Stock-based compensation plan

12 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

The Company has issued share incentives to directors and certain key employees within the Company under the MiX Telematics Long-Term Incentive Plan (“LTIP”), an equity-classified incentive plan.

The LTIP provides for three types of grants to be issued, namely performance shares, restricted share units (“RSUs”) and stock appreciation rights (“SARs”).

As of March 31, 2022, there were 34,965,000 shares reserved for future issuance under the LTIP.

The total stock-based compensation expense recognized during the years ended March 31, 2020, 2021 and 2022, was $0.7 million, $1.3 million and $1.3 million, respectively. Net deferred tax benefits recognized/(reversed) on total stock-based compensation expense in the Statement of Income for the years ended March 31, 2020, 2021 and 2022, was $0.4 million, $0.1 million and $(0.1) million, respectively. Tax benefits realized on awards exercised during the years ended March 31, 2020, 2021 and 2022, was $0.2 million, $0.1 million and $0.6 million, respectively.

Stock appreciation rights granted under the LTIP

Under the LTIP, SARs may be issued to certain directors and key employees. The exercise price of the SARs granted is equal to the closing market value of ordinary shares on the day preceding the date of grant. The SARs granted vest in tranches of 25%

per annum, commencing on the second anniversary of the grant date and expire 6 years after the grant date. Vesting is contingent upon employment within the Company and an annual total shareholder return in excess of 10% being achieved, taking into account any dividends paid during the vesting period. Management estimates forfeiture to be approximately 5%. Upon exercise, the Company will settle the value of the difference, between the closing market value of the ordinary shares on the day of settlement and the award price (if positive), by delivering shares. The Company has no legal or constructive obligation to settle the SARs in cash.

The following table summarizes the Company’s SARs for the year ended March 31, 2022:


	Number of SARs	Weighted- Average Exercise Price in U.S. Cents*	Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value* (in thousands)
Outstanding as of April 1, 2021	40,567,917	38
Granted on December 9, 2021	11,625,000	51
Granted on March 24, 2022	500,000	50
Exercised	(9,692,917)	22
Forfeited	(2,028,125)	46
Outstanding as of March 31, 2022	40,971,875	45	3.73
Vested and expected to vest as of March 31, 2022	39,407,969	45	3.71	$	2,569
Vested as of March 31, 2022	9,693,750	35	1.70	$	1,583

* The exercise price is denominated in South African cents. U.S. currency amounts are based on a ZAR:USD exchange rate of 14.4916 as of March 31, 2022.

The weighted-average grant-date fair value of SARs granted during the years ended March 31, 2020, 2021 and 2022, was 22 U.S. cents, 16 U.S. cents and 22 U.S. cents, respectively. The grant-date fair value was determined using a combination of the Monte Carlo Simulation option pricing model and the Binomial Tree option pricing model. U.S. currency amounts are based on a ZAR:USD exchange rate of 14.4916 as of March 31, 2022. The key drivers and assumptions input into the valuation models used to determine these values are disclosed below. The volatility was calculated using a mixture of the Company’s historical data as well as the share data of comparable companies for grants made in all financial years preceding 2022 and the Company’s historical share data for grants made in the 2022 fiscal year and the current year.

The total intrinsic value of SARs exercised during fiscal years 2020, 2021 and 2022 was $1.25 million, $0.57 million, and $3.01 million, respectively. U.S. Dollar amounts are based on a ZAR:USD exchange rate of 14.4916 as of March 31, 2022.

The following table summarizes the Company’s unvested SARs for the year ended March 31, 2022:


	Number of SARs	Weighted- Average Grant-Date Fair Value in U.S. Cents*
Unvested as of April 1, 2021	28,512,500	17
Granted on December 9, 2021	11,625,000	22
Granted on March 24, 2022	500,000	22
Vested	(7,331,250)	13
Forfeited	(2,028,125)	18
Unvested as of March 31, 2022	31,278,125	20

* The exercise price used to determine the grant date fair value is denominated in South African cents. U.S. currency amounts are based on a ZAR:USD exchange rate of 14.4916 as of March 31, 2022.

As of March 31, 2022, there was $2.81 million of unrecognized compensation cost related to unvested SARs. This amount is expected to be recognized over a weighted-average period of 4.07 years.

Restricted share units granted under the LTIP

Under the LTIP, RSUs may be issued to certain directors and key employees. The scheme rules allow for a maximum of 2 million RSUs to be granted in any financial year and for a maximum of 12 million RSUs to be granted in aggregate over the life of the plan.

2 million time-based RSUs were granted on June 1, 2020, and will vest in tranches of 50% per annum, commencing on the second anniversary of the grant date. Vesting is conditional upon the continued employment of the recipient with the Company. Management estimates forfeiture to be approximately 5%. Settlement will take place in the Company’s shares. The Company has no legal or constructive obligation to settle the RSUs in cash. The weighted average grant date fair value per RSU granted was 35 U.S. cents. U.S. currency amounts are based on a ZAR:USD exchange rate of 14.4916 as of March 31, 2022. The grant date fair value was determined by deducting the present value of expected dividends to be paid per share prior to vesting from the closing market price of the Company’s shares on the grant date. The unrecognized compensation cost related to unvested RSUs as of March 31, 2022 was $0.2 million, which will be recognized over a weighted average period of 1 year, which is also the weighted average remaining contractual period.