Commitment and contingencies

12 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Capital commitments

As of March 31, 2020, 2021 and 2022, the Company had approved, and contracted, capital commitments for property, plant and equipment of $1.8 million, $1.2 million and $14.8 million, respectively; and for intangible assets of $0.9 million, $1.3 million and $1.6 million, respectively.

Capital commitments will be funded out of a mixture of working capital and cash and cash equivalents.

Contingencies

Service agreement

In terms of an amended network services agreement with Mobile Telephone Networks Proprietary Limited (“MTN”), MTN is entitled to claw back payments from MiX Telematics Africa Proprietary Limited, a subsidiary of the Company, in the event of

early cancellation of the agreement or certain base connections not being maintained over the term of the agreement. No connection incentives will be received in terms of the amended network services agreement. The maximum potential liability under the arrangement as of March 31, 2021 and 2022 was $2.0 million and $1.7 million, respectively. No loss is considered probable under this arrangement.

Competition Commission of South Africa 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 Company and a number of its channel partners have engaged in market division. Should the Tribunal rule against MiX Telematics, the Company may be liable to an administrative penalty in terms of the Competition Act, No. 89 of 1998. The Company cooperated fully with the Commission during its preliminary investigation.

The Commission’s lawyer recently approached the Tribunal to secure a pre-hearing date. The pre-hearing will be used to set a timetable for the further process towards a hearing in due course. The parties expect the pre-hearing (once held) to result in dates for a hearing being established (along with a timeline for the production of documents such as the Commission’s investigative record, discovery, exchange of factual witness statements etc). The Tribunal has not yet reverted on the pre-hearing date.

We cannot predict the timing of a resolution or the ultimate outcome of the matter. However, the Company and its 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 currently not made any provisions for this matter.

The Ugandan Income Tax matter

A claim has been raised by the Uganda Revenue Authority (“URA”) for Income Tax against MiX Telematics East Africa Limited based in Uganda. The initial assessment was received on July 20, 2020. We formally objected to the initial assessment raised by the URA. The objection letter is clear in its presentation of financial information and the application of tax legislation and concludes that no further assessment is justified. On December 15, 2020 the URA rejected our objection and proceeded to raise an additional assessment.

We are currently investigating the basis for this additional tax. We have engaged an in-country legal counsel and tax advisors with the objective of having these additional assessments reversed. The potential liability as of March 31, 2022 was $1.0 million. No loss is considered probable, we have therefore currently not made any provisions for this matter.