MIXT MiX Telematics Limited

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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.

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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.

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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.

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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.

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⁽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.

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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.

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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

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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.

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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

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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.

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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;

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•	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;

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•	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.

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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

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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.

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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;

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•	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.

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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.

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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.”

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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

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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.

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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.

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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

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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.

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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

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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.

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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

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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

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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.

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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.

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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

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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”.

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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.”

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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.

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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.

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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

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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

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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.

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◦	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

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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

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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.

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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.

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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.

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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

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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

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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

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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.

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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

    

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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.

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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

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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.

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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

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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.

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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

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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.

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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

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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.

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		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.

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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

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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.

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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.

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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.

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•

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%.

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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

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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.

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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

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 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.

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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.

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.

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. Similar to the relationship

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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.

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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.

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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.

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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.

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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:

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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.

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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

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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.

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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.

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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

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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.

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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.

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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

More than 5 Years

(In thousands)

Approved and committed capital commitments

R58,341

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.

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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.

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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.

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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

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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.

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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

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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.

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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	%

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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

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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.

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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.

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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.

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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.

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.

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;

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•	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

    

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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.

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(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.

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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.

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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.

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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.

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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.

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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.

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.

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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;

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•	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

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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

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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.

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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.

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

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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

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*	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.

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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

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