to point out any pegs or beacons relating to the Property nor is the Seller responsible for the cost of locating them.


7	WARRANTEES BY SELLER


7.1	The Seller hereby warrants in favour of the Purchaser that -


7.1.1	the Seller is the registered owner of the Property and able to transfer the Property to the Purchaser;


7.1.2	all Fixtures and Fittings included in the Property are fully paid for and owned by the Seller;


7.1.3	the Seller will not have sold nor alienated the Property, nor will it have granted to any third party the right to acquire either by way of option or right of pre-emption, the Property or any right or interest therein;


7.1.4	the Property is zoned for the purpose for which it is used;


7.1.5	the Seller has no knowledge of any actual, pending or proposed expropriation for whatever purpose, or which will or may affect the Property in any manner whatsoever, either directly or indirectly;


7.1.6	the Property is not subject to any servitude, whether personal or praedial, other than those recorded against the title deeds of the Property, or provided for in any applicable town planning scheme, and no agreement will have been entered into whereby any restrictive condition or servitude is to be attached to the Property;


7.1.7	neither the Property nor any part thereof is subject to any lawful right of occupation by any person other than MiX Telematics Africa in terms of the Lease Agreement which will be cancelled with effect from the Transfer Date;


7.1.8	no buildings erected on the Property encroach on any neighbouring properties or vice versa;


7.1.9	to the best of the Seller’s knowledge, the buildings, including outbuildings, and all fixed improvements erected on the Property are structurally sound and have been erected in terms of -


7.1.9.1	plans approved in writing by the relevant local or other competent authority and in accordance with the provisions of the National Building Regulations and Building Standards Act, 1977; and


7.1.9.2	all other applicable laws, by-laws and applicable regulations, including any applicable town-planning scheme, building line or height restriction, and the conditions of the title deed of the Property;


7.1.10	no building on the Property has been declared as a national monument or protected or provisionally protected under the National Heritage Resources Act, 1999, nor has any proposal to do so been made;


7.1.11	the Property is not subject to any mortgage, pledge, lien or other similar real right, save for the existing bond in favour of Investec which will be cancelled on registration of the transfer;


7.1.12	the Seller has no actual, contingent or potential liability for any development contribution, contribution to engineering services, endowment, betterment or other similar contribution or expense in respect of the Property;


7.1.13	the Seller is not aware of any facts, matters or circumstances which may result in any of the warranties set out in this clause 7 becoming incorrect or untrue;


7.1.14	to the best of the Seller’s knowledge, the Property and all buildings and erections thereon comply in every respect with all governmental or other authorities' requirements relating thereto. The Seller is not under any obligation to make any alterations, repairs or additions to the Property or to any buildings or erections thereon;


7.1.15	to the best of the Seller's knowledge, as at the Signature Date no public road has been declared over the Property;


7.1.16	to the best of the Seller's knowledge, no demolition orders have been received by the Seller as at the Signature Date for any portion of the buildings or fixed improvements on the Property; and


7.1.17	no claim has been made to the Property in terms of the Restitution of Land Rights Act No. 22 of 1994 and no caveat has been registered or entered against the title deeds of the Property in the Deeds Registry in terms of the aforesaid Act.


8	ELECTRICAL COMPLIANCE CERTIFICATE

The Seller shall by no later than the Transfer Date furnish the Purchaser with a certificate of compliance as contemplated in the regulations in terms of the Occupational Health and Safety Act, No 85 of 1993, in respect of any electrical installation in or on the Property. Such certificate shall be dated less than 24 (twenty four) months prior to the date of transfer.


9	GAS INSTALLATION CONFORMITY CERTIFICATE (IF APPLICABLE)

The Seller shall, by not later than the Transfer Date, furnish the Purchaser with a certificate of conformity (in the prescribed form) in respect of any gas system, gas reticulation system or gas installation on the Property, if any, as contemplated in regulation 17(3) of the regulations made in terms of section 43 of the Occupation Health and Safety Act 85 of 1993.


10	WATER INSTALLATION COMPLIANCE CERTIFICATE

The Seller shall by not later than the Transfer Date furnish the Purchaser with a certificate of compliance in respect of the water installation on the Property.


11	PURCHASE PRICE


11.1	The purchase price of the Property is R44 000 000.00 (forty four million rand) exclusive of VAT.

11.2

The purchase price is payable by the Purchaser against registration of transfer of the Property into the name of the Purchaser. As security for the payment of such amount, the Purchaser will within 30 (thirty) business days after the date of fulfilment of the Conditions Precedent, furnish the Seller's Conveyancers with a bank guarantee or guarantees as required and approved of by the Seller or the Seller's Conveyancers, payable to the Seller or the Seller's nominee upon registration of transfer at such place or places in the Republic of South Africa as the Seller reasonably stipulates.


12	VALUE-ADDED TAX


12.1	It is recorded that the Seller is a VAT Vendor and that the sale of the Property in terms of this Agreement constitutes a taxable supply as contemplated in the VAT Act and that VAT is payable in respect thereof.


12.2	The purchase price of the Property is exclusive of VAT and the Purchaser shall pay such VAT as may be payable to the Seller on registration of transfer of the Property into the name of the Purchaser.


12.3	As security for the payment of such VAT, the Purchaser shall within the time period specified in clause 11.2, furnish the Seller's Conveyancers with a bank guarantee in accordance with the provisions of clause 11.2, which apply mutatis mutandis .


13	POSSESSION AND RISK


13.1	Possession of the Property will be given to the Purchaser on the Transfer Date, from which date it will be at the sole risk, loss or profit of the Purchaser, and the Purchaser will from such date be entitled to the rentals (if any) and be liable for all rates, taxes and other charges in respect of the Property.


13.2	If the Seller has paid any such charge or charges for any period subsequent to the date of possession, the Purchaser will refund to the Seller the charge or charges so paid, and the Purchaser will likewise be entitled to a refund from the Seller of the rentals (if any) collected prior to the date of possession in respect of any period subsequent to the date of registration of transfer.


14	TRANSFER AND COSTS


14.1	Transfer of the Property will be given to the Purchaser within a reasonable time after the Purchaser has paid the costs and charges referred to in clause 14.3 and the Purchaser has otherwise complied with the provisions of this Agreement. Transfer will be effected by the Seller's Conveyancers contemporaneously with the transfer of the Property from the Purchaser to BIG.


14.2	The Purchaser will on demand from the Seller's Conveyancers sign all documents required to be signed by the Seller's Conveyancers in order that transfer may be effected.

14.3

The Purchaser shall be responsible for the payment of all costs and charges incidental to the transfer of the Property, including transfer duty (where applicable), the costs of obtaining any rates or other clearance certificates, including any extended certificate, whether issued by a local authority, body corporate, property owners' association, managing agent or similar body, and all bank charges payable by the Seller and/or the Seller's Conveyancers.


15	GENERAL WARRANTIES


15.1	Each of the Parties hereby warrants to and in favour of the other that -


15.1.1	it has the legal capacity and has taken all necessary corporate action required to empower and authorise it to enter into this Agreement;


15.1.2	this Agreement constitutes an agreement valid and binding on it and enforceable against it in accordance with its terms;


15.1.3	the execution of this Agreement and the performance of its obligations hereunder does not and shall not -


15.1.3.1	contravene any law or regulation to which that Party is subject;


15.1.3.2	contravene any provision of that Party's constitutional documents; or


15.1.3.3	conflict with, or constitute a breach of any of the provisions of any other agreement, obligation, restriction or undertaking which is binding on it;


15.1.4	to the best of its knowledge and belief, it is not aware of the existence of any fact or circumstance that may impair its ability to comply with all of its obligations in terms of this Agreement;


15.1.5	it is entering into this Agreement as principal (and not as agent or in any other capacity);


15.1.6	the natural person who signs and executes this Agreement on its behalf is validly and duly authorised to do so;


15.1.7	no other party is acting as a fiduciary for it; and


15.1.8	it is not relying upon any statement or representation by or on behalf of any other Party, except those expressly set forth in this Agreement.


15.2	Each of the representations and warranties given by the Parties in terms of clause 15.1 shall -


15.2.1	be a separate warranty and will in no way be limited or restricted by inference from the terms of any other warranty or by any other words in this Agreement;


15.2.2	continue and remain in force notwithstanding the completion of any or all the transactions contemplated in this Agreement; and


15.2.3	prima facie be deemed to be material and to be a material representation inducing the other Party to enter into this Agreement.


16	PUBLICITY

16.1

Subject to clause 16.3, each Party undertakes to keep confidential and not to disclose to any third party, save as may be required in law (including by the rules of any recognised securities exchange, where applicable) or permitted in terms of this Agreement, the nature, content or existence of this Agreement and any and all information given by a Party to the other Party pursuant to this Agreement.

16.2

No announcements of any nature whatsoever will be made by or on behalf of a Party relating to this Agreement without the prior written consent of the other Party, save for any announcement or other statement required to be made in terms of the provisions of any law or by the rules of any recognised securities exchange, in which event the Party obliged to make such statement will first consult with the other Party in order to enable the Parties in good faith to attempt to agree the content of such announcement, which (unless agreed) must go no further than is required in terms of such law or rules. This will not apply to a Party wishing to respond to the other Party which has made an announcement of some nature in breach of this clause 16.


16.3	This clause 16 shall not apply to any disclosure made by a Party to that Party's professional advisors, financiers or consultants, provided that they have agreed to the same confidentiality undertakings, or to any judicial or arbitral tribunal or officer, in connection with any matter relating to this Agreement or arising out of it.


17	BREACH

17.1

Should either Party commit a breach of this Agreement (" Defaulting Party "), the other Party (" Aggrieved Party ") is entitled to give the Defaulting Party notice in writing calling upon the Defaulting Party to remedy the breach. Should the Defaulting Party fail to comply with such notice within 10 (ten) business days of receipt of such notice, then without prejudice to any other rights the Aggrieved Party may have in law, the Aggrieved Party is entitled -


17.1.1	to cancel this Agreement and thereupon to recover such damages as the Aggrieved Party may be able to prove the Aggrieved Party has sustained; or


17.1.2	to enforce performance in terms of this Agreement without prejudice to any right the Aggrieved Party may have to claim damages from the Defaulting Party.


17.2	The Parties agree that any costs awarded will be recoverable on an attorney-and-own-client scale unless the Court specifically determines that such scale shall not apply, in which event the costs will be recoverable in accordance with the High Court tariff, determined on an attorney-and-client scale.


18	DISPUTE RESOLUTION

18.1

In the event of there being any dispute or difference between the Parties arising out of this Agreement (including but not limited to any dispute or difference as to the validity or otherwise of this Agreement, or as to the enforceability of this Agreement), the chief executive or managing director of each of the respective parties shall meet at a mutually convenient time, following a call for such meeting by either of the Parties. The Parties representatives shall endeavour to find resolution to the dispute and if no such resolution can be found, the said dispute or difference shall on written demand by either Party be submitted to arbitration in Johannesburg in accordance with the AFSA rules, which arbitration shall be administered by AFSA.

18.2

Should AFSA, as an institution, not be operating at that time or not be accepting requests for arbitration for any reason, or should AFSA refuse to accept the particular request for arbitration for whatever reason, then the arbitration shall be conducted in accordance with the AFSA rules for commercial arbitration (as last applied by AFSA) before an arbitrator appointed by agreement between the parties to the dispute or failing agreement within 10 (ten) business days of the demand for arbitration, then any party to the dispute shall be entitled to forthwith call upon the chairperson of the Johannesburg Bar Council to nominate the arbitrator, provided that the person so nominated shall be an advocate of not less than 10 (ten) years standing as such. The person so nominated shall be the duly appointed arbitrator in respect of the dispute. In the event of the attorneys of the parties to the dispute failing to agree on any matter relating to the administration of the arbitration, such matter shall be referred to and decided by the arbitrator whose decision shall be final and binding on the parties to the dispute.


18.3	Any party to the arbitration may appeal the decision of the arbitrator or arbitrators in terms of the AFSA rules for commercial arbitration.


18.4	Nothing herein contained shall be deemed to prevent or prohibit a party to the arbitration from applying to the appropriate court for urgent relief or for judgment in relation to a liquidated claim.


18.5	Any arbitration in terms of this clause 18 (including any appeal proceedings) shall be conducted in camera and the Parties shall treat as confidential details of the dispute submitted to arbitration, the conduct of the arbitration proceedings and the outcome of the arbitration.


18.6	This clause 18 will continue to be binding on the Parties notwithstanding any termination or cancellation of the Agreement.


18.7	The Parties declare that it is their intention that this clause 18 will regulate the manner in which they will resolve any dispute or difference regarding the validity or otherwise of this Agreement, regardless of the fact that one of the parties may dispute the validity or enforceability of the Agreement.


18.8	The Parties agree that the written demand by a party to the dispute in terms of clause 18.1 that the dispute or difference be submitted to arbitration, is to be deemed to be a legal process for the purpose of interrupting extinctive prescription in terms of the Prescription Act, 1969.


19	Notices and Domicilia


19.1	The Parties select as their respective domicilia citandi et executandi the following physical addresses, and for the purposes of giving or sending any notice provided for or required under this Agreement, the said physical addresses as well as the following email addresses -



Name	Physical Address	Email Address
Seller	Office Suite 1, The Old Bakery Corner Main and Lincoln Roads Lakeside 7945	tanya@masalini.co.za

Marked for the attention of: Tanya Paulsen

Name	Physical Address	Email Address
Purchaser	Howick Close	gert.pretorius@mixtelematics.com
	Waterfall Park
	Bekker Road
	Midrand

Marked for the attention of: the Managing Director

provided that a Party may change its domicilium to another physical address in the Republic of South Africa (provided that such physical address is not a post office box or poste restante ), or may change its address for the purposes of notices to any other physical address or email address by written notice to the other Party to that effect. Such change of address will be effective 5 (five) business days after receipt of the notice of the change.


19.2	All notices to be given in terms of this Agreement will be given in writing and will -


19.2.1	be delivered by hand or sent by email;


19.2.2	if delivered by hand during business hours, be presumed to have been received on the date of delivery. Any notice delivered after business hours or on a day which is not a business day will be presumed to have been received on the following business day; and


19.2.3	if sent by email during business hours, be presumed to have been received on the date of successful transmission of the email. Any email sent after business hours or on a day which is not a business day will be presumed to have been received on the following business day.


19.3	Notwithstanding the above, any notice given in writing, and actually received by the Party to whom the notice is addressed, will be deemed to have been properly given and received, notwithstanding that such notice has not been given in accordance with this clause 19.


20	BENEFIT OF THE AGREEMENT

This Agreement will also be for the benefit of and be binding upon the successors in title and permitted assigns of the Parties or either of them.


21	APPLICABLE LAW AND JURISDICTION


21.1	This Agreement will in all respects be governed by and construed under the laws of the Republic of South Africa.


21.2	The Parties hereby consent and submit to the non-exclusive jurisdiction of the High Court of South Africa, Gauteng Local Division, Johannesburg in any dispute arising from or in connection with this Agreement.


22	NEW LAWS AND INABILITY TO PERFORM


22.1	If any law comes into operation subsequent to the signature of this Agreement which law affects any aspect or matter or issue contained in this Agreement, the Parties undertake to enter into negotiations in good faith regarding a variation of this Agreement in order to ensure that neither this Agreement nor its implementation constitutes a contravention of such law.

22.2

If either Party is prevented from performing any of its obligations in terms of this Agreement as a result of any existing or new law or as a result of any event beyond its reasonable control whether or not foreseeable, including general power failures, breakdown of telecommunication networks or computers, political intervention, imposition of sanctions, riot or insurrection, it shall not be liable for any failure to perform its obligations under this Agreement while such event persists and shall have the right (unless such event has or is likely to persist for a period not exceeding 30 (thirty) days) to terminate this Agreement at any time after the intervention of or becoming aware of such event.


22.3	If this Agreement is terminated by either Party in accordance with the provisions of this clause 22 neither Party shall have any claim or obligation in respect of any loss suffered or damages incurred as a result of such cancellation.


23	INDEPENDENT ADVICE

Each of the Parties to this Agreement hereby acknowledges and agrees that -


23.1	it has been free to secure independent legal and other professional advice (including financial and taxation advice) as to the nature and effect of all of the provisions of this Agreement and that it has either taken such independent advice or has dispensed with the necessity of doing so; and


23.2	all of the provisions of this Agreement and the restrictions herein contained are fair and reasonable in all the circumstances and are in accordance with the Party's intentions.


24	GENERAL


24.1	Whole Agreement


24.1.1	This Agreement constitutes the whole of the agreement between the Parties relating to the matters dealt with herein and, save to the extent otherwise provided herein, no undertaking, representation, term or condition relating to the subject matter of this Agreement not incorporated in this Agreement shall be binding on either of the Parties.


24.1.2	This Agreement supersedes and replaces any and all agreements between the Parties (and other persons, as may be applicable) and undertakings given to or on behalf of the Parties (and other persons, as may be applicable) in relation to the subject matter hereof.


24.2	Variations to be in Writing

No addition to or variation, deletion, or agreed cancellation of all or any clauses or provisions of this Agreement will be of any force or effect unless in writing and signed by the Parties.


24.3	No Indulgences

No latitude, extension of time or other indulgence which may be given or allowed by either Party to the other Party in respect of the performance of any obligation hereunder, and no delay or forbearance in the enforcement of any right of either Party arising from this Agreement and no single or partial exercise of any right by either Party under this Agreement, shall in any circumstances be construed to be an implied consent or election by that Party or operate as a waiver or a novation of or otherwise affect any of the Party's rights in terms of or arising from this Agreement or estop or preclude such Party from enforcing at any time and without notice, strict and punctual compliance with each and every provision or term hereof. Failure or delay on the part of any Party in exercising any right, power or privilege under this Agreement will not constitute or be deemed to be a waiver thereof, nor will any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege.


24.4	No Waiver or Suspension of Rights

No waiver, suspension or postponement by either Party of any right arising out of or in connection with this Agreement shall be of any force or effect unless in writing and signed by such Party. Any such waiver, suspension or postponement will be effective only in the specific instance and for the purpose given.


24.5	Provisions Severable

All provisions and the various clauses of this Agreement are, notwithstanding the manner in which they have been grouped together or linked grammatically, severable from each other. Any provision or clause of this Agreement which is or becomes unenforceable in any jurisdiction, whether due to voidness, invalidity, illegality, unlawfulness or for any other reason whatever, shall, in such jurisdiction only and only to the extent that it is so unenforceable, be treated as pro non scripto and the remaining provisions and clauses of this Agreement shall remain of full force and effect. The Parties declare that it is their intention that this Agreement would be executed without such unenforceable provision if they were aware of such unenforceability at the time of execution hereof.


24.6	Continuing Effectiveness of Certain Provisions

The expiration or termination of this Agreement shall not affect such of the provisions of this Agreement as expressly provide that they will operate after any such expiration or termination or which of necessity must continue to have effect after such expiration or termination, notwithstanding that the clauses themselves do not expressly provide for this.


24.7	No Assignment

Neither this Agreement nor any part, share or interest herein nor any rights or obligations hereunder may be ceded, delegated or assigned by either Party without the prior written consent of the other Party, save as otherwise provided herein.


24.8	Exclusion of Electronic Signature

The reference in clauses 24.2, 24.4 and 24.7 to writing signed by a Party shall, notwithstanding anything to the contrary in this Agreement, be read and construed as excluding any form of electronic signature.


25	COSTS

Except as otherwise specifically provided herein, each Party will bear and pay its own legal costs and expenses of and incidental to the negotiation, drafting, preparation and signature of this Agreement.


26	SIGNATURE


26.1	This Agreement is signed by the Parties on the dates and at the places indicated below.


26.2	This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same Agreement as at the date of signature of the Party last signing one of the counterparts.


26.3	The persons signing this Agreement in a representative capacity warrant their authority to do so.


26.4	The Parties record that it is not required for this Agreement to be valid and enforceable that a Party shall initial the pages of this Agreement and/or have its signature of this Agreement verified by a witness.

SIGNED at ....................................................................... on ........................................................................ 2018

For and on behalf of TPF INVESTMENTSTS

PROPRIETARY LIMITED

____________________________________

Signature

____________________________________

Name of Signatory

____________________________________

Designation of Signatory

SIGNED at ....................................................................... on ........................................................................ 2018

For and on behalf of

MiX TELEMATICS ENTERPRISE SA

PROPRIETARY LIMITED

____________________________________

Signature

____________________________________

Name of Signatory

____________________________________

Designation of Signatory

Exhibit 8.1

MiX Telematics Limited

List of Subsidiaries



Name of Subsidiary	Jurisdiction of Incorporation
MIX TELEMATICS AFRICA PROPRIETARY LIMITED	Republic of South Africa
MIX TELEMATICS INTERNATIONAL PROPRIETARY LIMITED	Republic of South Africa
MIX TELEMATICS EUROPE LIMITED	United Kingdom
MIX TELEMATICS NORTH AMERICA INCORPORATED	United States of America
MIX TELEMATICS AUSTRALASIA PROPRIETARY LIMITED	Australia
MIX TELEMATICS MIDDLE EAST FZE	United Arab Emirates
MIX TELEMATICS ENTERPRISE SA PROPRIETARY LIMITED	Republic of South Africa
MIX TELEMATICS SERVIÇOS DE TELEMETRIA E RASTREAMENTO DE VEÍCULOS DO BRAZIL LIMITADA	Brazil
MIX TELEMATICS FLEET SUPPORT PROPRIETARY LIMITED	Republic of South Africa
MIX TELEMATICS EAST AFRICA LIMITED	Uganda
MIX TELEMATICS INVESTMENTS PROPRIETARY LIMITED	Republic of South Africa
MIX TELEMATICS ROMANIA SRL	Romania
MIX TELEMATICS (THAILAND) LIMITED	Thailand
MIX TELEMATICS SOCIEDAD DE RESPONSABILIDAD LIMITADA DE CAPITAL VARIABLE	Mexico

Exhibit 12.1

CERTIFICATIONS

I, Stefan Joselowitz, certify that:


1.	I have reviewed this annual report on Form 20-F of MiX Telematics Limited;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;


4.	The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and


5.	The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: July 26, 2019

By: /s/ Stefan Joselowitz

Stefan Joselowitz

Chief Executive Officer

Exhibit 12.2

CERTIFICATIONS

I, John Granara, certify that:


1.	I have reviewed this annual report on Form 20-F of MiX Telematics Limited;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;


4.	The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and


5.	The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: July 26, 2019

By: /s/ John Granara

John Granara

Chief Financial Officer

Exhibit 13.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of MiX Telematics Limited (the “Company”) on Form 20-F for the year ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “report”), each of the undersigned officers of the Company, does hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge:


1.	the report, as filed with the Securities and Exchange Commission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


2.	the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 26, 2019

By: /s/ Stefan Joselowitz

Stefan Joselowitz

Chief Executive Officer

Date: July 26, 2019

By: /s/ John Granara

John Granara

Chief Financial Officer

Exhibit 4.19

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “ Agreement ”) is entered into as of this 3rd day of July 2019 by and between MIX TELEMATICS NORTH AMERICA INC. (“ MiX Telematics ”), and JOHN GRANARA (the “Executive” ). MiX Telematics and the Executive are collectively referred to herein as the “ Parties .” MiX Telematics is a subsidiary of MiX Telematics Limited, and together with all subsidiaries and affiliates will hereafter collectively be referred to as the “ MiX Group ”.

Recitals

WHEREAS , MiX Telematics desires to employ the Executive as Executive Vice President, Chief Financial Officer (the “ Position ”) of the MiX Group and the Executive desires to accept such employment with MiX Telematics, subject to the terms and conditions of this Agreement.

NOW THEREFORE , in consideration of the mutual representations, warranties, covenants and agreements contained in this Agreement, in addition to other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree to the following terms and conditions:

Terms and Conditions

1. Employment Period . MiX Telematics agrees to employ the Executive and the Executive agrees to accept employment with MiX Telematics, subject to the terms and conditions of this Agreement. The Executive’s employment pursuant to this Agreement will commence on the 8 ^th of July 2019 (the “ Effective Date ”) and may be terminated thereafter by either Party at any time, with or without notice, consistent with Section 10 below. (The period of the Executive’s employment with MiX Telematics from the Effective Date through the date of termination shall be referred to herein as the “ Employment Period ”).

2. Position and Responsibilities of the Executive .

a. During the Employment Period, the Executive will serve as the Chief Financial Officer of the MiX Group and will perform such duties as are customary of a Chief Financial Officer in the industry in which MiX Telematics transacts business, including, but not limited to the following (collectively, the “ Services ”):

i. Report to and execute the orders and directions of the Chief Executive Officer and the MiX Telematics Limited Board of Directors (“ MiX Board ”), carry out such functions and duties as are from time to time assigned to him and are consistent with his Position, and use his utmost endeavours to protect and promote the business and interests of the MiX Group and to preserve its reputation and goodwill;

ii. Not engage in activities which would detract from the proper performance of the Executive’s duties;

iii. Use the Executive’s best endeavours to promote and extend the business of the MiX Group; and

iv. Perform all other duties as may be assigned to the Executive by the Chief Executive Officer and/or the MiX Board.

b. During the Employment Period, the Executive shall obey all lawful directions of MiX Telematics and implement and abide by any and all company policies and procedures as may be in effect from time to time.

c. During the Employment Period, the Executive shall devote all of the Executive’s business time and efforts to the performance of the Services. Accordingly, the Executive will not accept other employment while employed by MiX Telematics unless prior written approval is provided by MiX Telematics Limited’s Nominations and Remuneration Committee. Further, during the Employment Period, the Executive may not serve on the board of directors or act as a paid consultant to any other entity, except for non-profit philanthropic entities approved by the MiX Board.

d. During the Employment Period, the Executive shall immediately inform MiX Telematics of any change in the Executive’s personal affairs that has or may have any material effect on MiX Telematics’ rights under this Agreement or the Executive’s ability to perform the Services.

3. Business Expenses . MiX Telematics will reimburse the Executive for the cost of meals, travel and other expenses reasonably and necessarily incurred for business purposes upon timely submission of receipts verifying the cost of such expenses in accordance with and upon the terms and conditions set forth in the “MiX Telematics Travel Policy and Expense Reimbursement” procedures as in effect from time to time, including the reimbursement for appropriate professional organizations, professional licensure, and the reasonable related continuing professional education requirements. The Executive shall have all business expenses above pre-approved levels approved in compliance with the “MiX Telematics Approvals Framework.”

4. Compensation and Benefits .

a. Compensation . During the Employment Period, the Executive shall be entitled to the following compensation as the Executive’s sole consideration for the Services rendered under the Agreement:

i. Base Salary . Beginning on the Effective Date of this Agreement and continuing throughout the Employment Period, the Executive shall receive a "Base Salary" at the annual rate of Three Hundred and Fifty Thousand Dollars ($350,000) (less applicable withholdings and statutory deductions). The Base Salary will be pro-rated for the last month of the Employment Period if employment ends other than on the last day of a month. The Executive’s Base Salary shall be paid in accordance with the regular payroll practices of MiX Telematics, currently semimonthly, but in no event less frequently than monthly. The Base Salary may be upwardly adjusted from time to time by MiX Telematics Limited’s Nominations and Remuneration Committee, in their sole discretion, without the need for the Parties to amend this Agreement. If the Executive’s Base Salary is increased, such adjusted Base Salary will then constitute the Base Salary for all purposes of this Agreement.

ii. Annual Incentive Bonus . The Executive shall be eligible to earn and receive an annual cash incentive bonus equal to fifty percent (50%) of the Executive's Base Salary based on both the Executive’s individual performance and MiX Telematics' performance, subject to approval by MiX Telematics Limited’s Nominations and Remuneration Committee. Furthermore, this bonus will not be capped and could exceed fifty percent (50%) where the Executive’s individual performance or the MiX Group’s performance exceeds set targets. MiX Telematics will pay the bonus, if any, on a bi-annual basis. The annual bonus plan and targets will be shared by no later than sixty (60) days following completion of the MiX Group’s fiscal year.

iii. Long-Term Incentive Plan and Restraint . On the Executive’s appointment as Chief Financial Officer, he will be eligible to participate in and receive awards under the MiX Telematics Long-Term Incentive Plan for the period of time stipulated in the said Plan. The incentive award will be commensurate with the Executive’s Position in the MiX Group, subject to the terms of the Plan, as implemented by MiX Telematics Limited from time to time.

iv. Share Appreciation Rights (SARs) and Non-Compete . In consideration of the Executive entering into the non-compete provision as contemplated in Section 5d below, the Executive will be awarded two million five hundred thousand (2,500,000) MiX Telematics Share Appreciation Rights (“ SARs ”) which are subject to the standard terms, conditions and performance gates as set forth by MiX Telematics Limited’s Nominations and Remuneration Committee which includes both time and share performance conditions (usually ten percent (10%) of the compounded annual growth rate in the share price). For the avoidance of doubt the MiX SARs are ordinary South African shares traded on the JSE and not NYSE ADRs. The award of the two million five hundred thousand (2,500,000) SARs will be made on the 5 ^th of August, 2019.

b. Benefits . During the Employment Period, the Executive, shall be entitled to participate in or receive benefits under any life insurance, health and accident plan or arrangement or other benefits made available from time to time by MiX Telematics to its employees, subject to, and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements. MiX Telematics shall have no obligation to provide any such plans or arrangements to its employees or to continue any such plans or arrangements in effect from time to time. The Executive shall also receive the following additional benefits during the Employment Period:

i. Vacation and Sick Time . In accordance with the terms of MiX Telematics’ Vacation Policy, the Executive shall be entitled to twenty (20) paid vacation days for each service year, to be taken at times mutually convenient to the Executive and MiX Telematics. Additionally, in accordance with MiX Telematics’ Sick Leave Policy, the Executive shall be entitled to up to ten (10) days of paid sick leave each service year.

ii. 401(k). The Executive shall be eligible to participate in MiX Telematics’ 401(k) Plan in accordance with the Plan’s eligibility terms. As a participant in the Plan, the Executive will generally be eligible to make salary deferral contributions and receive employer matching contributions, subject to the terms of the MiX Telematics 401(k) Plan document.

c. Payments Due Upon Termination. Upon termination of the Executive’s employment, the Executive will only be entitled to receive (i) any accrued but unpaid Base Salary and bonuses earned through the termination date; (ii) to the extent the conditions outlined in MiX Telematics’ Vacation Policy are met, payment for vacation time which is accrued and unused as of the termination date; (iii) any accrued but unpaid business and travel expenses required to be reimbursed in accordance with Section 3 and Section 6 of this Agreement; (iv) receive any compensation and/or benefits as may be due and payable to the Executive in accordance with the terms and provisions of any employee benefit plans or programs of MiX Telematics; and (iv) such rights as the Executive has under the terms of the indemnification agreement. Any amounts due to the Executive upon termination of employment will be paid within thirty (30) days of the actual termination date.

d. Indemnification . MiX Telematics shall indemnify the Executive in accordance with, and subject to, the terms of an indemnification agreement which the Parties agree to negotiate in good faith and execute under a separate agreement. Notwithstanding anything in this Agreement to the contrary, the rights and obligations of the Parties with respect to indemnification (including dispute resolution, governing law, and notice) shall be governed by the indemnification agreement.

e. No Other Compensation or Benefits. The Executive shall not be entitled to any compensation or benefits whatsoever other than as provided for in this Section 4.

5. Confidential Information, Non-Competition and Non-Solicitation .

a. MiX Telematics’ Business . MiX Telematics is engaged in the sale and service of fleet management, driver safety and vehicle tracking services and solutions (“ Telematics Business ” or “ Telematics Solutions ”), including, but not limited to: (i) in-vehicle systems for optimizing driver efficiency while simultaneously ensuring best practices for safety and compliance (e.g. ‘MiX Rovi’); (ii) enhancements to fleet management solutions that use video footage captured by in-vehicle cameras that deliver video via Fleet Manager, allowing for visual clarity at the time of an event (e.g. ‘MiX Vision’); (iii) integrated driver safety solutions for customers wishing to embrace high Quality, Health, Safety and Environment (QHSE) standards within their companies; (iv) fleet management solutions that reduce fuel costs, allow customers to better manage routes and deliver schedules, track vehicles, identify and monitor driver behavior, manage licensing and reduce vehicle wear and tear while increasing vehicle uptime and lessening carbon emissions; (v) systems that help ensure compliance with regional and national Hours of Service legislation in the United States and abroad; (vi) patented IFTA technology which detects crossing of State lines and produces a clear and concise report listing all mileage by vehicle and State without any interaction from the vehicle operator; and (vii) other Telematics Solutions hardware and/or services.

b. Access to Confidential Information and Third Party Information . The Executive acknowledges that in the course of the Executive’s employment, the Executive will become informed of and be provided with access to confidential and proprietary information and data (including trade secrets) concerning the business and affairs of MiX Telematics, its parent company, MiX Telematics Limited, and its subsidiaries and affiliates (the “MiX Group”) (“ Confidential Information ”). The Executive acknowledges that in the course of the Executive’s employment with MiX Telematics, the Executive also may receive or have access to confidential or proprietary information belonging to certain third parties (“ Third Party Information ”). For purposes of this Agreement, Confidential Information includes, but is not limited to, information relating to: methods of operation; business plans and projections; pricing structure, profit margins and other non-public financial information of any kind; customer, supplier, vendor, dealer, or value-added reseller accounts; research and development; policies and manuals constituting business secrets, confidential information, and/or proprietary information that is not available to the public; proprietary

software; personnel information of employees that is private and confidential and is unrelated to wages, hours and other terms and conditions of employment; information concerning planned or pending acquisitions or divestitures; or other non-public information relating to the Telematics Business or Telematics Solutions. The Executive acknowledges and agrees that the Confidential Information derives independent value from not being generally known to and not readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use. The Executive further acknowledges and agrees that such Confidential Information was developed at great expense and has been the subject of efforts by the MiX Group, which are reasonable under the circumstances to maintain its confidentiality. “Confidential Information” does not include information that has previously been or is hereafter made public, without breach of a confidential relationship, by an authorized representative of MiX Telematics.

c. Agreement Not to Disclose Confidential Information and Third Party Information. The Executive agrees that:

i. All Confidential Information and other materials relating in any way to any Confidential Information shall be and remain MiX Telematics’ sole property during and after the Employment Period.

ii. The Executive shall take all reasonable steps needed or requested by MiX Telematics to ensure that all Confidential Information and Third Party Information is kept confidential.

iii. The Executive agrees that at all times during and subsequent to the Employment Period, the Executive shall use Confidential Information and Third Party Information only for the contemplated purposes and for the sole benefit of MiX Telematics; shall not use Confidential Information or Third Party Information for any other purpose; and shall not disclose or cause to be disclosed Confidential Information or Third Party Information to any employee, contractor, or third party, except as required in the course and scope of the Executive’s employment by MiX Telematics and only if the employee, contractor, or third party has executed an agreement not to disclose Confidential Information and Third Party Information.

iv. The Executive shall not duplicate any Confidential Information or Third Party Information or other materials relating in any way to any Confidential Information or Third Party Information, other than as necessary to fulfill the Executive’s obligations to MiX Telematics, without the express written consent of MiX Telematics.

v. Upon demand by MiX Telematics, the Executive shall return all Confidential Information and Third Party Information, including any notes regarding or referring to Confidential Information or Third Party Information, which is then in the Executive’s possession, custody, or control, to MiX Telematics and shall represent in writing at such time that the Executive has complied with the provisions of this Section 5c.

vi. Other than as contemplated in subparagraphs vii and viii below, in the event that the Executive is compelled by legal subpoena or court order to provide Confidential Information or Third Party Information, the Executive will provide MiX Telematics with prompt notice thereof so that MiX Telematics may seek a protective order or other appropriate remedy and the Executive will cooperate with and assist MiX Telematics in securing such protective order or other remedy. In the event that such protective order is not obtained, or the Company waives compliance with this subparagraph to permit a particular disclosure, the Executive will furnish only that portion of the Confidential Information or Third Party Information that the Executive is legally required to disclose.

vii. Nothing in this Section 5c or otherwise in this Agreement shall be construed to interfere with the Executive’s rights under Section 7 of the National Labor Relations Act (“NLRA”). Further, nothing in this Section 5c or otherwise in this Agreement shall be construed to prohibit the Executive from: filing a charge or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission or any other federal, state or local government agency charged with enforcement of any law; reporting possible violations of any law, rule or regulation to any governmental agency or entity charged with enforcement of any law, rule or regulation; or making other disclosures that are protected under the whistleblower provisions of any law, rule or regulation.

viii. Immunity Notice : The Executive shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that: (1 ) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and made solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Should the Executive file a lawsuit against MiX Telematics for retaliation for reporting a suspected violation of law, the Executive may disclose the trade secret to the Executive’s attorney and use the trade secret information in the court proceeding, if the Executive: (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

d. Non-Competition and Non-Solicitation . The Executive acknowledges that MiX Telematics has a legitimate business interest in protecting the Confidential Information and the Third Party Information, its customer and vendor relationships, its training of employees, its business goodwill, reputation and other lawful interests, and that the restrictive covenants regarding competition and non-solicitation contained herein are reasonably necessary to protect these interests. In consideration for the access granted to Confidential Information and Third Party Information and other consideration provided for in this Agreement, the receipt and sufficiency of which is hereby acknowledged, the Executive agrees that, both during the Employment Period and for a period of twenty four (24) months following the termination of the Executive’s employment pursuant to this Agreement (the “ Restricted Period ”), the Executive shall not, directly or indirectly (in any capacity, on the Executive’s own behalf or on behalf of any other person or entity), anywhere in the geographical area in which the Executive performed the Services, which includes the United States of America:

i. have any ownership interest in, perform any work for or provide the same or similar services the Executive provided to the MiX Group (whether as an individual, employee, independent contractor, owner, proprietor, principal, partner, shareholder, joint venturer, member, trustee, officer, director, consultant, broker, agent, or in any other manner whatsoever) to any person or entity that is a Competitive Business to the MiX Group (except for an ownership interest not exceeding five percent (5%) of a publicly-traded entity). “ Competitive Business ” shall mean any business that sells or provides the same, or substantially similar, products and/or services as the MiX Group (including but not limited to Telematics Solutions).

ii. Solicit, recruit, induce, hire or engage any employee, customer, contractor, licensee, vendor, dealer or value-added reseller of the MiX Group to enter into an employment or business relationship with any other person or entity that is a Competitive Business or recruit, solicit or otherwise induce any employee, customer, contractor, licensee, vendor, dealer or value-added reseller of the MiX Group to terminate his/her employment, engagement or business relationship with the MiX Group. This covenant applies to any employee, customer, contractor, licensee, vendor, dealer or value-added reseller who, at the time of the recruitment/hire, is currently employed or engaged with the MiX Group or who was employed or engaged with the MiX Group at any time during the twelve (12) month period preceding the date of the attempted employment, recruitment, inducement, engagement or solicitation.

e. Reasonableness of Restrictive Covenants. The Executive acknowledges that each of the provisions of this Section 5 are reasonable and necessary to protect the legitimate business interests of the MiX Group and its and their present and potential business activities and the economic benefits derived therefrom, Confidential Information, including, but not limited to, trade secrets, and Third Party Information, and that the restrictions will not prevent the Executive from earning a livelihood in the Executive’s chosen profession, that they do not impose an undue hardship on the Executive, and that they will not injure the public.

f. Enforcement . The Executive expressly agrees and understands that the remedy at law for any breach by the Executive of this Section 5 will be inadequate and that damages flowing from such breach are not usually susceptible to being measured in monetary terms. Accordingly, it is acknowledged that upon the Executive’s violation of any provision of this Section 5, MiX Telematics shall be entitled to seek from any court of competent jurisdiction (including without limitation in Palm Beach County, Florida) immediate injunctive relief and obtain a temporary order and/or injunction restraining any threatened or further breach as well as an equitable accounting of all profits or benefits arising out of such violation. Nothing in this Section 5 shall be deemed to limit MiX Telematics’ remedies at law or in equity for any breach by the Executive of any of the provisions of this Section 5, which may be pursued by MiX Telematics. The existence of any claim or cause of action by the Executive against MiX Telematics, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by MiX Telematics of the restrictive covenants set forth herein but shall be claimed and litigated separately. In the event MiX Telematics applies to seal any papers produced or filed in any judicial proceedings between the Parties to preserve confidentiality, the Executive hereby specifically agrees not to oppose such application and to use his best efforts to join such application.

g. Assignment . The Executive expressly acknowledges and agrees that the provisions of this Section 5 shall be assignable by MiX Telematics to a successor in interest of MiX Telematics and the Executive hereby expressly consents to such assignment. This Agreement shall be binding upon the Executive's heirs, executors, administrators or other legal representatives or assigns. The Executive further acknowledges and agrees that the provisions of Section 5 are intended not only for MiX Telematics’ benefit, but also the benefit of the MiX Group and any of its or their past, present, or future parent corporations, subsidiaries, divisions, affiliates, officers, directors, agents, trustees, administrators, insurers, attorneys, employees, members of committees, employee benefit and/or pension plans or funds (including qualified and non-qualified plans or funds), successors and/or assigns, and that in addition to the rights of MiX Telematics hereunder, each shall have the right to enforce the provisions of this Section 5.

h. Toll Period. In the event the Executive violates any provision of this Section 5 as to which there is a specific time period during which the Executive is prohibited from taking certain actions or from engaging in certain activities, as set forth in such provision, then, such violation shall toll the running of such time period from the date of such violation until such violation shall cease. As such, if the Executive violates any restriction stated in this Section 5, such restriction shall remain in full force and effect beyond the expiration of the Restricted Period, such that MiX Telematics receives the full benefit of its bargain.

i. Notice to New Employer/Consulting Party . The Executive agrees that prior to the commencement of any employment or consulting relationship with any person or entity, the Executive will advise the person or entity of the restrictive covenant terms contained in this Agreement. The Executive also agrees that MiX Telematics may advise any of the Executive’s new or prospective employers or consulting parties of the existence and terms of this Agreement and may furnish said employer or consulting party with a copy of the relevant provisions of this Agreement.

j. Survival . The Executive agrees that this Section 5 and its subparts survive termination of this Agreement; survive termination of the Employment Period; and survive termination of the Executive’s business relationship with MiX Telematics.

k. Blue Pencil. If any portion of this Section 5 is held by a court of competent jurisdiction to be unreasonable, arbitrary or against public policy for any reason, that restrictive covenant shall be considered divisible as to line or scope of business, time, or geographic area and shall be modified by the court as to any of the foregoing in such a fashion as to be enforceable. The remainder of the Agreement shall remain in full force and effect.

6. Place of Performance . The Executive is aware that the executive team and particularly the Chief Executive Officer is based in Boca Raton, Florida at the company’s USA headquarters. The Executive is required to spend much of his time working out of the Florida location. The Parties have agreed that unless agreed otherwise from time-to-time, the Executive will spend Monday to Thursday typically three (3) weeks of each month physically at the company headquarters. Fridays and the full fourth week of the month, the Executive will be entitled to work remotely from his home office in Boston, Massachusetts. As a consequence, the Executive will be obliged to do extensive commuting. The Parties have agreed that the MiX Group will pick up the cost of this commuting (including airfare, hotel and car-hire) for the first twelve (12) months of employment capped to a maximum of Forty Thousand Dollars ($40k) for the period. The Parties have further agreed that the MiX Group will pick up the cost of this commuting (including airfare, hotel and car-hire) for the second twelve (12) months of employment capped to a maximum of Twenty Thousand Dollars ($20k) for the period. Thereafter (month twenty five (25) of employment onwards, the cost of commuting will be for the Executive’s account. The Executive recognizes that the Executive’s duties will require, at the MiX Group’s expense, routine travel to domestic and international locations.

7. General Employment Provisions.

a. Hours of Work . Normal office hours will be from Monday to Friday from 08h00 to 17h00 with an hour lunch break. As a senior executive the nature of the Executive’s work will be such that the Executive is sometimes required to work outside of MiX Telematics’ ordinary working hours. The Executive agrees to work such additional hours as may be reasonably necessary for the fulfilment of the Executive’s duties without additional compensation. MiX Telematics will be entitled, from time to time, to adjust the Executive’s working hours in terms of operational requirements.

b. Mobile Phone . MiX Telematics will provided the Executive with a mobile phone (at MiX Telematics’ reasonable expense), to be utilized for business purposes by the Executive.

c. Computer Systems . During the Executive's employment by MiX Telematics, the Executive will be supplied with a computer system and with access to the MiX Group’s network, computer systems and software. MiX Telematics may at all times specify the manner in which these facilities may be used and the Executive hereby agrees to be bound by any information technology policy of MiX Telematics in force from time to time. Without derogating from the generality of the aforementioned, the Executive shall (i) utilise the computer and access MiX Telematics' network, laptops, computer systems and software, including email and internet, solely in pursuance of the MiX Group's business activities; and (ii) not copy any software whatsoever, for whatever purpose, from one computer to another unless both the applicable software license and MiX Telematics permits it.

d. Interception and Monitoring of Electronic Communications . The Executive acknowledges, accepts and agrees that he consents to the monitoring and interception of the Executive’s communication insofar as it relates to electronic communications that he may send or receive using the equipment of MiX Telematics or during the Employment Period and scope of his employment.

e. Consent to use Personal Information . The Executive hereby consents to the collection, processing and further processing of the Executive's personal information by MiX Telematics, for the purposes of securing and further facilitating the Executive's employment.

Without derogating from the generality of the aforementioned, the Executive consents to MiX Telematics' collection and processing of personal information pursuant to this Section insofar as personal information of the Executive is contained in relevant electronic communications.

The Executive is hereby notified of the purpose and reason for the collection and processing of such personal information.

The Executive undertakes to make available to MiX Telematics all necessary personal information required by MiX Telematics for the purpose of securing and further facilitating the Executive's employment.

Without limiting the generality of the aforegoing, the Executive absolves MiX Telematics from any liability in terms of relevant data protection and security laws for failing to obtain the Executive's consent or to notify the Executive of the reason for the processing of any of the Executive's personal information.

8. Prior Restrictive Covenants . The Executive expressly states that he is not bound by any restrictive covenants, including non-competition and non-solicitation restrictions (for both customers and employees) from any prior employer. If it is later determined that the Executive is bound by any prior restrictive covenants, MiX Telematics may, at its sole discretion, immediately cancel this Employment Agreement. Further, by virtue of executing this Employment Agreement, the Executive understands and agrees that MiX Telematics will not defend the Executive in any future action brought by the Executive's prior employer due to claims of violating restrictive covenants or otherwise.

9. Inventions, Discoveries, Copyright and Documents . Any Intellectual Property made, created or discovered by the Executive in the course and scope of his employment, in connection with or in any way affecting or relating to the business of the MiX Group or capable of being used or adapted for use by the MiX Group in connection with its business, shall be disclosed to MiX Telematics and shall belong to MiX Telematics.

The Executive shall, if and when required by MiX Telematics, and at the expense of MiX Telematics, apply or join with MiX Telematics in applying for letters patent or other equivalent protection in the United States of America or in any other part of the world for the Intellectual Property and shall execute all instruments and do all things necessary for vesting the said letters patent or other equivalent protection in the name of MiX Telematics as sole beneficial owner or in the name of such other person as may be nominated.

Insofar as may be necessary, the Executive hereby assigns to MiX Telematics the copyright in all present and future works eligible for copyright including, without limitation, software programs of which he may be the author, which works were or are created, compiled, devised or brought into being during the course and in the scope of his employment. No consideration shall be payable to the Executive in respect of the assignment. The Executive hereby waives in favour of MiX Telematics or any successor-in-title any moral rights in copyright as provided for in the Agreement, which may vest in him.

All reports, manuals, financial statements, budgets, indices, research papers, letters or other similar documents, the nature of which is not limited by the specific reference to the aforegoing items, which are created, compiled or devised or brought into being by the Executive or come into the Executive's possession during the course and in the scope of his employment and all copies thereof, shall be the property of MiX Telematics.

10. Termination of Employment . Notwithstanding any other provision of this Agreement, MiX Telematics may terminate the Executive's employment ninety (90) days after providing written notice to the Executive of the termination. Likewise, the Executive may terminate his employment with MiX Telematics ninety (90) days after providing written notice to MiX Telematics of the Executive's intent to terminate his employment. In the event the Executive gives notice of his intent to terminate his employment, MiX Telematics, in its sole discretion, may place the Executive on immediate administrative leave until the expiration of the ninety (90) day period.

Where MiX Telematics terminates the Executive’s employment without cause, the Executive will be paid fifty percent (50%) of the Executive’s Base Salary and the Executive’s prorated annual incentive bonus earned through the termination date that the Executive would have been otherwise eligible for had employment not been terminated.

Where MiX Telematics terminates the Executive’s employment with cause, the Executive will be paid his Base Salary for the duration of the notice period and will not be entitled to any additional bonus.

The definition of " Cause " shall mean:

i. the Executive's refusal or reckless failure to perform his Services under this Agreement;

ii. the Executive's misconduct or negligence with regard to MiX Telematics, its vendors or agencies (including, without limitation, the Executive's fraud, dishonesty, embezzlement, moral turpitude or other act of dishonesty with regard to MiX Telematics);

iii. the Executive's misconduct, negligence or omission which has a material adverse economic impact on MiX Telematics;

iv. the Executive's conviction of, pleading nolo contendere to, or having adjudication withheld as to any felony or any crime involving fraud, dishonesty or moral turpitude;

v. the Executive's persistent failure to perform his duties and responsibilities for MiX Telematics that causes MiX Telematics harm or damages;

vi. the Executive's persistent failure to follow MiX Telematics applicable policies and procedures;

vii. the Executive's insubordination to the Chairperson, the MiX Board and/or the Chief Executive Officer, or refusal or failure to follow the lawful direction of the foregoing individuals and/or entities;

viii. any breach by the Executive of this Agreement;

ix. the Executive's disparagement of MiX Telematics, the MiX Board, Chairperson, customers, services, vendors, contractors or agencies;

x. the Executive conducting business on behalf of MiX Telematics while under the influence of alcohol or any illegal drugs;

xi. any other serious complaint of conduct which causes MiX Telematics to lose trust in the Executive;

xii. any breach of a fiduciary duty owed to MiX Telematics by the Executive;

xiii. any breach by the Executive of the trust bestowed upon him by MiX Telematics; and

xiv. any irreconcilable differences which may arise between the Executive and MiX Telematics.

11. Amendment and Waiver . This Agreement may not be modified, amended, supplemented, canceled or discharged, except by written instrument executed by all Parties. No failure to exercise, and no delay in exercising, any right, power or privilege under this Agreement shall operate as a waiver, nor shall any single or partial exercise of any right, power or privilege hereunder preclude the exercise of any other right, power or privilege. No waiver of any breach of any provision shall be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision, nor shall any waiver be implied from any course of dealing between the Parties. No extension of time for performance of any obligations or other acts hereunder or under any other agreement shall be deemed to be an extension of the time for performance of any other obligations or any other acts. The rights and remedies of the Parties under this Agreement are in addition to all other rights and remedies, at law or equity that they may have against each other.

12. Assignment; Third Party Beneficiary . This Agreement, and the Executive’s rights and obligations hereunder, may not be assigned, subcontracted, or delegated by the Executive. MiX Telematics may assign its rights, and delegate its obligations, hereunder to any successor in interest. The rights and obligations of MiX Telematics under this Agreement shall inure to the benefit of and be binding upon and enforceable by its respective successors and assigns.

13. Severability; Survival . In the event that any provision of this Agreement is found to be void and unenforceable by a court of competent jurisdiction, then such unenforceable provision shall be deemed modified so as to be enforceable or, if not subject to modification, then eliminated herefrom to the extent necessary to permit the remaining provisions to be enforced. The provisions of this Section and Sections 5 and 10 through 20 shall survive the termination of this Agreement, the Employment Period, and/or the Executive’s relationship with MiX Telematics.

14. Counterparts/Facsimile . This Agreement may be signed in any number of counterparts and by electronic transmissions and all so executed shall constitute one Agreement, binding on all the Parties hereto, notwithstanding that the Parties are not signatories to the original or same counterpart.

15. Governing Law; Prevailing Party Fees; Venue; Jury Trial Waiver . This Agreement and any disputes arising out of this Agreement shall be governed by the laws of the state of Florida without regard to its choice of law principles, except where the application of federal law applies. If either Party breaches this Agreement, or any dispute arises out of, or relating to, this Agreement, the prevailing Party shall be entitled to its reasonable attorneys’ fees, paralegals’ fees and costs, at all levels. In the event of any litigation arising out of this Agreement, the exclusive venue shall be in Palm Beach County, Florida and shall be decided by a judge, not a jury. THE PARTIES SPECIFICALLY WAIVE THEIR RIGHT TO A TRIAL BY JURY.

16. Notices . All notices required or permitted under this Agreement shall be in writing and shall be deemed sent: (i) on the same business day when faxed or delivered, personally or by confirmed facsimile transmission; (ii) three (3) business days after being mailed by United States registered or certified mail, return receipt requested, postage prepaid; (iii) five (5) business days after being mailed to the United States from another country; or (iv) one (1) business day after being sent by a reputable overnight courier, addressed as set forth below or to such other address as any Party may have furnished to the other in writing in accordance herewith. Notice of change of address shall be effective only upon receipt. Notices and all other communications shall initially be addressed to each Party at the address or facsimile number set forth below:

MiX Telematics Attn: Chief Executive Officer

MiX Telematics North America, Inc.

750 Park of Commerce Blvd. Suite 100

Boca Raton, FL 33487

Facsimile: (561) 994-3979

The Executive: John Granara

36 Apache Way

Wilmington, MA 01887

17. Entire Agreement . This Agreement contains the entire understanding of the Parties with respect to its subject matter and supersedes all prior agreements and understandings (oral or written) between or among the Parties with respect to such subject matter.

18. Headings . The headings of the Sections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement.

19. Executive’s Representation . The Executive represents and warrants to MiX Telematics that there is no legal impediment to the Executive entering into, or performing the Executive’s obligations under this Agreement, and neither entering into this Agreement nor performing the Services hereunder will violate any agreement to which the Executive is a party or any other legal restriction. The Executive further represents and warrants that in performing Services hereunder the Executive will not use or disclose any confidential information of any prior employer or other person or entity.

20. Section 409A of the Code . It is the intention of the Parties that the benefits and rights to which the Executive could be entitled pursuant to this Agreement comply with Section 409A (“ Section 409A ”) of the Internal Revenue Code of 1986, as amended (the “ Code ”) and the Treasury Regulations and other guidance promulgated or issued thereunder, to the extent that the requirements of Section 409A are applicable thereto, and this Agreement shall be construed in a manner consistent with that intention. If either Party believes, at any time, that any such benefit or right that is subject to Section 409A does not so comply, the Party shall promptly advise the other and shall negotiate reasonably and in good faith to amend the terms of such benefits and rights such that they comply with Section 409A (with the most limited possible economic effect on the Executive and on MiX Telematics).

If and to the extent required to comply with Section 409A, any payment or benefit required to be paid hereunder on account of termination of the Executive’s employment, service (or any other similar term) shall be made only in connection with a “separation from service” with respect to the Executive within the meaning of Section 409A.

Notwithstanding anything herein to the contrary or otherwise, except to the extent any expense, reimbursement or in-kind benefit provided pursuant in this Agreement does not constitute a “deferral of compensation” within the meaning of Section 409A and the Treasury Regulations and other guidance thereunder: (i) the amount of expenses eligible for reimbursement or in-kind benefits provided to the Executive during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to the Executive in any other calendar year; (ii) the reimbursements for expenses for which the Executive is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred; and (iii) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

[Remainder of page intentionally blank.

Signatures appear on the following page.]

IN WITNESS WHEREOF , the Parties have executed this Agreement as of the date first above written.



MiX TELEMATICS NORTH AMERICA, INC.: __________________________________ BY:_______________________________ as_________________________________	THE EXECUTIVE: __________________________________ John Granara

Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-199908 and No. 333-196723 on Form S-8 of our reports dated July 26, 2019 , relating to the consolidated financial statements of MiX Telematics Limited and its subsidiaries (collectively, the “Company”), and the effectiveness of the Company’s internal control over financial reporting (which report expresses an adverse opinion on the effectiveness of the Company's internal control over financial reporting because of a material weakness), appearing in this Annual Report on Form 20-F of MiX Telematics Limited for the year ended March 31, 2019.

/s/ Deloitte & Touche

Registered Auditor

Johannesburg, South Africa

July 26, 2019

A full list of partners and directors is available on request *Partner and Registered Auditor

Exhibit 15.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Forms S‑8 (No. 333-196723) and S-8 (No. 333-199908) of MiX Telematics Limited of our report dated July 14, 2017 relating to the financial statements, which appears in this Form 20-F.

/s/ PricewaterhouseCoopers Inc.

Johannesburg, South Africa

July 26, 2019



Consolidated statement of financial position


at March 31, 2019 and March 31, 2018



	Notes	March 31, 2019	March 31, 2018
	Notes	R ’ 000	R ’ 000

ASSETS
Non-current assets
Property, plant and equipment	6	457,446	334,038
Intangible assets	7	955,646	898,527
Capitalized commission assets	8	54,066	—
Deferred tax assets	18	51,666	40,717
Total non-current assets		1,518,824	1,273,282

Current assets
Assets classified as held for sale	6	17,058	17,058
Inventory	9	51,263	57,013
Trade and other receivables	10	376,475	286,406
Taxation	29	24,119	30,373
Restricted cash	11	20,187	20,935
Cash and cash equivalents	12	383,443	308,258
Total current assets		872,545	720,043
Total assets		2,391,369	1,993,325

EQUITY
Stated capital	13	786,633	846,405
Other reserves	14	83,212	(51,614	)
Retained earnings		881,819	722,380
Equity attributable to owners of the parent		1,751,664	1,517,171
Non-controlling interest		13	10
Total equity		1,751,677	1,517,181

LIABILITIES
Non-current liabilities
Deferred tax liabilities	18	139,049	82,658
Provisions	19	2,226	2,132
Recurring commission liability		1,798	—
Capitalized lease liability	20	31,183	—
Total non-current liabilities		174,256	84,790

Current liabilities
Trade and other payables	16	399,869	350,519
Capitalized lease liability	20	10,745	—
Taxation		2,511	2,832
Provisions	19	22,049	20,283
Bank overdraft	12	30,262	17,720
Total current liabilities		465,436	391,354
Total liabilities		639,692	476,144
Total equity and liabilities		2,391,369	1,993,325

The accompanying notes form an integral part of these financial statements.



Consolidated income statement


for the years ended March 31, 2019, March 31, 2018 and March 31, 2017



	Notes	March 31, 2019		March 31, 2018		March 31, 2017
	Notes	R’000		R’000		R’000

Revenue	22	1,975,863		1,712,482		1,540,058
Cost of sales		(655,844	)	(586,963	)	(498,785	)

Gross profit		1,320,019		1,125,519		1,041,273
Other income/(expenses) – net	23	1,009		4,246		426
Operating expenses		(982,116	)	(914,813	)	(903,837	)
Sales and marketing		(199,209	)	(184,978	)	(181,601	)
Administration and other charges		(782,907	)	(729,835	)	(722,236	)

Operating profit	24	338,912		214,952		137,862
Finance income/(costs) – net		1,386		(69	)	10,391
Finance income	25	12,286		8,951		16,068
Finance costs	26	(10,900	)	(9,020	)	(5,677	)

Profit before taxation		340,298		214,883		148,253
Taxation	29	(137,962	)	(33,690	)	(26,812	)
Profit for the year		202,336		181,193		121,441

Attributable to:
Owners of the parent		202,336		181,134		121,458
Non-controlling interest		*		59		(17	)
		202,336		181,193		121,441
Earnings per share
Basic (R)	30	0.36		0.32		0.19
Diluted (R)	30	0.35		0.32		0.19

* Amount less than R1,000

The accompanying notes form an integral part of these financial statements.



Consolidated statement of comprehensive income


for the years ended March 31, 2019, March 31, 2018 and March 31, 2017



		March 31, 2019	March 31, 2018		March 31, 2017
	Notes	R’000	R’000		R’000

Profit for the year		202,336	181,193		121,441
Other comprehensive income:
Items that may be subsequently reclassified to profit or loss
Exchange differences on translating foreign operations		114,596	(60,331	)	(80,870	)
Attributable to owners of the parent	14	114,593	(60,339	)	(80,820	)
Attributable to non-controlling interest		3	8		(50	)
Taxation relating to components of other comprehensive income	14, 18, 29	1,151	(237	)	(59	)
Other comprehensive income/(loss) for the year, net of tax		115,747	(60,568	)	(80,929	)
Total comprehensive income for the year		318,083	120,625		40,512

Attributable to:
Owners of the parent		318,080	120,558		40,579
Non-controlling interest		3	67		(67	)
Total comprehensive income for the year		318,083	120,625		40,512

The accompanying notes form an integral part of these financial statements.



Consolidated statement of changes in equity


for the years ended March 31, 2019, March 31, 2018 and March 31, 2017



		Attributable to owners of the parent
	Notes	Stated capital* R’000		Other reserves** R’000		Retained earnings R’000		Total R’000		Non- controlling interest R’000		Total equity R’000


Balance at April 1, 2016		1,320,955		74,262		526,082		1,921,299		(1,491	)	1,919,808
Total comprehensive income		—		(80,879	)	121,458		40,579		(67	)	40,512
Profit for the year		—		—		121,458		121,458		(17	)	121,441
Other comprehensive loss		—		(80,879	)	—		(80,879	)	(50	)	(80,929	)

Total transactions with owners		(466,610	)	2,247		(53,026	)	(517,389	)	—		(517,389	)
Shares issued in relation to share options exercised		7,072		—		—		7,072		—		7,072
Share-based payment transaction		—		2,247		—		2,247		—		2,247
Dividends declared	31	—		—		(53,026	)	(53,026	)	—		(53,026	)
Share repurchase		(473,682	)	—		—		(473,682	)	—		(473,682	)

Balance at March 31, 2017		854,345		(4,370	)	594,514		1,444,489		(1,558	)	1,442,931
Total comprehensive income		—		(60,576	)	181,134		120,558		67		120,625
Profit for the year		—		—		181,134		181,134		59		181,193
Other comprehensive (loss)/income		—		(60,576	)	—		(60,576	)	8		(60,568	)

Total transactions with owners		(7,940	)	13,332		(53,268	)	(47,876	)	1,501		(46,375	)
Shares issued in relation to share options and share appreciation rights exercised	13	10,726		—		—		10,726		—		10,726
Share-based payment transaction	14	—		9,000		—		9,000		—		9,000
Share-based payment – excess tax benefit	14	—		5,833		—		5,833		—		5,833
Transactions with non-controlling interest	21	—		(1,501	)	—		(1,501	)	1,501		—
Dividends declared	31	—		—		(53,268	)	(53,268	)	—		(53,268	)
Share repurchase	13	(18,666	)	—		—		(18,666	)	—		(18,666	)

Balance at March 31, 2018		846,405		(51,614	)	722,380		1,517,171		10		1,517,181

Adjustment on initial application of IFRS 15, IFRS 16 and IFRS 9***		—		—		24,675		24,675		—		24,675
Adjusted balance at April 1, 2018		846,405		(51,614	)	747,055		1,541,846		10		1,541,856



Consolidated statement of changes in equity


for the years ended March 31, 2019, March 31, 2018 and March 31, 2017



		Attributable to owners of the parent
	Notes	Stated capital* R’000		Other reserves** R’000	Retained earnings R’000		Total R’000		Non- controlling interest R’000	Total equity R’000



Total comprehensive income		—		115,744	202,336		318,080		3	318,083
Profit for the year		—		—	202,336		202,336		—	202,336
Other comprehensive income		—		115,744	—		115,744		3	115,747

Total transactions with owners		(59,772	)	19,082	(67,572	)	(108,262	)	—	(108,262	)
Shares issued in relation to share options and share appreciation rights exercised	13	13,776		—	—		13,776		—	13,776
Share-based payment transaction	14	—		12,140	—		12,140		—	12,140
Share-based payment – excess tax benefit	14	—		6,942	—		6,942		—	6,942
Dividends declared	31	—		—	(67,572	)	(67,572	)	—	(67,572	)
Share repurchase	13	(73,548	)	—	—		(73,548	)	—	(73,548	)

Balance at March 31, 2019		786,633		83,212	881,819		1,751,664		13	1,751,677

* Excludes 40,000,000 treasury shares held by MiX Telematics Investments Proprietary Limited (“MiX Investments”), a wholly owned subsidiary of the Group, which were acquired under the approved general share purchase program during fiscal 2016. See note 13.

** See note 14 for a composition of and movements in other reserves.

*** See note 2.1.1.1 for additional information.

The accompanying notes form an integral part of these financial statements.



Consolidated statement of cash flows


for the years ended March 31, 2019, March 31, 2018 and March 31, 2017



		March 31, 2019		March 31, 2018		March 31, 2017
	Notes	R’000		R’000		R’000

Cash flows from operating activities
Cash generated from operations	32.2	541,432		413,025		377,115
Interest received		12,132		8,576		14,737
Interest paid		(4,976	)	(3,731	)	(5,680	)
Taxation paid		(84,742	)	(64,662	)	(62,601	)
Net cash generated from operating activities		463,846		353,208		323,571

Cash flows from investing activities
Purchases of property, plant and equipment	6	(200,840	)	(238,646	)	(180,230	)
Proceeds on sale of property, plant and equipment and intangible assets		2,222		4,388		369
Purchases of intangible assets	7	(85,618	)	(99,615	)	(115,293	)
Deferred consideration paid		—		—		(1,103	)
Decrease in restricted cash		2,724		127		6,951
Increase in restricted cash		(983	)	(8,389	)	(3,588	)
Net cash used in investing activities		(282,495	)	(342,135	)	(292,894	)

Cash flows from financing activities
Proceeds from issuance of shares	13	13,776		10,726		7,072
Share repurchase	13	(73,548	)	(18,666	)	(473,682	)
Dividends paid to Company’s owners		(67,470	)	(53,201	)	(52,966	)
Repayments of capitalized lease liability	20	(11,435	)	—		—
Acquisition of non-controlling interest	21	—		(1,353	)	—
Net cash used in financing activities		(138,677	)	(62,494	)	(519,576	)
Net increase/(decrease) in cash and cash equivalents		42,674		(51,421	)	(488,899	)
Net cash and cash equivalents at the beginning of the year		290,538		356,333		860,762
Exchange gains/(losses) on cash and cash equivalents		19,969		(14,374	)	(15,530	)
Net cash and cash equivalents at the end of the year	12	353,181		290,538		356,333

The accompanying notes form an integral part of these financial statements.



Notes to the consolidated financial statements


for the year ended March 31, 2019

1. General information

MiX Telematics Limited (the “Company”) is a public company which is incorporated and domiciled in South Africa. The Company’s ordinary shares are publicly traded on the Johannesburg Stock Exchange (JSE: MIX) and its American Depositary Shares are listed on the New York Stock Exchange (NYSE: MIXT). The activities of the Company and its subsidiaries (the “Group”) focus on fleet and mobile asset management solutions delivered as Software-as-a-Service. The address of the Company’s registered office is Matrix Corner, Howick Close, Bekker Road, Waterfall Park, Midrand, South Africa, 1686. The financial statements were approved by the Board of Directors on July 26, 2019.

2. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These accounting policies have been consistently applied to all the years presented, unless otherwise stated.


2.1	Basis of preparation

The annual financial statements of the Group for the year ended March 31, 2019 have been prepared in accordance with:


•	International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”);


•	IFRS Interpretations Committee (“IFRIC”) interpretations applicable to companies reporting under IFRS;


•	SAICA Financial Reporting guides as issued by the Accounting Practices Committee;


•	Financial Pronouncements as issued by the Financial Reporting Standards Council (“FRSC”);


•	the requirements of the South African Companies Act, No. 71 of 2008; and


•	the JSE Listings Requirements.

The financial statements have been prepared in thousands of Rand (R’000) under the historical cost convention.

The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions or estimates are significant to the financial statements, are disclosed in note 4.


2.1.1	Changes in accounting policy and disclosures


2.1.1.1	New standards, amendments and interpretations adopted by the Group



Notes to the consolidated financial statements


for the year ended March 31, 2019



Standards and amendments	Executive summary
IFRS 9 Financial Instruments (“IFRS 9”)	IFRS 9 addresses classification and measurement of financial assets and replaces the multiple classification and measurement models in IAS 39 Financial Instruments: Recognition and Measurement with a single model that has only two classification categories: amortized cost and fair value. IFRS 9 also introduces a new impairment model and aligns hedge accounting more closely with an entity’s risk management. The standard is effective for the Group from April 1, 2018. The Group has elected not to restate comparatives and recognized the transitional adjustments in retained earnings on the date of initial application. The most relevant change to the Group is the requirement to use an expected loss model instead of the incurred loss model when assessing the recoverability of trade and other receivables. Based on the expected loss model contained in IFRS 9, the increase in the provision for doubtful debts at April 1, 2018 was R3.2 million.
IFRS 15 Revenue from Contracts with Customers (“IFRS 15”)	IFRS 15 replaces IAS 18 Revenue and IAS 11 Construction Contracts . It is a single, comprehensive revenue recognition model for all contracts with customers and has the objective of achieving greater consistency in the recognition and presentation of revenue. In terms of the new standard, revenue is recognized based on the satisfaction of performance obligations, which occurs when control of goods or services transfers to a customer. The revenue standard is effective for annual periods beginning on or after January 1, 2018 and therefore is applicable for the Group from April 1, 2018. The standard permits a modified retrospective cumulative catch-up approach for the adoption, which the Group decided to apply. Under this approach the Group recognized transitional adjustments in retained earnings on the date of initial application (i.e. April 1, 2018), without restating the comparative period. Under the practical expedient, the new requirements have only been applied to contracts that were not completed as of April 1, 2018. The impact of applying IFRS 15 is as follows: Costs incurred in obtaining a contract : Commissions incurred to acquire contracts need to be capitalized and amortized, unless the amortization period is 12 months or less. Previously, the Group expensed commissions. Under IFRS 15, the amortization expense reflects the settlement of the related performance obligations, which, depending on the specific contract, may include hardware, installation, training and/or service. To the extent commission capitalized is commensurate, the commission attributable to service will be amortized over the minimum contractual period or, if shorter, the expected life of the contract. To the extent it is not commensurate, the commission capitalized that is attributable to service will be amortized over the expected life of the contract. The impact on the Group at April 1, 2018 was as follows: – Capitalized commission asset with a net book value of R45.3 million and – Additional recurring commission liability of R6.9 million. Recurring commission is commission which is payable for each month the customer remains with the Group. Since the commission relates to acquiring a customer contract, as part of the adoption of IFRS 15, a recurring commission liability is recognized at the date on which the contract is acquired. The measurement reflects the total commission payable over the minimum contractual period or, if shorter, the expected life of the contract, together with the effect of the time value of money, where significant. Under previous accounting the recurring commissions were accrued for on a monthly basis. Amortization expense of external commissions capitalized under IFRS 15 is recognized in cost of sales, while that of internal commissions is recognized in sales and marketing costs. Commissions not capitalized under the 12-month practical expedient are also classified in the same manner. This is in line with the previous income statement presentation of the commission expense.



Notes to the consolidated financial statements


for the year ended March 31, 2019



Standards and amendments	Executive summary
IFRS 15 Revenue from Contracts with Customers (“IFRS 15”)	Significant financing: In respect of contracts for which the Group receives payment more than 12 months in advance, interest expense is accrued on the income received in advance liability. This results in the revenue being measured at a higher amount when it is recognized, compared to previous accounting. At April 1, 2018, the income received in advance liability (which is disclosed as ‘liabilities related to contracts with customers’) was R1.8 million higher than the balance at March 31, 2018. Fixed escalations: Fixed escalations are spread evenly over the contract period resulting in the related revenue being different to what is actually billed. In the earlier part of the contract, revenue will be higher than the amount billed, while in the latter part it will be lower. Previously, the Group recognized the increase in revenue due to fixed escalations only once the escalations were effective. A contract asset of R1.2 million was recognized on April 1, 2018, reflecting the amount by which revenue should have been higher under IFRS 15 in periods prior to March 31, 2018 as a result of straight-lining the fixed escalations.
IFRS 16 Leases (“IFRS 16”)	IFRS 16 replaces IAS 17 Leases and addresses the accounting and disclosures for leases. The standard provides a single lessee accounting model, requiring lessees to recognize right-of-use assets and lease liabilities for all leases, unless the lease term is 12 months or less or the underlying asset is a low-value asset. Lessors continue to classify leases as operating or finance, with IFRS 16’s approach to lessor accounting remaining substantially unchanged from its predecessor, IAS 17. IFRS 16 applies to annual reporting periods beginning on or after January 1, 2019, but can be early adopted. Given that the Group applied IFRS 15 from April 1, 2018, the Group decided to also adopt IFRS 16 from this date. The Group has chosen to apply the ‘simplified approach’ on adoption of IFRS 16 that includes certain relief related to the measurement of the right-of-use asset and the lease liability at April 1, 2018, rather than full retrospective application. Furthermore, the ‘simplified approach’ does not require a restatement of comparatives. The Group leases land and buildings, office equipment and vehicles which were previously treated as operating leases. The impact on the Group at April 1, 2018 was as follows: – Right-of-use asset with a net book value of R30.6 million; and – Lease liability (net of accruals/prepayments already recognized) of R32.6 million.



Notes to the consolidated financial statements


for the year ended March 31, 2019

Summary of the impact at April 1, 2018 of adopting IFRS 9, IFRS 15 and IFRS 16:



IFRS 9 assets	(R3.2 million)
Trade and other receivables	(R3.2 million)

IFRS 15 assets	R46.5 million
Capitalized commission assets	R45.3 million
Trade and other receivables ⁽¹⁾	R1.2 million

IFRS 16 assets	R29.9 million
Property, plant and equipment	R30.6 million
Trade and other receivables ⁽²⁾	(R0.7 million)

Total assets	R73.2 million

IFRS 15 liabilities	R8.7 million
Recurring commission liability (non-current)	R4.0 million
Trade and other payables ⁽³⁾	R4.7 million

IFRS 16 liabilities	R31.9 million
Capitalized lease liability (non-current)	R23.3 million
Capitalized lease liability (current)	R8.8 million
Trade and other payables ⁽²⁾	(R0.2 million)

Deferred tax liabilities	R7.9 million

Total liabilities	R48.5 million

Net increase in equity	R24.7 million

⁽¹⁾ Contract assets related to fixed escalations.

⁽²⁾ Reversal of lease prepayment and lease accruals under IAS 17 Leases. These have been reflected in the measurement

of the lease liability under IFRS 16.

⁽³⁾ Includes the current portion of additional recurring commission liability of R2.9 million and increase in liabilities related

to contracts with customers due to significant financing adjustments of R1.8 million .

Summary of the impact on fiscal 2019 results of adopting IFRS 9, IFRS 15 and IFRS 16:

The only material impact on the consolidated income statement for fiscal 2019 was a R7.9 million increase in finance costs. This was primarily as a result of IFRS 15 significant financing activity interest expense and IFRS 16 capitalized lease liability interest. The impact on every other line item in the condensed consolidated income statement for fiscal 2019 was not material.

2.1.1.2 New standards, amendments and interpretations not yet effective

Certain new accounting standards and interpretations have been published that are not mandatory for March 31, 2019 reporting periods and except for IFRS 16 have not been early adopted by the Group. Refer to note 2.1.1.1 above. Although none of these new accounting standards and interpretations that have not been early adopted by the Group are expected



Notes to the consolidated financial statements


for the year ended March 31, 2019

to have a significant effect on the consolidated financial statements of the Group, more information about the effect of IFRIC 23 is provided below:



Interpretation	Executive summary
IFRIC 23 Uncertainty over Income Tax Treatments (“IFRIC 23”)	IFRIC 23 is an interpretation that is effective for the Group from April 1, 2019, which provides guidance on the accounting for uncertain tax treatments. An uncertain tax treatment is a tax treatment for which there is uncertainty over whether the relevant tax authority will accept the tax treatment under tax law. Where such uncertainty exists and it is probable that the tax authority will accept the uncertain tax treatment in an entity’s income tax filings, IFRIC 23 requires the calculation of taxable profit or loss, tax bases, unused tax loss, unused tax credits or tax rates to be determined consistently with the tax treatment used or planned to be used in its income tax filings. When it is not considered probable; the uncertainty should be reflected using the most likely amount or the expected value depending on which method is expected to better predict the resolution of the uncertainty. IFRIC 23 can either be applied fully retrospectively (if possible without using hindsight) or retrospectively with a cumulative catch-up adjustment against opening retained earnings at the date of adoption. The Group has decided to apply the cumulative catch-up approach. Uncertain tax positions are currently accounted for by the Group using a weighted average estimate regardless of whether it is probable that the tax treatment will be accepted. With regard to the uncertain tax positions as at March 31, 2019, it was not considered probable that the tax authority would accept the tax treatment. Accordingly, it is not expected that the adoption of IFRIC 23 will have a significant impact on opening retained earnings at April 1, 2019.


2.2	Consolidation


(a)	Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

Inter-company transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement, statement of comprehensive income, statement of changes in equity and statement of financial position, respectively.


(b)	Business combinations

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:


•	fair values of the assets transferred;


•	liabilities incurred to the former owners of the acquired business;


•	equity interests issued by the Group;


•	fair value of any asset or liability resulting from a contingent consideration arrangement; and


•	fair value of any pre-existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.

Acquisition-related costs are expensed as incurred, except if related to the issue of equity securities, in which case these costs are also included in equity.



Notes to the consolidated financial statements


for the year ended March 31, 2019

The excess of the:


•	consideration transferred;


•	amount of any non-controlling interest in the acquired entity; and


•	acquisition-date fair value of any previous equity interest in the acquired entity

over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired, the difference is recognized directly in the income statement as a bargain purchase gain.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of acquisition. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. Unwinding of the interest element is recognized in the income statement.

Contingent consideration is measured at fair value on acquisition date and classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognized in the income statement.


(c)	Changes in ownership interests in subsidiaries without a change of control

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group, that is, transactions with the owners in their capacity as owners. For purchases from non-controlling interests, the difference between the fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity.

Gains or losses on disposals to non-controlling interests are also recorded in equity.


2.3	Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (“CODM”). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified collectively as the executive committee and the Chief Executive Officer who make strategic decisions.

Sales between segments are carried out at cost plus a margin.


2.4	Foreign currency translation


(a)	Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in South African Rand (“R”), which is the Group’s presentation currency.


(b)	Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognized in the income statement.

Foreign exchange gains/(losses) are classified as “Finance income/(cost) – net”.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.


(c)	Group companies

The results and financial position of foreign operations (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:


(i)	Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;



Notes to the consolidated financial statements


for the year ended March 31, 2019


(ii)	Income and expenses for each income statement presented are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions);


(iii)	All resulting exchange differences are recognized in other comprehensive income; and


(iv)	Equity items are measured at historical cost at the time of recording, translated at the rate on the date of the recording and are not retranslated to closing rates at reporting dates.

On consolidation, exchange differences arising from the translation of net investments in foreign operations are recognized in other comprehensive income. When a foreign operation is fully disposed of or sold (i.e. control is lost), exchange differences that were recorded in equity are recognized in the income statement as part of the gain or loss on sale. A repayment/capitalization of a net investment loan therefore does not result in any exchange differences being transferred from equity to the income statement unless it is part of a transaction resulting in a loss of control.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences are recognized in other comprehensive income.


2.5	Property, plant and equipment

Property, plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes all expenditure directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. Repairs and maintenance are charged to the income statement in the reporting period in which they are incurred.

The cost of in-vehicle devices installed in vehicles (including installation and shipping costs) as well as the cost of uninstalled in-vehicle devices, is capitalized as property, plant and equipment. The Group depreciates installed in-vehicle devices on a straight-line basis over their expected useful lives, commencing upon installation, whereas uninstalled in-vehicle devices are not depreciated until installed. The related depreciation expense is recorded as part of cost of sales in the income statement.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to reduce their cost to their residual values over their estimated useful lives, as follows:



Property: Buildings	50 years
Plant and equipment	3 – 20 years
Motor vehicles	3 – 7 years
Other: Furniture, fittings and equipment	2 – 10 years
Computer and radio equipment	3 – 7 years
In-vehicle devices installed	1 – 5 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (note 2.7).

Gains and losses on disposal of an asset are determined by comparing the proceeds with the carrying amount and are recognized within “Other income/(expenses) – net” in the income statement.

Right-of-use assets are included in property, plant and equipment on the statement of financial position, refer to note 2.25.1 for the accounting policy related to right-of-use assets.



Notes to the consolidated financial statements


for the year ended March 31, 2019


2.6	Intangible assets


(a)	Goodwill

Goodwill is not amortized but is tested annually for impairment, or more frequently if events or changes in circumstances indicate a potential impairment, and is carried at cost less accumulated impairment losses. Goodwill is allocated to cash-generating units (“CGUs”) for the purpose of impairment testing. The allocation is made to those CGUs or groups of CGUs that are expected to benefit from the business combination in which the goodwill arose. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level. The carrying amount of the CGU containing the goodwill is compared to the recoverable amount, which is the higher of value-in-use and the fair value less costs to sell. Impairment losses recognized as an expense in relation to goodwill are not subsequently reversed.


(b)	Patents and trademarks

Separately acquired patents and trademarks are shown at historical cost. Patents and trademarks acquired in a business combination are recognized at fair value at the acquisition date. Patents and trademarks have a finite useful life and are subsequently carried at cost less accumulated amortization and accumulated impairment losses. Amortization is calculated using the straight-line method to allocate the cost of patents and trademarks over their estimated useful lives ( three to 20 years ).


(c)	Customer relationships

Customer relationships acquired in a business combination are recognized at fair value at the acquisition date. Customer relationships have a finite useful life and are subsequently carried at cost less accumulated amortization and accumulated impairment losses. Amortization is calculated over the expected useful life of the customer relationship ( two to 15 years) and reflects the pattern in which future economic benefits of the customer relationship are expected to be consumed. The useful life principally reflects management’s view of the average economic life of the customer base and is assessed by reference to factors such as customer churn rates.


(d)	Computer software, technology, in-house software and product development costs

In-house software and product development costs that are directly attributable to the design, testing and development of identifiable and unique software and products, controlled by the Group, are recognized as intangible assets when the following criteria are met:


•	It is technically feasible to complete the software or product so that it will be available for use;


•	Management intends to complete the software or product and use or sell it;


•	There is an ability to use or sell the software or product;


•	It can be demonstrated how the software or product will generate probable future economic benefits;


•	Adequate technical, financial and other resources to complete the development and use or sell the software or product are available; and


•	The expenditure attributable to the software or product during its development can be reliably measured.

Directly attributable costs that are capitalized as part of the intangible assets include software and product development employee costs and an appropriate portion of relevant overheads.



Notes to the consolidated financial statements


for the year ended March 31, 2019

Costs, including annual licenses, associated with maintaining computer software programs are recognized as an expense as incurred.

Technology, in-house software and product development costs are capitalized on the basis of costs incurred to acquire and bring them into use. The recognized assets have a finite useful life and are subsequently carried at cost less accumulated amortization and accumulated impairment losses. In addition, they are amortized over their estimated useful lives ( one to 17 years ).


2.7	Impairment of non-financial assets

Assets that have an indefinite useful life, goodwill and intangible assets that are not ready to use are not subject to amortization but are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Assets that are subject to amortization or depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost to sell and value-in-use. In assessing the value-in-use, the estimated future cash flows are discounted to their present value using the pre-tax discount rate that reflects current market assessments on the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs, i.e. operating segments). Non-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at each reporting date.


2.8	Financial assets

The Group’s financial assets comprise:

• Trade and other receivables

• Restricted cash

• Cash and cash equivalents

All of the Group’s financial assets are held for the collection of the contractual cash flows and those cash flows represent solely payments of principal and interest. They are initially recognized at fair value (except for trade receivables) plus transaction costs that are directly attributable to the acquisition of the financial asset. Since the terms of payment are not more than 12 months, trade receivables are recognized initially at their fair value. Subsequent measurement is at amortized cost.

Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in the income statement and presented in “Other income/(expenses) – net”. Foreign exchange gains and losses are recognized directly in the income statement and presented in “Finance income/(costs) – net”.

Regular way purchases and sales of financial assets are recognized on the trade date (the date on which the Group commits to purchase or sell the asset). Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.


(a)	Trade receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business.

(b) Net cash and cash equivalents



Notes to the consolidated financial statements


for the year ended March 31, 2019

Restricted cash includes short-term deposits and amounts held that are not highly liquid and is accounted for at amortized cost.


2.8.1	Impairment of financial assets

For impairment of trade and other receivables, the Group applies the simplified approach permitted by IFRS 9, which requires lifetime expected credit losses to be recognized from initial recognition of the trade and other receivables, refer to note 10 for further details. Probability-weighted estimates of lifetime expected credit losses are determined for appropriate groupings of customers based on their credit characteristics. Historical losses are used as a starting point and adjusted to take account of current expectations of losses over the remaining life of the trade and other receivable.

Accounting policies applied until March 31, 2018

The Group has applied IFRS 9 retrospectively, but has elected not to restate comparative information. As a result, the comparative information provided continues to be accounted for in accordance with the Group’s previous accounting policy.

2.8.2 Classification

The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the end of the reporting period, which are classified as non-current assets. The Group’s loans and receivables comprise trade and other receivables, finance lease receivables, restricted cash and cash and cash equivalents in the statement of financial position.

2.8.3 Recognition and derecognition

2.8.4 Measurement

Financial assets are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss.

Loans and receivables

Loans and receivables are subsequently carried at amortized cost using the effective interest method, less any impairment losses.

2.8.5 Impairment of financial assets

The Group assesses, at the end of each reporting period, whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Loans and receivables



Notes to the consolidated financial statements


for the year ended March 31, 2019

financial reorganization and where observable data indicates that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For the loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred), discounted at the financial asset’s original effective interest rate. The asset’s carrying amount is reduced and the amount of the loss is recognized in the income statement. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Group may measure impairment on the basis of an instrument’s fair value using an observable market price.


2.9	Fair value

Fair value is determined in accordance with IFRS 13 Fair Value Measurement and is categorized as follows:


•	Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;


•	Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and


•	Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The carrying amounts for cash and cash equivalents, restricted cash, trade and other receivables (excluding pre-payments), trade and other payables (excluding leave pay) and the current portion of leases approximate fair value due to their short-term nature.


2.10	Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Group or the counterparty.


2.11	Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined on a first-in, first-out (“FIFO”), actual cost or weighted average cost basis, depending on the nature of the Group entity in which it is held. The cost of finished goods includes the cost of manufacturing as charged by third parties. It excludes borrowing costs. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale.


2.12	Stated capital

Ordinary shares are classified as equity. Incremental external costs directly attributable to the issue of new shares or the exercise of share options are shown in equity as a deduction, net of tax, from the proceeds.

Where any Group company purchases the Company’s equity instruments (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners of the parent as treasury shares until the shares are canceled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the parent.


2.13	Trade and other payables

Trade and other payables are initially recognized at fair value and are subsequently measured at amortized cost using the effective interest method.



Notes to the consolidated financial statements


for the year ended March 31, 2019


2.14	Non-current assets held for sale

An impairment loss is recognized for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognized for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognized. A gain or loss not previously recognized by the date of the sale of the non-current asset is recognized at the date of derecognition.

Non-current assets classified as held for sale are presented separately from the other assets in the statement of financial position.


2.15	Taxation

2.15.1 Current and deferred income taxes

The tax expense for the year comprises current and deferred tax. Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively. In addition, to the extent the tax deduction in respect of equity-settled share-based payments exceeds the cumulative share-based payment expense, the tax is recognized directly in equity.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company and its subsidiaries operate and generate taxable income.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Determining how much tax to recognize when an uncertain tax position exists requires judgement. The Group applies the measurement principle in IAS 12 Income Taxes, when measuring the amount of tax to recognize related to an uncertain tax position. Therefore, the Group measures uncertain tax positions based on a weighted average estimate, taking into account all of the tax uncertainties related to the tax position taken.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill; and neither are deferred tax liabilities nor deferred tax assets accounted for if they arise from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized.

Deferred tax (‘outside basis’ deferred tax) relating to temporary differences arising from investments in subsidiaries is considered as follows:


•	Deferred tax liabilities are recognized, except to the extent that the Group is able to control the timing of the reversal of the temporary differences, and it is probable that they will not reverse in the foreseeable future.


•	Deferred tax assets are recognized only to the extent that it is probable the temporary differences will reverse in the foreseeable future and there is sufficient taxable profit available against which the temporary differences can be utilized.

Temporary differences arising from investments in subsidiaries in the consolidated financial statements are different from those arising in the Company financial statements. This is because in the Company financial statements, an investment in a subsidiary is carried at cost; whereas the carrying amount in the consolidated financial statements is the consolidated net assets of the subsidiary.



Notes to the consolidated financial statements


for the year ended March 31, 2019

Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

2.15.2 Dividends tax

Dividend withholding tax is currently payable at a rate of 20% on dividends distributed to shareholders. This tax is not attributable to the Company but rather paid to the tax authorities on behalf of the shareholders through use of regulatory intermediaries, with only the net amount of the dividend being remitted to the shareholder.


2.16	Employee benefits


(a)	Short-term benefits

Remuneration to employees in respect of services rendered during a reporting period is recognized as an expense in that reporting period. Provision is made for accumulated leave and for short-term benefits when there is no realistic alternative other than to settle the liability, and there is a formal plan and the amounts to be paid are determined before the time of issuing the financial statements.


(b)	Defined contribution plan

The Group operates defined contribution plans. A defined contribution plan is one under which the Group pays a fixed percentage of employees’ remuneration as contributions into a separate fund, and the Group will have no further legal or constructive obligations to pay additional contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods. Contributions to defined contribution plans in respect of services rendered during a period are recognized as staff costs when they are due.


(c)	Short-term incentives – bonus plans

The Group recognizes a liability and an expense for bonuses based on the achievement of defined key performance criteria. An accrual is recognized where the Group is contractually obliged or where there is a past practice that has created a constructive obligation.


(d)	Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. Termination benefits exclude any benefits which are dependent on future service. The Group recognizes termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognizes costs for a restructuring that is within the scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets, and involves payment of termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.


2.20	Share-based payments

Equity-settled

The Group operates equity-settled share-based compensation plans, under which the entity receives services from employees as consideration for equity instruments of the Company. The equity instruments that may be granted in terms of the plans include share options, retention shares, performance shares and share appreciation rights, all of which entitle the holder to obtain shares in the Company. The fair value, determined at grant date, of the employee services received in exchange for the grant of equity instruments is recognized as an expense at Group level with a corresponding credit to equity. The total amount to be expensed is determined by reference to the grant date fair value of the equity instruments granted:


•	Including any market performance conditions;


•	Excluding the impact of any service and non-market performance vesting conditions (for example, remaining an employee of the entity over a specified time period); and



Notes to the consolidated financial statements


for the year ended March 31, 2019


•	Including the impact of any non-vesting conditions.

Non-market performance vesting conditions and service conditions are included in the assumptions about the number of equity instruments that are expected to vest. The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the Group revises its estimates of the number of equity instruments that are expected to vest based on the non-market vesting conditions and service conditions. It recognizes the impact of the revision to original estimates, if any, in the income statement, with a corresponding entry to equity.

When equity-settled instruments are settled, the Company may elect to issue new shares or use treasury shares to settle its resultant obligations. For share options, the proceeds received, net of any directly attributable transaction costs, are credited to stated capital (as there are no par value shares).

The grant by the Company of equity-settled instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution to those subsidiaries. The fair value of employee services received, measured by reference to the grant date fair value, is recognized over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity in the parent entity financial statements.

The Company has a recharge agreement with its South African subsidiaries, whereby the Company will recharge the relevant subsidiary an amount equal to the market value, at exercise date, of the shares issued to the participants of the plan upon exercise. A recharge asset is recognized in the parent entity financial statements from grant date of the equity-settled instruments for the expected recharge amount based on the proportion of the vesting period that has passed. The expected recharge amount reflects expected attrition and the current share price. The contra entry to the recharge asset is recognized against the relevant investment in subsidiary undertakings as it is considered a return of the afore-mentioned capital contribution. Once the carrying value of an investment in subsidiary undertakings has been reduced to nil, further recharges from that subsidiary are recognized in profit or loss as distributions.

The Group classifies awards issued with settlement alternatives as equity-settled when the Group holds the choice of settlement and there is no past practice of settling in cash. If the counterparty holds the choice of settlement, the award is classified as cash-settled.

Cash-settled

For cash-settled share-based payment transactions, the Group measures goods or services acquired and the liability incurred at the fair value of the liability. The liability and corresponding expense are recognized over the vesting period. Until the liability is settled, the Group shall remeasure the fair value of the liability at each reporting date and at the date of settlement, with any changes in fair value recognized in the income statement.


2.21	Provisions

Provisions are recognized when the Group has a present legal or constructive obligation as a result of a past event for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognized for future operating losses.

Provisions which are expected to be settled in a period greater than 12 months are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognized as an interest expense.

Provision for the estimated liability on all products under warranty is made on the basis of claims experience.

Provision for the estimated liability for maintenance costs is made on a per unit basis when the obligation to repair occurs.

Provision for the anticipated costs associated with the restoration of leasehold property (decommissioning provision) is based on the Group’s best estimate of those costs required to restore the property to its original condition.

Restructuring provisions are recognized when the Group has developed a detailed formal plan for restructuring and has raised a valid expectation that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring and is recorded in administration and other charges in the income statement.



Notes to the consolidated financial statements


for the year ended March 31, 2019


2.22	Revenue from contracts with customers

2.22.1 Recognition and measurement

Revenue is measured based on the consideration specified in a contract with a customer. The Group recognizes revenue when it transfers control over a good or a service to a customer.

The Group provides fleet and mobile asset management solutions to its customers, which comprise the provision of hardware and the rendering of services. Some customers obtain control of the hardware (where legal title transfers to the customer); while other customers do not (where legal title remains with the Group).


•	Hardware – when delivered to the customer


•	Installation – as the installation is done


•	Driver training and other services – at the contractual hourly/daily rate as the training/service is performed


•	Service (subscriptions) – over time as the service is provided

Revenue is shown net of discounts, value added tax, returns and after eliminating sales within the Group.

The Group distributes products to certain small fleet operators and consumers through distributors. Distributors act as agents and hardware revenue is only recognized when the distributor sells the hardware unit to the end customer. Once a unit is sold to a customer, the customer enters into a service agreement directly with the Group for the product. The obligation to supply the service and the credit risk rests with the Group. The service revenue is recognized when the service is rendered (i.e. on a monthly basis).

The Group also sells hardware to motor vehicle dealerships for fitment into their vehicle trading stock. These dealerships purchase the hardware from the Group and are considered principals because they obtain title to the hardware, bear the risks and rewards of ownership and accordingly control the hardware purchased. The buyer of the vehicle then enters into a service-only contract with the Group. Revenue is recognized upon sale of the hardware to the dealership and subscription revenue is recognized as the services are provided to the customer.

The Group distributes products to enterprise fleet customers through dealers. Dealers are considered principals in respect of the sale of hardware and revenue is recognized upon sale of the hardware unit to the dealer. Revenue from services is recognized as and when the service is provided to the dealers.

2.22.2 Costs incurred in obtaining a contract

Commissions incurred to acquire contracts are capitalized and amortized, unless the amortization period is 12 months or less. Under IFRS 15, the amortization expense reflects the settlement of the related performance obligations, which, depending on the specific contract, may include hardware, installation, driver training and/or other services. To the extent commission capitalized is commensurate, the commission attributable to service will be amortized over the minimum contractual period or, if shorter, the expected life of the contract. To the extent it is not commensurate, the commission capitalized that is attributable to service will be amortized over the expected life of the contract. Commission is considered commensurate with respect to a particular contract when equivalent/comparable commission is payable upon the extension or renewal of such a contract or upon the customer entering into a new contract. Typically, with regard to month-to-month contracts, commission payable is not considered commensurate for such contracts because no commission is payable as and when the customer extends each month by not giving notice. Accordingly, commission incurred on such contracts that is attributable to service is amortized over the expected life of the contract taking account of expected extensions/renewals.

Recurring commission is commission which is payable for each month the customer remains with the Group. Since the commission relates to acquiring a customer contract a recurring commission liability is recognized at the date on which the contract is acquired. The measurement reflects the total commission payable over the minimum contractual period or, if shorter, the expected life of the contract, together with the effect of the time value of money, where significant.



Notes to the consolidated financial statements


for the year ended March 31, 2019

2.22.3 Significant financing

2.22.4 Fixed escalations

Accounting policies applied until March 31, 2018

The Group has applied IFRS 15 using the modified retrospective cumulative catch-up approach. Under this approach, the Group recognized the transitional adjustments in retained earnings on April 1, 2018, without restating the comparative information. As a result, the comparative information provided continues to be accounted for in accordance with the Group’s previous accounting policy.

Revenue is measured at the fair value of the consideration received or receivable for the sale of goods or services in the ordinary course of the Group’s activities. Revenue mainly includes amounts earned on the sale of hardware units, subscription service sales to customers and installation revenue. Revenue is shown net of discounts, value added tax, returns and after eliminating sales within the Group.

The Group offers certain arrangements whereby the customer can purchase a combination of the products and services as referred to above. Where such multiple element arrangements exist, the amount of revenue allocated to each element is based on the relative fair values of the various elements offered in the arrangement. When applying the relative fair value approach, the fair values of each element are determined based on the current market price of each of the elements when sold separately.

The Group recognizes revenue when the amount of revenue can be measured reliably and it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group’s activities, as outlined below. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Invoicing for the various products and services, when sold separately or as part of a multiple element revenue arrangement, occurs based on the specific contractual terms and conditions.

The Group also sells hardware to motor vehicle dealerships for fitment into their vehicle trading stock. These dealerships purchase the hardware from the Group and are considered principals because they obtain title to the hardware and bear the risks and rewards of ownership. The buyer of the vehicle then enters into a service-only contract with the Group. Revenue is recognized upon sale of the hardware to the dealership and subscription revenue is recognized as the services are provided to the customer.

The Group distributes products to enterprise fleet customers through dealers. Dealers are considered principals in respect of the sale of hardware and revenue is recognized upon sale of the hardware unit to the dealer. Similar to the relationship with consumers and small fleet customers originated through distributors, the responsibility for providing services rests with the Group and revenue is recognized as the service is rendered.


(a)	Subscription revenue

Subscription revenue is recognized over the term of the agreement as it is earned. When contracted services are performed through a number of repetitive acts over the contract period, revenue is recognized on a straight-line basis over the contract period.



Notes to the consolidated financial statements


for the year ended March 31, 2019


(b)	Hardware sales

All hardware has value on a standalone basis. Revenue from hardware sales is recognized once the risks and rewards of ownership have transferred.


(c)	Driver training and other services

Revenue is recognized at the contractual hourly/daily rate as the training is performed.


(d)	Rental revenue

Where hardware is provided as part of a service contract the risk and rewards of ownership do not transfer and service revenue from the rental unit is recognized over the period of the service and included in subscription revenue.


(e)	Installation revenue

Revenue earned from the installation of hardware in customer vehicles is recognized once the installation has been completed.

(f) Repair services

Revenue in respect of repair services, which forms part of the monthly subscription, is recognized on a monthly basis over the period of the service arrangement.


2.23	Interest income

Interest income is recognized on a time-proportion basis with reference to the principal amount receivable and the effective interest rate applicable.


2.24	Dividend income

Dividend income is recognized when the right to receive payment is established.


2.25	Leases

2.25.1 The Group as a lessee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is reduced by impairment losses (refer to note 2.7), if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the lessee's incremental borrowing rate. Generally the Group uses the lessee's incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:


•	Fixed payments, including in-substance fixed payments;


•	Variable lease payments that depend on an index or a rate, initially measured using the index or rate at the commencement date;


•	Amounts expected to be payable under a residual value guarantee; and


•	The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.



Notes to the consolidated financial statements


for the year ended March 31, 2019

the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.

The Group presents right-of-use assets in property, plant and equipment and lease liabilities in capitalized lease liabilities on the statement of financial position.

2.25.2 Short-term leases and leases of low-value assets

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. The Group regards items that are below $5 000 to be low value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Accounting policies applied until March 31, 2018

The Group has applied IFRS 16 using the simplified approach. Under this approach, the Group recognized the transitional adjustments in retained earnings on April 1, 2018, without restating the comparative information. As a result, the comparative information provided continues to be accounted for in accordance with the group’s previous accounting policy.

2.25.3 The Group as a lessee

Payments made under operating leases are charged to the income statement on a straight-line basis over the term of the lease.


2.26	Dividend distribution

Any dividend distribution to the Company’s shareholders is recognized as a liability in the financial statements in the period in which the dividends are approved by the Company’s Board of Directors.


3.	Financial risk management


3.1	Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk, and price risk), credit risk, and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets as it relates to financial risks and seeks to minimize potential adverse effects on the Group’s financial performance. Risk management is carried out under policies approved by the Board of Directors. The Board has provided approved formal policies covering specific areas, such as foreign exchange risk as well as cash management and banking facilities.


(a)	Market risk


(i)	Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currencies, primarily with respect to the United States Dollar, the South African Rand, the Euro, the Australian Dollar, the Brazilian Real and the British Pound.

Foreign exchange risk arises when future commercial transactions or recognized assets and liabilities and net investments in foreign operations are denominated in a currency that is not the entity’s functional currency.

The Group has implemented a foreign currency hedging policy to limit the Group’s exposure to fluctuations in foreign currencies. The foreign currency policy reduces exchange rate risk on certain recognized assets and liabilities based on economic hedging principles as opposed to using derivative financial instruments.

The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the assets of the Group’s foreign operations is reduced as a result of assets and liabilities being denominated in the same foreign currencies.

As a result of our monetary assets being held in multiple currencies, the Group has significant foreign currency exposure.



Notes to the consolidated financial statements


for the year ended March 31, 2019

A financial risk sensitivity analysis is presented in note 37.


(ii)	Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates.

The Group’s cash flow interest rate risk arises from restricted cash, cash and cash equivalents and the bank overdraft. Bank overdrafts issued at variable rates expose the Group to cash flow interest rate risk, which is partly offset by financial assets held at variable rates (i.e. cash and cash equivalents and restricted cash). At March 31, 2019 and 2018 the Group had no interest-bearing borrowings except capitalized lease liabilities.

The Group is not exposed to fair value interest rate risk as the Group does not have any fixed rate interest-bearing financial instruments carried at fair value.

Interest rates are constantly monitored and appropriate steps are taken to ensure that the Group’s exposure to interest rate fluctuations is limited. This includes obtaining approval from the Board for all changes to and new borrowing facilities entered into. Refer to note 37 for an interest rate risk sensitivity analysis.


(iii)	Price risk

Currently the Group does not have significant price risk. The Group is not exposed to commodity price risk.


(b)	Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation and cause the Group to incur a financial loss. Credit risk arises from restricted cash, cash and cash equivalents as well as credit exposures to customers. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position, net of impairment losses where relevant.

Credit risk relating to accounts receivable balances is managed by each local entity which is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. The Group has a policy in place governing the allowance for credit losses. Refer to note 10 for further discussion on the Group's credit risk management.

Cash investments are only placed with reputable financial institutions rated B and above (note 12). All changes in or new banking arrangements entered into are in line with the Board’s approval framework. Refer to note 10 for further disclosure on credit risk.


(c)	Liquidity risk

Liquidity risk is the risk that there will be insufficient funds available to settle obligations when they are due.

The Group has limited liquidity risk due to surplus cash balances and the recurring nature of its income, which generates strong cash inflows. The level of cash balances in the Group is monitored weekly and cash generated from operations is reviewed against planned cash flows on a monthly basis. In addition, working capital reviews are performed monthly.

Surplus cash is invested in interest-bearing current accounts and time deposits that are expected to readily generate cash inflows for managing liquidity risk.

In addition, the Group maintains headroom on its undrawn borrowing facilities to ensure that the Group does not breach borrowing limits on its borrowing facilities. Refer to note 38 for further disclosure on liquidity risk.


3.2	Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern while enhancing the returns for shareholders and ensuring benefits for other stakeholders. The Board of Directors monitors capital by reviewing the net cash position. The Company currently has no long-term borrowings and none of its overdraft facilities, as set out in note 15, were subject to any financial covenants during fiscal 2019 and fiscal 2018.

In order to maintain the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debt, where applicable.



Notes to the consolidated financial statements


for the year ended March 31, 2019


4.	Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have significant risk of causing a material adjustment to the financial position and financial performance of the Group within the next 12 months are outlined below:


(a)	Maintenance provision

The Group, in some instances, offers maintenance services as part of its revenue contracts. Management estimates the related provision for maintenance costs per vehicle when the obligation to repair occurs.


(b)	Current and deferred income taxes

The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes. Where applicable tax legislation is subject to interpretation, management makes assessments, based on expert tax advice, of the relevant tax that is likely to be paid and provides accordingly. When the final outcome is determined and there is a difference, this is recognized in the period in which the final outcome is determined.

Determining how much tax to recognize when an uncertain tax position exists requires judgement. The Group applies the measurement principle in IAS 12 Income Taxes , when measuring the amount of tax to recognize related to an uncertain tax position. Therefore, the Group measures uncertain tax positions based on a weighted average estimate, taking into account all of the tax uncertainties related to the tax position taken.

The Company's interests in subsidiaries include certain loans denominated in foreign currencies which are repayable by agreement of both parties. Realization of such loans will result in taxable foreign exchange differences in accordance with prevailing legislation in South Africa. Although the Company controls the timing of the reversal of these temporary differences, given the volatility of the South African Rand and based on the Group's current assessment, it is not considered probable that the temporary difference relating to a loan between the Company and a South Africa subsidiary will not reverse in the foreseeable future. Hence, a deferred tax liability has been recognized in respect of these temporary differences (note 18).

The Group applies judgement when recognizing deferred tax assets in respect of tax losses. Deferred tax assets in respect of tax losses are recognized for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilized. In determining the level of future taxable profit that will be available the Group considers both an entity's historical profitability and estimates of future profitability and recognizes deferred tax for the whole or the part of the temporary difference that is more likely than not to be recovered. Where an entity has incurred historical losses, deferred tax assets are only recognized when the particular entity has shown a reasonable period of starting to return to profitability.


(c)	Impairment estimates

The Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy stated in note 2.7. Other assets are tested for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable.

For the purposes of assessing impairment, assets are grouped into CGUs at the lowest levels for which there are separately identifiable cash flows. The recoverable amount is based on the CGU’s value-in-use. These calculations require the use of estimates (see notes 6 and 7).


(d)	Customer relationships

The useful life applied principally reflects management’s view of the average economic life of the customer base and is assessed by reference to factors such as customer churn rates. An increase in churn rates may lead to a reduction in the estimated useful life.


(e)	Product development cost

Product development cost directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recorded as intangible assets by the Group when the criteria in note 2.6 have been met. The assessment as to when these criteria have been met is subjective and capitalization has been based on management’s best judgement of facts and circumstances in existence at year-end.



Notes to the consolidated financial statements


for the year ended March 31, 2019

The useful lives of development costs capitalized are reviewed at least on an annual basis. The useful life estimates are based on historical experience with similar assets as well as anticipation of future events such as technological changes, which may impact the useful life. The residual values of product development costs are estimated to be zero.


(f)	Provision for impairment of trade receivables

The Group applies the simplified approach permitted by IFRS 9, which requires lifetime expected losses to be recognized from initial recognition of the trade receivables. Probability-weighted estimates of lifetime credit losses are determined for appropriate groupings of customers based on their credit characteristics. Historical losses are used as a starting point and adjusted to take account of current expectations of losses over the remaining life of the trade receivable. Changes to the expected credit losses provided for may be required if the financial condition of the Group’s customers improves or deteriorates. An improvement in financial condition may result in lower actual write-offs. Historically, changes to the estimate of losses have not been material to the Group’s financial position and results.

(h) Allocation between in-vehicle devices and inventory

The allocation between in-vehicle devices and inventory reflects the Group’s estimates of how units are expected to be sold, thereby it is a significant area of judgement for the Group.

(i) Probability on the valuation of performance shares



Notes to the consolidated financial statements


for the year ended March 31, 2019

5. Segment information

Our operating segments are based on the geographical location of our Regional Sales Offices (“RSOs”) and also include our Central Services Organization (“CSO”). CSO is our central services organization that wholesales our products and services to our RSOs who, in turn, interface with our end-customers, distributors and dealers. CSO is also responsible for the development of our hardware and software platforms and provides common marketing, product management, technical and distribution support to each of our other operating segments.

The chief operating decision maker (“CODM”) reviews the segment results on an integral margin basis as defined by management. The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified collectively as the executive committee and the Chief Executive Officer who make strategic decisions. In respect of revenue, this method of measurement entails reviewing the segmental results based on external revenue only. In respect of Adjusted EBITDA (the profit measure identified by the CODM), the margin generated by CSO, net of any unrealized intercompany profit, is allocated to the geographic region where the external revenue is recorded by our RSOs. The costs remaining in CSO relate mainly to research and development of hardware and software platforms, common marketing, product management and technical and distribution support to each of the RSOs. CSO is a reportable segment of the Group because it produces discrete financial information which is reviewed by the CODM and has the ability to generate external revenues.

Each RSO ’ s results therefore reflect the external revenue earned, as well as the Adjusted EBITDA earned (or loss incurred) by each operating segment before the remaining CSO and corporate costs allocations. Segment assets are not disclosed as segment information is not reviewed on such a basis by the CODM.

The Group’s CODM assesses the performance of the operating segments based on Adjusted EBITDA. Adjusted EBITDA is defined as the profit for the period before income taxes, net finance income/(costs) including foreign exchange gains/(losses), depreciation of property, plant and equipment including capitalized customer in-vehicle devices and right-of-use assets, amortization of intangible assets including capitalized in-house development costs and intangible assets identified as part of a business combination, share – based compensation costs, restructuring costs, profits/(losses) on the disposal or impairments of assets or subsidiaries, insurance reimbursements relating to impaired assets and certain litigation costs.

The segment information provided to the Group’s CODM for the reportable segments for the year ended March 31, 2019 is as follows:



	Subscription revenue R'000	Hardware and other revenue R'000	Total revenue R’000	Adjusted EBITDA R’000

Regional Sales Offices
Africa	969,377	75,029	1,044,406	484,497
Europe	140,539	69,218	209,757	67,796
Americas	292,577	36,386	328,963	152,575
Middle East and Australasia	226,020	97,474	323,494	145,887
Brazil	63,987	4,421	68,408	27,598
Total Regional Sales Offices	1,692,500	282,528	1,975,028	878,353
Central Services Organization	745	90	835	(156,894	)
Total Segment Results	1,693,245	282,618	1,975,863	721,459
Corporate and consolidation entries	—	—	—	(118,674	)
Total	1,693,245	282,618	1,975,863	602,785



Notes to the consolidated financial statements


for the year ended March 31, 2019

The segment information provided to the Group’s CODM for the reportable segments for the year ended March 31, 2018 is as follows:



	Subscription revenue R'000	Hardware and other revenue R'000	Total revenue R’000	Adjusted EBITDA R’000

Regional Sales Offices
Africa	872,646	84,832	957,478	440,900
Europe	115,199	78,061	193,260	65,326
Americas	194,890	32,715	227,605	79,127
Middle East and Australasia	200,241	78,424	278,665	106,835
Brazil	50,735	3,695	54,430	16,747
Total Regional Sales Offices	1,433,711	277,727	1,711,438	708,935
Central Services Organization	904	140	1,044	(149,878	)
Total Segment Results	1,434,615	277,867	1,712,482	559,057
Corporate and consolidation entries	—	—	—	(117,191	)
Total	1,434,615	277,867	1,712,482	441,866

The segment information provided to the Group’s CODM for the reportable segments for the year ended March 31, 2017 is as follows:



	Subscription revenue R'000	Hardware and other revenue R'000	Total revenue R’000	Adjusted EBITDA R’000

Regional Sales Offices
Africa	772,224	86,945	859,169	344,077
Europe	113,223	64,108	177,331	52,369
Americas	121,462	38,957	160,419	26,804
Middle East and Australasia	199,474	104,976	304,450	91,149
Brazil	32,653	5,158	37,811	9,394
Total Regional Sales Offices	1,239,036	300,144	1,539,180	523,793
Central Services Organization	878	—	878	(127,828	)
Total Segment Results	1,239,914	300,144	1,540,058	395,965
Corporate and consolidation entries	—	—	—	(94,352	)
Total	1,239,914	300,144	1,540,058	301,613

The revenue from external parties reported to the Group’s CODM is measured in a manner consistent with that in the income statement. There are no material non-cash items provided to the Group’s CODM other than disclosed in the reconciliation of profit for the year to Adjusted EBITDA below.

During fiscal 2019, impairments to capitalized product development costs of R0.9 million within the CSO segment was recognized in profit or loss. During fiscal 2018, impairments to capitalized product development costs of R2.3 million within the Africa segment and R0.4 million within the CSO segment were recognized in profit or loss. During fiscal 2017, impairments to capitalized product development costs of R2.6 million within the Africa segment and R0.5 million within the CSO segment were recognized in profit or loss. During fiscal 2017, the Brazil segment recognized a reversal of impairment in respect of in-vehicle devices of R0.8 million in profit or loss.

Operating segments are reported in a manner consistent with the internal reporting provided to the Group’s CODM.



Notes to the consolidated financial statements


for the year ended March 31, 2019

A reconciliation of Adjusted EBITDA to profit for the year is disclosed below.



	March 31, 2019		March 31, 2018		March 31, 2017
	R’000		R’000		R’000

Reconciliation of Adjusted EBITDA to profit for the year
Adjusted EBITDA	602,785		441,866		301,613
Add:
Net profit on sale of property, plant and equipment and intangible assets	586		1,264		—
Reversal of impairment ⁽¹⁾	—		—		791
Decrease in restructuring cost provision	—		741		—
Less:
Depreciation ⁽²⁾	(183,478	)	(151,945	)	(98,508	)
Amortization ⁽³⁾	(64,877	)	(63,926	)	(44,734	)
Impairment ⁽⁴⁾	(930	)	(2,696	)	(3,166	)
Share-based compensation costs	(12,140	)	(10,352	)	(3,311	)
Equity-settled share-based compensation costs	(12,140	)	(9,000	)	(2,247	)
Cash-settled share-based compensation costs	—		(1,352	)	(1,064	)
Net loss on sale of property, plant and equipment and intangible assets	—		—		(262	)
Increase in restructuring cost provision ⁽⁵⁾	(3,034	)	—		(14,561	)
Operating profit	338,912		214,952		137,862
Add: Finance income/(costs) – net	1,386		(69	)	10,391
Less: Taxation	(137,962	)	(33,690	)	(26,812	)
Profit for the year	202,336		181,193		121,441


(1)	The reversal of impairment of R0.8 million in fiscal 2017 related to in-vehicle devices in the Brazil segment.


(2)	Includes depreciation of property, plant and equipment (including in-vehicle devices and right-of-use assets). The adoption of IFRS 16 during the year resulted in depreciation of right-of-use assets of R11.7 million being recorded in fiscal 2019.


(3)	Includes amortization of intangible assets (including capitalized in-house development costs and intangible assets identified as part of a business combination).

(4)

In fiscal 2019, asset impairments relate to the impairment of capitalized product development costs of R0.9 million in the CSO segment. In fiscal 2018, asset impairments related to the impairment of capitalized product development costs of R2.3 million in the Africa segment and R0.4 million in the CSO segment. In fiscal 2017, asset impairments related to the impairment of capitalized product development costs of R2.6 million in the Africa segment and R0.5 million in the CSO segment.


⁽⁵⁾	Restructuring costs incurred in fiscal 2019 are described in note 19.

Revenue generated by the South African-based operating segments of the Group (i.e. Central Services Organization and Africa, excluding East Africa) to its local and foreign-based customers amounted to R1,025.7 million (2018: R931.7 million , 2017: R836.2 million ) for fiscal 2019, whereas revenue generated by the foreign-based segments of the Group (i.e. Europe, Americas, East Africa, Middle East, Brazil and Australasia) to its local and foreign-based customers amounted to R950.2 million (2018: R780.8 million , 2017: R703.9 million ).

Total non-current assets other than financial instruments, capitalized commission assets and deferred tax assets located in South Africa is R685.8 million (2018: R615.9 million , 2017: R621.0 million ), and the total of these non-current assets located in foreign countries is R325.7 million (2018: R260.8 million , 2017: R174.6 million ). R257.8 million (2018: R208.5 million , 2017: R119.7 million ) of these foreign non-current assets were located in Americas segment. These assets are allocated



Notes to the consolidated financial statements


for the year ended March 31, 2019

based on the physical location of the asset and are stated before any inter-company eliminations. The numbers above exclude assets classified as held for sale disclosed in note 6.



Notes to the annual financial statements


for the year ended March 31, 2019

6. Property, plant and equipment



	Property R’000		Plant, equipment, vehicles and other R’000		Computer and radio equipment R’000		In-vehicle devices uninstalled R’000		In-vehicle devices installed R’000		Total R’000

At April 1, 2017
Cost	22,288		48,186		58,048		55,470		333,057		517,049
Accumulated depreciation and impairments	(4,777	)	(33,315	)	(45,728	)	—		(139,109	)	(222,929	)
Net book amount	17,511		14,871		12,320		55,470		193,948		294,120

Year ended March 31, 2018
Opening net book amount	17,511		14,871		12,320		55,470		193,948		294,120
Additions	—		4,090		4,630		229,528		—		238,248
Transfers	—		(613	)	613		(232,050	)	232,050		—
Assets classified as held for sale	(17,058	)	—		—		—		—		(17,058	)
Impairment (notes 5, 24, 30, 32.2)	—		(6	)	(3	)	—		—		(9	)
Disposals*	—		(606	)	(165	)	—		(1,165	)	(1,936	)
Depreciation charge (notes 5, 24, 32.2)	(453	)	(5,237	)	(6,772	)	—		(139,483	)	(151,945	)
Currency translation differences	—		(280	)	(253	)	(2,777	)	(24,072	)	(27,382	)
– Cost	—		(1,103	)	(985	)	(2,777	)	(33,762	)	(38,627	)
– Accumulated depreciation and impairments	—		823		732		—		9,690		11,245
Closing net book amount	—		12,219		10,370		50,171		261,278		334,038

At March 31, 2018
Cost	—		47,066		46,735		50,171		470,545		614,517
Accumulated depreciation and impairments	—		(34,847	)	(36,365	)	—		(209,267	)	(280,479	)
Net book amount	—		12,219		10,370		50,171		261,278		334,038



Notes to the annual financial statements


for the year ended March 31, 2019



	Property R’000		Plant, equipment, vehicles and other R’000		Computer and radio equipment R’000		In-vehicle devices uninstalled R’000		In-vehicle devices installed R’000		Total R’000

Year ended March 31, 2019

Opening net book amount	—		12,219		10,370		50,171		261,278		334,038
Adjustment on initial application of IFRS 16	29,273		1,295		—		—		—		30,568
Additions	14,674		6,068		6,474		196,810		—		224,026
Transfers	—		(12	)	12		(175,473	)	175,473		—
Disposals**	—		(223	)	(58	)	—		(1,355	)	(1,636	)
Depreciation charge (notes 5, 24, 32.2)	(10,947	)	(5,438	)	(5,418	)	—		(161,675	)	(183,478	)
Currency translation differences	5,668		432		356		5,005		42,467		53,928
– Cost	8,298		2,315		1,911		5,005		62,003		79,532
– Accumulated depreciation and impairments	(2,630	)	(1,883	)	(1,555	)	—		(19,536	)	(25,604	)
Closing net book amount	38,668		14,341		11,736		76,513		316,188		457,446



Owned assets
Year ended March 31, 2019
Opening net book amount	—		12,219		10,370		50,171		261,278		334,038
Additions	—		5,626		6,474		196,810		—		208,910
Transfers	—		(12	)	12		(175,473	)	175,473		—
Disposals**	—		(223	)	(58	)	—		(1,355	)	(1,636	)
Depreciation charge (notes 5, 24, 32.2)	—		(4,662	)	(5,418	)	—		(161,675	)	(171,755	)
Currency translation differences	—		267		356		5,005		42,467		48,095
– Cost	—		2,016		1,911		5,005		62,003		70,935
– Accumulated depreciation and impairments	—		(1,749	)	(1,555	)	—		(19,536	)	(22,840	)
Net book amount	—		13,215		11,736		76,513		316,188		417,652

Cost	—		50,262		51,853		76,513		654,453		833,081
Accumulated depreciation and impairments	—		(37,047	)	(40,117	)	—		(338,265	)	(415,429	)
Net book amount	—		13,215		11,736		76,513		316,188		417,652



Notes to the annual financial statements


for the year ended March 31, 2019



	Property R’000		Plant, equipment, vehicles and other R’000		Computer and radio equipment R’000	In-vehicle devices uninstalled R’000	In-vehicle devices installed R’000	Total R’000
Right-of-use assets
Year ended March 31, 2019
Opening net book amount	—		—		—	—	—	—
Adjustment on initial application of IFRS 16	29,273		1,295		—	—	—	30,568
Additions	14,674		442		—	—	—	15,116
Depreciation charge (notes 5, 24, 32.2)	(10,947	)	(776	)	—	—	—	(11,723	)
Currency translation differences	5,668		165		—	—	—	5,833
– Cost	8,298		22		—	—	—	8,320
– Accumulated depreciation and impairments	(2,630	)	143		—	—	—	(2,487	)
Net book amount	38,668		1,126		—	—	—	39,794
Cost	66,502		2,745		—	—	—	69,247
Accumulated depreciation and impairments	(27,834	)	(1,619	)	—	—	—	(29,453	)
Net book amount	38,668		1,126		—	—	—	39,794

Property, plant and equipment comprises owned and leased assets. The Group leases many assets including land and buildings, vehicles, machinery and IT equipment.

* The historical costs and accumulated depreciation on fully depreciated assets which were retired and removed from the accounting records during fiscal 2018

included R1.2 million relating to plant, equipment, vehicles and other, R14.7 million relating to computer and radio equipment and R63.9 million relating to

in-vehicle devices installed.

** The historical costs and accumulated depreciation on fully depreciated assets which were retired and removed from the accounting records during fiscal 2019

included R1.4 million relating to plant, equipment, vehicles and other, R0.2 million relating to computer and radio equipment and R55.6 million relating to

in-vehicle devices installed.

Additions of R224.0 million made in fiscal 2019 include non-cash additions of uninstalled in-vehicle devices of R9.0 million relating to the Central Services Organization segment and Americas segment, right-of-use of assets of R15.1 million and R0.5 million relating to other asset categories. R1.4 million was paid in the current fiscal year which related to uninstalled in-vehicle devices which were accrued and accounted for as non-cash additions in fiscal 2018 by the Central Services Organization. Additions of R238.2 million made in fiscal 2018 included non-cash additions of uninstalled in-vehicle devices of R1.4 million relating to the Central Services Organization segment. R1.9 million was paid in fiscal 2018 which related to uninstalled in-vehicle devices which were accrued and accounted for as non-cash additions in fiscal 2017 by the Central Services Organization.



Notes to the annual financial statements


for the year ended March 31, 2019

Depreciation expense of R162.9 million (2018: R141.6 million , 2017: R85.8 million ) has been charged to cost of sales. The remainder has been included in administration and other charges in the income statement.

Assets classified as held for sale

The assets classified as held for sale relate to the property held by the CSO segment. No impairment loss was recognized on reclassification of the property as held for sale as the fair value (estimated based on the recent market prices of similar properties in similar locations) less costs to sell is higher than the carrying amount. MiX Telematics has concluded agreements pertaining to a Broad-Based Black Economic Empowerment (“B-BBEE”) transaction in which the sale of this property is included, refer below for additional information. The transaction is subject to certain conditions precedent which were fulfilled on May 17, 2019. The transaction is expected to be concluded during fiscal 2020.

B-BBEE Property Transaction

MiX has concluded a B-BBEE transaction which involves the following:

•

Acquiring Erf 1335 Vorna Valley Extension 21 Township, Registration Division IR, Province of Gauteng situated in Midrand (“the Midrand property”) for R44.0 million from TPF Investments (Pty) Ltd (“TPF”), which Midrand property is currently being leased from TPF. TPF is an associate of Robin Frew, the non-executive Chairperson of MiX Telematics and therefore the acquisition is a small related party transaction under the JSE Listings Requirements.


•	In a back-to-back transaction, selling the Midrand property for R44.0 million , as well as the Group’s property in Stellenbosch currently classified as held for sale (discussed above) for R23.5 million to Black Industrialists Group Property Management Company (Pty) Ltd (“BIG”). The Group will also provide loan funding to BIG for R9.0 million .


•	Leasing both properties from BIG for an initial period of 5 years with an option to renew the lease for a further 5 years period.



	March 31, 2019 R’000	March 31, 2018 R’000

Non-current assets
Property, plant and equipment	457,446	334,038
Current assets
Assets classified as held for sale	17,058	17,058
Total property, plant and equipment	474,504	351,096



Notes to the consolidated financial statements


for the year ended March 31, 2019

7. Intangible assets



	Goodwill R’000		Patents and trademarks R’000		Customer relationships R’000		Product development costs R’000		Computer software, technology, in-house software and other R’000		Total R’000

At April 1, 2017
Cost	618,910		3,155		40,165		265,637		130,131		1,057,998
Accumulated amortization and impairments	—		(2,229	)	(16,942	)	(89,848	)	(67,079	)	(176,098	)
Net book amount	618,910		926		23,223		175,789		63,052		881,900

Year ended March 31, 2018
Opening net book amount	618,910		926		23,223		175,789		63,052		881,900
Additions	—		31		5,300		65,342		23,965		94,638
Transfers	—		—		—		(365	)	365		—
Disposals*	—		—		—		(1,188	)	—		(1,188	)
Amortization charge (notes 24 and 32.2)	—		(513	)	(7,516	)	(37,639	)	(18,258	)	(63,926	)
Impairment loss (notes 5, 24, 30 and 32.2)	—		—		—		(2,687	)	—		(2,687	)
Currency translation differences	(7,266	)	—		(356	)	(235	)	(2,353	)	(10,210	)
– Cost	(7,266	)	—		(475	)	(265	)	(4,760	)	(12,766	)
– Accumulated amortization and impairments	—		—		119		30		2,407		2,556
Closing net book amount	611,644		444		20,651		199,017		66,771		898,527

At March 31, 2018
Cost	611,644		1,031		44,990		312,338		145,387		1,115,390
Accumulated amortization and impairments	—		(587	)	(24,339	)	(113,321	)	(78,616	)	(216,863	)
Net book amount	611,644		444		20,651		199,017		66,771		898,527

Year ended March 31, 2019
Opening net book amount	611,644		444		20,651		199,017		66,771		898,527
Additions	—		213		—		69,912		23,012		93,137
Disposals**	—		—		—		—		—		—
Amortization charge (notes 24 and 32.2)	—		(119	)	(6,797	)	(37,318	)	(20,643	)	(64,877	)
Impairment loss (notes 5, 24, 30 and 32.2)	—		—		—		(930	)	—		(930	)
Currency translation differences	25,587		—		(9	)	229		3,982		29,789
– Cost	25,587		—		1,053		374		7,737		34,751
– Accumulated amortization and impairments	—		—		(1,062	)	(145	)	(3,755	)	(4,962	)
Closing net book amount	637,231		538		13,845		230,910		73,122		955,646

At March 31, 2019
Cost	637,231		1,244		46,043		365,665		166,832		1,217,015
Accumulated amortization and impairments	—		(706	)	(32,198	)	(134,755	)	(93,710	)	(261,369	)
Net book amount	637,231		538		13,845		230,910		73,122		955,646



Notes to the consolidated financial statements


for the year ended March 31, 2019

* The historical costs and accumulated amortization on fully depreciated assets which were retired and removed from the accounting records during the 2018 year included R2.2 million relating to patents and trademarks, R13.9 million relating to product development costs and R4.3 million relating to computer software, technology, in-house software and other.

** The historical costs and accumulated amortization on fully depreciated assets which were retired and removed from the accounting records during the 2019 year included R17.0 million relating to product development costs and R9.3 million relating to computer software, technology, in-house software and other.

In fiscal 2019, staff costs of R52.2 million (2018: R46.4 million , 2017: R54.6 million ) have been capitalized to product development costs. In fiscal 2019, no staff costs were capitalized to in-house software (2018: Nil , 2017: R1.6 million ).

Additions of R93.1 million were made during fiscal 2019 which includes non-cash additions of R2.3 million relating to capitalized development costs and R5.2 million relating to computer software. Additions of R94.6 million were made during 2018. In addition, R1.9 million relating to capitalized development costs and R3.1 million related to computer software, technology, in-house software and other intangibles were paid in fiscal 2018 which were accrued and accounted for as non-cash additions in 2017.

Amortization expense of R45.7 million (2018: R44.1 million , 2017: R30.1 million ) has been charged to cost of sales. The remainder has been included in administration and other charges in the income statement.

During fiscal 2019, impairment to capitalized product development costs of R0.9 million within the CSO segment was recognized in profit or loss. During fiscal 2018, impairments to capitalized product development costs of R0.4 million within the CSO segment and R2.3 million within the Africa segment were recognized in profit or loss. The impairment losses have been included in administration and other charges in the income statement.

Included in product development costs is product development assets in progress with a net book amount of R36.1 million (2018: R32.1 million , 2017: R51.1 million ). Computer software, technology, in-house software and other included internally generated in-house software in progress of R10.3 million (2018: Nil , 2017: R42.8 million ).

Impairment tests for goodwill

Goodwill is allocated to the Group’s CGUs identified within its operating segments. It should be noted that, as disclosed in note 5, while CSO is reported as a reportable segment excluding any inter-company revenue and related costs, it remains a CGU, as there remains an active market for the output produced by CSO. The impairment tests for goodwill have been performed on the same basis as the previous financial years.

A summary of the goodwill at operating segment level is presented below:



	March 31, 2018 R’000	Foreign currency translation differences R’000	March 31, 2019 R’000

Central Services Organization	103,119	—	103,119
Europe	108,624	15,001	123,625
Middle East and Australasia	46,851	10,586	57,437
Africa	353,050	—	353,050
Total	611,644	25,587	637,231

The recoverable amounts of all CGUs are determined based on value-in-use calculations, which use pre-tax cash flow projections based on approved financial budgets covering a three to five -year period. A five -year period was used to ensure that in respect of the Europe and Middle East and Australasia segments, stable cash flows are used for purposes of calculating terminal values included in the value-in-use calculations. These cash flows are based on the current market conditions and near-term expectations.



Notes to the consolidated financial statements


for the year ended March 31, 2019

The key assumptions used for the value-in-use calculations are as follows :



2019	Central Services Organization	Africa	Europe	Middle East and Australasia

Discount rate
– pre-tax discount rate applied to the cash flow projections (%)	17.9	17.8	9.0	11.1
Growth rate
– growth rate used to extrapolate cash flow beyond the budget period (%)	5.5	5.5	2.0	2.3



2018	Central Services Organization	Africa	Europe	Middle East and Australasia

Discount rate
– pre-tax discount rate applied to the cash flow projections (%)	17.1	17.3	9.2	13.3
Growth rate
– growth rate used to extrapolate cash flow beyond the budget period (%)	5.4	5.4	2.2	2.9

The discount rates were calculated using the capital asset pricing model. These rates reflect specific risks relating to the relevant CGUs. The growth rate has been determined based on the expected long-term inflation outlook .

Goodwill sensitivity

Given the significant headroom that exists in the CGUs, management believes that a reasonable change in assumptions would not result in any goodwill impairments.

Europe goodwill sensitivity

To determine the recoverable amount of its investment in the Europe CGU, the Group calculated future net cash flows of the CGU and discounted them to their present value using the rates as indicated above. The calculation of the CGU’s discounted net present value requires extensive use of estimates and assumptions about discount rates and budgeted cash flows. The budgeted cash flows at March 31, 2019 reflect the current market conditions for the European economy and near-term expectations. To the extent that anticipated new contracts do not materialize and the business strategy does not come to fruition, or key personnel are not retained, the forecasts could be negatively impacted.

At March 31, 2019, the date at which the impairment testing was performed, Europe CGU’s recoverable amount exceeded the carrying amount by 33.5% . A 10.7% pre-tax discount rate, or a 33.5% decrease of the projected cash flows, would reduce the headroom for the Europe CGU to nil . This analysis assumes that all other variables remain constant.

8. Capitalized commission assets



	March 31, 2019 R’000	March 31, 2018 R’000

Net book value of asset recognized from costs incurred in obtaining a contract	54,066	*

Amortization recognized during the year	30,477	*
– Cost of sales	20,885	*
– Sales and marketing	9,592	*



Notes to the consolidated financial statements


for the year ended March 31, 2019

* Due to the transition method chosen by the Group in applying IFRS 15, comparative information has not been restated to reflect the new requirements. Refer to note 2.1.1.1.

Amortization expense of external commissions capitalized is recognized in cost of sales, while that of internal commissions is recognized in sales and marketing costs. Commission not capitalized under the 12-month practical expedient is also classified in the same manner. This is consistent with the income statement presentation of the commission expense for fiscal 2018.

9. Inventory

During the current year an amount of R4.1 million (2018: R9.3 million ) was recognized as a charge in cost of sales as a result of the write-down of inventory to net realizable value (notes 24 and 32.2).

10. Trade and other receivables



	March 31, 2019 R’000		March 31, 2018 R’000

Trade receivables	344,551		248,878
Contract asset related to fixed escalations	207		—
Sundry debtors	43,189		27,811
Less : Provision for impairment	(43,768	)	(17,523	)
Trade and other receivables – net	344,179		259,166
Pre-payments	32,296		27,240
	376,475		286,406

The ageing of trade and other receivables (excluding pre-payments) at the reporting date is as follows:



	Gross R’000	Provision for impairment R’000		Net R'000

2019
Not past due	223,979	(5,425	)	218,554
Past due by 1 to 30 days	71,552	(1,898	)	69,654
Past due by 31 to 60 days	26,547	(1,069	)	25,478
Past due by more than 60 days	65,869	(35,376	)	30,493
Total	387,947	(43,768	)	344,179



	Gross R’000	Provision for impairment R’000		Net R'000

2018
Not past due	173,157	(334	)	172,823
Past due by 1 to 30 days	51,844	(2,518	)	49,326
Past due by 31 to 60 days	24,763	(3,732	)	21,031
Past due by more than 60 days	26,925	(10,939	)	15,986
Total	276,689	(17,523	)	259,166



Notes to the consolidated financial statements


for the year ended March 31, 2019

The carrying amounts of trade and other receivables are denominated in the following currencies:



	March 31, 2019 R’000	March 31, 2018 R’000

South African Rand	138,042	98,148
Australian Dollar	22,987	24,016
Brazilian Real	25,051	19,129
Euro	29,699	28,192
Great Britain Pound	16,301	18,883
Ugandan Shilling	4,659	3,515
United Arab Emirates Dirham	2,090	2,578
United States Dollar	133,166	91,105
Other	4,480	840
	376,475	286,406

Movements in the Group’s provision for impairment of trade and other receivables are as follows:



	March 31, 2019 R’000		March 31, 2018 R’000

Opening balance	(17,523	)	(13,346	)
Adjustment on initial application of IFRS 9	(3,171	)	*
Opening balance – restated	(20,694	)	*
Increase in provision for impairment (note 32.2)	(29,725	)	(24,143	)
Amount written off during the year as irrecoverable **	7,861		19,354
Foreign currency translation differences	(1,210	)	612
Closing balance	(43,768	)	(17,523	)

* Comparatives have not been restated under IFRS 9. Refer to note 2.1.1.1.

** Amounts written off are not subject to enforcement activity.

From April 1, 2018 the Group measures the provision for impairment of trade and other receivables at an amount equal to lifetime expected credit losses as a result of IFRS 9. The initial application resulted in an increase of the provision at March 31, 2018 of R3.2 million , which was recognized against opening retained income. Prior to April 1, 2018, the provision for impairment was determined on an incurred loss basis. A loss was considered to have been incurred when there was objective evidence of impairment as a result of one or more loss events that had incurred.

The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is default) and the exposure at default. The assessment of the probability given default and loss given default is based on historical data adjusted by relevant forward-looking information. The exposure at default is represented by the asset’s gross carrying amount at the reporting date.

The Group considers that default has occurred when a receivable is more than 90 days past due or information determined internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group, in full.

Amounts provided for are generally written off when there is no expectation of recovering the amount, in accordance with the Group’s write-off policy.

Overview of the Group’s exposure to credit risk

The maximum exposure to credit risk at the reporting date is the carrying value of each receivable, net of impairment losses where relevant. Other than 16% of the gross receivable balance (excluding pre-payments) relating to four debtors at the end



Notes to the consolidated financial statements


for the year ended March 31, 2019

of fiscal 2019 (2018: 11% of the gross receivable balance (excluding pre-payments) relating to two debtors), the Group has no significant concentration of credit risk, due to its spread of customers across various operations and geographical locations. The Group does not hold any collateral as security.

Trade receivables of R26.2 million (2018: R17.9 million ) are pledged as security for the Group’s overdraft facilities (notes 12 and 15).

Credit risk management

The Group minimizes credit risk by only dealing with creditworthy counterparties and performing adequate credit checks upon accepting new customers and determining credit limits. Credit approvals and other monitoring procedures are in place to ensure that follow-up action is taken to recover overdue debts. Furthermore, the Group reviews the recoverable amount of trade and other receivables individually, or for appropriate groupings of customers based on their credit characteristics, at the end of the reporting period to ensure that adequate provision is made for irrecoverable amounts. In this regard, the directors consider that the Group’s credit risk is significantly reduced.

11. Restricted cash



	March 31, 2019 R’000	March 31, 2018 R’000

Cash securing guarantee issued in terms of the Mobile Telephone Networks Proprietary Limited incentive agreement (denominated in South African Rand)	1,000	1,000
Cash securing guarantees issued in respect of lease agreements entered into (denominated in South African Rand)	393	393
Tax refund received erroneously (denominated in South African Rand)	7,188	7,188
Cash securing guarantees issued in respect of products sold by MiX Telematics Europe Limited (denominated in Euro)	1,276	1,447
Cash securing guarantees issued in respect of MiX Telematics Middle East FZE relating to employee visas in the UAE (denominated in UAE Dirham)	2,296	3,616
Cash held for purposes of distribution to MiX Telematics Enterprise BEE Trust and MiX Telematics Fleet Support Trust beneficiaries (denominated in South African Rand)	7,240	6,257
Cash securing guarantees issued in respect of property lease agreements entered into by MiX Telematics Australasia (denominated in Australian Dollar)	794	1,034
	20,187	20,935

12. Net cash and cash equivalents

Net cash and cash equivalents included in the statement of cash flow comprise the following amounts which are included in the statement of financial position:



	March 31, 2019 R’000		March 31, 2018 R’000		March 31, 2017 R’000

Cash and cash equivalents	383,443		308,258		375,782
Bank overdraft (note 15)	(30,262	)	(17,720	)	(19,449	)
	353,181		290,538		356,333



Notes to the consolidated financial statements


for the year ended March 31, 2019

The credit quality of cash and cash equivalents that are not impaired can be assessed by reference to external credit ratings, based on the Fitch rating scales, as follows :



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Cash and cash equivalents
AA	138,700	110,854	197,873
A	98,339	82,738	78,605
BBB	38,383	33,962	99,304
BB	98,027	80,704	—
B	9,994	—	—
	383,443	308,258	375,782

The carrying amounts of net cash and cash equivalents are denominated in the following currencies:



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Great Britain Pound	43,866	37,209	48,540
Brazilian Real	9,995	3,787	2,987
South African Rand	208,144	171,223	100,721
Australian Dollar	21,898	22,912	19,574
United States Dollar	65,226	48,354	178,768
Euro	1,233	4,300	4,649
Other	2,819	2,753	1,094
	353,181	290,538	356,333

13. Stated capital



	Number of shares 000s		Stated capital R’000


At April 1, 2017	563,435		854,345
Shares issued in relation to share options and share appreciation rights exercised	6,001		10,726
Share repurchase under the Share Repurchase Program	(5,016	)	(18,666	)
Balance at March 31, 2018	564,420		846,405
Shares issued in relation to share options and share appreciation rights exercised	6,685		13,776
Share repurchase under the Share Repurchase Program	(9,158	)	(73,548	)

Balance at March 31, 2019	561,947		786,633

The total authorized number of ordinary shares at the end of the financial year amounted to 1 billion shares (2018: 1 billion ) with no par value. All issued shares are fully paid up and carry one vote per share and the right to dividends. There were no changes to the authorized number of ordinary shares during the current or prior financial year.

In terms of a special resolution approved in fiscal 2014 a new class of no par value shares, consisting of 100 million preference shares, was created. No preference shares have been issued to date.

MiX Investments, a wholly owned subsidiary of the Company, holds 40,000,000 of the Company’s ordinary shares of no par value, which were acquired under an approved general share repurchase program during fiscal 2016. These shares were



Notes to the consolidated financial statements


for the year ended March 31, 2019

held as treasury shares by the Group at the end of the current and prior financial years.

Share repurchases

On May 23, 2017, the MiX Telematics Board of Directors approved a share repurchase program of up to R270 million under which the Company may repurchase its ordinary shares, including American Depositary Shares (“ADSs”). The Company may repurchase its shares from time to time at its discretion through open market transactions and block trades, based on ongoing assessments of the capital needs of the Company, the market price of its securities and general market conditions. This share repurchase program may be discontinued at any time by the Board of Directors, and the Company has no obligation to repurchase any amount of its securities under the program. The repurchase program will be funded out of existing cash resources.

Fiscal 2018 purchase

During fiscal 2018 the following purchases had been made under the share repurchase program:



	Total number of shares repurchased	Average price paid per share ⁽¹⁾ R	Shares canceled under the share repurchase program	Total value of shares purchased as part of publicly announced program R’000	Maximum value of shares that may yet be purchased under the program R’000

June 2017	5,015,660	3.72	5,015,660	18,666	251,334
	5,015,660		5,015,660	18,666	251,334

⁽¹⁾ Including transaction costs.

Subsequent to the repurchase, the shares were delisted and now form part of the authorized unissued share capital of the Company.

Fiscal 2019 purchase

During fiscal 2019 the following purchases had been made under the share repurchase program:



	Total number of shares repurchased	Average price paid per share ⁽¹⁾ R	Shares canceled under the share repurchase program	Total value of shares purchased as part of publicly announced program R’000	Maximum value of shares that may yet be purchased under the program R’000

October 2018	9,157,695	8.03	9,157,695	73,548	177,786
	9,157,695		9,157,695	73,548	177,786

⁽¹⁾ Including transaction costs.

Subsequent to the repurchase, the shares were delisted and now form part of the authorized unissued share capital of the Company.

Fiscal 2017 specific share repurchase from related party

Fiscal 2017

On April 29, 2016, the Company entered into an agreement (the “share repurchase agreement”) with Imperial Holdings Limited (“Imperial Holdings”) and Imperial Corporate Services Proprietary Limited (“Imperial Corporate Services”), a wholly owned subsidiary of Imperial Holdings, to repurchase all 200,828,260 of the Company’s shares held by Imperial Corporate Services (the “repurchase shares”) at R2.36 per repurchase share, for an aggregate repurchase consideration of R474.0 million (the “repurchase”). At the general meeting held on August 1, 2016, shareholders of the Company approved



Notes to the consolidated financial statements


for the year ended March 31, 2019

the repurchase in terms of the JSE Listings Requirements and the South African Companies Act, No. 71 of 2008, at which point the transaction was accounted for in terms of IFRS. The repurchase was implemented on August 29, 2016. Subsequent to the repurchase, the shares were delisted and now form part of the authorized unissued share capital of the Company.

In fiscal 2017, the financial effect of the transaction was as follows:



	R’000

Aggregate repurchase consideration	473,955
Impact of discounting related to the fiscal 2017 share repurchase transaction (note 25)	(3,222	)
Transaction costs capitalized	2,949
Total share repurchase costs	473,682

Equity incentive plans

The table below indicates the total number of awards under the LTIP which are available for issue:



	Number of awards

Reconciliation of number of awards available for issue under the LTIP
Maximum number of awards that may be issued during the life of the LTIP	120,000,000
Issued in fiscal 2015	(2,900,000	)
Number of awards available for issue as at March 31, 2015	117,100,000
Issued in fiscal 2016	(11,835,000	)
Number of awards available for issue as at March 31, 2016	105,265,000
Issued in fiscal 2017	(13,950,000	)
Number of awards available for issue as at March 31, 2017	91,315,000
Issued in fiscal 2018	(10,000,000	)
Number of awards available for issue as at March 31, 2018	81,315,000
Issued in fiscal 2019	(5,500,000	)
Number of awards available for issue as at March 31, 2019	75,815,000

Both equity incentive plans are discussed in further detail in the sections that follow.

Refer to note 24 for the total expense recognized in fiscal year 2019 in respect of equity-settled instruments granted to employees and directors.



Notes to the consolidated financial statements


for the year ended March 31, 2019

Share options under the TeliMatrix Group Executive Incentive Scheme

Share options have been granted to directors and certain key employees within the Group. The exercise price of the options granted is equal to the weighted average market value of ordinary shares for the 20 days preceding the date of the grant. The options vest in tranches of 25% per annum, commencing on the second anniversary of the grant date and expire 6 years after the grant date. In addition to these vesting periods, the vesting of the share options granted are conditional on certain performance conditions being met, namely the share price on the associated measurement date being in excess of the target, after being reduced by the aggregate amount of dividends paid, or an annual total shareholder return in excess of 10% , taking into account any dividends paid during the vesting period, being achieved. The Group has no legal or constructive obligation to repurchase or settle the options in cash.

Movements in the total number of share options outstanding and their related weighted average exercise prices are as follows:



	Weighted average exercise price 2019 cents per share	Number of options 2019 000s		Weighted average exercise price 2018 cents per share	Number of options 2018 000s

Outstanding at the beginning of the year	309	9,100		266	14,613
Exercised	246	(5,600	)	195	(5,513	)
Forfeited	—	—		—	—
Expired	—	—		—	—
Outstanding at the end of the year	411	3,500		309	9,100
Exercisable at the end of the year	411	2,625		285	7,350

The weighted average remaining contractual life on share options outstanding at year-end is 1.45 years (2018: 1.31 years ).

Options exercised in fiscal 2019 resulted in 5,600,000 shares (2018: 5,512,500 shares) being issued at a weighted average exercise price of 246 cents per share (2018: 195 cents per share). The related weighted average share price at the time of exercise was 922 cents per share (2018: 608 cents per share).

Share options outstanding at the end of the fiscal year have the following exercise prices:



					March 31, 2019 000s	March 31, 2018 000s

Annual shareholder return	Grant date	Expiry date	Exercise price
10%	November 7, 2012	November 7, 2018	246	cents	—	5,600
10%	September 10, 2014	September 10, 2020	411	cents	3,500	3,500
					3,500	9,100

No share options were granted during fiscal 2019 or fiscal 2018 under this scheme.



Notes to the consolidated financial statements


for the year ended March 31, 2019

Group executives held the following share options outstanding at March 31, 2019 (summarized by grant date):



	September 10, 2014 000s		Total 000s
C Tasker ⁽¹⁾	1,500		1,500
G Pretorius	1,000		1,000
C Lewis	1,000		1,000
	3,500		3,500
Option strike price (cents per share)	411
JSE share price on grant date (cents per share)	411
Expiry date	September 10, 2020
Performance condition
Minimum shareholder return of	10	%

⁽¹⁾ Executive director at March 31, 2019.

No options were held by retired executives as at March 31, 2019.

Group executives held the following share options outstanding at March 31, 2018 (summarized by grant date):



	November 7, 2012 000s		September 10, 2014 000s		Total 000s
S Joselowitz ⁽¹⁾	2,500		—		2,500
C Tasker ⁽¹⁾	2,000		1,500		3,500
G Pretorius	1,100		1,000		2,100
C Lewis	—		1,000		1,000
	5,600		3,500		9,100
Option strike price (cents per share)	246		411
JSE share price on grant date (cents per share)	300		411
Expiry date	November 7, 2018		September 10, 2020
Performance condition
Minimum shareholder return of	10	%	10	%

⁽¹⁾ Executive director at March 31, 2018.

No options were held by retired executives as at March 31, 2018.



Notes to the consolidated financial statements


for the year ended March 31, 2019

The following share options were exercised by Group executives during fiscal 2019:



	Date of exercise	Options exercised	Grant date	Strike price (cents per share)	Performance condition (R share price or % minimum shareholder return)		Exercise date share price (cents per share)

S Joselowitz	August 21, 2018	2,500,000	November 7, 2012	246	10	%	910
C Tasker	September 11, 2018	2,000,000	November 7, 2012	246	10	%	907
G Pretorius	November 6, 2018	1,100,000	November 7, 2012	246	10	%	1,030

The following share options were exercised by Group executives during fiscal 2018:



	Date of exercise	Options exercised	Grant date	Strike price (cents per share)	Performance condition (R share price or % minimum shareholder return)		Exercise date share price (cents per share)

C Tasker	November 29, 2017	2,000,000	January 3, 2012	154	10	%	628
G Pretorius	August 8, 2017	400,000	November 07, 2012	246	10	%	451
G Pretorius	November 22, 2017	750,000	January 3, 2012	154	10	%	648
C Lewis	March 2, 2018	1,500,000	November 07, 2012	246	10	%	600

Share appreciation rights

Under the LTIP, SARs may be issued to certain directors and key employees. The award price of the SARs granted is equal to the closing market value of ordinary shares on the day preceding the date of the grant. The SARs granted vest in tranches of 25% per annum, commencing on the second anniversary of the grant date and expire six years after the grant date. In addition to these vesting periods, the vesting of the SARs granted are conditional on a performance condition of an annual total shareholder return in excess of 10% , taking into account any dividends paid during the vesting period, being achieved.

Upon exercise of the SARs by participants, the Group will settle the value of the difference between the closing market value of ordinary shares on the day of settlement and the award price (if positive) by delivering shares, alternatively as a fall back provision only, by settling the value in cash.



Notes to the consolidated financial statements


for the year ended March 31, 2019

Movements in the total number of SARs outstanding and their related weighted average award prices are as follows:



	Weighted average award price 2019 cents per share	Number of SARSs 2019 000s		Weighted average award price 2018 cents per share	Number of SARs 2018 000s

Outstanding at the beginning of the year	322	28,039		309	20,810
Granted on May 25, 2018	964	500		—	—
Granted on December 14, 2018	965	1,000		—	—
Granted on May 30, 2017	—	—		346	10,000
Exercised	306	(1,593	)	310	(1,709	)
Forfeited	320	(2,025	)	314	(1,062	)
Outstanding at the end of the year	360	25,921		322	28,039
Exercisable at the end of the year	312	4,419		313	1,306

The weighted average remaining contractual life on SARs outstanding at year-end is 3.55 years (2018: 4.38 years ).

SARs exercised in fiscal 2019 resulted in 1,593,125 awards (2018: 1,708,750 ) being issued at a weighted average exercise price of 306 cents per award (2018: 310 ). The related weighted average share price at the time of exercise was 968 cents per award (2018: 464 ).

No SARs were exercised by Group executives during fiscal 2019 and fiscal 2018.

SARs outstanding at the end of the fiscal year have the following award prices:



				March 31, 2019 000s	March 31, 2018 000s

Annual shareholder return	Grant date	Expiry date	Award price
10%	August 31, 2015	August 31, 2021	313	6,090	7,764
10%	May 30, 2016	May 30, 2022	294	5,369	6,525
10%	November 24, 2016	November 24, 2022	328	4,000	4,000
10%	May 30, 2017	May 30, 2023	346	8,962	9,750
10%	May 25, 2018	May 25, 2024	964	500	—
10%	December 14, 2018	December 14, 2024	965	1,000	—
				25,921	28,039

The weighted average grant date fair value of SARs granted during fiscal 2019 and fiscal 2018 was determined using a combination of the Monte Carlo Simulation option pricing model and the Binomial Tree option pricing model. The key drivers and assumptions input into the valuation models used to determine these values are disclosed below.

The volatility was calculated using a mixture of the Company's historical data as well as the share data of comparable companies for grants made in all financial years preceding 2019 and the Company's historical share data for grants made in the current year.



Notes to the consolidated financial statements


for the year ended March 31, 2019

Group executives held the following SARs outstanding at March 31, 2019 (summarized by grant date):



	August 31, 2015 000s		May 30, 2016 000s		November 24, 2016 000s		May 30, 2017 000s		Total 000s
S Joselowitz ⁽¹⁾	1,000		1,000		—		1,100		3,100
C Tasker ⁽¹⁾	750		750		875		1,100		3,475
P Dell ⁽¹⁾	200		200		875		1,100		2,375
G Pretorius	500		500		875		1,100		2,975
C Lewis	500		500		875		1,100		2,975
	2,950		2,950		3,500		5,500		14,900

JSE share price on grant date (cents per share)	319		289		328		345
Expiry date	August 31, 2021		May 30, 2022		November 24, 2022		May 30, 2023
Performance condition
Minimum shareholder return of	10	%	10	%	10	%	10	%

⁽¹⁾ Executive director at March 31, 2019.

Group executives held the following SARs outstanding at March 31, 2018 (summarized by grant date):



	August 31, 2015 000s		May 30, 2016 000s		November 24, 2016 000s		May 30, 2017 000s		Total 000s
S Joselowitz ⁽¹⁾	1,000		1,000		—		1,100		3,100
C Tasker ⁽¹⁾	750		750		875		1,100		3,475
P Dell ⁽¹⁾	200		200		875		1,100		2,375
G Pretorius	500		500		875		1,100		2,975
C Lewis	500		500		875		1,100		2,975
	2,950		2,950		3,500		5,500		14,900

JSE share price on grant date (cents per share)	319		289		328		345
Expiry date	August 31, 2021		May 30, 2022		November 24, 2022		May 30, 2023
Performance condition
Minimum shareholder return of	10	%	10	%	10	%	10	%

⁽¹⁾ Executive director at March 31, 2018.



Notes to the consolidated financial statements


for the year ended March 31, 2019

The salient details of SARs granted during fiscal 2019 are provided in the table below:



	Total shareholder return	Total shareholder return

Grant date	December 14, 2018	May 25, 2018
Grant date fair value (cents per share)	399.5	434.8
Award price (cents per share)	965	964
JSE share price on grant date (cents per share)	922	989
Expiry date	December 14, 2024	May 25, 2024
Performance conditions
– Total shareholder return of (%)	10.0	10.0
Remaining contractual life at March 31, 2019	5.71	5.16

Valuation assumptions and drivers
Volatility (%)	41.0	41.0
Anticipated forfeiture rate (%)	5.0	5.0
Anticipated dividend yield (%)	1.55	1.45
Annual risk-free interest rate (%)	7.52	7.05

The salient details of SARs granted during fiscal 2018 are provided in the table below:



				Total shareholder return

Grant date				May 30, 2017
Grant date fair value (cents per share)				128.4
Award price (cents per share)				346
JSE share price on grant date (cents per share)				345
Expiry date				May 30, 2023
Performance conditions
– Total shareholder return of (%)				10.0
Remaining contractual life at March 31, 2018				5.17

Valuation assumptions and drivers
Volatility (%)				41.5
Anticipated forfeiture rate (%)				5.0
Anticipated dividend yield (%)				3.84
Annual risk-free interest rate (%)				7.51

Performance shares

Under the LTIP, performance shares may be issued to certain directors and key employees. The performance shares granted vest immediately once the service and performance conditions have been met. Settlement takes place by delivering ordinary shares equal to the number of performance shares that have vested, alternatively as a fall back provision only, by settling the value in cash.



Notes to the consolidated financial statements


for the year ended March 31, 2019

During fiscal 2019, the MiX Telematics Board of Directors authorized a supplemental performance share award under the LTIP. In terms of this award the Board has designated 8,000,000 ordinary shares, to be awarded to eligible employees if the Group achieves both of the following constant currency targets at March 31, 2020:


•	Cumulative subscription revenue for the 2019 and 2020 fiscal years of R3,588 million ; and


•	Cumulative Adjusted EBITDA for the 2019 and 2020 fiscal years of R1,322 million .

The targets have been derived using an average forecast exchange rate of R13.8000 per $1.00.

Half of this supplemental equity grant of 4,000,000 ordinary shares, was made during November 2018. No commitments have been made towards potential individual participants in the second grant that may be made. As a result, only the first grant is being accounted for at this stage.

The scheme rules allow for a maximum of 5,000,000 performance shares to be granted in any financial year and for a maximum of 30,000,000 performance shares to be granted in aggregate over the life of the plan.

Movements in the total number of performance shares outstanding are as follows:



	Number of performance shares 2019 000s

Outstanding at the beginning of the year	—
Granted on November 05, 2018	4,000
Forfeited	(200	)
Outstanding at the end of the year	3,800
Exercisable at the end of the year	—

The estimated weighted average remaining contractual life on performance shares outstanding at year-end is 1.31 years , which is based on an expected vesting date of June 14, 2020.

The grant date fair value of performance shares granted during fiscal 2019 was R5.87 per share. The fair value was determined by deducting the present value of expected dividends to be paid per share prior to vesting from the closing market price of the MiX Limited shares on grant date of R10.00 . Since the period related to the performance targets commenced substantially before the service period (which commenced only on grant date), as required by IFRS 2, management’s assessment of the probability of these targets being met was incorporated into the grant date fair value. The grant date fair value is not subsequently revised. This means that any changes in the share price as well as in management’s assessment of meeting the performance targets are not taken into account. Accordingly, should the performance targets not be met, the share-based payment expense shall continue to be recognized on a cumulative basis to the extent that the service conditions are met.

The probability of achieving the performance conditions is considered to be an area of critical accounting estimate and judgement. Refer to notes 2.20 and 4 of the Group’s accounting policies.

A 5% attrition rate due to staff departures has also been factored into the calculation of the number of performance shares expected to meet the service condition.



Notes to the consolidated financial statements


for the year ended March 31, 2019

The salient details of performance shares granted during fiscal 2019 are provided in the table below:



		Performance shares

Grant date		November 05, 2018
Grant date fair value (cents per share)		587.2
JSE share price on grant date (cents per share)		1,000
Expiry date (estimated)*		June 14, 2020
Performance conditions (R’million)
The following two constant currency targets both need to be met for the performance share awards to vest:
– Cumulative subscription revenue for fiscal years 2019 and 2020 and		3,588
– Cumulative Adjusted EBITDA for fiscal years 2019 and 2020		1,322
The targets have been derived using an average forecast exchange rate of R13.8000 per $1.00
Remaining contractual life at March 31, 2019		1.31

Valuation assumptions and drivers
Probability (%)		60.0
Anticipated forfeiture rate (%)		5.0
Anticipated present value of dividends (cents per share)		21.4

*The vesting of which will occur on the finalization and sign-off of the audited financial statements for fiscal 2020 (vesting period) and will be subject to continued employment and the satisfaction of both the performance conditions being the performance targets listed above. Management expect the fiscal 2020 audit to be concluded around June 14, 2020.



Notes to the consolidated financial statements


for the year ended March 31, 2019

Group executives held the following performance shares at March 31, 2019 (summarized by grant date):



	November 05, 2018 000s	Total 000s
S Joselowitz ⁽¹⁾	400	400
C Tasker ⁽¹⁾	400	400
P Dell ⁽¹⁾	200	200
G Pretorius	400	400
C Lewis	400	400
	1,800	1,800

JSE share price on grant date (cents per share)	1,000
Expiry date (estimated)	June 14, 2020
Performance condition	R'million
The following two constant currency targets both need to be met for the performance share awards to vest:
Cumulative subscription revenue for fiscal years 2019 and 2020 and	3,588
Cumulative Adjusted EBITDA for fiscal years 2019 and 2020	1,322
The targets have been derived using an average forecast exchange rate of R13.8000 per $1.00

⁽¹⁾ Executive director at March 31, 2019.

The remaining 2,000,000 performance shares outstanding at March 31, 2019 are held by other key employees that are not Group executives.



Notes to the consolidated financial statements


for the year ended March 31, 2019

14. Other reserves



	March 31, 2019 R’000		March 31, 2018 R’000

Opening balance	(51,614	)	(4,370	)
Foreign currency translation*	115,744		(60,576	)
– Movement for the year – Gross	114,593		(60,339	)
– Tax effect of movement	1,151		(237	)
Share-based payments (notes 24 and 32.2)	19,082		14,833
– Transaction	12,140		9,000
– Excess tax benefit	6,942		5,833
Transaction with non-controlling interests**	—		(1,501	)
Closing balance	83,212		(51,614	)

Foreign currency translation*	157,970		42,226
Reserve on transaction with non-controlling interest**	(138,939	)	(138,939	)
Share-based payments	64,181		45,099
Closing balance	83,212		(51,614	)

* The foreign currency translation reserve mainly results from the translation of the Group ’ s foreign subsidiaries for

which it is considered probable that temporary differences will not reverse in the foreseeable future. Refer to note 18

for details about deferred taxes recognized for related temporary differences.

** During fiscal 2008, the Group acquired a non-controlling equity interest held by a minority shareholder in one of its

subsidiaries in exchange for a share consideration. R137.9 million (2018: R137.9 million ) of the reserve represents

the difference between the consideration paid and the Group’s share in the net asset value of the subsidiary acquired

which has been recorded in equity.

The reserve on transaction with non-controlling interests included the transfer of Edge Gestao Empresarial Ltda's

( “ Edge ” ) share of the historical losses of MiX Telematics Servicos De Tlematria E Rastremento De Veiculos Do Brazil

Limitada (“MiX Brazil”) from distributable reserves to non-controlling interests. R0.5 million , representing a reduction

of the reserve, relates to the transaction with Edge in fiscal 2015, whereby Edge increased its non-controlling interest

in MiX Brazil from 0.0025% to 5.0% . R1.5 million of the non-controlling interest relates to the acquisition of Edge’s 5%

interest in MiX Brazil by MiX Investments (Proprietary) Limited (“MiX Investments”) during fiscal 2018 (note 21).

15. Borrowings

The Group and its subsidiaries have unlimited borrowing capacity as specified in their respective Memorandums of Incorporation.

Other than bank overdrafts, no new borrowings were raised by the Group during fiscal 2019 and fiscal 2018.



	Interest rate	March 31, 2019 R’000	March 31, 2018 R’000

Undrawn borrowing facilities at floating rates include:
– Standard Bank Limited:
Overdraft	Prime less 1.2%	39,738	52,280
Vehicle and asset finance	Prime less 1.2%	8,500	8,500
– Nedbank Limited overdraft	Prime less 2%	10,000	10,000
		58,238	70,780



Notes to the consolidated financial statements


for the year ended March 31, 2019

The Standard Bank and Nedbank facilities have no fixed renewal date and are repayable on demand.

Included in the bank overdraft (note 12) is the following Standard Bank Limited facility which was secured by the following at March 31, 2019 and at March 31, 2018:

• Cross suretyships between the following Group companies:

– MiX Telematics Africa Proprietary Limited;

– MiX Telematics International Proprietary Limited; and

– MiX Telematics Limited.


•	An unrestricted cession of book debts by the following entities:

– MiX Telematics Limited; and

– MiX Telematics International Proprietary Limited.

The facility from Nedbank Limited is unsecured.

16. Trade and other payables



	March 31, 2019 R’000	March 31, 2018 R’000

Trade payables	90,770	98,094
Accruals	200,502	176,963
Revenue received in advance ⁽¹⁾	88,552	66,120
Recurring commission liability	5,304	*
Value added taxes	11,280	6,646
Other	3,461	2,696
	399,869	350,519

⁽¹⁾ The impact of adopting IFRS 15 on April 1, 2018 was a R1.8 million increase in revenue received in advance due to significant financing adjustments. Refer to note 2.1.1.1. Revenue of R42.3 million was recognized during fiscal 2019 that was included in the opening balance of the revenue received in advance liability at April 1, 2018.

* Comparatives have not been restated on adoption of IFRS 15. Refer to note 2.1.1.1.

17. Retirement benefits

It is the policy of the Group to provide retirement benefits to all its South African, United Kingdom, United States, Brazilian, Romanian and Australian employees. All these retirement benefits are defined contribution plans and are held in separate trustee-administered funds. These plans are funded by members as well as company contributions. The South African plan is subject to the Pension Funds Act of 1956, the UK plan is subject to the United Kingdom Pensions Act 2008 and the



Notes to the consolidated financial statements


for the year ended March 31, 2019

Australian plan is subject to the Superannuation Guarantee Administration Act of 1992. In Brazil, the Group contributes to a mandatory state social contribution plan known as Regime Geral de Previdência Social ( “RGPS” ). In Romania there is a mandatory social security contribution paid to the state budget, as defined by the Pension Law (Law 263/2010) and the Fiscal Code (Law 227/2015). For the United States employees, a voluntary Internal Revenue Service section 401(k) tax-deferred defined contribution scheme is offered. The full extent of the Group’s liability, in respect of the retirement benefits offered, is the contributions made, which are charged to the income statement as they are incurred. The total Group contribution to such schemes in 2019 was R29.2 million (2018: R27.1 million , 2017: R29.4 million ) (note 24).



Notes to the consolidated financial statements


for the year ended March 31, 2019

18. Deferred tax



	March 31, 2019 R’000		March 31, 2018 R’000

Deferred tax liabilities
Capital allowances for tax purposes	79,800		42,828
Intangible assets	66,442		57,084
Pre-payments	3,012		2,857
Deferred foreign currency gains	84,978		33,858
Capitalized commission assets	13,805		—
Right-of-use assets	6,940		—
Other	2,108		887
Gross deferred tax liabilities	257,085		137,514
Set-off of deferred tax balances	(118,036	)	(54,856	)
Net deferred tax liabilities	139,049		82,658
Deferred tax assets
Revenue received in advance	16,835		15,730
Capital allowances for tax purposes	27,720		30,556
Provisions, accruals and lease straight-lining	48,341		33,910
Assessable losses	43,140		5,892
Share-based payments	16,828		8,187
Deferred foreign currency losses	4,052		—
Recurring commission liability	1,078		—
Capitalized lease liability	7,592		—
Expected credit losses	1,022		—
Other	3,094		1,298
Gross deferred tax assets	169,702		95,573
Set-off of deferred tax balances	(118,036	)	(54,856	)
Net deferred tax assets	51,666		40,717
Net deferred tax liability	(87,383	)	(41,941	)

The gross movement in net deferred tax assets/(liabilities) is as follows:
Beginning of the year	(41,941	)	(71,937	)
Adjustment on initial application of IFRS 15, IFRS 16 and IFRS 9 (note 2.1.1.1)	(7,923	)	—
Foreign currency translations	1,563		(578	)
Credited to equity (note 14)	8,093		5,596
– Foreign currency translation on net investment loans	1,151		(237	)
– Share-based payment - excess tax benefit	6,942		5,833
Income statement charge (note 29)	(47,175	)	24,978
End of the year	(87,383	)	(41,941	)

Deferred foreign currency gains

Deferred foreign currency gains and losses comprise of taxable temporary differences arising on investments in subsidiaries, including intercompany loans, in respect of which deferred tax has been recognized.



Notes to the consolidated financial statements


for the year ended March 31, 2019

Recognition of deferred tax

Deferred tax at year-end has been recognized using the following corporate tax rates:


•	South Africa 28% (2018: 28% )


•	Australia 30% (2018: 30% )


•	Brazil 34% (2018: 34% )


•	Romania 16% (2018: 16% )


•	Thailand 20% (2018: 20% )


•	Uganda 30% (2018: 30% )


•	United Arab Emirates 0% (2018: 0% )


•	United Kingdom 17% (2018: 19% )


•	United States of America 25% (2018: 27% )

Deferred tax assets are recognized for tax losses carried forward to the extent that the realization of the related tax benefit through future taxable profits is probable. The Group did not recognize deferred tax asse ts of R15.9 million (2018: R61.3 million ) in respect of losses amounting to R67.0 million (2018: R237.3 million ) at year-end. These tax losses can be carried forward indefinitely except for tax losses of R4.3 million in Thailand which expire after 5 years. During fiscal 2019 the Group raised a further net deferred tax asset of R3.6 million (2018: R0.6 million ) after taking into account taxable temporary differences in respect of a portion of the tax losses available in the Europe, Americas and Brazil segments. These tax losses were incurred in prior years. Over the past years, the Europe, Americas and Brazil segments started returning to profitability resulting in a reassessment of their ability to utilize the tax losses and the recognition of a deferred tax asset for a portion thereof.

The movement in deferred tax assets and liabilities during the year, prior to taking into account the offsetting of deferred tax balances within the same tax jurisdiction, is as follows:



Notes to the consolidated financial statements


for the year ended March 31, 2019



	March 31, 2018		Adjustment on initial application of IFRS 15, IFRS 16 and IFRS 9		Charged/ (credited) to the income statement (note 29)		Charged/ (credited) directly to equity (note 14)		Foreign currency translation differences		March 31, 2019
	R’000		R’000		R’000		R’000		R’000		R’000

Deferred tax liabilities
Capital allowances for tax purposes	42,828		—		35,132		—		1,840		79,800
Intangible assets	57,084		—		9,285		—		73		66,442
Pre-payments	2,857		—		155		—		—		3,012
Deferred foreign currency gains	33,858		—		47,993		2,901		226		84,978
Capitalized commission assets	—		10,743		3,062		—		—		13,805
Right-of-use asset capitalized	—		1,165		5,775		—		—		6,940
Other	887		418		803		—		—		2,108
	137,514		12,326		102,205		2,901		2,139		257,085

Deferred tax assets
Revenue received in advance	(15,730	)	—		(1,097	)	—		(8	)	(16,835	)
Capital allowances for tax purposes	(30,556	)	—		2,905		—		(69	)	(27,720	)
Provisions, accruals and lease straight-lining	(33,910	)	—		(13,969	)	—		(462	)	(48,341	)
Assessable losses	(5,892	)	—		(34,617	)	—		(2,631	)	(43,140	)
Deferred foreign currency losses	—		—		—		(4,052	)	—		(4,052	)
Share-based payments	(8,187	)	—		(1,699	)	(6,942	)	—		(16,828	)
Recurring commission liability	—		(2,004	)	926		—		—		(1,078	)
Capitalized lease liability	—		(1,296	)	(6,296	)	—		—		(7,592	)
Expected credit losses	—		(512	)	(510	)	—		—		(1,022	)
Other	(1,298	)	(591	)	(673	)	—		(532	)	(3,094	)
	(95,573	)	(4,403	)	(55,030	)	(10,994	)	(3,702	)	(169,702	)
Net deferred tax liability	41,941		7,923		47,175		(8,093	)	(1,563	)	87,383



Notes to the consolidated financial statements


for the year ended March 31, 2019

The movement in deferred tax assets and liabilities during the prior year, prior to taking into account the offsetting of deferred tax balances within the same tax jurisdiction, is as follows:



	March 31, 2017		Charged/ (credited) to the income statement (note 29)		Charged/ (credited) directly to equity (note 14)		Foreign currency translation differences		March 31, 2018
	R’000		R’000		R’000		R’000		R’000
Deferred tax liabilities
Capital allowances for tax purposes	33,616		9,185		—		27		42,828
Intangible assets	49,807		7,279		—		(2	)	57,084
Pre-payments	2,815		68		—		(26	)	2,857
Deferred foreign currency gains	61,616		(28,318	)	237		323		33,858
Other	1,106		105		—		(324	)	887
	148,960		(11,681	)	237		(2	)	137,514
Deferred tax assets
Revenue received in advance	(14,304	)	(1,426	)	—		—		(15,730	)
Capital allowances for tax purposes	(22,107	)	(8,503	)	—		54		(30,556	)
Provisions, accruals and lease straight-lining	(28,731	)	(5,572	)	—		393		(33,910	)
Assessable losses	(10,736	)	4,713		—		131		(5,892	)
Share-based payments	—		(2,354	)	(5,833	)	—		(8,187	)
Other	(1,145	)	(155	)	—		2		(1,298	)
	(77,023	)	(13,297	)	(5,833	)	580		(95,573	)
Net deferred tax liability	71,937		(24,978	)	(5,596	)	578		41,941

19. Provisions



	March 31, 2019 R’000		March 31, 2018 R’000

Product warranties
Beginning of the year	13,785		11,538
Income statement charge	2,993		5,772
Utilized	(5,916	)	(3,452	)
Foreign currency translation differences	401		(73	)
End of the year	11,263		13,785
Non-current portion	(291	)	(516	)
Current portion	10,972		13,269

The Group provides warranties on certain products and undertakes to repair or replace items that fail to perform satisfactorily. Management estimates the related provision for future warranty claims based on historical warranty claim information, the product lifetime, as well as recent trends that might suggest that past cost information may differ from future claims.



Notes to the consolidated financial statements


for the year ended March 31, 2019



	March 31, 2019 R’000		March 31, 2018 R’000

Maintenance provision
Beginning of the year	4,429		3,511
Income statement charge	20,098		13,695
Utilized	(17,923	)	(12,604	)
Foreign currency translation differences	311		(173	)
End of the year	6,915		4,429
Non-current portion	—		—
Current portion	6,915		4,429

The Group provides for maintenance required related to ongoing contracts when the obligation to repair occurs. Management estimates the related provision for maintenance costs per unit based on the estimated costs expected to be incurred to repair the respective units.



	March 31, 2019 R’000		March 31, 2018 R’000

Decommissioning provision
Beginning of the year	1,616		1,424
Finance costs (note 26)	44		213
Foreign currency translation differences	275		(21	)
End of the year	1,935		1,616
Non-current portion	(1,935	)	(1,616	)
Current portion	—		—

The Group provides for the anticipated present value of costs associated with the restoration of leasehold property to its condition at inception of the lease, including the removal of items included in plant and equipment that is erected on leased land. The final cash outflow of these costs is not expected to occur in the next 12 months.



	March 31, 2019 R’000		March 31, 2018 R’000

Restructuring provision
Beginning of the year	24		11,465
Income statement charge/(reversal) (note 24)	3,034		(741	)
Utilized	(2,278	)	(10,653	)
Foreign currency translation differences	4		(47	)
End of the year	784		24
Non-current portion	—		—
Current portion	784		24



Notes to the consolidated financial statements


for the year ended March 31, 2019

Restructuring costs

2019

R3.0 million provision was raised in respect of restructuring plans implemented during fiscal 2019. R1.9 million was raised in the Middle East and Australasia segment and R1.1 million in the Africa segment. R2.3 million of the restructuring provision was utilized in respect of these restructuring plans during fiscal 2019.The remaining restructuring provision is expected to be utilized by the third quarter of fiscal 2020.

2018

R10.7 million of the restructuring provision was utilized in respect of the restructuring plans implemented during fiscal 2017 by the Europe and Middle East and Australasia segments. The total cost of the restructuring plans was expected to approximate R15.0 million . These costs consisted of estimated staff costs in respect of affected employees. R0.7 million was released during fiscal 2018. The remaining restructuring provision was expected to be utilized within the first quarter of fiscal 2019.



	March 31, 2019 R’000		March 31, 2018 R’000

Other provisions
Beginning of the year	2,561		2,673
Income statement charge	227		224
Utilized	—		—
Foreign currency translation differences	590		(336	)
End of the year	3,378		2,561
Non-current portion	—		—
Current portion	3,378	—	2,561

Other provisions

The provision in fiscal 2018 relates to taxation matters which may not be resolved in a manner that is favorable to the Group. The Group has raised provisions in respect of these matters based on estimates and the probability of an outflow of economic benefits and this should not be construed as an admission of legal liability.



	March 31, 2019 R’000		March 31, 2018 R’000

Total provisions
Product warranties	11,263		13,785
Maintenance provision	6,915		4,429
Decommissioning provision	1,935		1,616
Restructuring provision	784		24
Other provisions	3,378		2,561
Total provision	24,275		22,415
Non-current portion	(2,226	)	(2,132	)
Current provision	22,049		20,283



Notes to the consolidated financial statements


for the year ended March 31, 2019

20. Capitalized lease liability

The present value of the capitalized lease liability was determined by discounting the lease payments at the interest rate implicit in the lease or, if that rate cannot be readily determined, the lessee ’ s incremental borrowing rate. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities is 6.6% . For the reconciliation between operating lease commitments at March 31, 2018 and the capitalized lease liability recognized on initial application of IFRS 16, refer to note 35.

On adoption of IFRS 16, the Group has elected to apply the practical expedient that allows for all leases with a lease term ending within 12 months of initial application, i.e. by March 31, 2019, to be measured by straight-lining the payments associated with those leases over the lease term. The Group also used hindsight in determining the lease term for leases that include options to extend the lease term.

Refer to note 24 for the expense incurred during the year for short-term leases and leases of low value assets.



	March 31, 2019 R’000		March 31, 2018 R’000

Current	10,745		*
Non-current	31,183		*
Total capitalized lease liability	41,928		*

Reconciliation of total capitalized lease liability
Opening finance lease liability	—		*
Adjustment on initial application of IFRS 16	32,104		*
Finance costs (note 26)	2,214		*
Additions	15,116		*
Capital repayments	(11,435	)	*
Interest repayments	(2,053	)	*
Foreign currency translation differences	5,982		*
Total capitalized lease liability	41,928		*

* The Group has applied the ‘simplified approach’ on adoption of IFRS 16 that includes certain relief related to the measurement of the right-of-use asset and the lease liability at April 1, 2018, rather than full retrospective application. Furthermore, the ‘simplified approach’ does not require a restatement of comparatives. Refer to note 2.1.1.1.

The total cash outflow relating to capitalized leases for the year amounts to R 13.5 million . For the Maturity analysis of the undiscounted contractual cash flows, refer to note 38.



Notes to the consolidated financial statements


for the year ended March 31, 2019

21. Share-based payment liability



	March 31, 2019 R’000	March 31, 2018 R’000

Movement in share-based payment liability for the year
Opening balance	—	—
Share-based payment expense recognized during the year	—	1,352
Payment made in settlement of the share-based payment liability	—	(1,353	)
Foreign currency translation differences	—	1
Closing balance	—	—

MiX Brazil

In June 2014, the Group entered into a quotaholders agreement with Edge, whereby Edge was granted a 5% holding in the equity interest of MiX Brazil. Prior to this quotaholders agreement Edge held a non-controlling interest in MiX Brazil of 0.0025% . Edge is a Brazilian-based investment company controlled by Luiz Munhoz, the Managing Director of MiX Brazil. The increase in the equity interests granted to Edge was in respect of services provided by Luiz Munhoz to MiX Brazil, in his role as Managing Director of MiX Brazil. In terms of the quotaholders agreement, Edge had an option to transfer its interest in MiX Brazil back to the Group at fair value. The quotaholders agreement with Edge represented a cash-settled share-based payment.

In September 2017, Edge exercised the put option in the quotaholders agreement. In terms of the subsequent sale agreement MiX Investments (Proprietary) Limited acquired Edge’s 5% equity interest in MiX Brazil for R 1.4 million which increased the Group's interest in MiX Brazil to 100% during fiscal 2018. As a result during fiscal 2018, the Group recognized a cash-settled share-based payment expense and liability of R 1.4 million , which was subsequently settled. The non-controlling interest related to MiX Brazil of R 1.5 million was also transferred to other reserves within equity during fiscal 2018 (note 14).

22. Revenue



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Subscription revenue	1,693,245	1,434,615	1,239,914
Hardware revenue	241,837	227,752	222,315
Driver training, installation and other revenue	40,781	50,115	77,829
	1,975,863	1,712,482	1,540,058

The impact of adopting IFRS 15 on the Group's revenue from contracts with customers is described in note 2.1.1.1. Due to the transition method chosen by the Group in applying IFRS 15, comparative information has not been restated to reflect the new requirements. T he impact of adopting IFRS 15 on the Group's revenue for fiscal 2019 was not material, therefore a reconciliation between the Group's revenue for fiscal 2019 under IAS 18 and IFRS 15 is not disclosed.

Refer to notes 8, 10 and 16 for contract balances from contracts with customers.



Notes to the consolidated financial statements


for the year ended March 31, 2019

23. Other income/(expenses) – net



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Insurance reimbursement relating to operating costs	—	2,500	—
Profit/(loss) on disposal of property, plant and equipment and intangible assets (note 32.2)	586	1,264	(262	)
Other	423	482	688
	1,009	4,246	426

24. Operating profit



	March 31, 2019 R’000	March 31, 2018 R’000		March 31, 2017 R’000

Operating profit is stated after accounting for the following charges:
Amortization (notes 7 and 32.2)	64,877	63,926		44,734
Depreciation (notes 6 and 32.2)	183,478	151,945		98,508
Amortization of capitalized commission assets (notes 8 and 32.2)	30,477	—		—
Impairment of intangible assets (notes 7 and 32.2)	930	2,687		3,166
Impairment/(reversal of impairment) of property, plant and equipment (notes 6 and 32.2)	—	9		(791	)
Restructuring costs (note 19)	3,034	(741	)	14,561
Write-down of inventory to net realizable value (notes 9 and 32.2)	4,112	9,294		9,967
Research expenditure	685	1,624		2,398
Professional fees	36,686	32,689		22,358
Lease expenses	12,863	24,622		24,690
– Operating lease charges – premises, vehicles and equipment under IAS 17	*	24,622		24,690
– Expenses relating to short-term leases under IFRS 16	12,659	*		*
– Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets under IFRS 16	204	*		*
Staff costs	625,958	601,656		587,474
– Salaries, wages and other costs	584,648	564,207		554,793
– Pension costs (note 17)	29,170	27,097		29,370
– Equity-settled share-based payments (notes 14 and 32.2)	12,140	9,000		2,247
– Cash-settled share-based payments (note 20)	—	1,352		1,064

Number of employees at the end of the year	1,078	1,054		1,056

* The Group’s leases that were accounted for under IAS 17 in fiscal 2018 have been accounted for under IFRS 16 in fiscal 2019. Comparatives have not been restated under IFRS 16. Refer to note 2.1.1.1.

25. Finance income



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Current accounts and short-term bank deposits	10,274	8,508	14,052
Finance lease receivable income	—	3	20
Tax authorities	999	303	—
Other	630	137	520
	11,903	8,951	14,592

Net foreign exchange gains	383	—	1,476

	12,286	8,951	16,068



Notes to the consolidated financial statements


for the year ended March 31, 2019

26. Finance costs



	March 31, 2019 R’000		March 31, 2018 R’000		March 31, 2017 R’000

Overdraft	(2,723	)	(2,324	)	(2,259	)
Impact of discounting related to the fiscal 2017 share repurchase transaction (note 13)	—		—		(3,222	)
Other long-term loans	—		—		(50	)
Decommissioning provision (note 19)	(44	)	(213	)	—
Capitalized lease liability (note 20)	(2,214	)	*		*
Significant financing activity **	(4,920	)	*		*
Recurring commission liability	(802	)	*		*
Other	(197	)	(1,410	)	(146	)
	(10,900	)	(3,947	)	(5,677	)

Net foreign exchange losses	—		(5,073	)	—

	(10,900	)	(9,020	)	(5,677	)

* Comparatives have not been restated on adoption of IFRS 15 and IFRS 16. Refer to note 2.1.1.1.

** The liability relating to the significant financing activity is included in revenue received in advance in note 16.

27. Auditors’ remuneration



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Auditors’ remuneration	11,259	12,076	8,821

In fiscal 2019, auditors ’ remuneration includes R0.3 million (2018: R2.2 million ) in respect of fees paid to PricewaterhouseCoopers Inc. (the previous auditors of the Group) and the balance relates to Deloitte & Touche.



Notes to the consolidated financial statements


for the year ended March 31, 2019

28. Directors’ and executive committee emoluments



Group	Directors’ fees R’000	Salary and allowances R’000		Other benefits R’000		Retirement fund R’000		Performance bonuses ⁽¹⁾ R’000		12 months R’000

2019
Non-executive directors
R Bruyns ⁽²⁾	900	—		—		—		—		900
F Futwa ^(2),(3)	371	—		—		—		—		371
R Frew ⁽²⁾	760	—		—		—		—		760
E Banda ⁽⁴⁾	130	—		—		—		—		130
A Welton	625	—		—		—		—		625
I Jacobs	400	—		—		—		—		400
F Roji-Maplanka	600	—		—		—		—		600
	3,786	—		—		—		—		3,786
Value added tax ⁽²⁾	305	—		—		—		—		305
Executive committee ⁽⁵⁾
S Joselowitz ⁽⁶⁾	—	7,383		—		—		9,276		16,659
C Tasker ⁽⁶⁾	—	5,820		—		—		7,097		12,917
P Dell ⁽⁶⁾	—	1,950		180		77		2,774		4,981
G Pretorius	—	2,843		281		481		3,280		6,885
C Lewis	—	2,808		67		117		2,786		5,778
	4,091	20,804		528		675		25,213		51,311

2018
Non-executive directors
R Bruyns ⁽²⁾	773	—		—		—		—		773
C Ewing ^(2),(7)	348	—		—		—		—		348
R Frew ⁽²⁾	746	—		—		—		—		746
E Banda	486	—		—		—		—		486
A Welton	614	—		—		—		—		614
I Jacobs	386	—		—		—		—		386
F Roji-Maplanka ⁽⁸⁾	292	—		—		—		—		292
	3,645	—		—		—		—		3,645
Value added tax ⁽²⁾	266	—		—		—		—		266
Executive committee ⁽⁵⁾
S Joselowitz ⁽⁶⁾	—	6,841		—		—		6,737		13,578
C Tasker ⁽⁶⁾	—	5,393		—		—		4,133		9,526
P Dell ⁽⁶⁾	—	1,844		100		71		1,750		3,765
G Pretorius	—	2,573		268		433		3,299		6,573
C Lewis	—	2,570		122		130		2,603		5,425
	3,911	19,221	—	490	—	634	—	18,522	—	42,778



Notes to the consolidated financial statements


for the year ended March 31, 2019



Group	Directors’ fees R’000	Salary and allowances R’000	Other benefits R’000	Retirement fund R’000	Performance bonuses ⁽¹⁾ R’000	12 months R’000


2017
Non-executive directors
R Bruyns	794	—	—	—	—	794
C Ewing	570	—	—	—	—	570
R Frew ⁽²⁾	566	—	—	—	—	566
E Banda	470	—	—	—	—	470
A Welton	650	—	—	—	—	650
M Lamberti ^{(2), (9)}	115	—	—	—	—	115
I Jacobs ⁽¹⁰⁾	277	—	—	—	—	277
G Nakos ⁽¹¹⁾	—	—	—	—	—	—
	3,442	—	—	—	—	3,442
Value added tax ⁽²⁾	95	—	—	—	—	95

Executive committee ⁽⁵⁾
S Joselowitz ⁽⁶⁾	—	7,219	—	—	3,404	10,623
M Pydigadu ⁽¹²⁾	—	2,101	98	80	1,206	3,485
C Tasker ⁽⁶⁾	—	3,612	178	256	1,511	5,557
B Horan ⁽¹³⁾	—	1,215	63	47	1,456	2,781
P Dell ⁽¹⁴⁾	—	275	14	11	—	300
G Pretorius	—	2,096	129	335	1,147	3,707
C Lewis	—	2,328	—	144	1,099	3,571
	3,537	18,846	482	873	9,823	33,561


⁽¹⁾	Performance bonuses are based on actual amounts paid during the fiscal year.


⁽²⁾	Value added tax (“VAT”) included as part of certain invoices received. Directors’ fees shown exclude VAT.


⁽³⁾	Appointed to the Board with effect July 4, 2018.


⁽⁴⁾	Resigned from the Board with effect July 4, 2018.


⁽⁵⁾	All prescribed officers of the Company are included as part of the executive committee.


⁽⁶⁾	Executive director as at March 31, 2019, March 31, 2018 and March 31, 2017.


⁽⁷⁾	Resigned from the Board with effect from November 7, 2017.


⁽⁸⁾	Appointed to the Board with effect from October 3, 2017.


⁽⁹⁾	Appointed to the Board with effect from November 19, 2014, resigned from the Board with effect from August 18, 2016.


⁽¹⁰⁾	Appointed to the Board with effect from June 1, 2016.


⁽¹¹⁾	Appointed as alternate director to Mark Lamberti with effect from November 4, 2015. Subsequently resigned as alternate director to Mark Lamberti with effect from August 18, 2016.


⁽¹²⁾	Resigned from the Board with effect from February 9, 2017.


⁽¹³⁾	Resigned with effect from September 30, 2016.


⁽¹⁴⁾	Appointed as Group executive committee member from February 1, 2017 and to the Board with effect from February 9, 2017. Executive director as at March 31, 2019, March 31, 2018 and March 31, 2017.

The remaining related party transactions are set out in note 33.



Notes to the consolidated financial statements


for the year ended March 31, 2019

29. Taxation



	March 31, 2019 R’000		March 31, 2018 R’000		March 31, 2017 R’000

Major components of taxation expense
Normal taxation	(90,787	)	(58,668	)	(46,788	)
– Current	(87,540	)	(55,385	)	(43,434	)
– (Under)/Over-provision prior years	1,318		325		589
– Foreign tax paid	(3,800	)	(2,880	)	(3,711	)
– Withholding tax	(765	)	(728	)	(232	)

Deferred taxation (note 18)	(47,175	)	24,978		19,976
– Current year	(43,700	)	25,658		20,748
– Under-provision prior years	(3,475	)	(680	)	(772	)
	(137,962	)	(33,690	)	(26,812	)

Taxation recognized in other comprehensive income



	Before tax R’000	Tax impact R’000	After tax R’000

2019
Exchange differences on translating foreign operations	114,596	1,151	115,747
	114,596	1,151	115,747



	Before tax R’000		Tax impact R’000		After tax R’000

2018
Exchange differences on translating foreign operations	(60,331	)	(237	)	(60,568	)
	(60,331	)	(237	)	(60,568	)



	Before tax R’000		Tax impact R’000		After tax R’000

2017
Exchange differences on translating foreign operations	(80,870	)	(59	)	(80,929	)
	(80,870	)	(59	)	(80,929	)



Notes to the consolidated financial statements


for the year ended March 31, 2019

Tax rate reconciliation

The tax on the Group’s profit before taxation differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the entities as follows:



		March 31, 2019 R’000		March 31, 2018 R’000		March 31, 2017 R’000
Profit before taxation		340,298		214,883		148,253
Tax at the applicable tax rate of 28%		95,283		60,167		41,511
Tax effect of:		42,679		(26,477	)	(14,699	)
– Income not subject to tax		(557	)	(552	)	—
– Expenses not deductible for tax purposes ⁽¹⁾		5,014		6,460		7,409
– Non-deductible/(non-taxable) foreign exchange movements ⁽²⁾	`	47,318		(28,184	)	(15,884	)
– Withholding tax		765		728		232
– Utilization of prior year assessed losses ⁽³⁾		(5,497	)	(6,452	)	(1,461	)
– Foreign tax paid ⁽⁴⁾		3,800		2,880		3,711
– Tax rate differential		(3,317	)	(2,546	)	1,281
– Deferred tax not recognized on assessed losses		239		517		4,049
– Deferred tax asset previously not recognized		(3,598	)	(1,122	)	(5,342	)
– Under-provision prior years		2,157		355		183
– Tax incentives in addition to incurred cost ⁽⁵⁾		(6,049	)	(3,258	)	(10,387	)
– Share-based payment expense previously not deductible		—		(1,049	)	—
– Imputation of controlled foreign company income		2,438		2,365		1,453
– Transfer pricing imputation		78		3,381		57
– Other		(112	)	—		—
		137,962		33,690		26,812


⁽¹⁾	These non-deductible expenses consist primarily of items of a capital nature and costs attributable to exempt income.


⁽²⁾	The non-deductible/(non-taxable) foreign exchange movements arise as a result of the Group’s internal loan structures.


⁽³⁾	The utilization of assessed losses arises mainly in Europe, Brazil and the Americas where historical assessed losses are being utilized, refer to note 18.


⁽⁴⁾	The foreign tax paid relates primarily to withholding taxes on revenue earned in jurisdictions where the Group does not have a legal entity.


⁽⁵⁾	The tax incentives relate mainly to the section 11D allowance detailed below, as well as S12H learnership allowances received.

The Group’s weighted average tax rate is 40.5% (2018: 15.7% , 2017: 18.1% ).

Section 11D allowances relating to tax assets recognized



Notes to the consolidated financial statements


for the year ended March 31, 2019

The taxation receivable includes amounts due of R13.8 million in respect of S11D tax incentives at March 31, 2019 (2018: R17.7 million ).

30. Earnings per share

Basic

Basic earnings per share is calculated by dividing the profit attributable to owners of the parent by the weighted average number of ordinary shares in issue during the year.



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Profit attributable to owners of the parent	202,336	181,134	121,458
Weighted average number of ordinary shares in issue (000s)	563,578	561,088	629,626
Basic earnings per share (R)	0.36	0.32	0.19

Diluted

Diluted earnings per share is calculated by dividing the diluted profit attributable to owners of the parent by the diluted weighted average number of ordinary shares in issue during the year. Share options and share appreciation rights granted to employees under the TeliMatrix Group Executive Incentive Scheme and the MiX Telematics Long-Term Incentive Plan (“LTIP”), as disclosed in note 13, are considered to be potential ordinary shares. They have been included in the determination of diluted earnings per share if the required target share price or annual shareholder return hurdles (as applicable) would have been met based on the Company's performance up to the reporting date, and to the extent to which they are dilutive. Details relating to the share options and share appreciation rights are set out in note 13.

Performance share awards were issued for the first time during fiscal 2019. The performance share awards are not considered to be dilutive as the performance conditions have not been met. Share appreciation rights were issued for the first time during fiscal 2015 and there were no potentially dilutive share appreciation rights at March 31, 2017.



Notes to the consolidated financial statements


for the year ended March 31, 2019



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Diluted profit attributable to owners of the parent	202,336	181,134	121,458

Weighted average number of ordinary shares in issue (000s)	563,578	561,088	629,626
Adjusted for:
– potentially dilutive effect of share appreciation rights	16,275	7,230	—
– potentially dilutive effect of share options	3,794	5,663	2,193
Diluted weighted average number of ordinary shares in issue (000s)	583,647	573,981	631,819
Diluted earnings per share (R)	0.35	0.32	0.19

Adjusted earnings per share

Adjusted earnings per share is defined as profit attributable to owners of the parent, MiX Telematics Limited, excluding net foreign exchange gains/(losses) net of tax and share based compensation costs related to performance share awards net of tax, divided by the weighted average number of ordinary shares in issue during the period.



	March 31, 2019 R’000		March 31, 2018 R’000		March 31, 2017 R’000

Reconciliation of adjusted earnings
Profit attributable to owners of the parent	202,336		181,134		121,458
Net foreign exchange (gains)/losses	(383	)	5,073		(1,476	)
IFRS 2 charge on performance share awards (note 13)	5,110		—		—
Income tax effect on the above components ⁽¹⁾	47,382		(29,403	)	(15,307	)
Adjusted earnings attributable to owners of the parent	254,445		156,804		104,675


⁽¹⁾	The income tax effect is mainly influenced by the Group’s internal loan structures (note 29).

Basic

Basic adjusted earnings per share is calculated by dividing the adjusted earnings attributable to owners of the parent by the weighted average number of ordinary shares in issue during the year.



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Adjusted earnings attributable to owners of the parent	254,445	156,804	104,675
Weighted average number of ordinary shares in issue (000s)	563,578	561,088	629,626
Basic adjusted earnings per share (R)	0.45	0.28	0.17

Diluted

Adjusted diluted earnings per share is calculated by dividing the diluted adjusted earnings attributable to owners of the parent by the diluted weighted average number of ordinary shares in issue during the year.



Notes to the consolidated financial statements


for the year ended March 31, 2019



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Diluted adjusted earnings attributable to owners of the parent	254,445	156,804	104,675
Diluted adjusted weighted average number of ordinary shares in issue (000s)	583,647	573,981	631,819
Diluted adjusted earnings per share (R)	0.44	0.27	0.17

Headline earnings per share

Headline earnings is a profit measure required for JSE-listed companies and is calculated in accordance with circular 4/2018 issued by the South African Institute of Chartered Accountants. The profit measure is determined by taking the profit for the period prior to certain separately identifiable re-measurements of the carrying amount of an asset or liability that arose after the initial recognition of such asset or liability net of related tax (both current and deferred) and related non-controlling interest.



	March 31, 2019 R’000		March 31, 2018 R’000		March 31, 2017 R’000

Reconciliation of headline earnings
Profit attributable to owners of the parent	202,336		181,134		121,458
(Profit)/loss on disposal of property, plant and equipment and intangible assets (note 32.2)	(586	)	(1,264	)	262
Impairment of intangible assets (notes 5, 7 and 32.2)	930		2,687		3,166
Impairment/(reversal of impairment) of property, plant and equipment (notes 5, 6 and 32.2)	—		9		(791	)
Non-controlling interest effects of adjustments	—		—		8
Income tax effect on the above components	(85	)	(380	)	(661	)
Headline earnings attributable to owners of the parent	202,595		182,186		123,442

Basic

Basic headline earnings per share is calculated by dividing the headline earnings attributable to owners of the parent by the weighted average number of ordinary shares in issue during the year.



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Headline earnings attributable to owners of the parent	202,595	182,186	123,442
Weighted average number of ordinary shares in issue (000s)	563,578	561,088	629,626
Basic headline earnings per share (R)	0.36	0.32	0.20

Diluted

Diluted headline earnings per share is calculated by dividing the diluted headline earnings attributable to owners of the parent by the diluted weighted average number of ordinary shares in issue during the year.



Notes to the consolidated financial statements


for the year ended March 31, 2019



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Diluted headline earnings attributable to owners of the parent	202,595	182,186	123,442
Diluted weighted average number of ordinary shares in issue (000s)	583,647	573,981	631,819
Diluted headline earnings per share (R)	0.35	0.32	0.20

31. Dividends



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Dividends declared	67,572	53,268	53,026

During fiscal 2016 the Board decided to reintroduce the Company’s policy of paying regular dividends. Dividend payments are currently considered on a quarter-by-quarter basis.

The following dividends were declared by the Company in fiscal 2019 (excluding dividends paid on treasury shares):


•	In respect of the fourth quarter of fiscal 2018, a dividend of R16.9 million was declared on May 8, 2018 and paid on June 4, 2018. Using shares in issue of 564,420,145 (excluding 40,000,000 treasury shares), this equated to a dividend of 3 cents per share.


•	In respect of the first quarter of fiscal 2019, a dividend of R16.9 million was declared on July 31, 2018 and paid on August 27, 2018. Using shares in issue of 564,634,076 (excluding 40,000,000 treasury shares), this equated to a dividend of 3 cents per share.


•	In respect of the second quarter of fiscal 2019, a dividend of R16.8 million was declared on October 30, 2018 and paid on November 26, 2018. Using shares in issue of 561,807,639 (excluding 40,000,000 treasury shares), this equated to a dividend of 3 cents per share.


•	In respect of the third quarter of fiscal 2019, a dividend of R16.9 million was declared on January 31, 2019 and paid on February 25, 2019. Using shares in issue of 561,807,639 (excluding 40,000,000 treasury shares), this equated to a dividend of 3 cents per share.

The following dividends were declared by the Company in fiscal 2018 (excluding dividends paid on treasury shares):


•	In respect of the fourth quarter of fiscal 2017, a dividend of R11.3 million was declared on May 23, 2017 and paid on June 19, 2017. Using shares in issue of 563,514,561 (excluding 40,000,000 treasury shares), this equated to a dividend of 2 cents per share.


•	In respect of the first quarter of fiscal 2018, a dividend of R14.0 million was declared on August 1, 2017 and paid on August 28, 2017. Using shares in issue of 558,898,901 (excluding 40,000,000 treasury shares), this equated to a dividend of 2.5 cents per share.



Notes to the consolidated financial statements


for the year ended March 31, 2019


•	In respect of the second quarter of fiscal 2018, a dividend of R14.0 million was declared on October 31, 2017 and paid on November 27, 2017. Using shares in issue of 559,418,095 (excluding 40,000,000 treasury shares), this equated to a dividend of 2.5 cents per share.


•	In respect of the third quarter of fiscal 2018, a dividend of R14.0 million was declared on January 30, 2018 and paid on February 26, 2018. Using shares in issue of 562,320,145 (excluding 40,000,000 treasury shares), this equated to a dividend of 2.5 cents per share.

The following dividends were declared by the Company in fiscal 2017 (excluding dividends paid on treasury shares):


•	In respect of the fourth quarter of fiscal 2016, a dividend of R15.2 million was declared on May 24, 2016 and paid on June 20, 2016. Using shares in issue of 761,337,500 (excluding 40,000,000 treasury shares), this equated to a dividend of 2 cents per share.


•	In respect of the first quarter of fiscal 2017, a dividend of R15.3 million was declared on August 4, 2016 and paid on August 29, 2016. Using shares in issue of 763,087,500 (excluding 40,000,000 treasury shares), this equated to a dividend of 2 cents per share.


•	In respect of the second quarter of fiscal 2017, a dividend of R11.3 million was declared on November 3, 2016 and paid on November 28, 2016. Using shares in issue of 563,434,240 (excluding 40,000,000 treasury shares), this equated to a dividend of 2 cents per share.


•	In respect of the third quarter of fiscal 2017, a dividend of R11.2 million was declared on February 2, 2017 and paid on February 27, 2017. Using shares in issue of 563,434,240 (excluding 40,000,000 treasury shares), this equated to a dividend of 2 cents per share.



Notes to the consolidated financial statements


for the year ended March 31, 2019

32. Cash flow statement

32.1 The following convention applies to figures other than adjustments:

Outflows of cash are represented by figures in brackets. Inflows of cash are represented by figures without brackets.

32.2 Reconciliation of profit for the year before taxation to cash generated from operations:



	March 31, 2019 R’000		March 31, 2018 R’000		March 31, 2017 R’000

Profit before taxation	340,298		214,883		148,253
Adjustments	346,614		279,727		197,023
– (Profit)/loss on disposal of property, plant and equipment and intangible assets (note 23)	(586	)	(1,264	)	262
– Depreciation (notes 6 and 24)	183,478		151,945		98,508
– Amortization (notes 7 and 24)	64,877		63,926		44,734
– Amortization of capitalized commission assets (notes 8 and 24)	30,477		*		*
– Impairment of intangible assets (notes 7 and 24)	930		2,687		3,166
– Impairment/(reversal of impairment) of property, plant and equipment (notes 6 and 24)	—		9		(791	)
– Finance income (note 25)	(11,903	)	(8,951	)	(14,592	)
– Finance costs (note 26)	10,900		3,947		5,677
– Equity-settled share-based payments (notes 14 and 24)	12,140		9,000		2,247
– Cash-settled share-based payments (notes 21 and 24)	—		1,352		—
– Foreign exchange losses/(gains) (notes 25 and 26)	(383	)	5,073		(1,476	)
– Impairment of receivables (note 10)	29,725		24,143		17,713
– Write-down of inventory to net realizable value (notes 9 and 24)	4,112		9,294		9,967
– Increase in provisions	26,352		18,950		31,821
– Lease straight-line adjustment	—		(384	)	(213	)
– Significant financing revenue adjustment	(4,542	)	*		*
– Fixed escalations revenue adjustment	1,037		*		*
Cash generated from operations before working capital changes	686,912		494,610		345,276

Changes in working capital	(145,480	)	(81,585	)	31,839
– Decrease/(increase) in inventories	1,638		(39,858	)	28,073
– (Increase)/decrease in trade and other receivables	(123,733	)	(49,601	)	17,404
– Increase in capitalized commission assets under IFRS 15	(31,769	)	*		*
– Decrease in finance lease receivable	—		165		1,009
– Increase in trade and other payables	70,430		8,519		21,993
– Decrease in provisions	(26,117	)	(26,709	)	(32,854	)
– Foreign currency translation differences on working capital	(35,929	)	25,899		(3,786	)

Cash generated from operations	541,432		413,025		377,115

* Due to the transition method chosen by the Group in applying IFRS 15, comparative information has not been restated to reflect the new requirements. Refer to note 2.1.1.1.



Notes to the consolidated financial statements


for the year ended March 31, 2019

33. Related party transactions

Directors’ and executive committee members’ interest

The list of directors and executive committee members and their beneficial interests declared in the Company’s share capital at year-end held directly, indirectly and by associates were as follows:



	March 31, 2019			March 31, 2018
	Direct 000s	Indirect 000s	Associate 000s	Direct 000s	Indirect 000s	Associate 000s

Non-executive
R Bruyns	—	3,697	—	—	3,697	—
R Frew	—	63,848	70,261	—	63,848	70,261
A Welton	—	—	235	—	—	235
E Banda ⁽¹⁾	—	—	—	—	—	—
I Jacobs	241	14,296	—	241	14,296	—
F Roji-Maplanka ⁽²⁾	—	—	—	—	—	—
F Futwa ⁽³⁾	—	—	—	—	—	—

Executive
S Joselowitz	23,842	—	—	26,342	—	—
C Tasker	2,907	—	2,428	2,057	—	2,428
P Dell	1	—	—	1	—	—
G Pretorius	690	—	—	338	—	—
C Lewis	1,525	—	—	1,525	—	—
	29,206	81,841	72,924	30,504	81,841	72,924


⁽¹⁾	Resigned from the Board with effect from July 4, 2018.


⁽²⁾	Appointed to the Board with effect from October 3, 2017.


⁽³⁾	Appointed to the Board with effect from July 4, 2018.

Interests in contracts

During the year under review, the following were disclosed as contractual arrangements that existed between the Group and parties outside of the Group, in which certain of the directors and executive committee members had interests:



Name of director	Related party	Nature of relationship with the Group

R Frew	TPF Investments Proprietary Limited	Lease agreement: Midrand office*
R Frew	Masalini Capital Proprietary Limited	Provides directors’ services

*During the year a small related party transaction was entered into with TPF. Refer to note 6 for further details.

A list of subsidiaries has been included in note 40.



Notes to the consolidated financial statements


for the year ended March 31, 2019

Transactions with related parties and balances outstanding at year-end are as follows (excluding key management personnel emoluments):



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Sales of goods and services	—	—	22,263
– Imperial Group Limited*	—	—	22,263
Purchases of goods and services	7,384	8,277	11,206
– TPF Investments Proprietary Limited**	7,384	8,277	5,277
– Imperial Group Limited*	—	—	5,929


*	Related party until August 1, 2016. See “ Fiscal 2017 specific share repurchase ” in note 13 for additional information.


**	Previously known as Thynk Property Fund Proprietary Limited.

Refer to note 28 for key management personnel emoluments disclosure. Key management personnel include executive committee members.

The related parties included above are related to the Group due to certain shares in these entities being held by executive or non-executive directors of the Company or due to common directorships held.

There were no receivables from related parties at March 31, 2019, 2018 and 2017.

There were no payables to related parties at March 31, 2019, 2018 and 2017.

34. Contingencies

Service agreement

In terms of an amended network services agreement with Mobile Telephone Networks Proprietary Limited (“MTN”), MTN is entitled to claw back payments from MiX Telematics Africa Proprietary Limited, a subsidiary of the Group, in the event of early cancellation of the agreement or certain base connections not being maintained over the term of the agreement. No connection incentives will be received in terms of the amended network services agreement. The maximum potential liability under the arrangement is R39.1 million (2018: R43.7 million ). No loss is considered probable under this arrangement.

Competition Commission of South Africa matter

On April 15, 2019 the Competition Commission of South Africa (“Commission”) referred a matter to the Competition Tribunal of South Africa (“Tribunal”). The Commission contends that the Group and a number of our channel partners have engaged in market division. Should the Tribunal rule against MiX Telematics, the Group may be liable to an administrative penalty in terms of the Competition Act, No. 89 of 1998. The Group had cooperated fully with the Commission during its preliminary investigation. We cannot predict the timing of a resolution or the ultimate outcome of the matter, however, the Group and our external legal advisers continue to believe that we have consistently adhered to all applicable laws and regulations and that the referral from the Commission is without merit. We have therefore not made any provisions for this matter as yet.



Notes to the consolidated financial statements


for the year ended March 31, 2019

35. Commitments

Capital commitments

At March 31, the Group had approved, but not yet contracted, capital commitments for:



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Property, plant and equipment	—	—	—
Intangible assets	52,366	56,406	58,036
	52,366	56,406	58,036

At March 31, the Group had approved and contracted capital commitments for:



	March 31, 2019 R’000	March 31, 2018 R’000	March 31, 2017 R’000

Property, plant and equipment	40,070	11,601	50,074
Intangible assets	18,271	17,046	24,726
	58,341	28,647	74,800

Capital commitments will be funded out of a mixture of working capital and cash and cash equivalents.

Lease commitments

At March 31, 2019, the Group had ongoing month-to-month lease contracts with respect of leases to which the 12-month practical expedient has been applied during fiscal 2019.

Operating leases until March 31, 2018 under IAS 17 Leases accounting

The Group leases various offices under operating lease agreements as defined in IAS 17 Leases . The leases have various terms and escalation clauses and renewal rights.

The future minimum lease payments in respect of land and buildings under non-cancellable operating leases are as follows:



	March 31, 2018 R’000	March 31, 2017 R’000

Land and buildings
Within one year	12,324	15,201
One to five years	10,862	20,354
	23,186	35,555

The Group leases various office equipment and vehicles under non-cancellable operating lease agreements as defined in IAS 17 Leases . The lease terms are between one and five years with annual escalations up to 10% per annum. The Group is required to give up to three months’ notice for the termination of these agreements.

100



Notes to the consolidated financial statements


for the year ended March 31, 2019

The future minimum lease payments of office equipment and vehicles under non-cancellable operating leases are as follows:



	March 31, 2018 R’000	March 31, 2017 R’000

Office equipment
Within one year	716	853
One to five years	674	495
	1,390	1,348

Vehicles
Within one year	1,585	1,507
One to five years	1,617	1,626
	3,202	3,133

The lease expenditure charged to the income statement during fiscal 2018 and fiscal 2017 is disclosed in note 24.

The Group has adopted IFRS 16 from April 1, 2018, for information regarding capitalized lease liabilities recognized under IFRS 16 refer to note 20.

Reconciliation of operating lease commitments to IFRS 16 liability recognized on April 1, 2018



	March 31, 2019 R’000

Operating lease commitments at March 31, 2018	27,778
Discounted using the incremental borrowing rate at April 1, 2018 ⁽²⁾	25,771
Recognition exemption for:
– Short term leases	(5,010	)
– Leases of low value assets	(1,186	)
Extension and termination options reasonably certain to be exercised and variable lease payments based on an index or rate	12,529
Lease liabilities recognized at April 1, 2018 (note 20)	32,104

⁽²⁾ The weighted average lessee’s incremental borrowing rate applied was 6.6% .

36. Events after the reporting period

Other than the items below, the directors are not aware of any matter material or otherwise arising since March 31, 2019 and up to the date of this report, not otherwise dealt with herein.

Dividend declared

The Board of Directors declared in respect of the fourth quarter of fiscal 2019 which ended on March 31, 2019, a dividend of 4 South African cents per ordinary share that was paid on June 3, 2019.

B-BBEE Property Transaction

All of the conditions precedent related to the B-BBEE transaction were fulfilled on May 17, 2019. The Stellenbosch property was transferred into the name of BIG on July 25, 2019. Once transfer of the Midrand property is concluded, MiX Enterprise will, similarly to the Stellenbosch property, conclude a lease agreement with BIG and will lease the premises in Midrand for an initial period of five years with an option to renew the lease for a further five-year period. The Midrand transfer is expected to be concluded during fiscal 2020. Refer to note 6 for further information regarding this transaction.

101



Notes to the consolidated financial statements


for the year ended March 31, 2019

Changes to the Board

John Granara has been appointed as Chief Financial Officer (“CFO”) and Executive Vice President, effective July 8, 2019. John Granara will succeed Paul Dell, who has filled the role of interim CFO since early 2017 and who resigned from the Board as interim CFO and Director of the Company with effect from July 8, 2019. Paul will continue at MiX Telematics in an alternative senior role.

102



Notes to the consolidated financial statements


for the year ended March 31, 2019

37. Financial risk sensitivity analysis

Interest rate sensitivity

A change in the interest rate at the reporting date of 100 basis points for ZAR denominated instruments would have increased/(decreased) profit or loss before tax by the amounts shown below. A change in the interest rate at the reporting date of 10 basis points for USD denominated instruments is not material. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for the year ended March 31, 2018.



		March 31, 2019 R’000		March 31, 2018 R’000

ZAR denominated instruments	Increase of 100 basis points	1,803		1,811
	Decrease of 100 basis points	(1,803	)	(1,811	)

* Amount less than R1,000.

Foreign currency sensitivity

The Group has used a sensitivity analysis technique that measures the estimated change to profit or loss and equity of an instantaneous 5% strengthening or weakening in the functional currency against all other currencies, from the rate applicable at March 31, 2019, for each class of financial instrument with all other variables remaining constant. This analysis is for illustrative purposes only as, in practice, market rates rarely change in isolation.

The Group is exposed mainly to fluctuations in foreign exchange rates in respect of the South African Rand, Australian Dollar, United States Dollar, the British Pound, the Brazilian Real and the Euro. This analysis considers the impact of changes in foreign exchange rates on profit or loss.

A change in the foreign exchange rates to which the Group is exposed at the reporting date would have increased/(decreased) profit before taxation by the amounts shown below. The analysis has been performed on the basis of the change occurring at the end of the reporting period.

103



Notes to the consolidated financial statements


for the year ended March 31, 2019



		Increase/(decrease) in profit before taxation
	Change in exchange rate %	Result of weakening in functional currency R’000		Result of strengthening in functional currency R’000

2019
Denominated currency: Functional currency
EUR:GBP	5	1,075		(1,075	)
USD:GBP	5	242		(242	)
USD:ZAR	5	103		(103	)
EUR:ZAR	5	33		(33	)
GBP:ZAR	5	(5	)	5
ZAR:USD	5	(24	)	24
EUR:USD	5	119		(119	)
USD:AUD	5	39		(39	)
AUD:ZAR	5	50		(50	)
ZAR:GBP	5	(98	)	98
ZAR:AUD	5	(18	)	18
USD:BRL	5	(24	)	24


2018
Denominated currency: Functional currency
EUR:GBP	5	710		(710	)
USD:GBP	5	(149	)	149
USD:ZAR	5	814		(814	)
EUR:ZAR	5	368		(368	)
GBP:ZAR	5	(78	)	78
ZAR:USD	5	2		(2	)
EUR:USD	5	231		(231	)
USD:AUD	5	(33	)	33
AUD:ZAR	5	598		(598	)
ZAR:GBP	5	(22	)	22
USD:BRL	5	(33	)	33

104



Notes to the consolidated financial statements


for the year ended March 31, 2019

38. Liquidity risk

Liquidity risk is the risk that there will be insufficient funds available to settle obligations when they are due.

The Group has limited risk due to the recurring nature of its income and the availability of liquid resources. The Group meets its financing requirements through a mixture of cash generated from its operations and its access to undrawn borrowing facilities (note 15). In addition, the Group holds the following cash resources:

The table below analyzes the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.



	Payable within 1 month or on demand R’000	Between 1 month and 1 year R’000	Between 1 year and 2 years R’000	Between 2 years and 5 years R’000	More than 5 years R’000	Total R’000

March 31, 2019
Trade payables	50,742	40,028	—	—	—	90,770
Accruals and other payables	90,432	91,970	—	—	—	182,402
Bank overdraft	30,262	—	—	—	—	30,262
Capitalized lease liability	883	10,180	8,493	19,061	9,691	48,308
Recurring commission liability	171	6,700	1,845	—	—	8,716
Total	172,490	148,878	10,338	19,061	9,691	360,458

March 31, 2018
Trade payables	58,085	40,009	—	—	—	98,094
Accruals and other payables	92,318	68,646	—	—	—	160,964
Bank overdraft	17,720	—	—	—	—	17,720
Total	168,123	108,655	—	—	—	276,778

There have been no significant changes in the Group’s financial risk management described above relative to the prior year.

39. Exchange rates

The following major rates of exchange were used in the preparation of the consolidated financial statements:



		March 31, 2019	March 31, 2018	March 31, 2017

ZAR:USD	– closing	14.48	11.83	13.41
	– average	13.75	12.99	14.06
ZAR:GBP	– closing	18.90	16.60	16.75
	– average	18.03	17.21	18.42

105



Notes to the consolidated financial statements


for the year ended March 31, 2019

40. List of Group companies

MiX Telematics Limited is the parent company of the MiX Telematics Group of companies outlined below. All of the entities listed below have been consolidated.



Name	Principal activity	Place of incorporation	Legal % ownership
Name	Principal activity	Place of incorporation	March 31, 2019 %	March 31, 2018 %

Direct
MiX Telematics Investments Proprietary Limited	Treasury company	RSA	100	100
MiX Telematics Africa Proprietary Limited	Asset tracking and fleet management products and services	RSA	100	100
MiX Telematics International Proprietary Limited	Fleet management products and services and research and development	RSA	100	100
MiX Telematics Europe Limited	Fleet management products and services	UK	100	100
MiX Telematics North America Incorporated	Fleet management products and services	USA	100	100
MiX Telematics Serviços De Telemetria E Rastreamento De Veículos Do Brazil Limitada	Fleet management products and services	Brazil	95	95

Indirect
MiX Telematics Middle East FZE	Fleet management products and services	UAE	100	100
MiX Telematics Enterprise SA Proprietary Limited ⁽¹⁾	Fleet management products and services	RSA	85.1	85.1
MiX Telematics Fleet Support Services Proprietary Limited	Fleet management products and services	RSA	100	100
MiX Telematics East Africa Limited	Fleet management products and services	Uganda	99.9	99.9
MiX Telematics Romania SRL ⁽²⁾	Fleet management services	Romania	99	99
MiX Telematics (Thailand) Limited	Fleet management products and services	Thailand	100	100
MiX Telematics Australasia Proprietary Limited	Fleet management products and services	Australia	100	100
MiX Telematics Serviços De Telemetria E Rastreamento De Veículos Do Brazil Limitada(3)	Fleet management products and services	Brazil	5	5
MiX Telematics Sociedad De Responsabilidad Limitada De Capital Variable	Dormant	Mexico	100	—

⁽¹⁾

The remaining shareholding in this company is owned by a structured entity, the MiX Telematics Enterprise BEE Trust (which holds a 14.9% interest in MiX Telematics Enterprise SA Proprietary Limited), which has been fully consolidated. Control of the structured entity was assessed when IFRS 10 Consolidated Financial Statements was adopted with effect from April 1, 2013 and there was no change to the historical accounting treatment applied by the Group. This trust was set up in prior years to invest in the specified Group company and to hold such investment for its beneficiaries.


⁽²⁾	During fiscal 2015, MiX Telematics Middle East FZE incorporated MiX Telematics Romania SRL and obtained a 99% interest therein. The 1% non-controlling interest is held by management.


⁽³⁾	MiX Investments Proprietary Limited acquired Edge’s 5% equity interest in MiX Brazil during fiscal 2018.

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