Integrated Annual Report 2013
MiX
Tele
ma
tics In
teg
rate
d A
nn
ua
l Re
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rt 2013
A Journey of DiscoveryTo make information meaningful and put it to good use is a journey of discovery for both MiX Telematics and our customers. As a global leader in our field, we pride ourselves on being at the forefront of this very topic – and in many ways for mastering the conversion of information into valuable insight.
MiX Telematics communicates and analyses high volumes of vehicle and driver data on a daily basis. The result is that thousands of people now rely on our solutions as a means to manage the performance and well-being of their mobile assets.
Stefan Joselowitz
Chief Executive Officer, MiX Telematics
1MiX TelematicsIntegrated Annual Report 2013
ContentsOverview of MiX
4 Profile
4 Scope of this Report
5 Summarised Results
6 Financial Highlights
7 Non-financial Highlights
8 Group Structure and History
10 Global Presence and Key Statistics
Leadership Commentary
12 Chairman’s Report
14 Chief Executive Officer’s Report
Business and Strategy
20 Our Business Model
21 Stakeholders
22 What We Do
26 Vision, Mission, Strategy, Values
Operational Performance
28 Development
30 Sustainability Review
Governance and Accountability
42 Group Executive and Non-Executive Directors
46 Social and Ethics Committee Report
48 Governance Structures and Systems
52 Risk Management
53 Information Technology Review
Financial Reports
56 Financial Reports
Notice of Meeting and Company Information
132 Notice of Annual General Meeting
139 Company Information
140 Company Offices
141 Form of Proxy
2 MiX TelematicsIntegrated Annual Report 2013
3MiX TelematicsIntegrated Annual Report 2013
AmbitiousMiX Telematics is a leading global provider of fleet and mobile asset management solutions delivered as software-as- a-service, or SaaS. While expanding through an extensive global distribution network, we employ over 900 people who are dedicated to the design, development, sales and support of our products and services.
4 MiX TelematicsIntegrated Annual Report 2013
ProfileMiX Telematics is a leading global provider of fleet and mobile asset management solutions delivered as software-as-a-service, or SaaS. Our solutions deliver a measurable return by enabling our customers to manage, optimise and protect their investments in commercial fleets 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. MiX Telematics solutions rely on our proprietary, highly scalable technology platform, which allows us to collect, analyse and deliver data from our customers’ vehicles. Using an intuitive, web-based interface, our fleet customers can access large volumes of historical and real-time data, monitor the location and status of their drivers and vehicles and view a wide selection of reports and key performance indicator dashboards. The Company is listed on the Johannesburg Stock Exchange (“JSE”), under the share code “MIX”, and has offices in Australia, Brazil, South Africa, Uganda, the United Arab Emirates, the United Kingdom and the United States.
The Group has been built on an ethos of partnership and entrepreneurship.
Scope of this ReportIn line with the recommendation of the King Report on Corporate Governance in South Africa (“King III”), MiX has endeavoured to integrate the financial and non-financial aspects of its reporting to support the information needs of all the Group’s stakeholders and to provide a more holistic view of the year under review. This report covers the activities of MiX for the 12 months ended 31 March 2013, unless otherwise stated.
The integrated report provides stakeholders with:
Ք An overview of the MiX Group
Ք A review of the governance performance
Ք Risks and opportunities
Ք An overview of remuneration practices and human resources
Ք A detailed review of the financial performance for the 2013 financial year
Ք The Chairman’s and management’s review of performance for the 2013 financial year
The information included in the Integrated Annual Report has been provided in accordance with International Financial Reporting Standards (“IFRS”), the requirements of the South African Companies Act 2008, the JSE Listings Requirements and King III.
Overview of MiX
View further information about the Group online:www.mixtelematics.com
5MiX TelematicsIntegrated Annual Report 2013
Overview of MiX
Summarised Results
2013R’000
2012R’000
2011 R’000
FinancialRevenue 1 171 480 1 018 482 886 604EBITDA 284 540 237 552 200 143Operating profit 181 196 146 388 117 180Net finance costs 1 330 2 873 11 432Profit for the year 128 471 103 240 71 501Headline earnings 132 352 104 679 74 542Adjusted headline earnings 141 129 123 453 92 716Total assets, excluding cash and cash equivalents 1 005 086 949 721 884 201Cash and cash equivalents 147 702 118 695 110 007Equity attributable to shareholders 867 874 772 090 682 935Total interest-bearing debt including overdraft 59 477 73 106 103 546Capital expenditure* 94 147 77 466 81 689
liquidityCash generated from operations* 287 847 192 477 214 541Net cash 88 225 45 589 6 461
RatiosEffective tax rate (%) 28.6 28.1 32.4Net interest cover 136.2 51.0 10.3Adjusted headline earnings to shareholders’ equity return (%) 16.3 16.0 13.6
shaRe peRFoRmance and statisticsEarnings per share (basic) (cents) 19.5 15.7 10.9Headline earnings per share (basic) (cents) 20.1 15.9 11.3Adjusted headline earnings per share (basic) (cents) 21.4 18.8 14.1Weighted average number of shares in issue ('000) 658 456 657 045 657 000Share price 31 March 370 175 123 High (cents) 400 180 153 Low (cents) 165 110 100Dividend per share (cents) 10.0 8.0 6.0Dividend cover (based on adjusted headline earnings) 2.1 2.4 2.4
numbeR oF employees 937 824 765
*2012 and 2011 have been restated.
Revenue (Rm)
887
1 01
8
1 17
1
’11 ’12 ’13
EBITDA (Rm)
200 23
8 285
’11 ’12 ’13
Ove
rvie
w o
f MiX
6 MiX TelematicsIntegrated Annual Report 2013
Earnings per share – basic (cents)
’11 ’12
10.9
15.7 19
.5
’13
Headline earnings per share – basic (cents)
’11 ’12 ’13
11.3 15
.9 20.1
Adjusted headline earningsper share – basic (cents)
14.1 18
.8 21.4
’11 ’12 ’13
Net asset value per share (cents)
103.
9
117.
5
131.
5
’11 ’12 ’13
Net cash (Rm)
6
46
88
’11 ’12 ’13
Dividends declared (cents)
6
8
10
’11 ’12 ’13
Ք R1 171 million Ք R285 millionRevenue ebitda
Ք R687 million Ք R288 millionannuity revenue cash generated from
operations
Overview of MiX
Financial Highlights
Annuity revenue to total revenue
● Annuity revenue 59%
Foreign currency revenue to total revenue
● Foreign currency 51%
7MiX TelematicsIntegrated Annual Report 2013
Overview of MiX
Non-financial Highlights
May 2012
Ք Fleet operators start benefiting significantly from newly launched professional analytics tool – MiX Insight Analyser.
June 2012
Ք Beam-e creates a new sales and fitment channel in the tracking industry – via Tiger Wheel & Tyre.
Ք The MiX Learning Centre is launched – a proprietary e-learning resource for MiX Telematics customers, channel partners and employees.
July 2012
Ք The new Trailer Tracking solution from MiX Telematics gives fleet managers direct control of their trailers – independently from their truck tractors.
October 2012
Ք The third Global Fleet Partner Conference is hosted by MiX Telematics in Istanbul, Turkey, with a record attendance of over 120 delegates representing 35 countries.
November 2012
Ք New Zealand’s largest operator of urban bus services enters a fleet management contract using MiX Telematics to improve vehicle and driver performance.
December 2012
Ք MiX Telematics finalises the implementation of its solution in a leading oilfield service company in the United States.
Monthly fleet statistics for March 2013
Ք 660million kilometres tracked (further than to the sun and back)
Ք 551million events
Ք 540million automated live positions stored
Ք 2.8billion Gps points
Ք 3terabytes of data transferred and a total of 147 terabytes of data stored
Ք 500servers across five data centres
Ove
rvie
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f MiX
Overview of MiX
Group Structure
MiX TelematicsIntegrated Annual Report 20138
Africa Brazil Europe Middle East and Australasia
North America
Rest of World
1Group Executive
CEOStefan Joselowitz1
GroupFinance
Strategyand M&A
CentralOperations
Fleet Solutions
R&D SpecialProjects
ConsumerSolutions
Megan Pydigadu1
Howard Scott1
Gert Pretorius1
Charles Tasker1
Terry Buzer1
Riëtte Botha1
Brendan Horan1
Overview of MiX
History
MiX TelematicsIntegrated Annual Report 2013 9
2008Ք MiX acquires TripMaster (USA).Ք MiX acquires SafeDrive International
(UAE and Australia).
2007Ք OmniBridge cancels distribution
contract with Siemens VDO and commences direct distribution globally.
Ք MiX acquires OmniBridge and subsidiaries.
Ք MiX lists on the JSE.
1997Ք OmniBridge designs, develops and
manufactures FM product range for Siemens VDO.
2012Ք MiX breaks the R1 billion revenue barrier.
1996Ք Matrix Vehicle Tracking (which later
became MiX Telematics) is established and starts trading.
10 MiX TelematicsIntegrated Annual Report 2013
Overview of MiX
Global Presence and Key Statistics
Stellenbosch, South Africa North America Brazil Africa Europe Middle East and Australasia
Ք R331 million Ք R156 million Ք 0 Ք R612 million Ք R128 million Ք R266 millionRevenue Revenue Revenue Revenue Revenue Revenue
Ք R93 million Ք R2 million Ք (R2 million) Ք R179 million Ք (R5 million) Ք R32 millionebitda ebitda ebitda ebitda ebitda ebitda
Ք R243 million Ք R53 million Ք R5 million Ք R358 million Ք R60 million Ք R129 millionassets assets assets assets assets assets
oFFices: Stellenbosch, South Africa oFFices: Boca Raton, Florida, and Dallas, Texas, USA
oFFices: Sao Paolo, Brazil oFFices: Midrand and Stellenbosch, South Africa, and Kampala, Uganda
oFFices: Birmingham and Swindon, England, UK
oFFices: Dubai, UAE and Perth, Melbourne and Brisbane, Australia
actiVities: Research and development, hosting and operations, in-group supply of hardware, software and marketing
actiVities: Fleet solutions actiVities: Fleet solutions actiVities: Consumer solutions and fleet solutions
actiVities: Fleet solutions actiVities: Fleet solutions
employees: 156 employees: 59 employees: 3 employees: 572 employees: 55 employees: 92
11MiX TelematicsIntegrated Annual Report 2013
Stellenbosch, South Africa North America Brazil Africa Europe Middle East and Australasia
Ք R331 million Ք R156 million Ք 0 Ք R612 million Ք R128 million Ք R266 millionRevenue Revenue Revenue Revenue Revenue Revenue
Ք R93 million Ք R2 million Ք (R2 million) Ք R179 million Ք (R5 million) Ք R32 millionebitda ebitda ebitda ebitda ebitda ebitda
Ք R243 million Ք R53 million Ք R5 million Ք R358 million Ք R60 million Ք R129 millionassets assets assets assets assets assets
oFFices: Stellenbosch, South Africa oFFices: Boca Raton, Florida, and Dallas, Texas, USA
oFFices: Sao Paolo, Brazil oFFices: Midrand and Stellenbosch, South Africa, and Kampala, Uganda
oFFices: Birmingham and Swindon, England, UK
oFFices: Dubai, UAE and Perth, Melbourne and Brisbane, Australia
actiVities: Research and development, hosting and operations, in-group supply of hardware, software and marketing
actiVities: Fleet solutions actiVities: Fleet solutions actiVities: Consumer solutions and fleet solutions
actiVities: Fleet solutions actiVities: Fleet solutions
employees: 156 employees: 59 employees: 3 employees: 572 employees: 55 employees: 92
Overview of MiX
MiX Telematics offices
MiX Telematics channel partners
12 MiX TelematicsIntegrated Annual Report 2013
Leadership Commentary
Chairman’s Report
Earnings per share rose by 24% to
19.5 cents. Of more significance is the
growth in vehicles under subscription,
which this year grew by more than 84 000,
an increase of over 30%. More significantly
this growth was more than double that of
the previous year.
As you are aware MiX has a strong focus on
cash flow. To this end 2013 was a great
year, with cash generated from operations
amounting to R288 million, which represents
101% of EBITDA.
With the continued strong generation of
cash and profitability your Board has
approved a final dividend of 6 cents per
share. When added to the interim dividend
of 4 cents per share paid out in December,
this gives a total distribution for the year
of 10 cents per share, and an increase of
25% over the prior year.
Reading our CEO’s report is exciting as
the Group has once again launched new
products and services that we believe will
enhance our growth trajectory moving
forward.
A perennial every year in my Chairman’s
statement is our commitment to excellent
corporate governance. We make this a
cornerstone of our Company and continually
strive to improve our position. Our integrated
report clearly sets out all our efforts in the
area of corporate governance. We have
detailed statements on the audit and risk
committee, the remuneration committee,
our social and ethics committee and the
Board’s performance throughout the year
under review.
At the end of our financial year, Richard
Friedman resigned as a non-executive
director of the Company. Richard was one
of our founding directors, and we place
on record our sincere thanks for his
contribution to the Group. We wish him
well in his future endeavours.
Strong generation of cashMiX Telematics has produced a solid set of results for the year ended 31 March 2013
Cash generated from operations (Rm)
215
192
288
’11 ’12 ’13
Vehicles under subscription (’000)
239 27
5 359
’11 ’12 ’13
13MiX TelematicsIntegrated Annual Report 2013
Leadership Commentary
Our Company is blessed with some truly
wonderful and dedicated people. They are
the backbone of our business, and they live
our values day in and day out. These results
are a tribute to their untiring efforts. The
Board wishes to thank all of them for their
continued efforts throughout the year. To
our executive team, we say thank you for
yet another great set of results.
To my fellow non-executive directors,
many thanks for your efforts and wise
counsel throughout the year. I look forward
to fiscal 2014.
Richard Bruyns
Chairman
Midrand
4 June 2013
Lead
ersh
ip C
omm
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ry
14 MiX TelematicsIntegrated Annual Report 2013
Leadership Commentary
Chief Executive Officer’s Report
sales offices, and through our global
network of distributors and dealers. The
direct sales teams focus on marketing our
fleet solutions to multi-national enterprise
accounts and to other large customer
accounts.
We have built our software solutions to be
highly scalable and flexible to support
geographically distributed fleets of any size.
We currently provide subscription services
to customers ranging from small fleet
operators and consumers to large
enterprise fleets of more than
10 000 vehicles.
We have globalised sales, distribution and
support capabilities. We currently maintain
a direct or indirect sales and support
presence, with localised application support
in 24 languages, for customers in
112 countries across Africa, Asia, Australia,
Europe, the Middle East, North America
and South America. In seven of those
countries, we own and manage regional
operations and engage directly with our
customers. In the balance of the countries
we generally deal through third-party
distributors. Our regional operations source
products and services from the business we
Fiscal 2013 proved to be another strong
year for the MiX Telematics Group. Our
overall subscriber base grew to over
359 000 active subscribers, an increase of
over 30%. While total revenue was up 15%
to R1 171 million, we have seen acceleration
in the growth of our recurring revenue
component, which grew over 19% to
R687 million. Our subscriber base is the
economic engine of our business and we
believe the Group’s strong performance in
this area bodes well for the future.
EBITDA was up nearly 20% at R285 million.
We finished the year with headline earnings
of R132 million, up 26% over the previous
year. This translates to 20.1 cents per share
(15.9 cents per share in 2012).
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. Sales
are generated through the efforts of our
direct sales teams, staffed in our regional
Another strong yearMiX Telematics is a leading global provider of fleet and mobile asset management solutions delivered as software-as-a-service, or SaaS.
Highlights
Revenue� R1 171 million
up 15%
Subscribers� 359 000
up 31%
EBITDA� R285 million
up 20%
Annuity revenue� R687 million
up 19%
HEPS� 20.1 cps
up 26%
Cash generated from operations
� R288 millionup 50%
Net cash at year-end� R88 million
up 94%
15MiX TelematicsIntegrated Annual Report 2013
Leadership Commentary
call MiX International. This operation, based
in Stellenbosch, South Africa, is responsible
for much of the design, development and
procurement of the MiX range of products
and services. MiX International is a central
services organisation that wholesales our
products and services to our regional
distribution network. We believe our global
presence gives us an important advantage
in competing for business from multi-
national enterprise fleet customers.
Our solutions deliver a measurable return
by enabling our customers to manage,
optimise and protect their investments in
commercial fleets or personal vehicles. We
generate actionable intelligence that allows
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.
All of our regional fleet operations grew
their subscriber bases but some fared
better than others against plan. As a
consequence of our global subscriber
growth, MiX International performed well
during the year under review. At the
beginning of the year, we transferred the
business relationship management of all of
our third-party distributors based in the
Middle East from MiX International to our
regional operation headquartered in Dubai
– although this was an absolutely logical
move from an operational efficiency
perspective, it has skewed the segmental
picture from a year-on-year comparative
perspective by approximately $1 million of
EBITDA in favour of MiX MEA.
Stefan JoselowitzChief Executive Officer
Lead
ersh
ip C
omm
enta
ry
16 MiX TelematicsIntegrated Annual Report 2013
Leadership Commentary
Chief Executive Officer’s Report continued
• Middle East – We have a well-established
operation in place with a committed
distributor channel in multiple countries.
Our experienced team has delivered a
great performance with a series of solid
wins that bode well for the future.
• Africa – This operation enjoyed a great
year with growth at both top-line and
profit level. The team delivered
substantial subscriber growth, winning
prize contracts in the midst of tough
competition. New product offerings,
which include a trailer-tracking solution,
are being viewed favourably by
customers. As we reported at the half-
year, we are also pleased with our recent
acquisition of Intellichain, which has
bedded down nicely. Intellichain’s
integrated supply-chain management
software dovetails with our MiX Fleet
Manager offerings and enhances our
ability to further grow the SaaS
component of our annuity stream.
• North America – Although we did see
strong subscriber and annuity revenue
growth out of this operation, this was
mainly due to the rollout of two large
deals that had been won in the previous
fiscal year. Our North America segment
has historically been focused on the oil-
and-gas industry, which is generally
characterised by large fleet sales
opportunities but relatively long sales
cycles. We are currently competing for a
number of high value tenders on which
we are cautiously optimistic but in the
meantime, the team is seeking new
vertical opportunities to complement the
oil-and-gas vertical. In addition, we are
gaining momentum in our efforts to
develop the Latin American market.
• Europe – Although this business
experienced difficult trading conditions,
we did achieve some slow but steady
improvement as the year progressed. We
won a sizeable bus deal in Ireland and
this, coupled with the ongoing rollout of a
leading bus operator in Belgium and
a four-year contract extension by Go-
Ahead Group in the UK, has firmly
positioned us as a leading supplier to the
bus and coach industry in the region.
The business delivered double-digit
subscriber growth for the year but
Sterling revenue is down on the previous
comparative period for two reasons:
– In the comparative period we still had
revenue from One Stop Shop (the
business we disposed of in the 2012
financial year).
– We converted the legacy Datatrak
subscribers onto our core MiX platform
and then closed down the Datatrak
network in fiscal 2012. This conversion
resulted in lower average revenue per
subscriber carrying forward into our
latest fiscal year.
• Australia – This operation has delivered
excellent performance for the year and in
the process has concluded a number of
large deals both in the resource sector
and most notably, a sizeable deal with a
bus operator, which is our first regional
beachhead in the bus and coach market,
a vertical in which we have developed
significant expertise.
Consumer Solutions
The activities of this operation are not
strictly restricted to the Business-to-
Consumer (B2C) market – there is also a
large Business-to-Business (B2B)
component to this operation. Through our
widely recognised Matrix and Beam-e
brands, we provide our customers with a
broad range of value-added safety and
convenience features such as “Crash Alert”,
“No-Go-Zones”, and even an automated
“Tax Logbook” which is accessed by our
customers online through our SaaS
platform. In addition, we provide our
business customers with location-based
services for fleet movement and depot
management purposes. This division
delivered strong performance this year,
particularly at the subscriber growth level.
As we reported at the half-year there has
been broad market acceptance of our new
Beam-e offering. Analysis of the numbers
will reveal that the subscriber growth in our
Consumer Solutions business does not
appear to have flowed through to the
revenue line – this is not the case; earlier
this fiscal year, we renegotiated the cellular
data package that we use in this division to
a non-CIB (connection incentive bonus)
package. The quid pro quo for foregoing
this CIB (and the resultant negative impact
17MiX TelematicsIntegrated Annual Report 2013
Leadership Commentary
on our revenue line) is that our monthly
cellular data costs have reduced and the
overall effect is that this change is earnings
enhancing. Our Consumer Solutions
division currently operates primarily in
South Africa but our team is in the process
of taking the first steps towards globalisation.
Moving onto a few additional indicators:
Annuity revenue
We are pleased to again show strong
growth at a subscriber level with an overall
increase in our active base (net of churn) of
over 30% year-on-year. We have seen
good growth flowing through to the annuity
revenue line, which totalled R687 million for
the period, a year-on-year rise of over 19%.
Our annuity revenue has risen to close to
60% of total revenue.
Cash
The Group delivered a strong performance
in the second half of the year and generated
cash from operations of close to
R288 million for the year (R192 million in
2012) and we concluded the year in a net
cash position (net cash on hand minus
outstanding debt) of R88 million. This was
achieved even after paying out dividends of
R79 million to shareholders this year.
Having put another solid year behind us,
our team is excited about the new
opportunities and challenges that we face in
the year ahead. Despite a turbulent
economic outlook in many of the territories
in which we operate, we believe we have
the passion, talent, technologies, geographic
spread and strategies in place to meet our
growth objectives.
On behalf of the Board of Directors, we
would like to extend our gratitude to our
employees for their ongoing hard work and
commitment. Thank you!
Stefan Joselowitz
Chief Executive Officer
Midrand
4 June 2013
Lead
ersh
ip C
omm
enta
ry
18 MiX TelematicsIntegrated Annual Report 2013
19MiX TelematicsIntegrated Annual Report 2013
MiX Telematics actively monitors in excess of 359 000 mobile assets worldwide – from trucks and buses, to vans, cars, motorbikes and trailers. In March 2013, our software recorded around 551 million vehicle and driver events, generated from approximately 660 million kilometres driven. Our customers’ data is hosted in one of five secure Tier-3 data centres around the world.
20 MiX TelematicsIntegrated Annual Report 2013
Business and Strategy
Our Business Model
MiX Telematics delivers information and scalable services for an annuity fee per vehicle. This is done by making use of the software-as-a-service (SaaS) delivery model, which is complemented by hardware sales, vehicle recovery, driver training and consulting services.
We leverage our cash generative, profitable business and track record to grow our global connection base by giving customers real solutions to their business issues. Through focused innovation as well as global execution and service delivery, we are able to create and deliver ongoing value for customers across diverse industries.
1. Global
2. Subscribers
4. C
ash
gene
ratio
n
3. SaaS/Hardware
Our platform
Fleet management
Regulatory compliance
Recovery services
Enhanced analytical reports
Crash notification
Driver scoring and analysis, and real-time driver monitoring
Our services Customer benefits
Improve driver and passenger safety
Reduce costs and improve profitability
Reduce environmental impact
Ensure compliance
Enhance customer service
Reduce impact of theft
21MiX TelematicsIntegrated Annual Report 2013
Business and Strategy
Stakeholders
The Group recognises that it has various stakeholders, namely employees, investors, customers, suppliers and other stakeholders. Stakeholders are defined as entities or individuals that can reasonably be expected to be significantly affected by the Group’s activities and whose actions can reasonably be expected to affect the ability of the Group to successfully implement its strategies and achieve its objectives. Stakeholders are engaged primarily on the basis of their impact on the Group.
Investors are engaged at regular scheduled
intervals including results announcements,
general meetings, one-on-one meetings
and investor days. Such dialogue is held in
a spirit of mutual understanding of the
statutory, regulatory and other directives
prohibiting the dissemination of unpublished
financial information. Financial results,
trading updates and announcements are
published in accordance with the
requirements of the JSE Limited. Half-year
and full-year announcements of results,
the annual report and presentations
to shareholders and analysts are also
published on the Group’s website.
Shareholders also have the opportunity
to question the Board at annual
general meetings.
Customers, suppliers and employees are
engaged on an ad hoc basis and at regular
scheduled meetings.
Stakeholder concerns are raised in a
number of different ways. They can be
received as a formal concern or query
lodged with the Company; or raised in
stakeholder forums. We either provide
feedback informally in the forum or
telephonically; where appropriate, we will
respond in writing. We also consider the
interests and expectations from stakeholder
engagement initiatives that have taken
place during the year when preparing the
content of our sustainability report.
Our approach to stakeholder engagement
favours personal interaction, but where this
is not possible other methods such as
surveys and call centres are used.
MiX has a number of geographically
diverse businesses, each with its
own unique features, stakeholders and
operating environments. It is the Group’s
philosophy to empower local management
who are best placed to identify and
engage stakeholders on virtually all levels
and to ultimately make decisions within
agreed guidelines.
For the benefit of stakeholders the website
also provides a wealth of non-financial
information dealing with products, solutions,
commercial news and investor relations.
www.facebook.com/MiXTelematics www.twitter.com/MiXTelematics
www.linkedin.com/company/mix-telematicswww.youtube.com/MiXTelematics
MiX Telematics Brazilwww.mixtelematics.com.br
MiX Telematics North Americawww.mixtelematics.net
MiX Telematics Middle East and Australasiawww.mixtelematics.aewww.mixtelematics.com.au
MiX Telematics Europewww.mixtelematics.co.uk
MiX Telematics Africawww.mixtelematics.co.za
MiX Telematics Limited and Internationalwww.mixtelematics.com
Bus
ines
s an
d St
rate
gy
22 MiX TelematicsIntegrated Annual Report 2013
Business and Strategy
What We Do
An overviewMiX Telematics actively monitors in excess of 359 000 mobile assets – from trucks and buses, to vans, cars, motorbikes and trailers.
At any given moment, our customers are either becoming more profitable, enhancing their safety, reducing their risk, or lessening their impact on the environment. In essence, we help thousands of people to have better, safer experiences on the road.
While the core of MiX’s business is vehicle telematics, our solutions cater to Fleet and Consumer customers through a range of diverse solutions.
Our products and services, designed for both commercial fleet operators and consumers are available in 112 countries today via an extensive distribution network and direct sales.
MiX Telematics currently serves a highly diverse customer base, including more than 4 000 fleet operators, which represented approximately 64% of our subscription revenue for fiscal year 2013. We have consistently grown our customer base, and from 1 April 2010 to 31 March 2013, we increased the number of vehicles under subscription at a compound annual growth rate of 20.3%. MiX targets sales of our enterprise fleet management solutions to customers who desire a premium solution, generally for large fleets, which we define as fleets of 100 or more vehicles. Large fleets accounted for approximately 74% of our fleet vehicles under subscription at 31 March 2013.
MiX believes we have a satisfied customer base and, among our 224 large fleet operator customers, we experienced an annual customer retention rate in excess of 95% in fiscal year 2013. We have multinational enterprise fleet customer deployments with leading global companies such as Baker Hughes, Bechtel Corporation, Chevron, Nestlé, PepsiCo, Rio Tinto and Schlumberger.
A range of subscription-based fleet and vehicle management solutions are offered by MiX 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.
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
23MiX TelematicsIntegrated Annual Report 2013
Business and Strategy
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 has resulted in automotive insurance mandates and regulatory require-ments for vehicle tracking. Consequently, fleet managers and consumers demand solutions that promote driver and passenger safety, mitigate theft, improve stolen vehicle recovery rates and reduce automotive insurance rates. 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.
There have been substantial advances in the performance, reliability and affordability of technologies that can be used to collect and disseminate large amounts of vehicle data remotely. GPS navigation 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 capa-bilities have supported the rise of cloud computing. These technological advances and market shifts have helped to foster demand for subscription-based fleet and mobile asset management solutions like ours. Our SolutionsOur subscription-based solutions enable our customers to effectively manage, optimise and protect their investments in their commercial fleets and personal vehicles. The key attributes of our solutions include:
• Highly scalable solutions: MiX has built software solutions to scale
and support geographically distributed fleets of any size. We currently provide
services to more than 359 000 vehicles under subscription, with customers ranging from small fleet operators and consumers to large enterprise fleets with more than 10 000 vehicles under subscription.
• 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, route optimisation and enhanced dispatching; for regulatory compliance, we offer compliance monitoring, hours of service tracking and fuel tax reporting; for driver improvement, we offer in-vehicle video monitoring and real-time driver feedback; for risk management, we offer driver scoring and analysis; and for safety and security, we offer vehicle tracking, crash notifications and vehicle theft recovery.
• Insightful business intelligence and reporting:
MiX Telematics’ fleet management software is designed to provide our customers with insightful, actionable business intelligence on demand.
• Easily accessible, intuitive applications:
Web-based solutions by MiX Telematics are accessible from fixed and mobile computing devices, including Android and iOS mobile devices, and our fleet management solutions can be readily integrated with third-party software systems.
• Software-as-a-service powered by a proven, reliable infrastructure:
MiX makes use of a multi-tenant SaaS architecture, allowing 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
“The MiX Telematics team have proved themselves to be perfect partners. They understand our business, deliver on their promises and have worked alongside us every step of the way to continuously improve and develop our use of the system.”Phil Margrave, Engineering Director – Go-Ahead Group
infrastructure of redundant servers and other hardware located in five Tier-3 data centres. Over the last three years, MiX has consistently maintained an overall system uptime of over 99.8%.
MiX Telematics consumer brands:
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24 MiX TelematicsIntegrated Annual Report 2013
Business and Strategy
What We Do continued
Improve profitabilityAccording to a Frost & Sullivan1 report in 2009, effective fleet management systems have the potential to influence up to 62% of operating costs.
A major impact on fleet businesses is, of course, the rising cost of fuel. With MiX’s solutions we can deliver savings on fuel costs.
When fleet operators are properly equipped to manage their mobile assets and take charge of driver behaviour, the result is an increase in profitability. How is this done?
• Improved vehicle utilisation and optimised route planning directly affect the bottom line. In the case of the Go-Ahead Group in London, for whom we monitor in excess of 4 000 buses, fuel efficiency has improved by 12%.
• By being able to easily identify the vehicle closest to a customer site and assign jobs accordingly, fleet operators can accurately predict estimated arrival times, ensure clear and specific job instructions, and better manage routes and delivery schedules. In addition, customer service is improved, which further raises profits.
• By lessening poor driving habits like harsh acceleration, over-speeding and excessive idling, fuel consumption, as well as wear-and-tear on vehicles, is reduced significantly.
• Safer driving lowers accident rates, in turn, reducing insurance claims and premiums.
• Efficient servicing and licensing, along with improved driver behaviour, means vehicles are better maintained, thereby lowering costs and increasing vehicle uptime.
MiX Telematics is a leading global provider of fleet and mobile asset management solutions, helping consumers and fleet operators all over the world to effectively manage their mobile assets. Whether our customers are reducing their risk, reducing their fleet costs, improving their safety levels or lessening their environmental impact, they’re experiencing a multitude of benefits.
Save lives and reduce riskAs referenced by the International Association of Oil & Gas Producers, human error is the cause of up to 80% of motor accidents. It is worrying statistics like these that contribute to mounting pressure on fleet operators to not only identify risky driver behaviour and scenarios, but to take corrective action and boost their safety levels.
MiX’s end-to-end safety solutions have become an invaluable tool for fleet operators large and small, enabling them to:
• Make informed decisions, almost immediately, about driver and vehicle events, which in turn allow fleet managers to attend to events like over-speeding and entry into no-go zones.
• Identify and gain insight into poor driving habits.
• Compare drivers in relation to past performance as well as to other drivers in the fleet.
• Implement highly effective targeted driver training and/or risk reduction programmes.
• Hone drivers’ skills through professional driver training.
• Develop customised driver safety policies.
25MiX TelematicsIntegrated Annual Report 2013
Business and Strategy
Driver safety is vastly improved through the incorporation of MiX’s RIBAS and MiX Rovi devices – our in-cab mentors, which are pivotal in helping drivers to rectify poor driving habits on a real-time basis.
Our consumer solutions in South Africa boast stand-out features like insurance approval, road-side assistance, automated tax logbook and crash alert, serving to enhance personal safety and protect private assets.
1 “ Demand for Green Telematics to Challenge Slowdown” – Frost & Sullivan, May 2009
Reduce environmental impactMiX offers a range of controls and reports to help customers ensure compliance with health, safety and environmental (“HSE”) regulations in their relevant countries and industries.
While driver safety is at the top of our list, so too is fleet efficiency. MiX is well known for helping fleet operators to significantly reduce their fuel consumption. Less fuel usage means lowered carbon emissions, and a healthier, more sustainable environment.
Reducing carbon emissions is particularly important for the road transport industry, which is solely responsible for 18%1 of global carbon emissions. Committing to reduce carbon emissions is not only the right thing to do, but it assists fleet operators in preparing for inevitable legislation surrounding carbon emission reporting and reduction.
In addition, MiX is the first telematics provider in the world to offer a service that enables fleet operators to take responsibility for their carbon footprint. The MiX Carbon Offset Initiative allows fleet operators to both measure and offset their carbon footprint. Offsetting is achieved through the investment in globally certified carbon reduction projects.
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Business and Strategy
26 MiX TelematicsIntegrated Annual Report 2013
VisionMiX Telematics remains committed to our long-standing vision: To be the leading global provider of information and related services for mobile assets.
MissionOur current mission is to achieve one million subscribers by 2016.
StrategyIn order to achieve our mission and vision, our strategy is to leverage our profitable, cash-generative businesses into growing our global subscription revenue model. With significant critical mass, a global footprint, a large subscriber base and a history of operating successfully in international markets, the Company believes it is ideally positioned to take advantage of significant international and local growth opportunities.
ValuesThe corporate culture at MiX Telematics revolves around our ‘GET WISER’ values. Whether in our day-to-day activities, the interactions we have with suppliers and customers, or through internal engagement initiatives, MiX Telematics aims to ensure that our values are reflected in all that we do.
27MiX TelematicsIntegrated Annual Report 2013
Business and Strategy
27MiX TelematicsIntegrated Annual Report 2013
Work smartWe will always apply our minds to our tasks to ensure that the desired outcome is achieved in an optimal manner.
Talk straightWe will be straightforward and sincere with one another, encouraging openness and impartiality.
Get things doneWe will be accountable for getting things done with a sense of urgency, while taking the Company’s best interests into account.
RelationshipsWe will build and nurture lasting relationships with our colleagues, customers and suppliers.
Encourage innovationWe will encourage and listen to new or creative ideas and different ways of doing things, while avoiding negative or dismissive behaviour.
IntegrityWe will be open and honest with each other and conduct all our business in an ethical and trustworthy manner.
Service cultureWe will deliver excellent service that exceeds our customers’ expectations.
Entrepreneurial spiritWe will seek new commercial opportunities and be prepared to change to take advantage of them, without deviating from our core business.
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Operational Performance
Development
The purpose and the challengeOur solutions provide information that is
vital to the safety, efficiency and
environmental responsibility of our
customers and, as such, we need to be
online 24 hours of every day of the year. In
a typical month we process terabytes
of data from customers’ vehicles in
112 countries via our network of servers
in five international Tier-3 data centres.
In order to meet the exacting demands of
our customers as well as the varied and
sometimes harsh conditions in which we
operate, MiX manages the development
process from concept, right through to the
final production and implementation. Our
hardware products are manufactured at a
number of world-class outsourced facilities.
MiX’s focus is on quality, reliability, ease of
use and ensuring that the investment made
in our systems by customers is continually
reaping them rewards.
People, functions and locationMiX employs around 90 people responsible
for the design, development and quality
assurance of our entire suite of solutions.
The majority are based at our offices in
Stellenbosch, South Africa. To meet
regional customisation demands, MiX also
has smaller satellite teams in our Midrand
(RSA), Swindon (UK) and Boca Raton
(USA) offices.
The development team handles every
aspect of the solution, from the user
interface on the web through to the test
equipment used in the factories that
manufacture our products. The team
consists of not just hardware, firmware and
Focussed on developing new solutionsMiX prides itself on having a world-class development facility. The team is focussed not just on developing new solutions but on supporting and enhancing the systems we currently have running in hundreds of thousands of vehicles around the world.
29MiX TelematicsIntegrated Annual Report 2013
Operational Performance
Within our engineering and production
environment, we use a waterfall
development methodology whereby
products pass through a number of
development stage gates before they are
approved and released to the market.
Strong emphasis is placed on adherence to
prescribed development processes and
standards. Formal peer reviewing of
hardware and firmware is conducted
throughout the development process. Our
coding standards are based on the set
published by the Motor Industry Software
Reliability Association (“MISRA”).
software engineers but also skilled graphic
designers and test engineers. Where
specialist third-party hardware is involved,
we handle the customisation and integration
into our software and communication
applications.
Methodology and qualityIn order to develop complex international
systems, MiX ensures that development
adheres to strict processes and proven
methodologies. In our software department
we have implemented a precise agile
methodology called “Scrum”. This, coupled
with Test Driven Development and Domain
Driven Design, gives us a very robust but
flexible development practice. We are able
to release new features every few months.
Development HighlightsMajor events over the past year
included the following launches:
• MiX Rovi, an in-cab
messaging system.
• MiX Locate, an enterprise
tracking solution.
• A trailer tracking product.
• A more powerful, smaller
Beam-e for entry-level
vehicle security.
MiX Telematics’ products and services are designed and developed in Stellenbosch, South Africa.
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30 MiX TelematicsIntegrated Annual Report 2013
Operational Performance
Sustainability Review
MiX’s Group strategies, general conduct
and responsibility as a good corporate
citizen, is underpinned and guided by a
code of ethics and conduct and a set of
core values. These values dictate that we
deliver value not only to our shareholders,
but also to our employees, customers,
business partners, communities and
broader society.
Sustainability initiatives form part of our
business strategy, and the Group finds itself
in the privileged position where many of
the drivers of the commercial success
of MiX also contribute to and support social,
environmental and economic sustainability.
Improving our sustainability performance is
an integral part of improving business
performance, and the results in one area
support and advance the achievement of
objectives in another.
Key stats at a glanceEconomic 2013 2012 2011
Number of people employed 937 824 765Enterprise development spend R2.4m R2.0m R2.0mValue of vehicles recovered R264m R225m R359m
Environmental 2013 2012 2011
Carbon emissions* 3 054 tonnes 3 560 tonnes 3 820 tonnesCredits purchased 3 054 tonnes 3 560 tonnes 3 820 tonnesNet neutral 0 0 0* Restated for Scope 1 and 2 emissions only.
Social 2013 2012 2011
Total salaries, wages and other R329m R280m R219mTraining spend R4 172k R4 557k R4 079kSocial responsibility spend R522k R476k R410k
This report identifies our most material
sustainability issues and opportunities,
provides insight into some of our challenges
and highlights some of our sustainability
successes and future initiatives.
Economic contributionThe Group provides employment to
937 employees, which is an increase of
113 people from the previous year.
Enterprise development spend increased
by 20% to R2.4 million and more than 1 300
vehicles were recovered during the year.
Recovery operationWorking with our recovery partner, MiX
Africa provided a direct saving to the South
African economy by returning vehicles to
the value of R264 million to their rightful
owners during the year. This amount
excludes all of the indirect costs related to
the process and cost of replacing a vehicle
as well as the loss of productivity, and, in
the case of a commercial fleet, the lost
revenue from not having these vehicles
available – in some instances for an
extended period of time.
This year has been no exception in terms of
MiX’s tireless fight against crime in South
Africa. As an active participant in the
policing forums, MiX shares in the
information gathered from a variety of
participants and uses this information to
keep our “high risk zones” aligned and up-
to-date in terms of the latest identified crime
hot spots. This has contributed to our
customers’ safety.
Fleet operationMiX offers a comprehensive range of fleet
management and related information
products and services. The fleet
management solutions are built specifically
for commercially utilised vehicles and are
suitable for both small and large fleets
across numerous industries. The technology
collects and transmits information on driving
hours, driver identity, fuel usage, distances
travelled, locations visited, routes taken, trip
duration and driving speed. The information
is made available to customers in a format
and manner that ensures that MiX’s fleet
customers enjoy an ongoing return on their
investment. Benefits realised include
improved driver behaviour and safety,
improved fuel efficiency, reduced fleet
operating and maintenance costs and a
reduced impact on the environment through
lowered carbon emissions.
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Operational Performance
Return on investmentWhen fleet operators are properly equipped to manage their mobile assets and take charge of driver behaviour, the result is a potential increase in profitability. By implementing a MiX Telematics fleet management solution, our customers are able to deal with the major issue of the rising cost of fuel. A significant number of MiX Telematics customers reduce their fuel costs. Better management of routes and delivery schedules as well as improving vehicle utilisation also help to enhance productivity and efficiency. An example of this would be the easy identification of a vehicle closest to a customer site. Becoming more efficient and improving customer service naturally helps operators to maintain a healthy bottom line. The identification and correction of poor driver behaviour that includes harsh acceleration, over-speeding and excessive idling also plays a key role in lessening fleet costs. Better driving style means less wear-and-tear on vehicles, reduced fuel consumption and lowered accident rates, which results in less claims and savings on insurance premiums.
Customer resultsA long-term trial with bus operator Sylter Verkehrsgesellschaft (SVG) from Germany revealed a 10% improvement in fuel efficiency and a total net saving of €2 200 per year per vehicle.
RATP London United achieved a 17% reduction in their accident rate and a 10% improvement in fuel efficiency following the implementation of a collaborative risk reduction programme with MiX Telematics.
A large Oil and Gas customer in the Middle East achieved a 72% sustained improvement in driver behaviour only six weeks after installing a MiX Telematics fleet solution – as well as a 15% reduction in fuel costs within 12 months.
MiX Telematics monitors over 4 000 buses for the Go-Ahead Group in the United Kingdom. Over the course of the long-term contract, the operator’s fuel efficiency has been improved by 12%, while their accidents have been reduced by 17.6%.
In addition, the MiX Telematics R2MS solution helps fleet operators in South Africa to deal with all aspects relating to AARTO – the impending Administrative Adjudication of Road Traffic Offences Act, designed to encourage the payment of fines and persuade drivers to obey the rules of the road. The new Act will serve to lighten the load on South African courts, and fleet owners who are not prepared to deal with the bureaucratic implications of AARTO will inevitably find their operations losing significant amounts of time and money.
Further reading is available at http://www.mixtelematics.com/case-studies
Enterprise developmentMiX increased its spend on enterprise
development by R400 000, or 20%, from
the prior year. MiX Fleet Support, which
is one of the major initiatives in this
category, is in its fourth year of operation
and continues its consistent economic
improvement. 51% of this company is
owned by an employee trust with previously
disadvantaged employees as the
beneficiaries. MiX Enterprise owns the
other 49%.
During the financial year, the beneficiaries
of the employee trust received a distribution
of R442 000, which brings the total
distribution to R662 000 since inception in
2010. MiX Enterprise, who provided the
initial start-up capital, equipment and
expertise for this venture, continues to
dedicate time, money and expertise to
ensure the long-term growth and
sustainability of this venture.
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Operational Performance
Sustainability Review continued
Each operating division, in terms of its
priorities, runs internal campaigns to monitor
and actively reduce their carbon footprint.
These sustainability initiatives include re-
cycling, green purchasing and the reduction
of electricity usage. Our internal green mascot,
“Maximus”, ensures that enthusiasm and
the reasons for these initiatives, both in the
workplace and at home, is sustained by
providing green tips, running competitions
and ensuring staff receive feedback on
achievements.
MiX Europe maintained its ISO 14001
certification for environmental management
in the UK.
In addition, MiX is a proud member of
the Carbon Protocol in South Africa and
a senior sponsor of the World Wildlife
Fund (“WWF”).
The ‘green’ in MiX TelematicsWhile MiX Telematics is well known for
helping fleet operators to significantly
reduce their fuel consumption, an
important benefit that results from using
less fuel is of course lowered carbon
emissions. Our customers therefore
participate in the creation of a healthier,
more sustainable environment.
How one customer benefitedAn 18-month trial with German bus
operator Sylter Verkehrsgesellschaft
(SVG) enabled them to improve their
fuel efficiency by 10%. The reduction in
fuel usage decreased SVG’s carbon
emissions by 150 tonnes.
Reducing carbon emissions is
particularly important for the road
transport industry, which is alone
responsible for 18% of global carbon
emissions according to a report by Frost
& Sullivan. Committing to reduce carbon
emissions is not only the right thing to
do, but it assists fleet operators in
preparing for inevitable legislation
surrounding carbon emission reporting
and reduction.
In addition, MiX Telematics pioneered a
service offering that enables fleet
operators to take responsibility for their
carbon footprint: the MiX Carbon Offset
Initiative. This allows fleet operators to
both measure and offset their carbon
footprint. Offsetting is achieved through
the investment in globally certified
carbon reduction projects.
EnvironmentalThe Group remains committed to improved
environmental management, both in terms
of its own operations and in assisting
our fleet customers to manage the carbon
footprint of their fleets. MiX is the
first telematics company in the world
to become carbon neutral and also
submitted a voluntary response to the
Carbon Disclosure Project: a project that
facilitates climate change analysis by
gathering information from leading
companies on their carbon emissions. The
Company complies with all relevant
environmental legislation in the regions in
which we operate.
MiX reduced its carbon emissions by 14.2%
from the prior year down to 3 054 tonnes
and remains carbon neutral. This reduction
is the result of accumulated internal carbon
reduction campaigns from all of our
operations. A major contribution to this
achievement was the reduction of electricity
usage in our large South African operation,
where electricity-monitoring devices have
been installed in all of the offices.
33MiX TelematicsIntegrated Annual Report 2013
Operational Performance
Health And SafetyThe Group is committed to a safe and
healthy working environment for staff and
complies with the relevant Health and
Public Safety legislation and requirements
in the respective countries in which we have
workforces.
One of MiX’s core value drivers is to provide
our customers with the tools and know-how
to improve the safety of their drivers. In
addition, MiX launched an Online Driver
Training initiative for all our staff, exposing
them to a key safety tool that makes up a
part of our defensive driving offering to
customers. Motor collisions kill and injure
millions of people around the world each
year and our aim is to facilitate awareness
and equip staff to become more responsible
road users, and as such reduce motor
collisions and traffic violations.
Our Online Driver Training system was
selected for the quality of its tools and
materials, which address specific driving
skill sets through creative and interactive
delivery. Every MiX staff member is required
to participate in the programme, completing
each and every module at the rate of one
module per month. A score of 80% or above
must be achieved for each module and all
modules are completed online, so all that is
required is an internet connection. Staff
receive regular reminders to stay up-to-date
with their training and regional repre sen ta-
tives monitor the progress of the training,
reporting back to Group management
periodically. Staff are encouraged to make
this training available to one of their family
members as well – completely free of charge.
Matrix Road Safety AssociationMiX Telematics’ entire range of solutions view personal safety as a top priority and this remains a guiding factor as to why thousands of people choose a MiX Telematics product and/or service. Considering the statistics of road deaths and serious accidents on South African roads, 18 000 people killed annually and 150 000 severely injured according to the Medical Research Council, it is understandable why road safety is of primary importance for Matrix, the premium vehicle tracking, security and safety brand in South Africa. Due to the fact that all of our customers are vehicle owners and are potentially affected by dangerous situations on the roads, the Matrix Road Safety Association (“MRSA”) was established in April 2012. All South Africans have a duty to ensure that their actions on our roads do not impact negatively on the lives of others. The MRSA empowers road users with life-saving information and creates awareness around responsibilities when behind the wheel. Lord Robertson of Port Ellen, chairman of the Commission for Global Road Safety, best highlighted this responsibility when posing the question, “What kills more children than Aids?”, the answer being – roads.
The MRSA provides all the tools necessary to educate and empower drivers through real-life events. It is an unfortunate reality that road accidents occur daily, but rather than hiding these unpleasant truths, MRSA uses these realities to educate road users on preventive measures. In actuality, these accidents could happen to anyone; dangerous situations present themselves to drivers every day, but how the situation is handled can often mean the difference between life and death. The MRSA deals with both prevention and crisis training to equip road users with the necessary knowledge in a crisis situation.
MRSA reported on around 80 incidents over the past nine months. Where possible, MRSA actively attended accident scenes, vehicle collisions and/or pedestrian accidents, with life-saving equipment and paramedics to provide emergency assistance where necessary. Road users were given emergency assistance, a shoulder to cry on, an ear to listen to and the strength in knowing we were with them through it all. It has been an honour to offer support to those in need and our unwavering service will continue. Matrix would like to thank everyone who contributed his or her time and effort to this life-saving initiative.
https://www.matrix.co.za/mrsf
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Operational Performance
Sustainability Review continued
SocialHuman capitalMiX is proud to be the employer of
937 people in our 12 offices around the
world. The quality and loyalty of our people
form the foundation of the success and
growth that the Group has achieved. It is
after all our people who interact with our
customers, suppliers, business partners
and other stakeholders and who are
therefore instrumental in maintaining and
improving MiX’s reputation with these
parties.
Acquiring, developing, training, retaining
and empowering quality people at all levels
of the Group will always remain a priority
for MiX. The Group values to which we
ascribe are clearly communicated to staff
and are visible in a respectful and trusting
relationship between staff and management,
customers, partners, suppliers, and
between staff members across the world.
Our regular employee review and leadership
development programmes ensure that the
leaders in our business stay true to and
promote our values while executing Group
goals. MiX recognises the rights of
employees to freedom of association,
collective bargaining, dispute resolution
mechanisms and protection against any
form of harassment, victimisation or
discrimination.
Labour practicesMiX achieved recognition as one of the best
employers to work for in South Africa for the
sixth consecutive year. The Group complies
with labour legislation in all of the countries
in which we employ staff. In South Africa,
where the bulk of our staff are employed,
we comply with the Labour Relations Act
(1995) and the Basic Conditions of
Employment Act (1997).
Employment equity and equal opportunitiesThe Group is committed to the ongoing
development of all its employees, regardless
of race or gender and endeavours to ensure
that equal opportunities are created. The
South African businesses submit
employment equity plans and progress
reports to the Department of Labour and
comply with the Employment Equity Act
(1998). Management of each South African
business sets their own employment equity
targets and defines their approach to
managing and achieving these targets.
However, staff demographics are reported
to the Group executive committee on a
quarterly basis. The MiX staff demographics
can be seen on page 37. Some of the
businesses found it challenging to meet their
targets during the past year, specifically in
terms of management level representation,
but remain committed to improve this aspect.
LearnershipsMiX Enterprise embarked on a learnership programme for disabled persons in 2012 and based on its success continued with this learnership in 2013. The services of Progression, a service provider specialising in the recruitment of disabled persons assisted with the process in terms of placement, training and support to ensure a successful outcome. To date, five learners suffering from various disabilities have been placed at MiX in the Finance and Contact Centre environments. Their integration into our business was a fairly smooth process and one of the learners was nominated by colleagues as the employee who excels at living the values of MiX. These learners proved that diversity is a strength and not a weakness and that we need to appreciate our differences.
MiX also commenced with a Fleet Management learnership in partnership with Southern Business School in 2012. Employees attend classroom courses on five modules, namely, Business Communication, Fleet Management, Accountancy, Management Practice and Business Law. Apart from assignments, they also write exams and obtain a certificate in Fleet Management. Employees enjoy the exposure and knowledge transfer, although the exams are often approached with some apprehension. Despite this, there are staff members who completed the learnership with several distinctions in 2012, the top student being Bronia Paulse from Stellenbosch. The success in 2012 led to the intake of a new group of 10 staff members in 2013. The staff now views this learnership as an excellent opportunity for growth and development and a path to future diploma or degree studies.
35MiX TelematicsIntegrated Annual Report 2013
Operational Performance
Staff wellnessStaff health, wellness and morale are very
important to the Group. Each business in
the Group manages their own initiatives to
suit their demographics and these initiatives
continue throughout the year.
MiX Enterprise, MiX Africa and MiX Fleet
Support, who share an office in Midrand,
subscribe to the Careways Group.
Careways specialises in providing
comprehensive wellness solutions to staff
with the aim to assist workers to achieve a
work/life balance, leading to job satisfaction
and healthy, productive lifestyles. Their
offering includes a 24-hour telephonic
wellness helpline that is available to staff as
well as their family members. During the
year, staff had health screening checks that
included blood pressure, cholesterol and
glucose assessments, on-site eye testing
as well as an holistic personal risk report
for each individual. Substance Abuse
Awareness was another wellness
campaign, which included an external
volunteer sharing their success story with
our staff, followed by an education session
regarding obtaining support, counselling
and information for rehabilitation.
MiX participates in regular blood drives
conducted by the South African National
Blood Service in South Africa and the Group
also facilitates free flu vaccinations before
winter each year. World Aids Day was again
used as an opportunity to raise awareness
around Aids and the MiX businesses in
Midrand hosted the South African National
Tuberculosis Association (“SANTA”) truck.
This provided the opportunity for staff to
have an on-site tuberculosis assessment.
MiX sponsored several other wellness-
related activities for our staff and their
families during the year and these included
the Discovery Cape Times Big Walk,
Lourensford Wine Estate Pride & Joy Fun
Run, the Pick n Pay Cape Argus Cycle Tour,
the CANSA Shavathon in support of cancer
awareness and the 702 Walk the Talk.
A recent staff survey revealed that the
majority of our staff are proud to work for
MiX and would encourage other people to
join the Group.
Training and developmentThe Group invested R4.2 million in training
during the 2013 financial year. Training
and skills development programmes are
Sabri Attalla, MiX’s first intern who is currently a Technical Support Engineer; Brendan Mc Phillips, Customer Care Associate; Kelsey Butler, Customer Care Sales Administrator; Hadeel Bogary, Scheduling Administrator; Nathaniel Green, Database Analyst; and Mereste Duvelsaint, Accounting Coordinator.
implemented across the Group and across
all levels of staff. They include internal
classroom courses, e-learning modules,
external programmes as well as learnerships.
It is our policy to give preference to promoting
from within and it is therefore crucial that
training is not only focused on improving our
staff’s skill in their current position, but also to
develop and equip them for their future
opportunities within the Group. During the
early parts of the year, the MiX Learning
Centre was launched to staff and partners
around the world. This is an e-learning centre
that ensures that the quality of technical
training of our staff and partners is
standardised and available at a lower cost
than traditional training. The number of
training interactions increased.
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Operational Performance
Sustainability Review continued
Internship programme launched in North AmericaMiX North America recently launched a new internship programme in collaboration with Lynn University, Florida Atlantic University (FAU) and ITT Technical Institute. The initiative provides an ideal opportunity for students to experience the “real” business world, while exposing MiX to new talent and fresh insight. The programme has been highly successful, resulting in a number of permanent hires.
Hiring an intern is one of the most effective ways of evaluating the potential of a future employee, while students also benefit by experiencing a company’s culture, management style and other organisational dynamics before having to make a decision should an offer of employment be made. Additionally, MiX sees the programme as an excellent way to give back to the community. Hiring interns not only helps students in the community to get started, but it enhances the local workforce as a whole.
Here are some comments from a couple of our interns“I recommend an internship because it gives you the opportunity to apply fundamentals learned in the classroom to real-world issues. It also gives you an in-depth analysis of what it is really like to work within your field of study. There was always something new to learn, and I learned as much as I could. The internship gave me the opportunity to build relationships with senior engineers and managers, to consider all the factors of a project, and use the systems that are in place to get things done. Most of all I was able to make an impression on those making hiring decisions and I was offered a permanent position in the end. It’s the challenges I get to work on every day that keep me here. I get to constantly figure out how to do things more efficiently, and it forces me to be innovative. Collaboration is important, too, so I have a good network inside MiX to get things done.”
Sabri Attalla, Technical Support Engineer
“It has been a pleasure to commence my professional career through an internship opportunity at Lynn University. A month or two before the expiration of the internship, I was offered full-time permanent employment. My team includes customer support for both North and South America, support in both English and Spanish. As an international business major, I am very happy to work for a company as diverse as MiX Telematics. In terms of cultural diversity, MiX closely resembles Lynn University, at which 50% of the student body is made up of students from other countries. At least 30% are from Latin America, which is now one of the regions I serve at MiX, making a good fit for both myself and the company. In the future, I see myself assuming a sales role at MiX, and that’s something I really look forward to.”
Brendan Mc Phillips, Customer Care Associate
Broad-based black economic empowerment
MiX Telematics International Proprietary Limited
Valid to 31 March 2013 Level six contributor
MiX Telematics Enterprise SA Proprietary Limited
Valid to 24 July 2013 Level two contributor
MiX Telematics Fleet Support Proprietary Limited
Valid to 26 August 2013 Level two contributor
MiX Telematics Africa Proprietary Limited
Valid to 25 November 2013 Level six contributor
MiX Telematics Limited Valid to 31 March 2014 23.46% effective black shareholding of all issued shares as at 25 March 2013
The Board is committed to transformation
and stated their intention to increase focus
on the monitoring of transformation efforts
of the Group during the coming year.
B-BBEE and transformation is a Board
agenda item.
In accordance with the Codes of Good
Practice issued in terms of section 9(1) of
the B-BBEE Act of 2003 (Act 53 of 2003),
the various South African entities rate
as follows:
MiX Enterprise and MiX Fleet Support are the Group’s two most empowered entities, and
produce more than 31% of the Group’s earnings before interest and tax. The MiX Fleet
Support Trust has 17 black MiX employees as beneficiaries, who received a distribution of
R442 000 during the 2013 financial year, bringing the amount distributed since inception to a
total of R662 000.
37MiX TelematicsIntegrated Annual Report 2013
Operational Performance
South African employee demographics2013 2012
● African 31%● Indian 8%● Coloured 16%● White 45%
● African 36% ● Indian 9%● Coloured 11%● White 44%
Group employee demographicsGeographic breakdown
● Africa and SA 78% ● UK and Europe 6%● North America 6%● Middle East 6%● Australia 4%● Brazil 0%
Gender Length of service
● Male 60% ● Female 40%
● 0 – 5 years 76% ● 6 – 10 years 15%● >10 years 9%
MiX Enterprise BEE Trust
(Enterprise Trust)
The Enterprise Trust holds a 14.9% stake in
MiX Enterprise and is defined as a B-BBEE
trust. It has accumulated R5 552 427 in
dividends since it was established and has
to date paid R1 472 530 towards qualifying
charities, with a further R500 000 already
committed to Heartbeat, an NGO that
supports Aids orphans and vulnerable
children in areas throughout South Africa.
The trustees have agreed that at least
20% of the Enterprise Trust fund income
would be for the benefit of qualifying
MiX staff and they are investigating
the alternatives for this scheme.
The Enterprise Trust committed R1 million
during March 2012 towards the new
Heartbeat education centre for children in
Vosloorus. The centre is scheduled for
completion in November 2013. The
Enterprise Trust has had a long-standing
relationship with Heartbeat, and is
committed to the Vosloorus community. The
children of Vosloorus have suffered,
especially those who have been orphaned
by Aids. A sound education offers the best
chance for these children to be successful
in life. We are confident that this investment
represents a meaningful contribution
towards improving learning, social, and
support conditions for these children.
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38 MiX TelematicsIntegrated Annual Report 2013
Operational Performance
Sustainability Review continued
New education centre for the children in Vosloorus
Heartbeat, an NGO that supports Aids orphans and vulnerable children in Vosloorus, is building a new learning centre for the children of the poverty-stricken township, thanks to a major investment by fleet telematics company MiX Telematics Enterprise.
Heartbeat’s chief operating officer, Phetole Seodi, says the new learning centre will enable the organisation to expand the range and scope of services it delivers to the children of the Vosloorus community. Heartbeat has helped more than 54 000 affected children in the past decade. Construction of the new centre, which was delayed as a result of red tape, will start in the next few months. The centre will support the children through various activities to ensure that they can excel academically. Assistance with homework will be provided, along with other support activities including individual counselling, support groups, youth camps, workshops and puppet shows, all of which focus on and ensure the wellbeing of the children. The centre will accommodate about 150 children. Seodi says the centre will bring new hope to children in one of Gauteng’s poorest communities by improving their education. “We estimate that more than three million children in South Africa are orphaned through HIV/Aids. Our approach is to try and keep family units together as much as possible, and this new centre will really help us empower these young people to reach their full potential in spite of their circumstances,” he said.
Heartbeat was founded in 2000 by Professor Sunette Pienaar in response to a call by the then president Nelson Mandela. Its mission is to empower orphans and vulnerable children, and those who support them, to be responsible leaders of the future. The organisation works in close partnership with communities, service providers, donors, government and friends to provide holistic services to these children, including psychological and social support, food, education, care and opportunities for development and growth.
The Enterprise Trust’s partnership with Heartbeat is an example of an investment in young people in surrounding areas who will potentially be MiX’s future employees and customers.
Corporate and social investmentGood corporate citizenship dictates that
investment in communities in which we
operate is not only good corporate
governance, it is just the right thing to do.
During the year, MiX invested R522 000
towards socially responsible initiatives.
This excludes additional funds raised by
MiX staff.
Education, from MiX’s perspective remains
the cornerstone of upliftment and socio-
economic development as it ensures future
growth of the individual and the community
in which each individual will work and
reside. This remains the premise of the
Group and guides us in terms of our social
investment. In addition to the skills
development and training provided to
employees, the Group also supports a
number of initiatives that focus on education
and training within previously disadvantaged
communities and is proud to be associated
with the following initiatives:
• Heartbeat is a beneficiary of the
Enterprise Trust and also benefits from
funding directly from MiX Enterprise.
• Clover Mama Afrika – Ukwakha Isizwe
(building and nurturing our nation), is a
national social upliftment project that
aims to assist and support communities
at grassroots level in an enabling and
empowering manner so that they can
help themselves and those around them.
The focus of the projects is to empower
and uplift women who look after abused,
abandoned, orphaned and vulnerable
children as well as the elderly, in order to
progress to a sustainable means of
supporting the community.
• Habitat for Humanity is a non-profit
housing organisation that seeks to
eliminate poverty and homelessness
39MiX TelematicsIntegrated Annual Report 2013
Operational Performance
from the world, and to make decent
shelter a matter of conscience and
action. During May 2012 some of the
staff from our Stellenbosch office
completed the entire construction of a
small house in only one week. The house
was constructed in the Mfuleni township,
located approximately 30 kilometres from
practical gifts for underprivileged children
who would not otherwise receive anything
during the December festive season.
• Other initiatives, of which there are many,
include but are not limited to the Reach
for a Dream project and Casual Day in
support of people with disabilities.
Cape Town. The group of staff involved
found this to be a very rewarding
experience and say they look forward to
their next project.
• Santa Shoebox is a project where staff
from Midrand and Stellenbosch
collaborated to put together nearly
300 “shoeboxes” full of personalised and
Ashbury, Montagu, known as the
Gateway to the Karoo, is a village where
you will find Mama Selestien, who
assists her community by caring for
children and the elderly, while overseeing
a catering business that involves a
number of community members. There
is no quiet time for this lady on any given
day. Between baking 500 loaves of
bread, baking cakes, and arranging
functions, she helps to prepare up to
200 fish and chips parcels, each of
which provides a daily meal to a family
of four in Ashbury. Mama Selestien is
one of the beneficiaries of the Mama
Afrika project, a community initiative by
Clover, generously supported by MiX.
Clover is a long-standing customer of
MiX. The Clover Mama Afrika project
aims to develop communities by
appointing women who are already
making a difference in their communities,
and further empowering them with
sustainable skills that can be transferred
to the community at large. The brainchild
of Professor Elain Vlok, Mama Afrika
has already touched the lives of more
than 14 000 children and over 2 500
elderly throughout the country. Mama
Selestien’s efforts received a renewed
boost late last year when the Clover
Mama Afrika team paid her a visit as part
of a 6 319 km journey around South
Africa – a journey which covered 20
centres across all nine provinces. The
road trip was funded by MiX. The socio-
economic problems faced by Mama
Selestien’s community are typical of
communities across South Africa and
the efforts of local corporates are making
a genuine difference in the country. The
ethos of the Clover Mama Afrika project
is based on the concept of ‘Ubuntu’ – an
ancient African wisdom, which teaches:
“I am who I am because of others around
me; I am because we are.” Ubuntu
speaks about how we, as human beings,
can’t exist in isolation and are all
connected. It’s in our ability to show that
we care and our generosity that
connects us to others within our
community and further afield. The
primary objectives of the trip were to
evaluate and mentor the “Mamas”, as
well as providing the Clover team with
an opportunity to meet the ladies and
engage with them on a personal level.
With the focus being on identifying
Mamas already operating within
communities, the project seeks out
opportunities for the individuals to further
develop their skills, while offering
financial assistance to help them grow
their businesses. Through their
involvement in these businesses, and
with these openhearted women, other
community members are able to learn
and use similar skills to further their own
development. The long-standing
relationship between MiX and Clover
South Africa is an ideal example of what
can be achieved when companies pool
their resources to make a greater
impact. Helping to offer the Mamas the
opportunity of becoming self-sustainable
is their best chance to be successful in
life. The road trip proved to be beneficial
for both the Clover Mamas and the
Clover Mama Afrika team.
The journey of a thousand miles begins with MiX
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VisionaryFrom personal safety to advanced fleet management solutions, MiX Telematics helps thousands of people to have better, safer experiences on the road. Our customers are reducing their risk, lowering their fleet operating costs, improving their safety levels and lessening their environmental impact.
41MiX TelematicsIntegrated Annual Report 2013 41MiX TelematicsIntegrated Annual Report 2013
42 MiX TelematicsIntegrated Annual Report 2013
Governance and Accountability
Group Executive
Megan Pydigadu (38)Group Financial DirectorRe-elected 13 September 2011CA(SA)
Megan is a CA(SA), having completed her articles with Deloitte & Touche in 1999. She stayed on for a further two years as an audit manager. She has experience working for global groups, having worked for both De Beers and Bateman Engineering in the head office function.
Brendan Horan (38)Executive – Consumer SolutionsCA(SA)
Brendan qualified as a CA after completing articles at KPMG in 2001. He worked in London for three years for Intecbilling. He returned to South Africa to join the Control Instruments Group as financial director of its automotive aftermarket division. In 2007 he joined CI OmniBridge as the general manager of the RSA Sales division in Johannesburg. Shortly thereafter, CI OmniBridge was acquired by MiX and Brendan’s roles and responsibility were largely sales and business development focused where he contributed to exponential business growth in multiple and diverse channels on the African continent. This is his first completed year at the helm of our consumer business.
Charles Tasker (49)Executive – Fleet SolutionsDirectorRe-elected 11 September 2012
Charles founded DataPro in 1986, which was subsequently acquired by Control Instruments in 1996. In 1997 Charles joined Control Instruments Group as managing director of their fleet management business which became OmniBridge (now MiX Telematics International). Charles has a strong sales and commercial background and is passionate about technology. Today he is responsible for MiX Telematics’ fleet business globally.
Stefan Joselowitz (54)Chief Executive OfficerDirectorConfirmed 29 August 2007
A serial entrepreneur, Joss attributes his disappointing foray into the hospitality industry at the age of 23 as the best business education he could ever have hoped for. He sold his share in his second restaurant in 1985 and returned to his tech roots when he joined Shurlok. Since then, he has built several successful technology businesses. In 1995, he developed a business plan for a unique telematics concept and raised capital from an investment consortium for what was to become Matrix Vehicle Tracking. This was the seed that ultimately grew into MiX Telematics, a multi-national corporation with 12 offices in seven countries. In 2007, Joss and his team listed MiX on the main board of the Johannesburg Stock Exchange. Five years later, MiX employs close to 1 000 people worldwide and was adjudged one of the top five best performing companies on the JSE for 2012 by Financial Mail.
43MiX TelematicsIntegrated Annual Report 2013
Governance and Accountability
Terry Buzer (64)Executive – Development and EngineeringDirectorRe-elected 13 September 2011BSc (Hons)
Terry was appointed to the board of Control Instruments Group in 1987. He was involved in Control Instruments’ investment in Matrix (now MiX Telematics Africa) and the start-up and growth of OmniBridge (now MiX Telematics International), the two core companies on which MiX Telematics was founded. Terry is now heading up our technology, engineering and development teams, based in Stellenbosch.
Riëtte Botha (45)Executive – Special ProjectsDirectorRe-elected 11 September 2012BCom (Hons)
Riëtte practiced as an accountant with various companies, before joining MiX Telematics Africa in 1999. Her career at MiX has seen her through a variety of positions such as financial manager, financial director, chief operating officer, and managing director of the MiX Telematics Africa operation. Riëtte was recently appointed Executive of Special Projects. She also sits on the board of Heartbeat, an NGO focused on the care and upliftment of orphans and vulnerable children and serves on the social and ethics committee.
Howard Scott (54)Executive – Strategy and AcquisitionsDirectorRe-elected 13 September 2011BBusSci; CTA
Howard has been involved with the MiX Group in various roles since its inception. He served as a non-executive director from 1997 until 2003 and as the financial director from August 2007 until February 2008. He then worked as a consultant from March 2008 until November 2010 when he was re-appointed to the Board. Howard relocated temporarily from Australia to the USA to provide support to the Group CEO in the areas of strategy, mergers and acquisitions.
Howard was formerly registered with the South African Institute of Chartered Accountants and CPA Australia, having trained in computer auditing while completing his accounting articles with Arthur Young & Co. He then moved to Investec Bank where he was the group accountant before spending 12 years at the Radiospoor Group as the financial director. He also served as a non-executive director for a JSE DCM listed software house.
Gert Pretorius (45)Executive – Africa Fleet SolutionsBCom
Gert worked in several financial positions before joining the fleet management industry. Since 1998 he has worked as a senior executive in fleet management companies such as Super Group and Daimler Fleet Management, and in the security industry at Coin Security Group, before joining OmniBridge in 2006 as operations manager. He fulfilled various other positions in the Group in the operations and sales spheres. In 2008 he was appointed Managing Director of MiX Enterprise. In 2010 he was appointed chief operating officer for MiX Africa. At the beginning of 2012 he was appointed to the executive committee and made responsible for central operations and Africa Fleet Solutions.
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44 MiX TelematicsIntegrated Annual Report 2013
Governance and Accountability
Non-Executive Directors
Richard Bruyns (60)
Chairman
CA(SA), PDM (Harvard)
Re-elected 11 September 2012
Richard’s directorship experience spans many industries and
achievements. During the past 20 years, Richard has led
companies of 500 to 12 000 employees with annual sales ranging
from R500 million to R20 billion in the IT, manufacturing, construction,
hospitality and consumer goods industries. His experience includes
turning one of Africa’s largest operators and managers of high-end
bush lodges from losses to strong profitability and culminating with
“best hotel in Africa and the Middle East”, and “second best small
hotel in the world 2005” for two of the group’s lodges.
Richard has served on many boards including Malbak, Kohler
Packaging, Kimberly Clark of SA, Crown Cork SA, Control
Instruments Group, Carnelley Rangecroft Consultancy, Conservation
Corporation of SA (CC Africa), Shift Interactive Communications,
and New Africa Investments. Richard is currently also a non-
executive director on the board of Conduit Capital, a listed company
in the financial services sector.
Hubert Brody (49)
CA(SA)
Re-elected 13 September 2011
Hubert is chief executive officer and chairman of the executive
board of Imperial Holdings, the diversified mobility group with an
annual turnover of over R80 billion and assets of R48 billion.
He studied at the University of Stellenbosch and qualified as a CA in
1988. He has previously worked in the property, IT and banking
industries. Before being transferred to Imperial Holdings in 2003, he
was the chief financial officer of Imperial Bank.
Chris Ewing (64)
BCom LLB (Wits)
Appointment confirmed 11 September 2012
Chris is chairman of Cliffe Dekker Hofmeyr and a director in the
Corporate and Commercial practice, and has practiced in corporate
law for more than 30 years, specialising in mergers and acquisitions.
Chris completed his BCom LLB at the University of the Witwatersrand,
and began his career in the finance department of South African
Breweries in 1970. He joined Cliffe Dekker as a candidate attorney
in 1974, and was admitted as an attorney in 1976. In 1978, he joined
Credit Guarantee as their legal adviser, and returned to Cliffe Dekker
as a director in 1979. He was elected chairman in September 2001,
then as chief executive officer of Cliffe Dekker Hofmeyr in 2008 and
chairman in 2011.
Robin Frew (53)
BBus Sci (UCT), BCompt (Hons)
Re-elected 11 September 2012
Robin is chief executive officer of Masalini Capital, an investment
company which manages listed and unlisted equity and property
investments. In addition to MiX Telematics, Robin serves as a non-
executive director for Wizzit Bank, PayM8 Payment Solutions and
Hymax Telecommunications.
Robin’s previous experience includes 15 years with Radiospoor
Technology Holdings, a supplier of cellular and related mobile
communication services. Robin was chief executive officer of the
group while it was listed on the JSE between 1997 and 2000. Robin
has been involved with MiX Telematics since its inception.
45MiX TelematicsIntegrated Annual Report 2013
Governance and Accountability
Richard Friedman (58)
BCom, AMP (Harvard)
Resigned 31 March 2013
Richard joined Control Instruments Group as a director of a
subsidiary company in 1981. He became managing director of
Control Instruments in 1985 and managing director and CEO
of Control Instruments Group in 1986. Richard resigned after
25 years as CEO of Control Instruments Group on 31 December
2011 to manage his and his family’s private investment and business
portfolio, which include their interests in MiX.
Fundiswa Roji (37)
BCom (Hons), BCompt, CA(SA)
Re-elected 13 September 2011
Fundi, a CA(SA), is a senior manager in strategy and investor
relations at Imperial Holdings, the diversified mobility group with an
annual turnover of over R80 billion and assets of R48 billion. Prior to
the current position, she was a director of investments at Kagiso Tiso
Holdings, a position she held until December 2012. She is also a
member of the social and ethics committee of MiX. She was
previously the chairman of Matrix Vehicle Tracking (now MiX
Telematics Africa), a wholly owned subsidiary of MiX Telematics
prior to its listing. Fundi qualified as a CA(SA) in 2000 having served
her articles with Ernst & Young.
Roy Shough (62)
CA(SA), HDipBDP, CIA
Appointment confirmed 11 September 2012
Roy retired as a partner in Risk Advisory at Deloitte & Touche in
May 2012. He created their corporate governance and risk
management services in January 1995, and led this function for
many years. He has over 40 years’ experience in advising listed and
unlisted companies on corporate governance, internal audit, risk
management implementation and risk assessment. Roy was a
member of the King II and King III – Boards and Directors Task
Teams. Roy is the chairman of the audit and risk committee.
Tony Welton (65)
CA(SA), MBL (Unisa)
Re-elected 13 September 2011
Appointed a non-executive director in February 2008, Tony has both
financial and operational expertise, having been the financial director
of large listed companies from 1986 to 2002. From November 2009
to August 2010, Tony was interim financial director of the Company
following the resignation of the previous incumbent. Tony is currently
an independent non-executive director, chairman of the social and
ethics committee and a member of the remuneration committee.
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46 MiX TelematicsIntegrated Annual Report 2013
Governance and Accountability
Social and Ethics Committee Report
The MiX Telematics Limited (“MiX”) social
and ethics committee (“committee”) is in its
second year of existence and as chairman
I am pleased to report on the activities of
the committee for the 2013 financial year.
In accordance with the committee’s
mandate given by the Board and in
compliance with the Companies Act 71 of
2008 (“Act”) as set out in section 43 of the
Companies Regulations (“regulations”), the
committee executes its responsibility in
terms of its prescribed functions as well as
the rules governing the composition and
conduct of the committee. In terms of the
regulations, the committee also acts as the
social and ethics committee for the South
African subsidiaries of MiX.
Members of the committeeDuring the year under review, the social and
ethics committee members were:
• Anthony Welton (chairman and
independent non-executive director)
• Fundiswa Roji (independent non-
executive director)
• Riëtte Botha (executive director
responsible for social and ethics)
All the committee members served for the
full financial year of 2013.
The regulations prescribe that the
committee should comprise not less than
three directors or prescribed officers of the
Company, one of whom must not have
been involved in the day-to-day
management of the Company’s business
within the prior three financial years. The
committee complies with this requirement.
Summary of the committee’s function as prescribed by the ActSince this committee is still in its infancy it is
apt to briefly remind our stakeholders about
the obligations of this committee:
1. It is the obligation of the committee to
monitor the Company’s activities,
having regard to relevant legislation,
other legal requirements or prevailing
codes of best practice, relating to:
a. Social and economic development;
b. Good corporate citizenship;
c. The environment, health and
public safety, inclusive of the
impact of the Company’s
activities, products and services
thereon;
d. Consumer relationships, including
advertising, public relations and
compliance with consumer
protection laws; and
e. Labour and employment.
2. The committee must, as the occasion
dictates, bring matters within its
mandate to the attention of the Board.
3. A committee member must report on
matters within its mandate to the
shareholders at the Company’s annual
general meeting.
Regulations also refer to the 10 principles
as set out in the United Nations Global
Compact Principles, the OECD recom-
menda tions regarding corruption and the
International Labour Organisation Protocol
in terms of certain of the items to be
monitored.
Monitoring approachTaking into consideration the geographical
spread of MiX operations and the extent of
the monitoring required in terms of those
items mentioned above, the committee has
developed a comprehensive questionnaire,
which is distributed annually to all the MiX
operations. Results of the questionnaire
are, where relevant, reported to the Board
and incorporated into the report for the
annual general meeting.
The committee is satisfied with the Group’s
performance in each of the areas listed
above. Kindly refer to the sustainability
review for more detail on certain of these
aspects.
47MiX TelematicsIntegrated Annual Report 2013
Governance and Accountability
Policy reviewDuring the period under review, the Group’s
Code of Ethics and Conduct was updated.
An Anti-corruption and Bribery Policy,
together with a Whistleblowing Policy, were
also introduced.
Meetings and Board feedbackThe committee charter as approved by the
Board in 2012, remained unchanged for the
2013 financial year.
Three formal meetings were held during the
year as well as two informal meetings. As a
result of the close working relationship
between the audit and risk committee and
the social and ethics committee a member
of the audit and risk committee is invited to
every social and ethics committee meeting,
while a social and ethics committee member
is in turn invited to the audit and risk
committee meetings.
As more literature and advice has become
available in respect of social and ethics
committees, the committee was able to
refine and crystallise the scope of its
monitoring obligations, including the scope
of the legislative compliance requirements.
During the 2013 financial year, the
committee complied with and met its
obligations to monitor those items under
its mandate.
Signed on and behalf of the social and
ethics committee
AR Welton
Chairman of the committee
Midrand
4 June 2013
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48 MiX TelematicsIntegrated Annual Report 2013
Governance and Accountability
Governance Structures and Systems
IntroductionMiX Telematics is fully committed to ensuring adherence to the strictest standards of ethical
conduct, fair dealing and integrity in its business practices. In support of this commitment MiX
endorses the principles and recommendations of King III. A register of MiX’s performance
against the 75 King III principles can be found on our website under investor relations
(www.mixtelematics.com). Mechanisms and policies appropriate to the Company’s business
have been established in keeping with this commitment to best practices of corporate
governance and integrity, and to ensure compliance thereto. Further to this, the Group has a
Code of Ethics and Conduct which all employees have to subscribe to and is underpinned by
MiX’s principles of honesty, equity, respect and dignity.
Board of Directors and executivesNon-executive directors
Independentdirector
Audit and risk
committeemember
Nominations and
remunerationcommittee
member
Social andethics
committeemember
Richard Bruyns ✓ ✓ ✓
Hubert BrodyChris Ewing ✓ ✓
Robin Frew ✓
Richard Friedman1 ✓
Fundiswa Roji2 ✓ ✓
Roy Shough3 ✓ ✓
Tony Welton ✓ ✓ ✓
1 Resigned from the Board effective 31 March 2013.2 Resigned from the audit and risk committee from 8 February 2013, but remains a member of the social and ethics committee.
3 Appointed to the Board of directors and audit and risk committee from 1 June 2012.
Executive committeeExecutive Director
Stefan Joselowitz (CEO) ✓ ✓
Riëtte Botha4 ✓ ✓
Terry Buzer ✓ ✓
Brendan Horan ✓
Gert Pretorius ✓
Megan Pydigadu (FD) ✓ ✓
Howard Scott ✓ ✓
Charles Tasker ✓ ✓
4 Member of the social and ethics committee.
The MiX Telematics Board is the focal point
and custodian of corporate governance in
the MiX Telematics Group. Board members
are expected to act in the best interest of
the Company and the Group and the
Company Secretary maintains a register of
directors’ interests as required by law.
Directors are appointed on the basis of skill,
experience and their contribution and
impact on the Group’s activities. The Board
decides on the appointment of directors
based on recommendations from the
nominations and remuneration committee.
The Board appoints the independent non-
executive Chairman and Chief Executive
Officer. The roles of the Chairman and the
Chief Executive Officer are distinct.
At least one-third of the non-executive
directors retire by rotation each year and
stand for re-election at the annual general
meeting in accordance with the MOI.
Directors’ appointments during the year are
ratified at the annual general meeting.
The Board comprises seven non-executive
directors and six executive directors. Four
of the non-executive directors, including the
Chairman, are independent.
An executive committee is in place that is
responsible for devising the Group strategy
for recommendation to the Board of
Directors and to implement the strategies
and policies approved by the Board. The
executive committee is also responsible for
the day-to-day business and affairs of
the Group.
The Chairman reviews the Board’s
performance informally on an ongoing
basis; this includes monitoring the
contribution of individual directors. This is
considered sufficient at this time.
49MiX TelematicsIntegrated Annual Report 2013
Governance and Accountability
In line with its annual meeting plan, the
Board meets at least quarterly. The Board
has adopted a charter which clearly defines
the responsibilities of the Board. The
Board’s primary responsibilities are to
create sustainable shareholder value and to
provide effective governance over the
Company’s affairs. The Company’s non-
executive directors provide an independent
perspective and complement the skills and
experience of the executive directors,
assessing strategy, budgets, performance,
resources, transformation, risk, key
performance areas and conduct. A copy of
the Board charter may be obtained from the
Company Secretary.
The Board has developed an approvals
framework, which delegates specific
powers and delegations of authorities to
operating management. This approvals
framework is updated annually. At Board
level, there is a clear balance of power and
authority which ensures that no single
director has unfettered powers of
decision-making.
The information needs of the Board and
committees are regularly assessed and
comprehensive and timely information is
provided in order that they may discharge
their duties effectively. Directors have
unrestricted access to all Company
information, records and documents. All
directors may seek the advice of the
Company Secretary or other independent
professional advice as necessary, at the
Company’s expense.
Board committeesIn the execution of its duties, the Board is
assisted by various committees to which
specific responsibilities have been
assigned. The committees operate in
accordance with approved charters (these
are available on request from the Company
Secretary) and report to the Board on their
activities. An evaluation of the committees’
performance is done on an annual basis.
Audit and risk committeeMiX has combined the audit and risk
committee into one committee. Members
consist only of independent non-executive
directors, one of whom is appointed
chairman. A quorum consists of the majority
of the members.
The Chairman of the Board is a member
of the audit and risk committee and
this dual role will be put forward to
shareholders for approval at the upcoming
annual general meeting.
Representatives from the outsourced
internal audit function and the external
auditors attend meetings. The chairman of
the social and ethics committee is also
invited to attend meetings due to the close
working relationship required between the
two committees. The Group Financial
Director attends all meetings, with the Chief
Executive Officer attending the half-year
and year-end results meetings.
The committee meets at least six times a
year, with two meetings a year focused on
risk management.
The duties and operations of the committee
are set out in the audit and risk committee
report on page 61.
Nominations and remuneration committeeThis committee is chaired by Richard
Bruyns and includes other non-executive
directors as members. A quorum consists of
the majority of the members. The Chief
Executive Officer is invited to attend
meetings.
Due to the mandatory requirements of the
JSE, that the chairman of the Board cannot
chair the remuneration committee, Robin
Frew will chair the committee going forward.
The committee meets at least four times a
year. The duties and operations of the
committee are set out in the nominations
and remuneration committee report on
page 63.
Social and ethics committeeIn line with the Companies Act 71 of 2008,
this committee was established in the prior
financial year. The committee includes two
non-executive directors and one executive
director as members. A quorum consists of
the majority of members. The Chief
Executive Officer and Group Financial
Director are invited to attend meetings.
The committee meets at least three times
a year. The duties and operation of the
committee are set out in the social and
ethics committee report on page 46 and are
further reported back to shareholders at
the AGM.
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Governance and Accountability
Governance Structures and Systems continued
Members’ attendance at meetings
Board:Regular
meetings
Board:Annual
strategyExecutivecommittee
Audit andrisk
committee
Nominationsand
remunerationcommittee
Social andethics
committee
Number of meetings held during the year 5 1 6 6 4 3Richard Bruyns 5 1 1* 6 4Stefan Joselowitz 5 1 6 2* 4*Riëtte Botha 4 1 6 3Hubert Brody 5 1Terry Buzer 4 1 6Chris Ewing 5 1 6Robin Frew 5 1 4Richard Friedman1 5 1 4Brendan Horan 5* 1* 6 2*Gert Pretorius 5* 1* 6Megan Pydigadu 5 1 6 6* 1*Fundiswa Roji2 4 1 4 3Howard Scott 5 1 6Roy Shough3 4 1 5Charles Tasker 4 1 6Tony Welton 5 1 5* 3
* Attended as an invitee.1 Resigned from the Board effective 31 March 2013.2 Resigned from the audit and risk committee from 8 February 2013.3 Appointed to the Board and audit and risk committee from 1 June 2012.
Company SecretaryThe company secretarial function is
outsourced to Java Capital Trustees and
Sponsors Proprietary Limited (“Java”),
which provides an independent company
secretarial service. Prior to Java’s
appointment as Company Secretary during
February 2013, the Board considered the
competence, qualifications and experience
of the individual at Java who is responsible
for the performance of all company
secretarial duties to MiX and is satisfied that
the individual, who is an attorney with more
than eight years’ company secretarial
experience, has the necessary qualifications
and skills to undertake the role. Furthermore,
the Board is satisfied that an arm’s-length
relationship is maintained between the
Company and Java through the provisions
of the service agreement entered into
between Java and the Company which
limits the duties of the Company Secretary
to only those related to the corporate
governance of the Company and the
administration of company secretarial
documentation.
Java provides the Board as a whole, and
directors individually, with detailed guidance
on discharging their responsibilities. Java
ensures that proceedings and affairs of the
Board are properly administered in
accordance with pertinent laws and in
compliance with the rules and Listings
Requirements of the JSE Limited on which
the Company’s securities are listed.
AccountabilityGoing concernThe audit and risk committee considers the
facts and assumptions used in the
assessment of the going concern status of
the Group and the Company at financial
year-end so as to make a statement with
regards to the preparation of the financial
statements on the going concern basis and
the ability of the Company to pay out a
dividend to shareholders. The Group’s
budget and three-year plan form the basis
of the Board’s conclusion on the going
concern principle.
Internal controlsThe directors acknowledge that they are
responsible for instituting internal control
systems that provide reasonable
assurance on safeguarding assets and
preventing their unauthorised use or
disposal, as well as maintenance of proper
accounting records that give reasonable
assurance on the reliability of financial
information produced.
Internal auditThe internal audit function is outsourced to
Deloitte. The outsourced internal audit
function works closely with the Group
Financial Director but reports to the audit
and risk committee. The outsourced internal
51MiX TelematicsIntegrated Annual Report 2013
Governance and Accountability
audit function has unrestricted access to
the chairman and members of the audit and
risk committee. The internal audit plan for
the Group is developed using a risk-based
approach and is approved by the audit and
risk committee.
The internal audit function focuses on
value-added operational controls and the
adequacy thereof as opposed to the review
of the effectiveness of financial controls. As
the role of internal audit matures, the
intention is that financial control
effectiveness will become part of the
internal audit coverage plan.
Internally, management has reviewed the
entity level controls and presented their
findings to the audit and risk committee.
Based on this review, nothing has come to
the attention of the audit and risk committee
to indicate that significant internal financial
reporting controls have not operated as
intended.
Financial reportingMiX has a comprehensive system for
reporting financial information to the Board
on a monthly basis in the form of
management accounts. Each operation is
responsible for preparing budgets and
three-year plans which are approved by the
Board. Regular forecasts are performed
during the financial year and circulated to
the Board.
Standard group accounting policies are in
place, with which all operations comply.
IT governanceThe Board takes overall responsibility for IT
governance. This has not been delegated
to the audit and risk committee nor has a
separate Board committee been
established. The responsibility for IT
governance rests with an executive
committee member and is reported on at
all Board meetings.
Dealings in securitiesDirectors’ dealings in the Company’s shares
are strictly controlled in terms of the JSE
Listings Requirements. The Board Charter,
in compliance with the Securities Services
Act and JSE Listings Requirements,
prohibits directors, officers and selected
employees from dealing in the Company’s
shares during designated periods preceding
the announcement of the Group’s financial
results, any period while the Company is
trading under a cautionary announcement
and at any other time deemed necessary by
the Board. Dealings by directors are given
prior clearance and reported to the
Chairman, Company Secretary and are
published on SENS within 48 hours of the
dealing.
Compliance with laws and regulationsThere has been nothing that has come to
our attention where we have not complied
with laws and regulations in the jurisdictions
within which we operate. During the year
under review, we have not paid any material
fines for non-compliance with laws and
regulations.
Business integrity and ethicsIn support of the requirements of the King III
recommendations, MiX Telematics has
formalised its business ethics process. A
formal code of ethics and conduct has been
adopted which is applicable to all directors
and employees of the Group.
The code requires, among others:
• Corrupt or illegal practices will not be
tolerated.
• MiX Telematics will observe the laws of
any country in which its business is
transacted.
• All business transactions will be
completely and properly recorded.
• Customers and their information will be
treated with the utmost confidentiality.
• MiX Telematics does not participate in
any illegal anti-competitive activity.
• MiX Telematics is non-political.
• MiX Telematics’ business dealings
(including use of Company assets)
should be conducted at normal arm’s-
length terms, in the interest of MiX
Telematics.
• Business gifts and other offers of
hospitality can only be accepted in
compliance with the MiX Telematics Anti-
Bribery and Corruption Policy.
• MiX Telematics does not discriminate
against any employee, third party,
customer, or member of the public on the
grounds of race, colour, gender, sexual
orientation, age, religion or creed.
• MiX Telematics requires timeous
dissemination of transparent, honest and
accurate information both internally and
to outside stakeholders and investors.
• MiX Telematics fosters a work ethic
based on non-discrimination and
opportunity for all.
• Sound environmental practices.
Effective communication of the Code of
Ethics and Conduct is an ongoing process.
MiX has also established an Anti-bribery
and Corruption Policy together with a
Whistleblowing Policy. A hotline has
also been set up offering a confidential
and safe system by which employees or
other parties can report unethical or risky
behaviour. Such reports can be submitted
to: [email protected].
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Governance and Accountability
Risk Management
The Board takes overall responsibility for
risk management with a formal process
implemented for managing risk. This
process is overseen by the audit and risk
committee. The audit and risk committee
sets aside two meetings during the year to
review matters pertaining to risk. The
objective of the Group’s risk management
processes is to assist the Board in its
responsibility to identify, assess, manage
and monitor the risks to which the business
is exposed. These include both strategic
and operational risks. On an annual basis,
the Board reviews the Group’s risk register
to ensure risks are being managed within a
tolerable level and that sufficient attention is
being paid to reducing items where the risk
is considered unacceptable. The Group
follows the King III principles of risk
management by either treating, transferring
or terminating the risk.
Risk is managed at an operational level with
operations maintaining their own risk
registers. These risk registers are in turn
consolidated at Group level to determine
the Group risk register.
Risk Strategy implemented
Product offering not being of acceptable quality or failing
• Quality control procedures in place
Currency volatility • Established economic hedging policy• Diversification across territories to minimise
overall impact of currency volatility
Non-compliance with relevant legislations and regulations
Contractual agreements legally flawed
• Review of major contracts by legal experts• Advice taken from professional advisers when
dealing in new territories• Ongoing training of staff
Liquidity risk of not having sufficient banking facilities
• Multi-banked• Sufficient debt facilities expiring at different
dates• Surplus cash on hand
Critical systems not providing sufficient uptime to service customers
• Use of redundant architecture• Business continuity plan in place
Reliance on cloud computing and risk of unauthorised access
• ISO27001 project in place• Ongoing third-party review of system
weaknesses
No formal succession planning in place
• Succession plan in place at Board level• Manco structure in place to groom next level
of management
Reputation and brand perception • Ongoing training• Ongoing review of compliance to Group
ethics and legal requirements• Group-wide brand guidelines
Over-reliance on key relationships • Multiple suppliers in place• Risk mitigation plan in place for strategic
supplies
Industry consolidation
Failing to participate in value-adding transactions
Paying too much to acquire a business
Not integrating acquisitions successfully
• Potential transactions are subject to rigorous analysis
• Active mergers and acquisition strategic focus on a global basis
Doing business in high-risk, politically unstable countries
• No material capital outlay upfront• Risk assessment of countries done prior to
entering a region and doing business
Not adapting timeously to changes and trends in the telematics industry
• Annual strategic review of market trends• Ensuring offering is agile and highly
adaptable
53MiX TelematicsIntegrated Annual Report 2013
Governance and Accountability
Information Technology Review
MiX has a large and expanding customer
base with a mission to grow to one million
subscribers by 2016. To do this the Group
relies on robust IT systems to support the
business operations. Over the past months,
the Group has formalised a business
operating model and started a modernisation
programme to refresh and replace some
of the enterprise business platforms. MiX
strives for efficiency and prides itself on
excellent service delivery and providing
value to our customer base.
Business processMiX focuses on end-to-end business
processes targeting how best to provide
service to the customer base. By taking a
process view of the business we have
identified the core capabilities required to
effectively execute the business process
and organise hiring and training activities to
improve the required capabilities.
Investment decisions are made with the
business operating model, business
process and required capabilities in mind
which ensures MiX receives the highest
return on every investment.
Enterprise systemsTo optimise efficiencies and reduce costs
the last year has seen a significant effort
to merge and modernise our systems
landscape. The focus has been on customer
service systems, concentrating on how we
can communicate and transact more
effectively, with both our channel partners
as well as our customer base. These
activities will continue and should start
showing returns in the new financial year.
Information securityMiX prides itself as a premium software and
service provider in the telematics market.
The Group has a wealth of information on
both mobile assets and company and
personal information. Keeping that
information safe and secure is a primary
focus and throughout the years, MiX has
had a number of programmes in place to
ensure customer data is safe. The last year
saw MiX embark on the ISO 27001 journey
to further enhance our security focus and
provide additional assurance to both our
consumer and corporate customers. MiX
has dedicated staff in place to constantly
monitor the information security practice
and makes use of a number of external
consulting partners to provide further
assurance in this space.
People and structureGroup IT has two significant areas of focus:
• Hosting and operations. The primary
focus is on providing hosting facilities for
the software products the Group
develops. In addition, the hosting and
operations team provide end-to-end
support for the hardware and software
platforms and ensure customers are well
looked after in their contracted services.
• Business systems. The business systems
team focus on providing efficient and
robust business platforms for the Group
to better serve the customer base and
channel partners.
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PioneeringWith a global footprint, a large and growing subscriber base as well as a history of operating successfully in international markets, MiX Telematics is positioned to take advantage of significant growth opportunities. We share our success with over 130 fleet channel partners worldwide.
55MiX TelematicsIntegrated Annual Report 2013
56 MiX TelematicsIntegrated Annual Report 2013
Financial Reports
ContentsFinancial Reports
57 Statement of Directors’ Responsibility
57 Certificate of the Company Secretary
58 Directors’ Report
61 Report of the Audit and Risk Committee
63 Nominations and Remuneration Committee Report
67 Independent Auditor’s Report
68 Statements of Financial Position
69 Income Statements
70 Statements of Comprehensive Income
71 Statements of Changes in Equity
72 Statements of Cash Flows
73 Notes to the Annual Financial Statements
131 Shareholder Information
57MiX TelematicsIntegrated Annual Report 2013
Financial Reports
Statement of Directors’ Responsibilityfor the year ended 31 March 2013
Certificate of the Company Secretaryfor the year ended 31 March 2013
The directors are responsible for the preparation, integrity and fair
presentation of the annual financial statements of MiX Telematics
Limited (“the Company”) and its subsidiaries (“the Group”). The
annual financial statements have been prepared in accordance with
International Financial Reporting Standards (“IFRS”) and in
accordance with the requirements of the Companies Act 71 of 2008
(“the Act"), and include amounts based on judgements and estimates
made by management.
The Group’s independent auditors, PricewaterhouseCoopers Inc.,
have audited the annual financial statements and their unqualified
report appears on page 67.
The directors consider that having applied IFRS in preparing the
financial statements, they have used the most appropriate
accounting policies, consistently applied unless otherwise indicated
and supported by reasonable and prudent judgements and
estimates, and that all IFRS that they consider applicable have been
followed. The directors are satisfied that the information contained in
the financial statements fairly presents the results of the operations
for the year, and the financial position of the Group and Company at
year-end, in accordance with IFRS.
The directors are also responsible for the systems of internal control.
These are designed to provide reasonable, but not absolute,
assurance as to the reliability of the annual financial statements, and
to adequately safeguard, verify and maintain accountability of
In terms of the Companies Act 2008 (“the Act”), we certify that, to the best of our knowledge and belief, the Company has lodged with the
Companies and Intellectual Properties Commission, for the financial year ended 31 March 2013, all such returns as are required of a public
company in terms of section 88 of the Act and that all such returns are true, correct and up to date.
Java Capital Trustees and Sponsors Proprietary Limited
Company Secretary
Midrand
4 June 2013
assets, as well as prevent and detect material misstatement and
loss. Nothing has come to the attention of the directors to indicate
that any material breakdown in the functioning of these controls,
procedures and systems has occurred during the year.
The annual financial statements are prepared on a going concern
basis. Nothing has come to the attention of the directors to indicate
that the Company or the Group will not remain a going concern
for the foreseeable future, based on forecasts and available
cash resources.
The annual financial statements set out on pages 57 to 62 and 67 to 131 were approved by the Board of Directors on 4 June 2013 and are signed on its behalf by:
Richard Bruyns Stefan JoselowitzChairman ChiefExecutiveOfficer
Megan PydigaduGroup Financial Director
Midrand
4 June 2013
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Financial Reports
Directors’ Reportfor the year ended 31 March 2013
Nature of businessMiX Telematics Limited is a holding company listed under the “MIX”
short code in the Business Support Services sector on the JSE
Limited (“JSE”). The Group’s activities focus on fleet and mobile
asset management solutions delivered as software-as a-service or
SaaS.
Review of resultsThe results of the Group and the Company have been set out in the
attached financial statements, as set out on pages 57 to 62 and
67 to 131.
Acquisitions and disposalsThe Group did not make any disposals of businesses during the
year. During the year, the Group acquired the business of Intellichain
Proprietary Limited (“Intellichain”) (consisting of selected assets and
liabilities and employees) for an amount equal to the outstanding
balance of the loan previously provided to Intellichain by the Group.
On the effective date of the transaction, the aforementioned loan
approximated R6 million. In the prior year, One Stop Shop, the
vehicle conversion business unit forming part of the MiX Telematics
Europe business, was disposed of to Imperial Commercials Limited,
a related party.
Changes to share capitalThere were no changes in the Company’s authorised number of
shares during the year under review (2012: none). The number of
issued shares increased by 2 762 500 as a result of employee share
options exercised during the year (2012: 200 000).
On 25 October 2012, the Company's new Memorandum of
Incorporation (“MOI”) was accepted by the Companies and
Intellectual Property Commission. As a result, the issued share
capital of MiX Telematics Limited of 659 450 000 shares with a par
value of 0.002 cent per share at the conversion date was converted
to shares of no par value.
At year-end, the authorised stated capital amounted to one billion
ordinary shares with no par value. The number of issued shares of
no par value amounted to 659 962 500. No treasury shares were
held (2012: none).
DividendsDividends paid during the year under review are set out in note 34 to
the financial statements.
Subsequent to year-end, a cash dividend of 6 cents per share has
been awarded to shareholders. The dividend has been declared out
of income reserves for the 12 months ended 31 March 2013. The
dividend will be subject to a dividend withholding tax at a rate of
15%, which will result in a net dividend of 5.1 cents per share to
those shareholders who are not exempt in terms of section 64F of
the Income Tax Act.
The salient dates are as follows:
Last date to trade cum dividend Friday, 28 June 2013
Trading ex dividend commences Monday, 1 July 2013
Record date Friday, 5 July 2013
Payment date Monday, 8 July 2013
Shares may not be dematerialised or rematerialised between
Monday, 1 July 2013 and Friday, 5 July 2013, both dates inclusive.
Special resolutions of MiX Telematics LimitedThe following special resolutions were passed at the annual general
meeting of shareholders, held on 11 September 2012:
• providing general authority to enable the Company (or any
subsidiary) to acquire its own shares. This authority will be put up
for renewal at the forthcoming annual general meeting;
• providing authority to the directors of the Company to approve
actions related to any transaction amounting to financial assistance
between inter-related companies, in terms of section 45 of the
Companies Act 71 of 2008. This authority will be put up for renewal
at the forthcoming annual general meeting;
• approving the remuneration payable to non-executive directors
for the 2012/2013 financial year;
• approving the conversion of ordinary shares from shares with a
nominal par value of 0.002 cent per share into no par value
shares; and
• adoption of the new MOI.
59MiX TelematicsIntegrated Annual Report 2013
Financial Reports
Special resolutions of subsidiary companiesThe following special resolutions were passed at the subsidiary
companies:
• MiX Telematics International Proprietary Limited – Adoption of
new MOI – 1 October 2012.
• MiX Telematics Africa Proprietary Limited – Adoption of new
MOI – 1 October 2012.
• MiX Telematics Enterprise SA Proprietary Limited – Adoption of
new MOI – 1 October 2012.
DirectorateAt 31 March 2013, the Board comprised:
Non-executive directorsR Bruyns (Chairman)
H Brody
C Ewing
R Frew
F Roji
R Shough
A Welton
Executive directorsS Joselowitz (Chief Executive Officer)
R Botha
T Buzer
M Pydigadu (Group Financial Director)
H Scott
C Tasker
On 1 June 2012, R Shough was appointed as a non-executive director
and chairman of the audit and risk committee. R Friedman resigned
as a director of the Company with effect from 31 March 2013.
Directors’ interestsPlease refer to note 37 of the annual financial statements which sets
out the directors’ shareholdings and interests in contracts.
Service contractsNeither the non-executive directors nor the executive directors have
fixed term employment contracts.
SubsidiariesThe subsidiary companies are set out in note 46 to the annual
financial statements.
Borrowing powersIn terms of the Memorandum of Incorporation of the Company, the
borrowing powers of the Company are unlimited. The details of
borrowings appear in note 20 of the annual financial statements.
Going concernThe directors have reviewed the Group and Company’s budget and
cash flow forecast for the year ending 31 March 2014. On the basis
of this review, and in light of the current financial position and existing
borrowing facilities, the directors are satisfied that the Group and
Company have access to adequate resources to continue in
operational existence for the foreseeable future and are going
concerns. The directors have continued to adopt the going concern
basis in preparing the financial statements.
Litigation statementThere are no legal or arbitration proceedings, nor are the directors
aware at the date of this report of any proceedings which are pending
or threatened, which may have or have had a material effect on the
Group’s or Company’s financial position.
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Contingent liabilitiesThe Group’s contingent liabilities are set out in note 38 to the
financial statements.
Events after reporting dateThe Group’s events after reporting date are set out in note 40 to the
financial statements.
Changes to the board committeesOn 13 May 2013, R Bruyns, the independent non-executive
chairman of the Company, resigned as chairman of the nominations
and remuneration committee of MiX with effect from 7 May 2013, but
will remain a member of the nominations and remuneration
committee. R Bruyns has also been appointed as a member of the
social and ethics committee.
R Frew, a non-executive director, was appointed as chairman of the
nominations and remuneration committee on 13 May 2013.
E Banda has been appointed as an independent non-executive
director to the Board of Directors of the Company and as a member
of the audit and risk committee with effect from 13 May 2013.
F Roji resigned as a non-executive director from the Board of
Directors of the Company and has been appointed as an alternate
director to H Brody with effect from 13 May 2013. She remains a
member of the social and ethics committee.
AuditorsPricewaterhouseCoopers Inc. are the appointed auditors to the
Company and also audit all of the subsidiaries, other than MiX
Telematics Europe Limited and MiX Telematics Europe GmbH which
are audited by KPMG Inc.
Company SecretaryFrom 15 February 2013 the company secretarial function was
outsourced to Java Capital Trustees and Sponsors Proprietary
Limited (“Java”), which provides an independent company secretarial
service. Prior to Java’s appointment as Company Secretary
during February 2013, Probity Business Services Proprietary Limited
was responsible for the company secretarial function.
Midrand
4 June 2013
Financial Reports
Directors’ Report continued
for the year ended 31 March 2013
61MiX TelematicsIntegrated Annual Report 2013
Financial Reports
Report of the Audit and Risk Committeefor the year ended 31 March 2013
The audit and risk committee has pleasure in submitting this report,
which has been approved by the Board and prepared in compliance
with the Companies Act 71 of 2008 (“the Act”) and in accordance
with the mandate given by the Board.
Members of the audit and risk committeeThe audit and risk committee consists of the independent non-
executive directors listed below and meets six times per annum
in accordance with its charter. All members are suitably skilled
and experienced and act independently as described in the Act.
The appointment of the audit and risk committee was approved at
the AGM held on 11 September 2012. F Roji resigned from the
committee on 8 February 2013 as a result of accepting a position
with a significant shareholder of the Company and was no longer
deemed independent.
In the review period ended 31 March 2013, the members of the audit
and risk committee were:
• Roy Shough (appointed 1 June 2012, Chairman)
• Richard Bruyns (Chairman 1 April 2012 to 31 May 2012)
• Chris Ewing
• Fundiswa Roji (resigned 8 February 2013)
The committee was in place throughout the 2013 financial year, and
the external auditors and internal auditors have direct access to its
chairman and are invited to all meetings.
The chairman of the social and ethics committee attends all audit
and risk committee meetings as an invitee due to the close working
relationship between the two committees.
Members of the executive team, including the Group Financial
Director and Chief Executive Officer, attend committee meetings by
invitation and have no voting rights. Similarly, external and internal
auditors attend committee meetings by invitation and have no
voting rights.
The chairman reports to the Board at all Board meetings on the
activities and recommendations of the committee.
Financial reportingThe committee reviewed the interim and year-end Group financial
statements culminating in a recommendation to the Board to adopt
them. The review of the results included ensuring compliance with
International Financial Reporting Standards (“IFRS”) and the
acceptability of the Company’s accounting policies. This includes
the appropriate disclosures in the financial statements so that
shareholders will have meaningful insight into the state of the
financial affairs of the Company and the Group.
Independence of the external auditorA formal procedure governs the process for considering the provision
of non-audit services by the external auditors, and the engagement
letters for such services are reviewed by the committee in advance.
The committee has satisfied itself through enquiry that the external
auditor is independent as defined by the Act.
The committee has met with the external auditors without
management present, to discuss the results of their examinations,
their evaluations of the Company’s internal controls, including
internal control over financial reporting; and the overall quality
of the Company’s financial reporting. The committee also
discussed the expertise, resources and experience of the
Company’s finance function with the external auditors. No matters
of concern were raised during those meetings.
The committee has agreed to an audit fee for the 2013 financial year.
Auditors’ remuneration is disclosed in note 30 to the financial
statements. We are of the view that this remuneration is appropriate.
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Report of the Audit and Risk Committee continued
for the year ended 31 March 2013
The committee has recommended PricewaterhouseCoopers Inc. as
external auditors for the 2014 financial year subject to approval at
the annual general meeting.
Internal auditThe internal audit plan for the past year was approved by the
committee. All internal audit reports were reviewed and discussed at
committee meetings and where appropriate recommendations were
made to the Board.
Internally, management has reviewed the entity level controls and
presented their findings to the audit and risk committee. Based
on this review, nothing has come to the attention of the audit and risk
committee to indicate that the internal financial reporting controls
have not operated as intended.
Risk managementThe committee reviewed the Group risk register prior to it being
presented to the Board. The committee also had two meetings
dedicated to risk during the year where matters of risk were
discussed.
Expertise and experience of the Group Financial Director and finance functionThe committee reviewed the performance and expertise of the
Group Financial Director, Ms Megan Pydigadu, and confirms her
suitability to continue to hold office as Group Financial Director in
terms of the JSE Listings Requirements.
Integrated reportThe committee has considered all factors and risks that may impact
the integrity of this integrated report. The committee has reviewed
and discussed the audited financial statements with the external
auditors and executive management as reported in the integrated
report. Apart from the annual financial statements set out on the
portion of pages 67 to 131 that form part of the integrated report, no
other external assurance has been obtained for information
contained in the integrated report. The committee is satisfied that
the report complies with the Act, the JSE Listings Requirements
and IFRS and has therefore recommended the annual financial
statements for approval to the Board.
Discharge of responsibilities The committee determined that during the financial year under
review it has discharged its legal and other responsibilities as
outlined in its charter. The Board concurred with this assessment.
R ShoughChairman of the committee
Midrand
4 June 2013
63MiX TelematicsIntegrated Annual Report 2013
Financial Reports
Nominations and Remuneration Committee Reportfor the year ended 31 March 2013
We are pleased to report to you on the nominations and remuneration
committee’s activities for the 2013 financial year. The committee
executes its responsibility in accordance with the mandate given by
the Board.
In the review period ended 31 March 2013, the members of the
nominations and remuneration committee were:
• R Bruyns (Chairman)
• R Frew
• R Friedman (resigned 31 March 2013)
• A Welton (appointed 31 March 2013)
Mr R Bruyns is an independent non-executive director. The
committee normally invites the Chief Executive Officer to attend its
meetings but he has no voting rights. He does not participate in
discussions on his own remuneration, which is set by the committee.
The committee meets on a quarterly basis.
Among other items, the committee’s terms of reference include:
• 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;
• advising on senior executive and executive director appointments;
• reviewing succession planning at an executive level;
• confirming the share incentive plan and the allocation of awards
under the plan; and
• selecting and recommending candidates for appointment to
the Board.
Changes to the non-executive directors’ fees are approved by
shareholders at the annual general meeting.
The King III recommendations suggest that the remuneration policy
be approved by shareholders and that certain senior executives’
remuneration be disclosed. The Company has not formally obtained
shareholder approval for its remuneration policy but the Company’s
philosophy is detailed below. The executive remuneration has been
detailed further on in the report.
Remuneration policyPrinciples of executive remunerationMiX Telematics’ remuneration policy is formulated to attract and
retain high-calibre executives and motivate them to develop and
implement the Company’s business strategy in order to optimise
long-term shareholder value. It is the intention that this policy should
conform to best practice standards. The policy is framed around the
following key principles:
• total rewards are set at levels that are 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.
Elements of executive remunerationExecutive remuneration comprises the following four principal
elements:
• basic salary and allowances;
• bi-annual incentive bonuses;
• share incentive plans; and
• retirement and other benefits.
The committee seeks to ensure an appropriate balance between the
fixed and performance-related elements of executive remuneration
and between those aspects of the package linked to short-term
financial performance and those linked to longer-term shareholder
value creation. The policy relating to each component of remuneration
is summarised below.
Basic salaryThe basic salary of each executive is subject to annual review and is
set to be responsible 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 bonusAll executives are eligible to receive a performance-related bi-annual
bonus. The bonus is non-contractual and not pensionable. The
committee reviews bonuses at the half-year and at year-end, and
determines the level of bonus based on performance criteria set at
the start of the performance period. The criteria include targets
relating to subscribers, earnings, cash growth targets and certain
discretionary elements.
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64 MiX TelematicsIntegrated Annual Report 2013
Financial Reports
Nominations and Remuneration Committee Report continued
for the year ended 31 March 2013
The short-term incentive programme is available to executive
directors, senior executives and selected employees. Cash bonuses
to senior executives and executive directors are approved by the
nominations and remuneration committee.
Share incentive planThe long-term incentive programme is administered through the
Group Executive Incentive Plan – a share option plan. The share
option plan and the award of share options to executive directors
and senior executives is controlled by the committee. Motivations for
the award of share options are presented by the executive directors
to the committee which, after review and consideration, recommends
the award of such options as it deems fit to the Board for approval.
Selected participants will receive grants of share options which are
conditional rights to receive MiX shares at prices equal to the
exercise price. Vesting of options is subject to time and performance
conditions. The performance conditions and period are 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, MiX Telematics Limited
will settle the value of options by delivering the Company’s shares
that will be issued out of authorised unissued shares of the Company.
These options are treated as equity-settled instruments.
EligibilityAny senior employee with significant managerial or other
responsibility, including any director holding salaried employment
or office in the Group, is eligible to participate in the share
incentive plan.
A total of 63 675 000 share options remain unexercised at an
average price of 138 cents per share of which 11 512 500 options
have vested and met their performance conditions. Refer to note 18
of the annual financial statements for further detail.
Retirement plans and other benefitsExecutives are remunerated on a cost-to-company basis and as part
of their package are entitled to a car allowance, provident fund
contributions, medical, death and disability insurance. The provision
of these benefits is considered to be market competitive for executive
positions.
Other matters affecting remuneration of directorsExternal appointments
Executive directors are not permitted to hold external directorships
or offices without the approval of the Board, other than those of a
personal nature.
Non-executive directors
Fees payable to non-executive directors are proposed and reviewed
by the nominations and remuneration committee and recommended to
the Board, which in turns 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-calibre individuals.
Non-executive directors, in accordance with the recommendations
of King III, do not participate in any incentive programmes.
2013Total
R’000
2012Total
R’000
Non-executive R Bruyns 754 771H Brody1 240 240C Ewing1 365 61R Frew1 296 296R Friedman 296 296A Patel1 – 304F Roji1 376 389R Shough 325 –A Welton 320 328
2 972 2 685Value-added tax1 179 181
3 151 2 8661 VAT included as part of invoice received. Directors’ fees shown exclude VAT.
Directors’ feesDirectors’ fees are determined every two years. The proposed fees
to be approved by shareholders at the annual general meeting are
detailed below:R
Director’s fee 270 000Audit and risk committee member* 140 000Nominations and remuneration committee member* 63 000Social and ethics committee member* 50 000Chairman of the Board* 605 000Chairman of the audit and risk committee* 168 000Chairman of the nominations and remuneration committee* 95 000Chairman of the social and ethics committee* 90 000
*In addition to the Director’s fee.
65MiX TelematicsIntegrated Annual Report 2013
Financial Reports
Executives’ remunerationThe table below provides an analysis of the emoluments paid to executives of the Company for the year ended 31 March 2013.
Salary andallowances
R’000
Otherbenefits
R’000
Retirementfund
R’000
Performancebonuses1
R’000
2013Total
R’000
2012Total
R’000
Executive3 S Joselowitz 3 678 – – 3 798 7 476 5 788R Botha 2 326 11 90 704 3 131 3 386T Buzer 1 898 19 150 2 013 4 080 3 041M Pydigadu 1 746 91 71 1 632 3 540 2 463H Scott 2 636 – – 2 134 4 770 2 685C Tasker 2 199 40 189 2 285 4 713 3 646B Horan2 1 662 97 68 1 544 3 371 450G Pretorius2 1 587 96 150 2 154 3 987 450
17 732 354 718 16 264 35 068 21 9091Performancebonusesarebasedonactualamountspaidduringthefinancialyear.2 Appointed to the executive with effect from 1 January 2012.3AllprescribedofficersoftheCompanyareincludedaspartoftheexecutivecommitteeasnotedabove.
Executives’ employment contractsAll executives’ contracts are terminable on three calendar months’ notice.
Non-executive directors’ appointments are made in terms of the Company’s Memorandum of Incorporation and are initially confirmed at the
first annual general meeting of shareholders following their appointment, and thereafter directors are re-elected by rotation. Non-executive
directors do not hold fixed-term contracts.
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Nominations and Remuneration Committee Report continued
for the year ended 31 March 2013
Incentive planExecutives participate in the incentive plan, designed to recognise the contributions of senior staff to the growth in the Company’s equity.
Within limits imposed by shareholders, rights are allocated to directors and senior staff. The equity-linked compensation benefits for executives
are set out below.17 March
2008000’s
17 March2008000’s
9 December2008000’s
9 December2008000’s
4 June2010000’s
4 June2010000’s
3 January2012000’s
7 November2012000’s
Total000’s
S Joselowitz1 1 500 2 000 500 1 000 1 500 3 000 – 2 500 12 000R Botha1 375 2 000 250 1 000 1 500 – – – 5 125T Buzer1 1 500 2 000 250 1 000 1 500 – – – 6 250M Pydigadu1 – – – – 1 500 1 000 – 1 000 3 500H Scott1 – – – – 1 500 1 000 – – 2 500C Tasker1 1 500 2 000 500 1 000 1 500 – 2 000 2 000 10 500B Horan 200 100 150 50 500 – 1 000 1 500 3 500G Pretorius 500 200 – – 500 – 1 000 1 500 3 700
5 575 8 300 1 650 4 050 10 000 5 000 4 000 8 500 47 075
Option strike price (cents per share) 118 118 70 70 112 112 154 246JSE share price on grant date (cents per share) 118 118 58 58 104 104 160 300Expiry date 17 March
201417 March
20149 December
20149 December
20144 June
20164 June
20163 January
20187 November
2018Performance conditions:Share price of (Rand) n/a 10 n/a 5 n/a 5 n/a n/aMinimum shareholder return of 10% n/a 10% n/a 5% n/a 10% 10%1 Executive director
Signed on behalf of the nominations and remuneration committee.
SR Bruyns
Chairman of the committee
Midrand
4 June 2013
67MiX TelematicsIntegrated Annual Report 2013
Financial Reports
Independent Auditor’s Report
TO THE SHAREHOLDERS OF MiX TELEMATICS LIMITEDWe have audited the consolidated and separate financial statements
of MiX Telematics Limited set out on pages 68 to 131 which comprise
the statements of financial position as at 31 March 2013, and the
income statements, statements of comprehensive income,
statements of changes in equity and statements of cash flows for the
year then ended, and the notes, comprising a summary of significant
accounting policies and other explanatory information.
Directors’ responsibility for the financial statementsThe Company’s directors are responsible for the preparation and fair
presentation of these consolidated and separate financial statements
in accordance with International Financial Reporting Standards and
the requirements of the Companies Act of South Africa, and for such
internal control as the directors determine is necessary to enable the
preparation of consolidated and separate financial statements that
are free from material misstatement, whether due to fraud or error.
Auditor’s responsibilityOur responsibility is to express an opinion on these consolidated
and separate financial statements based on our audit. We conducted
our audit in accordance with International Standards on Auditing.
Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance
about whether the consolidated and separate financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor’s judgement, including
the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
entity’s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated and separate financial statements
present fairly, in all material respects, the consolidated and separate
financial position of MiX Telematics Limited as at 31 March 2013,
and its consolidated and separate financial performance and its
consolidated and separate cash flows for the year then ended in
accordance with International Financial Reporting Standards and
the requirements of the Companies Act of South Africa.
Other reports required by the Companies ActAs part of our audit of the consolidated and separate financial
statements for the year ended 31 March 2013, we have read the
Directors’ Report, the Report of the Audit and Risk Committee
and the Certificate of the Company Secretary for the purpose of
identifying whether there are material inconsistencies between
these reports and the audited consolidated and separate financial
statements. These reports are the responsibility of the respective
preparers. Based on reading these reports we have not identified
material inconsistencies between these reports and the audited
consolidated and separate financial statements. However, we have
not audited these reports and accordingly do not express an opinion
on these reports.
PricewaterhouseCoopers Inc.
Director: JR van Huyssteen
Registered Auditor
Sunninghill4 June 2013
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Statements of Financial Positionat 31 March 2013
Group Company
Notes
2013
R’000
2012(Restated)
R’000
1 April 2011(Restated)
R’000
2013
R’000
2012
R’000
ASSETSNon-current assetsProperty, plant and equipment 6 96 547 85 207 81 038 – – Intangible assets 7 645 736 643 086 647 013 362 353 Interest in subsidiaries 8 – – – 890 526 860 140 Investment in joint venture 9 – – – – – Available-for-sale financial asset 10 – – – – – Finance lease receivable 11 6 359 – – – – Deferred tax assets 23 13 868 13 266 11 302 – – Total non-current assets 762 510 741 559 739 353 890 888 860 493 Current assetsInventory 12 38 927 35 903 26 355 – – Trade and other receivables 13 186 987 163 125 114 744 225 168 Loan to related party 14 – – – – 15 087 Loan to external party 15 – 6 001 – – – Finance lease receivable 11 3 604 – – – – Taxation 4 823 – 1 897 – – Restricted cash 16 8 235 3 133 1 852 – – Cash and cash equivalents 17 147 702 118 695 110 007 306 1 412 Total current assets 390 278 326 857 254 855 531 16 667 Total assets 1 152 788 1 068 416 994 208 891 419 877 160
EQUITYStated capital 18 790 491 – – 790 491 – Share capital 18 – 13 13 – 13 Share premium 18 – 787 589 787 353 – 787 589 Other reserves 19 (111 362) (154 745) (179 844) 10 350 7 199 Retained earnings 188 750 139 233 75 413 85 086 69 315 Equity attributable to shareholders of the parent 867 879 772 090 682 935 885 927 864 116 Non-controlling interest (5) – – – – Total equity 867 874 772 090 682 935 885 927 864 116
LIABILITIESNon-current liabilitiesBorrowings 20 – – 36 070 – – Deferred tax liabilities 23 8 605 25 816 28 170 – – Provisions 24 283 – 1 092 – – Total non-current liabilities 8 888 25 816 65 332 – –Current liabilitiesTrade and other payables 21 184 397 157 038 133 190 2 020 1 845 Borrowings 20 3 472 22 941 27 508 3 472 11 199 Taxation 10 691 11 403 4 669 – – Provisions 24 21 461 28 963 40 606 – – Bank overdraft 17 56 005 50 165 39 968 – – Total current liabilities 276 026 270 510 245 941 5 492 13 044 Total liabilities 284 914 296 326 311 273 5 492 13 044 Total equity and liabilities 1 152 788 1 068 416 994 208 891 419 877 160 Net asset value per share (cents) 131.5 117.5 103.9 134.2 131.5 Net tangible asset value per share (cents) 33.7 19.6 5.5 134.2 131.4 The notes on pages 73 to 130 form an integral part of these financial statements.
69MiX TelematicsIntegrated Annual Report 2013
Financial Reports
Income Statementsfor the year ended 31 March 2013
Group Company
Notes2013
R’0002012
R’0002013
R’0002012
R’000
Revenue 25 1 171 480 1 018 482 – –Cost of sales (424 545) (390 926) – –
Gross profit 746 935 627 556 – –Other (expenses)/income – net 26 (421) 7 008 100 808 78 582 Operating expenses (565 318) (488 176) (6 591) (5 899)– Sales and marketing (132 849) (97 312) – –– Administration and other charges (432 469) (390 864) (6 591) (5 899)
Operating profit 27 181 196 146 388 94 217 72 683 Finance income 28 2 018 2 392 904 2 226 Finance costs 29 (3 348) (5 265) (396) (1 386)Profit before taxation 179 866 143 515 94 725 73 523 Taxation 32 (51 400) (40 275) – (3 942)
Profit for the year 128 466 103 240 94 725 69 581
Attributable to: Shareholders of the parent 128 471 103 240 94 725 69 581 Non-controlling interests (5) – – –
128 466 103 240 94 725 69 581
Earnings per share Basic (cents) 33 19.5 15.7 14.4 10.6 Diluted (cents) 33 19.0 15.6 14.0 10.5
The notes on pages 73 to 130 form an integral part of these financial statements.
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Statements of Comprehensive Incomefor the year ended 31 March 2013
Group Company
Notes2013
R’0002012
R’0002013
R’0002012
R’000
Profit for the year 128 466 103 240 94 725 69 581 Other comprehensive income/(losses):Exchange differences on translating foreign operations 19 37 090 29 816 – –Exchange differences on net investments in foreign operations 19 3 142 (6 718) – –Taxation relating to components of other comprehensive income 32 – – – –Other comprehensive income for the year, net of tax 40 232 23 098 – –
Total comprehensive income for the year 168 698 126 338 94 725 69 581
Attributable to: Shareholders of the parent 168 703 126 338 94 725 69 581 Non-controlling interests (5) – – –
Total comprehensive income for the year 168 698 126 338 94 725 69 581
The notes on pages 73 to 130 form an integral part of these financial statements.
71MiX TelematicsIntegrated Annual Report 2013
Financial Reports
Statements of Changes in Equityfor the year ended 31 March 2013
Attributable to shareholders of the parent Non-
Notes
StatedcapitalR’000
SharecapitalR’000
Sharepremium
R’000
Other reserves
R’000
Retained earnings
R’000Total
R’000
controlling interest
R’000
Total equityR’000
CompanyAt 1 April 2011 – 13 787 353 5 198 39 154 831 718 – 831 718 Total comprehensive income – – – – 69 581 69 581 – 69 581 Transactions with shareholders– Shares issued in relation to share
options exercised 18 – * 236 – – 236 – 236 – Share-based payment 19 – – – 2 001 – 2 001 – 2 001 – Dividend declared of 6 cents per share 34 – – – – (39 420) (39 420) – (39 420)Total transactions with shareholders – * 236 2 001 (39 420) (37 183) – (37 183)
Balance at 31 March 2012 – 13 787 589 7 199 69 315 864 116 – 864 116 Total comprehensive income – – – – 94 725 94 725 – 94 725 Transactions with shareholders– Shares issued in relation to share
options exercised 18 464 * 2 425 – – 2 889 – 2 889 – Share-based payment 19 – – – 3 151 – 3 151 – 3 151 – Dividend declared of 8 cents per share 34 – – – – (52 576) (52 576) – (52 576)– Interim dividend declared of 4 cents
per share 34 – – – – (26 378) (26 378) – (26 378)Total transactions with shareholders 464 * 2 425 3 151 (78 954) (72 914) – (72 914)Transfer from share capital and share premium to stated capital 18 790 027 (13) (790 014) – – – – –
Balance at 31 March 2013 790 491 – – 10 350 85 086 885 927 – 885 927
GroupAt 1 April 2011 – 13 787 353 (179 844) 75 413 682 935 – 682 935 Total comprehensive income – – – 23 098 103 240 126 338 – 126 338 Transactions with shareholders– Shares issued in relation to share
options exercised 18 – * 236 – – 236 – 236 – Share-based payment 19 – – – 2 001 – 2 001 – 2 001 – Dividend declared of 6 cents per share 34 – – – – (39 420) (39 420) – (39 420)Total transactions with shareholders – * 236 2 001 (39 420) (37 183) – (37 183)
Balance at 31 March 2012 – 13 787 589 (154 745) 139 233 772 090 – 772 090 Total comprehensive income – – – 40 232 128 471 168 703 (5) 168 698 Transactions with shareholders– Shares issued in relation to share
options exercised 18 464 * 2 425 – – 2 889 – 2 889 – Share-based payment 19 – – – 3 151 – 3 151 – 3 151 – Dividend declared of 8 cents per share 34 – – – – (52 576) (52 576) – (52 576)– Interim dividend declared of 4 cents
per share 34 – – – – (26 378) (26 378) – (26 378)Total transactions with shareholders 464 * 2 425 3 151 (78 954) (72 914) – (72 914)Transfer from share capital and share premium to stated capital 18 790 027 (13) (790 014) – – – – –
Balance at 31 March 2013 790 491 – – (111 362) 188 750 867 879 (5) 867 874 * Amount less than R1 000
The notes on pages 73 to 130 form an integral part of these financial statements.
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Statements of Cash Flowsfor the year ended 31 March 2013
Group Company
Notes
2013
R’000
2012(Restated)
R’000
2013
R’000
2012
R’000
Cash flows from operating activitiesCash generated from/(used in) operations 35.2 287 847 192 477 (6 462) (6 119)Interest received 1 880 1 917 403 150 Interest paid 29 (3 421) (5 549) (165) (1 054)Dividends received – – 93 548 71 012 Taxation paid (74 388) (35 769) – (3 942)
Net cash generated from operating activities 211 918 153 076 87 324 60 047
Cash flows from investing activitiesPurchases of property, plant and equipment 6 (51 499) (41 593) – –Proceeds on sale of property, plant and equipment and intangible assets 966 867 – –Purchases of intangible assets 7 (42 648) (35 873) (59) (50)Loan granted to external party – (5 486) – –Acquisition of business, net of cash acquired 36 23 – – –Government grant received with regards to development of intangible assets 7 2 207 – – –Investment in subsidiary 8 – – (4 428) –Increase in restricted cash (5 103) – – –
Net cash used in investing activities (96 054) (82 085) (4 487) (50)
Cash flows from financing activitiesProceeds from issuance of ordinary shares 18 2 889 236 2 889 236 Dividends paid to Company’s shareholders (78 874) (39 374) (78 874) (39 374)Repayments of borrowings (19 701) (41 548) (7 958) (24 670)
Net cash used in financing activities (95 686) (80 686) (83 943) (63 808)
Net increase/(decrease) in cash and cash equivalents 20 178 (9 695) (1 106) (3 811)Net cash and cash equivalents at the beginning of the year 68 530 70 039 1 412 5 223 Exchange gains on cash and cash equivalents 2 989 8 186 – –
Net cash and cash equivalents at the end of the year 17 91 697 68 530 306 1 412
The notes on pages 73 to 130 form an integral part of these financial statements.
73MiX TelematicsIntegrated Annual Report 2013
Financial Reports
Notes to the Annual Financial Statementsfor the year ended 31 March 2013
1. General information MiX Telematics Limited (the “Company”) is a public
company which is listed on the JSE Limited and is incorporated and domiciled in South Africa. The Company is the parent and ultimate parent of the Group. The activities of the Group focus on fleet and mobile asset management solutions delivered as software-as-a-service. The address of the Company's registered office is Matrix Corner, Howick Close, Waterfall Park, Midrand, 1686.
2. Summary of significant accounting policies
The principal accounting polices applied in the preparation of these financial statements are set out below. These accounting policies have been consistently applied to all the years presented, unless otherwise stated.
2.1. Basis of preparation The annual financial statements of the Group and the
Company for the year ended 31 March 2013 have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), IFRIC Interpretations and the requirements of the South African Companies Act 71 of 2008 (“the Act”).
The financial statements have been prepared in thousands of Rands (R’000) under the historical cost convention except for available-for-sale financial assets, which are measured at fair value. Historical cost is generally based on the fair value of consideration paid in exchange for assets.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions or estimates are significant to the financial statements are disclosed in note 4.
2.1.1. Changes in accounting policy and disclosures Other than as explained below, there are no IFRS or
IFRIC Interpretations that were effective for the first time during the current financial year beginning 1 April 2012 that would be expected to have a material impact on the Group.
2.1.1.1. Amended standards adopted by the Group
Amendments to IFRS 7, Disclosures – Transfers of Financial Assets
The Group has adopted the amendments to IFRS 7 in the year under review. The amendments increase the disclosure requirements for transactions involving transfers of financial assets and are intended to provide greater transparency around risk exposures when a financial asset is transferred but the transferor retains some level of continuing exposure in the asset; and also require disclosures where transfers of financial assets are not evenly distributed throughout the period. This has had no impact on the Company or the Group during the year under review.
2.1.1.2. Standards, amendments and interpretations not yet
effective
Certain IFRS and amendments and interpretations of IFRS have been issued but are not effective for the year ended 31 March 2013. The Group will apply the standards and interpretations when they become effective (effective date is defined as financial years beginning on or after the stated date), the impact of which is still in the process of being assessed and finalised by management.
IFRS 9 Financial Instruments (effective date: 1 January 2015)
IFRS 9 is part of the IASB’s project to replace IAS 39, Financial Instruments: Recognition and Measurement. The statement addresses classification and measurement of financial assets and replaces the multiple classification and measurement models in IAS 39 with a single model that requires financial assets to be classified into two measurement categories: those measured at fair value and those measured at amortised cost. The determination is made at initial recognition.
The classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument.
IFRS 9 has amended the classification and measurement of financial liabilities to account for changes in the fair value of a financial liability (designated at fair value through profit or loss) attributable to changes in the credit risk of that liability. Changes in fair value attributable to a financial liability’s credit risk are accounted for in other comprehensive income unless such recognition would create or enlarge an accounting mismatch and are not subsequently reclassified to the income statement.
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Notes to the Annual Financial Statements continued
for the year ended 31 March 2013
2. Summary of significant accounting policies (continued)
2.1. Basis of preparation (continued)2.1.1. Changes in accounting policy and disclosures
(continued)2.1.1.2. Standards, amendments and interpretations not yet
effective (continued)
IFRS 10 Consolidated Financial Statements (effective date: 1 January 2013)
This standard replaces the parts of IAS 27, Consolidated and Separate Financial Statements that deal with consolidated financial statements. SIC-12, Consolidation – Special Purpose Entities, has been withdrawn upon the issuance of IFRS 10. Under IFRS 10, control is based on whether an investor has: (a) power over an investee, (b) exposure or rights to variable returns from its investment with the investee, and (c) the ability to use its power over the investee to affect the amount of the investor’s returns. The standard also provides additional guidance to assist in the determination of control where it is difficult to assess.
In a subsequent amendment, it was also clarified that the date of initial application is the first day of the annual period in which IFRS 10 is adopted. The Group when adopting IFRS 10 will assess control at the date of initial application as the treatment of comparative figures depends on this assessment.
IFRS 11 Joint Arrangements (effective date: 1 January 2013)
This standard replaces IAS 31, Interests in Joint Ventures. The standard provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. SIC-13, Jointly Controlled Entities – Non-Monetary Contributions by Ventures, has been withdrawn upon the issuance of IFRS 11. Two types of joint arrangements are defined under this standard: joint operations (rights to assets and obligations) and joint ventures (rights to net assets). Proportional consolidation of joint ventures is no longer allowed.
IFRS 12 Disclosures of Interests in Other Entities (effective date: 1 January 2013)
This standard includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose entities and other off-balance sheet vehicles.
In June 2012, the amendments to IFRS 10, IFRS 11 and IFRS 12 were issued to clarify certain transitional guidance on the application of these IFRS for the first time.
IFRS 13 Fair Value Measurement (effective date: 1 January 2013)
IFRS 13 aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across all IFRS standards. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRS.
IAS19(revised2011)EmployeeBenefits(effectivedate:1 January 2013)
IAS 19 has made significant changes to the recognition and measurement of defined benefit plans and termination benefits, and to the disclosures for all employee benefits.
IAS 27 (revised 2011) Separate Financial Statements
(effective date: 1 January 2013) This standard will only deal with the requirements for
separate financial statements as the requirements for consolidation are now contained in IFRS 10. The standard requires that when an entity prepares separate financial statements, investments in subsidiaries; associates and jointly controlled entities are accounted for either at cost or in accordance with IFRS 9.
IAS 28 (revised 2011) Associates and Joint Ventures (effective date: 1 January 2013)
This standard includes the requirements for joint ventures, as well as associates, to be equity accounted following the issue of IFRS 11.
Amendments to IAS 1 Presentation of Financial Statements, on presentation of items of OCI (effective date: 1 July 2012)
The amendments to IAS 1 introduce new terminology for the statement of comprehensive income and income statement. The amendments retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments to IAS 1 require items of other comprehensive income to be grouped into
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two categories in the other comprehensive income section: (a) items that will not be reclassified subsequently to profit or loss and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis. The amendments do not address which items are presented in other comprehensive income.
Amendments to IAS 1 Presentation of Financial Statements, on changes in accounting policies (effective date: 1 January 2013)
IAS 1 requires an entity that changes accounting policies retrospectively, or makes a retrospective restatement or reclassification, to present a statement of financial position as at the beginning of the preceding period. The amendments clarify that an entity is required to present a third statement of financial position only when the retrospective application, restatement or reclassification has a material effect on the information in the third statement of financial position and that related notes are not required to accompany the third statement of financial position.
Amendments to IFRS 7 Financial Instruments – Disclosures and IAS 32 Financial Instruments – Presentation, regarding the offsetting of financial assetsandfinancialliabilitiesandtherelateddisclosures(effectivedate: 1 January 2013 and 1 January 2014 respectively)
The amendments to IAS 32 clarify some of the requirements for offsetting financial assets and financial liabilities on the statement of financial position. Specifically, the amendments clarify the meaning of “currently has a legally enforceable right of set-off” and “simultaneous realisation and settlement”.
The amendments to IFRS 7 require entities to disclose information about rights of offset and related arrangements (such as collateral requirements) for financial instruments under an enforceable master netting agreement or similar arrangement.
The amendments to IFRS 7 are effective for annual periods beginning on or after 1 January 2013 and are effective for IAS 32 for annual periods beginning on or after 1 January 2014.
Amendments to IAS 16 Property, Plant and Equipment (effective date: 1 January 2013)
The amendments to IAS 16 clarify that spare parts, stand-by equipment and servicing equipment should be classified as property, plant and equipment when they meet the definition of property, plant and equipment in IAS 16 otherwise these items should be classified as inventory.
Amendments to IAS 32 Financial Instruments: Presentation (effective date: 1 January 2013)
The amendments to IAS 32 clarify the treatment of income tax relating to distributions and transaction costs. The amendment clarifies that the treatment is in accordance with IAS 12 Income Taxes. So income tax related to distributions is recognised in the income statement, and income tax related to the costs of equity transactions is recognised in equity.
There are no other IFRS or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company or the Group.
2.2. Consolidation(a) Subsidiaries Subsidiaries are all entities (including special purpose
entities) over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. The Group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de facto control. De facto control may arise in circumstances where the size of the Group’s voting rights relative to the size and dispersion of holdings of other shareholders give the Group the power to govern the financial and operating policies, etc.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.
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2. Summary of significant accounting policies (continued)
2.2. Consolidation (continued)(a) Subsidiaries (continued) The acquisition method of accounting is used to account
for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity instruments issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of the acquiree’s identifiable net assets.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred, and the fair value of any non-controlling interests in the acquiree over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is then recognised in profit or loss.
Inter-company transactions, balances and unrealised income/expenses on transactions between group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised as assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
The Company accounts for investments in subsidiaries at cost. Acquisition-related costs are expensed as incurred. The cost is adjusted to reflect changes in consideration arising from contingent consideration amendments where it relates to facts and circumstances existing on acquisition date.
Business combinations that took place prior to 1 January 2010 were accounted for in accordance with the previous version of IFRS 3 Business Combinations.
(b) Changes in ownership interests in subsidiaries without a change of control
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between the fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary, is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
(c) Disposal of subsidiaries When the Group ceases to have control in an entity, any
retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in the carrying amount recognised in profit and loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets and liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to the income statement.
(d) Joint venture A joint venture is a contractual arrangement whereby the
Group and other parties undertake an economic activity which is subject to joint control.
Investments in joint ventures are accounted for using the equity method of accounting and are initially recognised at cost. The Group’s investment in joint venture includes goodwill identified on acquisition, net of any accumulated impairment loss.
The Group’s share of its joint venture’s post-acquisition profits or losses is recognised in the income statement, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in a joint venture equals or exceeds its interest in the joint venture,
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including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the joint venture.
The Group determines at each reporting date whether there is any objective evidence that the investment in the joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value and recognises the amount adjacent to its share of profit/(loss) of the joint venture in the income statement.
Unrealised gains on transactions between the Group and its joint venture are eliminated to the extent of the Group’s interest in the joint venture. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the joint venture have been changed where necessary to ensure consistency with the policies adopted by the Group.
(e) Common control transactions Transactions in which combining entities are controlled by
the same party or parties before and after the transaction and where control is not transitory are referred to as common control transactions. The Group’s accounting policy for the acquiring entity would be to account for such transactions at book values as reflected in the financial statements of the selling entity. The excess of the cost of the transaction over the acquirer’s proportionate share of the net asset value acquired in common control transactions, will be allocated to a common control reserve/(deficit) in equity.
(f) Group reorganisation Transactions in which an entity within the group transfers
a subsidiary to another entity within the same group without losing control, are accounted for and presented in accordance with their substance and economic reality and not merely their legal form.
No gain or loss is recognised in the separate financial statements when the transaction is considered to be a reorganisation only without economic substance. In addition, no profit or loss is recognised in the consolidated financial statements as the transaction eliminates on consolidation.
Upon the transfer of subsidiaries in such group reorganisations where indirect subsidiaries are transferred to the ultimate holding company, the ultimate holding company transfers value from its investment in the transferor subsidiary to its newly obtained investment(s) in the transferee subsidiary based on the relative historical cost values of the transferred subsidiary(ies) and the remainder of the transferor’s group, unless it can be demonstrated that another method better reflects the value so transferred.
2.3. Segment reporting Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified collectively as the executive committee and the Chief Executive Officer who make strategic decisions.
Sales between segments are carried out at cost plus a margin.
2.4. Foreign currency translation(a) Functional and presentation currency Items included in the financial statements of each of
the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in South African Rands (“R”), which is the Company’s functional and the Group’s presentation currency.
(b) Transactions and balances Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at the dates of the transactions or date of valuation, where items are remeasured. 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 recognised in the income statement.
Foreign exchange gains and losses are presented in the income statement within “Other income/(expenses) – net”.
Translation differences on non-monetary financial assets and liabilities such as equities classified as available-for-sale, are included in other comprehensive income.
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2. Summary of significant accounting policies (continued)
2.4. Foreign currency translation (continued)(c) Group companies The results and financial position of all the group 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 the presentation currency as follows:
(i) assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;
(ii) 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);
(iii) all resulting exchange differences are recognised in other comprehensive income; and
(iv) 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 to 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 recognised in the income statement as part of the gain or loss on sale. A repayment/capitalisation 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. However, upon such conversion/ repayment, the amount previously recognised in the shareholder’s loan revaluation reserve is transferred to the foreign currency translation reserve in the statement of changes in equity.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in equity.
2.5. Property, plant and equipment Property, plant and equipment is stated at historical cost
less accumulated depreciation and any accumulated impairment losses. Historical cost includes all expenditure directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to the income statement in the financial 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 capitalised as property, plant and equipment. The Group depreciates installed in-vehicle devices on a straight-line basis over their expected useful lives, commencing upon installation whereas the uninstalled in-vehicle devices are not depreciated until installed. The related depreciation expense is recorded as part of cost of sales in the income statement.
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to reduce their cost to their residual values over their estimated useful life, as follows:
Buildings 50 years Plant and equipment 4 – 20 years Motor vehicles 5 years Furniture, fittings and equipment 2 – 10 years Computer and radio equipment 3 – 5 years In-vehicle devices installed 2 – 5 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (note 2.7).
Gains and losses on disposals of an asset are determined by comparing the proceeds with the carrying amount and are recognised within “Other income/(expenses) – net” in the income statement.
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2.6. Intangible assets(a) Goodwill Goodwill arises on the acquisition of subsidiaries and
represents the excess of the consideration transferred over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interests in the acquiree. Goodwill on acquisition of subsidiaries 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 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 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 recognised as an expense in relation to goodwill are not subsequently reversed. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units 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.
(b) Patents and trademarks Separately acquired patents and trademarks are shown at
historical cost. Patents and trademarks acquired in a business combination are recognised at fair value at the acquisition date. Patents and trademarks have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated using the straight-line method to allocate the cost of patents and trademarks over their estimated useful lives (4 – 20 years).
(c) Customer relationships Contractual customer relationships acquired in a
business combination are recognised at fair value at the acquisition date. The contractual customer relationships have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated using the straight-line
method over the expected life of the customer relationship (3 – 5 years).
(d) Computer software, technology, in-house software and product development
Acquired computer software licences are capitalised on the basis of costs incurred to acquire and bring the software into use. The acquired computer software licences have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. These costs are amortised over their estimated useful lives (3 – 5 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 the Group, are recognised as intangible assets when the following criteria are met:
• It is technically feasible to complete the software product so that it will be available for use;
• Management intends to complete the software product and use it or sell it;
• There is an ability to use or sell the software product;
• It can be demonstrated how the software will generate probable future economic benefits;
• Adequate technical, financial and other resources to complete the development and use or sell the software product are available; and
• The expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the 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 recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period if the criteria are subsequently met.
Costs associated with maintaining computer software programmes are recognised as an expense as incurred.
Computer software and product development costs recognised as assets are amortised over their estimated useful lives (3 – 8 years).
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2. Summary of significant accounting policies (continued)
2.7. Impairment of non-financial assets Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation or depreciation but are tested annually for impairment or whenever there is an indication of impairment. Assets that are subject to amortisation or depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost to sell, and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using the pre-tax discount rate that reflects current market assessments on the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units i.e. operating segments). Non-financial assets other than goodwill that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
2.8. Financial assets2.8.1. Classification The Group classifies its financial assets in the following
categories: loans and receivables and available-for-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the end of the reporting period, which are classified as non-current assets. The Group’s loans and receivables comprise trade and other receivables, loans to external parties, finance lease receivables, restricted cash and
cash and cash equivalents in the statement of financial position. The Company’s loans and receivables comprise trade and other receivables, loans to related parties and cash and cash equivalents in the statement of financial position.
Available-for-salefinancialassets
Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of the investment within 12 months of the end of the reporting period.
2.8.2. Recognition Regular purchases and sales of financial assets are
recognised on the trade date (the date on which the Group commits to purchase or sell the asset). Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit and loss. Financial assets are derecognised when the rights to receive cash flows from the assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.
2.8.3. Measurement Loans and receivables
Loans and receivables are subsequently carried at amortised cost using the effective interest rate method, less any impairment losses.
Available-for-salefinancialassets
Available-for-sale financial assets are subsequently carried at fair value.
Changes in the fair value of monetary and non-monetary securities classified as available-for-sale are recognised in other comprehensive income.
When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in other comprehensive income are reclassified to the income statement as gains or losses on the investments.
Dividends on available-for-sale equity instruments are recognised in the income statement as part of other income when the Group’s right to receive payments is established.
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2.8.4. Impairment Loans and receivables
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
The criteria that the Group uses to determine if there is objective evidence of an impairment loss include:
• Significant financial difficulty of the issuer or obligor;
• A breach of contract, such as a default or delinquency in interest or principal payments;
• It becomes probable the borrower will enter bankruptcy or other financial reorganisation; and
• Where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
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
recognised 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.
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 recognised, the reversal of the previously recognised impairment loss is recognised in the income statement.
Available-for-salefinancialassets
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the
security below its cost is also evidence that the assets are impaired. If any such evidence exists, the cumulative impairment loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in the income statement – is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement.
2.9. Offsetting financial instruments Financial assets and liabilities are offset and the net
amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
2.10. Inventories Inventories are stated at the lower of cost and net realisable
value. Cost is determined on a first-in, first-out (“FIFO”) or weighted average cost basis, depending on the nature of the group entity in which it is held. The cost of finished goods includes the cost of manufacturing as charged by third parties. It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
2.11. 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 recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.
2.12. Cash and cash equivalents 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. Fi
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2. Summary of significant accounting policies (continued)
2.13. Restricted cash Restricted cash consists of short-term deposits and
amounts held in trusts that are not highly liquid and are accounted for as loans and receivables.
2.14. Stated capital Ordinary shares are classified as equity. Incremental
external costs directly attributable to the issue of new shares or the exercise of share options are shown in equity as a deduction, net of tax, from the proceeds.
2.15. Trade and other payables Trade 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 payables are initially recognised at fair value and are subsequently measured at amortised cost using the effective interest method.
2.16. Borrowings Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.
2.17. Borrowing costs General and specific borrowing costs that are directly
attributable to the acquisition, construction, or production of a qualifying asset, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of that asset until such time as the asset is substantially ready for its intended use or sale. The amount of borrowing costs eligible for capitalisation is determined as follows:
• Actual borrowing costs on funds specifically borrowed for the purpose of constructing or producing a qualifying asset less any investment income on the temporary investment of those borrowings.
• Weighted average of the borrowing costs applicable to the entity on funds generally borrowed.
The borrowing costs capitalised do not exceed the total
borrowing costs incurred.
The capitalisation of borrowing costs commences when:
• Expenditures for the asset have occurred;
• Borrowing costs have been incurred; and
• Activities that are necessary to prepare the asset for its intended use or sale are in progress.
Capitalisation is suspended during extended periods in which active development is interrupted.
Capitalisation ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are completed.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
2.18. Taxation2.18.1. Current and deferred income taxes The tax expense for the year comprises current and
deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantially enacted at the end of the reporting period in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax
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returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax assets are not accounted for if it arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and joint ventures, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
2.18.2. Dividends tax/Secondary tax on companies (“STC”)
During the year under review, STC had been replaced by dividend withholding tax, which is a tax on the shareholder as opposed to the Company. South African resident companies were subject to STC on distributed income in the previous financial year. A company incurred STC charges on the declaration or deemed declaration of
dividends (as defined under tax law) to its shareholders. STC was not a withholding tax on shareholders, but a tax on companies.
The STC tax was recognised as a taxation charge in the income statement in the same period that the related dividend was paid. The STC liability was reduced by external dividends received during the dividend cycle. Where dividends declared exceeded external dividends received during a cycle, STC was payable at the current STC rate on the net amount. Where dividends received exceeded dividends declared within a cycle, there was no liability to pay STC.
Dividend withholding tax is payable at a rate of 15% on
dividends distributed to shareholders. This tax is not
attributable to the Company but rather paid to the tax
authorities on behalf of the shareholders through use of
regulatory intermediaries, with only the net amount of the
dividend being remitted to the shareholder.
2.19. Employee benefits(a) Short-term benefits Remuneration to employees in respect of services
rendered during a reporting period is recognised as an expense in that reporting period. Provision is made for accumulated leave and for short-term benefits when there is no realistic alternative other than to settle the liability, and at least one of the following conditions is met:
• There is a formal plan and the amounts to be paid are determined before the time of issuing the financial statements; or
• Achievement of previously agreed bonus criteria has created a valid expectation by employees that they will receive a bonus and the amount can be determined before the time of issuing the financial statements.
(b) Defined contribution plan The Group operates defined contribution plans. A defined
contribution plan is one under which the Group pays a fixed percentage of employees’ remuneration as contributions into a separate fund, and the Group will have no further legal or constructive obligations to pay additional contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods. Contributions to defined contribution plans in respect of services rendered during a period are recognised as staff costs when they are due.
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2. Summary of significant accounting policies (continued)
2.19. Employee benefits (continued)(c) Short-term incentives – bonus The Group recognises a liability and an expense for
bonuses based on the achievement of defined key performance criteria. An accrual is recognised where the Group is contractually obliged or where there is a past practice that has created a constructive obligation.
(d) Termination benefits Termination benefits are payable when employment is
terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits, calculated on the number of employees expected to accept, as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.
2.20. Share-based payment The Group operates a number of equity-settled share-
based compensation plans, under which the entity receives services from employees as consideration for equity instruments (share options) of the Group. The fair value, determined at grant date, of the employee services received in exchange for the grant of share options is recognised as an expense at a Group level with a corresponding credit to equity. The total amount to be expensed is determined by reference to the grant date fair value of the options issued:
• Including any market performance conditions;
• Excluding the impact of any service and non-market performance vesting conditions (for example, remaining an employee of the entity over a specified time period); and
• Including the impact of any non-vesting conditions.
Non-market performance and service conditions are included in the assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the
end of each reporting period, the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding entry to equity.
When the options are exercised, the Company issues new shares. Prior to the amendment of the Memorandum of Incorporation (“MOI”) of the Company, the proceeds received net of any directly attributable transaction costs, were credited to share capital (par value) and share premium. Subsequent to the amendment of the MOI of the Company, all proceeds received are credited to stated capital (as there are no par value shares).
The grant by the Company of options over its equity instruments to the employees of subsidiaries of the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to the investment in the subsidiary undertaking with a corresponding credit to the Company’s equity.
2.21. Provisions Provisions are recognised when the Group has a present
legal or constructive obligation as a result of a past event for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.
Provisions which are expected to be settled in a period greater than 12 months are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised 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.
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Provision for the anticipated costs associated with the restoration of leasehold property is based on the Group’s best estimate of those costs required to restore the property to its original condition.
2.22. Revenue recognition Revenue is measured at the fair value of the consideration
received or receivable for the sale of goods or services in the ordinary course of the Group’s activities. Revenue includes amounts earned on the sale of hardware units, subscription service sales to customers, fleet management services, installation revenue and cellular network connection and upgrade incentives. Revenue is shown net of discounts, value-added tax, returns and after eliminating sales within the Group.
The Group offers certain arrangements whereby the customer can purchase a combination of the products and services as referred to above. Where such multiple element arrangement exists, the amount of revenue allocated to each element is based on the relative fair values of the various elements offered in the arrangement or by using the residual value method, depending on the nature and specifics of the arrangement. Where the fair value of the respective elements can be readily determined and accurately measured, the Group applies the relative fair value method and where the fair value of the delivered elements is not readily determinable, the residual method is applied. When applying the relative fair value approach, the fair values of each element are determined based on the current market price of each of the elements when sold separately.
The Group recognises revenue when the amount of revenue can be measured reliably, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group’s activities, as outlined below. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
(a) Subscription revenue Subscription revenue is recognised over the term of the
agreement as it is earned.
(b) Hardware sales Revenue from hardware sales which has fair value on a
standalone basis is recognised once the risks and rewards of ownership have transferred.
(c) Driver training and other services Revenue is recognised at the contractual hourly/daily rate
in the period during which the training is performed.
(d) Connection and upgrade incentive revenue Revenue from cellular network connection and upgrade
incentives is recognised on the date of installation of a unit in a vehicle, which is considered to be the point at which the Group has substantially completed its service obligation to the cellular network.
(e) Fleet management services These services are provided on a contracted price basis,
with contract terms generally ranging from less than one year to five years.
When contracted services are performed through a number of repetitive acts over the contract period, revenue is recognised on a straight-line basis over the contract period. This would typically apply to bureau services.
(f) Rental revenue Where hardware is provided as part of a service contract
the risk and rewards of ownership do not transfer and service revenue from the rental unit is recognised over the period of the service and included in subscription revenue.
(g) Installation revenue Revenue earned from the installation of hardware in
customer vehicles is recognised once the installation has been completed.
(h) Extended product warranties The fair value of the consideration relating to extended
warranty periods is deferred and recognised over the extended warranty period.
2.23. Interest income Interest income is recognised on a time proportion basis
with reference to the principal amount receivable and the effective interest rate applicable.
2.24. Dividend income Dividend income is recognised when the right to receive
payment is established.
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2. Summary of significant accounting policies (continued)
2.25. Leases 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.
2.25.1. The Group as a lessor When assets are leased out under a finance lease, the
present value of the lease payments is recognised as a receivable. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance income. The method for allocating gross earnings to accounting periods is referred to as the “actuarial method”. The actuarial method allocates rentals between finance income and repayment of capital in each accounting period in such a way that finance income will emerge as a constant rate of return on the lessor’s net investment in the lease. When assets are leased out under an operating lease, the asset is included in the statement of financial position based on the nature of the asset. Lease income on operating leases is recognised over the term of the lease on a straight-line basis.
2.25.2. The Group as a lessee Leases in which a significant portion of the risks and
rewards of ownership are retained by the lessor 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 relevant lease.
The Group leases certain property, plant and equipment. Leases of property, plant and equipment, where the Group has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments.
Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges, are included in borrowings. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance
of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term.
2.26. Dividend distribution Any dividend distribution to the Company’s shareholders is
recognised as a liability in the Group’s and Company’s financial statements in the period in which the dividends are approved by the Company’s Board of Directors.
2.27. Government grants Grants from the government are recognised at their fair
value where there is reasonable assurance that the grant will be received and the Group will comply with all attached conditions.
Government grants related to non-current assets are deducted in arriving at the carrying value of the asset. The grant is recognised in profit or loss over the life of the asset as a reduced depreciation expense.
3. Financial risk management3.1. Financial risk factors The Group’s activities expose it to a variety of financial
risks: market risk (including foreign exchange risk, interest rate risk, and price risk), credit risk, and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets as it relates to foreign exchange risk and seeks to minimise potential adverse effects on the Group’s financial performance. Risk management is carried out under policies approved by the Board of Directors. The Board has provided a written policy covering specific areas, such as foreign exchange risk.
(a) Market risk(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the United States Dollar, the South African Rand, the Euro, the Australian Dollar and the British Pound. Foreign exchange risk arises when future commercial transactions or recognised assets and liabilities and net investments in foreign operations are denominated in a currency that is not the entity’s functional currency.
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The Group has implemented a foreign currency hedging policy to limit the Group’s exposure to fluctuations in foreign currencies which is mainly based on economic hedging principles as opposed to using derivative financial instruments
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates.
The Group’s cash flow interest rate risk arises from borrowings, loans to external parties, restricted cash, cash and cash equivalents and the bank overdraft. Borrowings and bank overdrafts issued at variable rates expose the Group to cash flow interest rate risk which is partly offset by financial assets held at variable rates (i.e. cash and cash equivalents, restricted cash).
The Group is not exposed to fair value interest rate risk as the Group does not have any interest-bearing financial instruments carried at fair value.
Interest rates are constantly monitored and appropriate steps are taken to ensure that the Group’s exposure to interest rate fluctuations is limited. This includes obtaining approval from the Board for all changes to and new borrowing facilities entered into during the year.
(iii) Price risk
Currently the Group does not have significant price risk. The Group is not exposed to commodity price risk.
(b) Credit risk Credit risk is the risk that a counterparty to a financial
instrument will fail to discharge an obligation and cause the Group to incur a financial loss. Credit risk arises from cash and cash equivalents as well as credit exposures to customers and in respect of loans provided to external parties. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position, net of impairment losses where relevant.
Credit risk relating to accounts receivable balances is managed by each local entity which is responsible for managing and analysing the credit risk for each of their
new clients before standard payment and delivery terms and conditions are offered.
Cash investments are only placed with high quality financial institutions rated BBB and above (note 17). All changes in or new banking arrangements entered into are approved by the Board.
(c) Liquidity risk Liquidity risk is the risk that there will be insufficient funds
available to settle obligations when they are due.
The Group has limited risk due to the recurring nature of its income thereby generating strong cash inflows. The level of cash balances in the Group is monitored weekly and cash generated from operations is reviewed against budgeted cash flows on a monthly basis. In addition, working capital reviews are performed monthly.
In addition, the Group maintains headroom on its undrawn borrowing facilities to ensure that the Group does not breach borrowing limits or covenants (where applicable) on its borrowing facilities.
3.2. Capital risk management The Group’s objectives when managing capital are to
safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure. The Board of Directors monitors capital by reviewing the net debt position and the net gearing ratio. Gearing is calculated as net debt divided by total equity. Net debt is calculated as total borrowings (including current and non-current borrowings as shown in the statement of financial position) less net cash and cash equivalents. Total capital is calculated as “total equity” as shown in the statement of financial position.
During the current and prior financial year, the Group’s target gearing ratio was 60%. Currently, all excess cash has been allocated to outstanding borrowing facilities.
There were no changes to the Group’s approach to capital management during the year. The Group was subject to financial covenants on its borrowings in the previous financial year. During the current and prior financial year the Group did not transgress any of the financial covenants.
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MiX TelematicsIntegrated Annual Report 2013
4. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below:
(a) Warranty claims The Group generally offers warranties on its hardware
units. Management estimates the related provision for future warranty claims based on historical warranty claim information, as well as recent trends that might suggest that past cost information may differ from future claims.
(b) Maintenance provision The Group, in some instances, offers maintenance
services as part of its revenue contracts. Management estimates the related provision for maintenance costs per vehicle when the obligation to repair occurs.
(c) Decommissioning provision The Group estimates the costs based on best estimates of
the costs to restore the property to its original condition. The costs are discounted to present value, where the obligation extends beyond twelve months, using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation.
(d) Income taxes Where applicable tax legislation is subject to interpretation,
management makes assessments, based on expert tax advice, of the relevant tax that is likely to be paid and provides accordingly. When the final outcome is determined and there is a difference this is recognised in the period in which the final outcome is determined.
(e) Estimated impairment of goodwill The Group tests annually whether goodwill has suffered any
impairment in accordance with the accounting policy stated in note 2.7. The recoverable amount of cash-generating units has been based on value in use calculations. These calculations require the use of estimates.
(f) Product development cost Product development cost directly attributable to the
design and testing of identifiable and unique software products controlled by the Group are recorded as intangible assets by the Group when the criteria in note 2.6 have been met. The assessment as to when these criteria have been met is subjective and capitalisation has been based on management’s best judgement of facts and circumstances in existence at year-end.
(g) Receivables allowance The valuation allowance for trade receivables reflects the
Group’s estimates of losses arising from the failure or inability of the Group’s customers to make required payments. The allowance is based on the ageing of customer accounts, customer creditworthiness and the Group’s historical write-off experience. Changes to the allowance may be required if the financial condition of the Group’s customers improves or deteriorates. An improvement in financial condition may result in lower actual write-offs. Historically, changes to the estimate of losses have not been material to the Group’s financial position and results.
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5. Segment informationThe segment information provided to the Group’s chief operating decision-maker for the reportable segments for the year ended 31 March 2013 is as follows:
Totalrevenue
R’000
Inter-segment revenue
R’000EBITDA
R’000Assets
R’000
Africa Consumer solutions 343 578 (11 910) 86 580 279 239 Fleet solutions 281 937 (5 838) 92 429 83 047
Europe Fleet solutions 128 116 (576) (4 796) 60 078 North America Fleet solutions 155 657 – 2 271 53 067 Middle East and Australasia Fleet solutions 265 598 – 32 445 129 133 Brazil Fleet solutions – – (2 062) 4 529 International Fleet solutions and development 330 755 (315 837) 92 728 243 284
Total 1 505 641 (334 161) 299 595 852 377 Corporate and consolidation entries – – (15 055) 415 493 Inter-segment elimination (334 161) 334 161 – (115 082)
Total 1 171 480 – 284 540 1 152 788
The segment information provided to the Group’s chief operating decision-maker for the reportable segments for the year ended 31 March 2012 is as follows:Africa Consumer solutions 342 324 (8 546) 73 523 253 162
Fleet solutions 232 542 (2 953) 79 040 79 082 Europe Fleet solutions 126 782 – (6 541) 71 110 North America Fleet solutions 156 013 (298) 13 532 54 365 Middle East and Australasia Fleet solutions 131 393 – 14 528 72 333 International Fleet solutions and development 286 433 (245 208) 83 450 258 692
Total 1 275 487 (257 005) 257 532 788 744 Corporate and consolidation entries – – (19 980) 408 349 Inter-segment elimination (257 005) 257 005 – (128 677)
Total 1 018 482 – 237 552 1 068 416
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MiX TelematicsIntegrated Annual Report 2013
5. Segment information (continued)There are no material non-cash items provided to the Group’s chief operating decision-maker other than disclosed in the reconciliation of operating profit to EBITDA below.
The additions to non-current assets which are included in the measure of segment assets provided to the Group’s chief operating decision-maker for the reportable segments for the year ended 31 March 2013 are as follows:
Property, plant and
equipmentR’000
Intangible assets
R’000
Africa Consumer solutions 36 721 7 394 Fleet solutions 5 409 2 128
Europe Fleet solutions 2 288 –North America Fleet solutions 592 1 227 Middle East and Australasia Fleet solutions 890 13 Brazil Fleet solutions 319 –International Fleet solutions and development 5 280 31 827 Corporate and consolidation entries – 59
Total 51 499 42 648
The additions to non-current assets which are included in the measure of segment assets provided to the Group’s chief operating decision-maker for the reportable segments for the year ended 31 March 2012 (restated) are as follows:Africa Consumer solutions 25 042 8 636
Fleet solutions 6 830 – Europe Fleet solutions 2 028 – North America Fleet solutions 841 494 Middle East and Australasia Fleet solutions 856 – International Fleet solutions and development 5 996 26 693 Corporate and consolidation entries – 50
Total 41 593 35 873
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5. Segment information (continued)Operating segments are reported in a manner consistent with the internal reporting provided to the Group’s chief operating decision-maker. The Group’s chief operating decision-maker, 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.
The MiX Telematics businesses are managed primarily on a geographic and also on a product basis. EBITDA is defined as earnings before interest, tax, depreciation, amortisation, impairment of assets and negative goodwill. Due to the reclassification of inventory held in client vehicles to property, plant and equipment during the year, amortisation of inventory held in client vehicles is no longer added back separately as the impact is already included as part of the depreciation expense for the year (note 44).
The revenue from external parties reported to the Group’s chief operating decision-maker is measured in a manner consistent with that in the income statement. The amounts provided to the Group’s chief operating decision-maker with respect to total assets are measured in a manner consistent with that of the financial statements. These assets are allocated based on the physical location of the asset.
2013
R’000
2012(Restated)
R’000
Reconciliation of operating profit to EBITDAOperating profit 181 196 146 388 Add Depreciation and amortisation 87 765 71 332 Amortisation of intangible assets arising out of business combinations 10 421 18 500 Impairment of product development costs capitalised (notes 7, 27, 33, 35.2) 5 158 1 332
EBITDA per segment analysis 284 540 237 552
Revenue generated by the South African-based operating segments of the Group (i.e. Africa and International) to its local and foreign-based customers amounted to R615.2 million (2012: R601.3 million) for the year under review, whereas revenue generated by the foreign-based segments of the Group (i.e. Europe, North America, East Africa, Middle East and Australasia) to its local and foreign-based customers amounted to R556.2 million (2012: R417.2 million).
Total non-current assets other than financial instruments and deferred tax assets located in South Africa is R318.5 million (2012: R314.7 million), and the total of these non-current assets located in foreign countries is R14.1 million (2012: R13.5 million).
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MiX TelematicsIntegrated Annual Report 2013
PropertyownedR’000
Plant, equipment,
vehicles andother owned
R’000
Computer and radio
ownedR’000
In-vehicledevices
uninstalled R’000
In-vehicledevices
installed R’000
Total owned
R’000
Plant, equipment,
vehicles andother leased
R’000
Computer and radio
leasedR’000
Total leased R’000
Total R’000
6. Property, plant and equipmentGroupAt 1 April 2011 (restated)Cost 22 863 33 582 41 838 8 194 87 793 194 270 – 2 936 2 936 197 206 Accumulated depreciation (2 384) (21 480) (29 822) – (59 754) (113 440) – (2 728) (2 728) (116 168)
Net book amount 20 479 12 102 12 016 8 194 28 039 80 830 – 208 208 81 038
Year ended 31 March 2012 (restated)Opening net book amount 20 479 12 102 12 016 8 194 28 039 80 830 – 208 208 81 038 Additions – 9 396 5 422 26 727 – 41 545 48 – 48 41 593 Transfers (545) (3 271) 3 816 (24 809) 24 809 – – – – –Disposals – (1 059) (201) – – (1 260) – – – (1 260)Depreciation charge (notes 27, 35.2) (447) (5 487) (7 396) – (23 249) (36 579) (5) (208) (213) (36 792)Currency translation differences – 294 222 – 110 626 2 – 2 628
Closing net book amount 19 487 11 975 13 879 10 112 29 709 85 162 45 – 45 85 207
At 31 March 2012 (restated)Cost 22 014 37 342 39 883 10 112 112 817 222 168 50 1 999 2 049 224 217 Accumulated depreciation (2 527) (25 367) (26 004) – (83 108) (137 006) (5) (1 999) (2 004) (139 010)Net book amount 19 487 11 975 13 879 10 112 29 709 85 162 45 – 45 85 207
Year ended 31 March 2013Opening net book amount 19 487 11 975 13 879 10 112 29 709 85 162 45 – 45 85 207 Additions – 6 205 11 388 33 854 – 51 447 52 – 52 51 499 Business combination (note 36) – 72 110 – – 182 – – – 182 Transfers – – – (34 657) 34 657 – – – – –Disposals – (32) (19) – – (51) – – – (51)Depreciation charge (notes 27, 35.2) (447) (4 889) (7 793) – (28 047) (41 176) (25) – (25) (41 201)Currency translation differences – 407 270 – 223 900 11 – 11 911
Closing net book amount 19 040 13 738 17 835 9 309 36 542 96 464 83 – 83 96 547
At 31 March 2013Cost 22 014 41 500 51 525 9 309 148 104 272 452 117 770 887 273 339 Accumulated depreciation (2 974) (27 762) (33 690) – (111 562) (175 988) (34) (770) (804) (176 792)
Net book amount 19 040 13 738 17 835 9 309 36 542 96 464 83 – 83 96 547
Depreciation expense of R30.9 million (2012: R26.5 million) has been charged to cost of sales. The remainder has been included in administration and other charges in the income statement.
During the current financial year it was resolved that all inventory installed and designated for installation in vehicles be classified as property, plant and equipment, as opposed to being included under inventory held in client vehicles and inventory, respectively. The comparatives were amended accordingly (note 44).
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PropertyownedR’000
Plant, equipment,
vehicles andother owned
R’000
Computer and radio
ownedR’000
In-vehicledevices
uninstalled R’000
In-vehicledevices
installed R’000
Total owned
R’000
Plant, equipment,
vehicles andother leased
R’000
Computer and radio
leasedR’000
Total leased R’000
Total R’000
6. Property, plant and equipmentGroupAt 1 April 2011 (restated)Cost 22 863 33 582 41 838 8 194 87 793 194 270 – 2 936 2 936 197 206 Accumulated depreciation (2 384) (21 480) (29 822) – (59 754) (113 440) – (2 728) (2 728) (116 168)
Net book amount 20 479 12 102 12 016 8 194 28 039 80 830 – 208 208 81 038
Year ended 31 March 2012 (restated)Opening net book amount 20 479 12 102 12 016 8 194 28 039 80 830 – 208 208 81 038 Additions – 9 396 5 422 26 727 – 41 545 48 – 48 41 593 Transfers (545) (3 271) 3 816 (24 809) 24 809 – – – – –Disposals – (1 059) (201) – – (1 260) – – – (1 260)Depreciation charge (notes 27, 35.2) (447) (5 487) (7 396) – (23 249) (36 579) (5) (208) (213) (36 792)Currency translation differences – 294 222 – 110 626 2 – 2 628
Closing net book amount 19 487 11 975 13 879 10 112 29 709 85 162 45 – 45 85 207
At 31 March 2012 (restated)Cost 22 014 37 342 39 883 10 112 112 817 222 168 50 1 999 2 049 224 217 Accumulated depreciation (2 527) (25 367) (26 004) – (83 108) (137 006) (5) (1 999) (2 004) (139 010)Net book amount 19 487 11 975 13 879 10 112 29 709 85 162 45 – 45 85 207
Year ended 31 March 2013Opening net book amount 19 487 11 975 13 879 10 112 29 709 85 162 45 – 45 85 207 Additions – 6 205 11 388 33 854 – 51 447 52 – 52 51 499 Business combination (note 36) – 72 110 – – 182 – – – 182 Transfers – – – (34 657) 34 657 – – – – –Disposals – (32) (19) – – (51) – – – (51)Depreciation charge (notes 27, 35.2) (447) (4 889) (7 793) – (28 047) (41 176) (25) – (25) (41 201)Currency translation differences – 407 270 – 223 900 11 – 11 911
Closing net book amount 19 040 13 738 17 835 9 309 36 542 96 464 83 – 83 96 547
At 31 March 2013Cost 22 014 41 500 51 525 9 309 148 104 272 452 117 770 887 273 339 Accumulated depreciation (2 974) (27 762) (33 690) – (111 562) (175 988) (34) (770) (804) (176 792)
Net book amount 19 040 13 738 17 835 9 309 36 542 96 464 83 – 83 96 547
Depreciation expense of R30.9 million (2012: R26.5 million) has been charged to cost of sales. The remainder has been included in administration and other charges in the income statement.
During the current financial year it was resolved that all inventory installed and designated for installation in vehicles be classified as property, plant and equipment, as opposed to being included under inventory held in client vehicles and inventory, respectively. The comparatives were amended accordingly (note 44).
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Goodwill R’000
Patents and trademarks
R’000
Customer relation-
ships R’000
Product develop-
ment costs R’000
Technology, softwareand other
R’000 Total R’000
7. Intangible assets GroupAt 1 April 2011Cost 532 609 6 621 46 825 104 842 87 958 778 855 Accumulated amortisation – (4 496) (31 494) (36 441) (59 411) (131 842)
Net book amount 532 609 2 125 15 331 68 401 28 547 647 013
Year ended 31 March 2012Opening net book amount 532 609 2 125 15 331 68 401 28 547 647 013 Additions – 50 – 32 578 3 245 35 873 Capitalisation of borrowing cost – – – 837 – 837 Transfers – – – (8 094) 8 094 – Disposals – – – – (37) (37)Amortisation charge (notes 27, 35.2) – (1 018) (7 444) (26 295) (18 283) (53 040)Impairment loss (notes 5, 27, 33, 35.2) – – – (1 332) – (1 332)Currency translation differences 12 100 185 1 063 3 421 13 772
Closing net book amount 544 709 1 342 8 950 66 098 21 987 643 086
At 31 March 2012Cost 544 709 7 435 47 109 128 833 84 024 812 110 Accumulated amortisation – (6 093) (38 159) (62 735) (62 037) (169 024)
Net book amount 544 709 1 342 8 950 66 098 21 987 643 086
Year ended 31 March 2013Opening net book amount 544 709 1 342 8 950 66 098 21 987 643 086 Additions – 59 – 31 220 11 369 42 648 Business combination (note 36) – – – – 5 739 5 739 Capitalisation of borrowing cost – – – 304 – 304 Government grant received – – – (2 207) – (2 207)Transfers – – – (4 839) 4 839 – Disposals – – – (600) – (600)Amortisation charge (notes 27, 35.2) – (951) (5 660) (33 501) (16 873) (56 985)Impairment loss (notes 5, 27, 33, 35.2) – – – (5 158) – (5 158)Currency translation differences 17 554 116 893 6 340 18 909
Closing net book amount 562 263 566 4 183 51 323 27 401 645 736
At 31 March 2013Cost 562 263 8 609 51 591 142 489 104 961 869 913 Accumulated amortisation – (8 043) (47 408) (91 166) (77 560) (224 177)
Net book amount 562 263 566 4 183 51 323 27 401 645 736
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7. Intangible assets (continued)Staff costs of R23.8 million (2012: R22.0 million) have been capitalised to product development costs during the year.
Amortisation expense of R33.5 million (2012: R26.5 million) has been charged to cost of sales. The remainder has been included in administration and other charges in the income statement.
An impairment loss amounting to R5.2 million (2012: R1.3 million) in the International operating segment (notes 5, 27, 33, 35.2) arose due to the recoverable amount being less than the carrying value of certain identified intangible assets. The impairment loss has been included in administration and other charges in the income statement.
The Group has capitalised borrowing costs amounting to R0.3 million (2012: R0.8 million) on qualifying assets during the current financial year. Borrowing costs were capitalised at the weighted average rate of its general borrowings of 7.3% (2012: 7.8%).
The Group received a government grant from the Department of Trade and Industry in South Africa during the current financial year of R2.2 million (2012: Nil) relating to certain technology developed. As of 31 March 2013, all conditions attached to the grant have been met.
Patents and trademarks
R’000 Total
R’000
CompanyAt 1 April 2011Cost 411 411 Accumulated amortisation (65) (65)
Net book amount 346 346
Year ended 31 March 2012Opening net book amount 346 346 Additions 50 50 Amortisation charge (notes 27, 35.2) (43) (43)
Closing net book amount 353 353
At 31 March 2012Cost 461 461 Accumulated amortisation (108) (108)
Net book amount 353 353 Year ended 31 March 2013Opening net book amount 353 353 Additions 59 59Amortisation charge (notes 27, 35.2) (50) (50)
Closing net book amount 362 362
At 31 March 2013Cost 520 520Accumulated amortisation (158) (158)
Net book amount 362 362
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MiX TelematicsIntegrated Annual Report 2013
7. Intangible assets (continued)Impairment tests for goodwillGoodwill is allocated to the Group’s cash-generating units (“CGU”) identified within its operating segments. A summary of the goodwill at an operating segment level is presented below:
Group 2013
R’0002012
R’000
International fleet solutions and development 100 463 100 463 Europe fleet solutions 91 907 80 491 Middle East and Australasia fleet solutions 36 583 30 445 Africa fleet solutions 333 310 333 310
Total 562 263 544 709
The recoverable amount of a CGU is determined based on value in use calculations, which use pre-tax cash flow projections based on approved financial budgets covering a three to five year period. A five year period was used to ensure that in respect of the Europe fleet solutions segment, stable cash flows are used for purposes of calculating terminal values included in the value in use calculations. These cash flows are based on the current market conditions and near-term expectations.
The key assumptions used for the value in use calculations are as follows:
International fleet solutions
and development and Africa
fleet solutionsEurope fleet
solutions
Middle East and
Australasia fleet solutions
Discount rate– pre-tax discount rate applied to the cash
flow projections (%) 15.2 – 16.8 9.7 11.9 Growth rate– growth rate used to extrapolate cash flow beyond the
budget period (%) 4.8 2.0 0.7
The discount rates were calculated using the capital asset pricing model. These rates are pre-tax and reflect specific risks relating to the relevant CGUs. The growth rate has been determined based on the expected long-term inflation outlook.
Europe fleet solutions goodwill sensitivityTo determine the recoverable amount of its investment in the Europe fleet solutions CGU, the Group calculated future net cash flows of the CGU and discounted them to their present value using the rates as indicated above. The calculation of the CGU’s discounted net present value requires extensive use of estimates and assumptions about discount rates and forecasted cash flows. Actual results could be different. Future changes in assumptions or market conditions, such as uncertainty in the European economy, may negatively affect these discounted cash flows.
At 31 March 2013, the date at which the impairment testing was performed, Europe fleet solutions’ recoverable amount exceeded the carrying amount by 161.4%.
An 18.3% discount rate, or a 59.7% decrease of the projected cash flows would reduce the headroom for the Europe fleet solutions CGU to nil. This analysis assumes that all other variables remain constant.
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Group Company2013
R’0002012
R’0002013
R’0002012
R’000
8. Interest in subsidiariesShareholding– 1 000 shares (100%) (2012: 100%) in MiX Telematics Africa
Proprietary Limited – – 159 286 158 204 – 739 672 shares (100%) (2012: 100%) in MiX Telematics
International Proprietary Limited – – 433 395 432 367 – 8 301 420 shares (100%) (2012: 100%) in MiX Telematics
Europe Limited – – 197 719 197 625 – 5 913 927 shares (100%) (2012: 100%) in MiX Telematics
North America Incorporated – – 15 445 14 658 – 100 shares (100%) (2012: 100%) in MiX Telematics
Australasia Proprietary Limited – – 57 446 57 286
– 980 000 quotas (99.9975%) in MiX Telematics Serviços De Telemetria E Rastreamento De Veículos Do Brazil Limitada – – 4 428 –
Loans toMiX Telematics Europe Limited – – 7 222 –MiX Telematics North America Incorporated – – 15 585 –
– – 890 526 860 140
Refer to note 46 for a list of Group companies.
During the current financial year, MiX Telematics Limited obtained a 99.9975% equity interest in a newly incorporated entity in Brazil: MiX Telematics Serviços De Telemetria E Rastreamento De Veículos Do Brazil Limitada (“MiX Brazil”). R4.4 million (1.0 million BRL) was contributed to MiX Brazil as a capital investment in the company.
The movement in interest in subsidiaries is as a result of the movements described in this note, together with the effect of share options granted to employees of the respective subsidiary companies, resulting in the expensed fair value of the options being recognised as an equity contribution by the Company to the respective subsidiary.
In the current financial year, a loan between Sunstore Limited and MiX Telematics Europe Limited was ceded to MiX Telematics Limited as part of the final liquidation distribution from Sunstore Limited. The loan is unsecured, non-interest bearing and has no fixed date of repayment.
The loan to MiX Telematics North America Incorporated is unsecured, currently bears interest at the US prime interest rate of 3.25% per annum with no fixed date of repayment. The loan has been reclassified as an investment in the 2013 financial year following a change in its terms and conditions with effect from 1 April 2012 (note 14).
The loan to MiX Telematics North America Incorporated is denominated in South African Rand and the loan to MiX Telematics Europe Limited is denominated in UK Pounds. The maximum exposure to credit risk at the reporting date is the carrying value of the loans.
The shares held in MiX Telematics Australasia Proprietary Limited are held as security for the outstanding Investec Loan (note 20).
During the previous financial year, the directors reorganised the Group. On 31 July 2011, Sunstore Limited transferred its interest in MiX Telematics Europe Limited, MiX Telematics North America Incorporated and MiX Telematics Australasia Proprietary Limited to MiX Telematics Limited. The historical cost attributable to the investment in Sunstore Limited was re-allocated to the entities now owned by MiX Telematics Limited on a relative basis using the historical cost of the respective entities. Sunstore Limited was fully liquidated during the current financial year. In line with the Group’s elected accounting policy to recycle cumulative exchange differences on the date of disposal, change in control or liquidation of a subsidiary, a debit amount of R0.4 million has been released to the income statement.
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for the year ended 31 March 2013
MiX TelematicsIntegrated Annual Report 2013
Group Company2013
R’0002012
R’0002013
R’0002012
R’000
9. Investment in joint ventureBeginning of the year – – – – Share of joint venture losses – – – –
End of the year – – – –
The investment in joint venture includes the Group’s 60% interest held in Matrixvtrack Nig. Limited, an unlisted company incorporated in Nigeria. The investment is denominated in Nigerian Naira (NGN).The Group’s share of the results of the joint venture and its aggregated assets and liabilities are as follows:Assets 1 670 1 641 – – Liabilities 1 299 1 549 – – Revenue 1 054 613 – – Profit/(loss) for the year 196 (147) – – Limited to – – – –
The Group has not recognised its portion of the profit for the year amounting to R0.2 million (2012: loss of R0.1 million) due to the existence of accumulated losses not yet recovered at year-end. The accumulated losses not yet recovered amounted to R0.2 million at 31 March 2013 (2012: R0.4 million). There are no contingent liabilities relating to the Group’s interest in the joint venture and no contingent liabilities of the venture itself.
10. Available-for-sale financial assetAvailable-for-sale financial assets include the following listed securities:– 1 288 920 ordinary shares in Datatrak Malta Limited, which
are denominated in Euro. – – – –
The Group impaired the available-for-sale financial asset in full in the 2011 financial year as there was no demonstrable active market for trading these shares and no income is expected to be derived from this investment in the foreseeable future. The position remains unchanged at the end of the 2013 financial year.
There were no additions or disposals of available-for-sale financial assets during the 2013 or 2012 financial years.
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Group Company2013
R’0002012
R’0002013
R’0002012
R’000
11. Finance lease receivableTotal finance lease receivable 9 963 – – – Short-term portion receivable within 12 months 3 604 – – –
Long-term portion receivable after 12 months 6 359 – – –
The Group entered into a finance lease arrangement with a customer to supply fleet management products and services. The term of the lease is 36 months and the lease is denominated in Euros. The unguaranteed residual values of the assets leased under the finance lease are considered negligible.
The finance lease receivables are neither past due nor impaired.
Gross finance lease receivable – minimum lease payments:Not later than one year 4 238 – – – Later than one year but not later than five years 6 549 – – –
10 787 – – –Unearned finance income 824 – – –
Net investment in finance leases 9 963 – – –
The net investment in finance leases may be analysed as follows:Not later than one year 3 604 – – – Later than one year but not later than five years 6 359 – – –
Net investment in finance leases 9 963 – – –
12. InventoryInventory – finished goods 38 927 35 903 – –
During the current financial year an amount of R4.8 million (2012: R3.1 million) was recognised as a charge in cost of sales as a result of the write down of inventory to net realisable value (notes 27, 35.2). During the 2013 financial year it was resolved that all inventory installed and designated for installation in vehicles be classified as property, plant and equipment. As a result the inventory held in client vehicles and a portion of the inventory, respectively, was reclassified to property, plant and equipment. The comparatives were amended accordingly (note 44). The 2011 restated inventory-finished goods balance was R26.4 million.
13. Trade and other receivablesTrade receivables 164 904 144 997 – – Less: provision for impairment of trade receivables (7 356) (7 569) – –
Trade receivables – net 157 548 137 428 – – Pre-payments 12 209 10 900 192 162 Sundry debtors 17 230 14 797 33 6
186 987 163 125 225 168
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MiX TelematicsIntegrated Annual Report 2013
Group Company
Gross R’000
Provision for impairment
R’000 Gross R’000
Provision for impairment
R’000
13. Trade and other receivables (continued)The ageing of trade receivables at the reporting date is as follows:2013Not past due 99 616 (447) – – Past due by 1 to 30 days 33 934 (361) – – Past due by 31 to 60 days 9 251 (1 332) – – Past due by more than 60 days 22 103 (5 216) – –
Total 164 904 (7 356) – –
2012Not past due 96 323 (1 155) – – Past due by 1 to 30 days 25 837 (803) – – Past due by 31 to 60 days 7 833 (900) – – Past due by more than 60 days 15 004 (4 711) – –
Total 144 997 (7 569) – –
The trade receivables above, which are past due and not impaired and fully performing trade receivables, relate to customers for whom there is no recent history of default.
Sundry debtors are neither past due nor impaired.
The carrying amounts of trade and other receivables are denominated in the following currencies:
Group Company2013
R’0002012
R’0002013
R’0002012
R’000
South African Rand 37 124 50 898 225 168 UK Pound 17 965 15 042 – – US Dollar 77 678 62 825 – – AU Dollar 28 972 17 137 – – Euro 19 723 14 625 – – Other 5 525 2 598 – –
186 987 163 125 225 168
Movements in the Group’s provision for impairment of trade receivables are as follows:Opening balance (7 569) (11 709) – – Increase in provision for impairment (note 35.2) (6 159) (7 050) – – Receivables written off during the year as irrecoverable 6 585 11 311 – – Foreign currency translation differences (213) (121) – –
Closing balance (7 356) (7 569) – –
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13. Trade and other receivables (continued)The creation of the provision for impairment of trade receivables has been included in administration and other charges in the income statement. In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted until the end of the reporting year. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.
Trade receivables of R20.3 million (2012: R12.3 million) are pledged as security for the Group’s overdraft facilities (note 17) and were previously pledged as security for long-term loans (note 20).
The fair value of trade and other receivables approximate their book values as the impact of discounting is not considered material due to the short-term nature of the receivables. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. Other than 12% of the gross receivable balance relating to one debtor at the end of the 2013 year (2012: 18% of the gross receivable balance relating to two debtors), the Group has no significant concentration of credit risk, due to its spread of customers across various operations and geographical locations. The Group does not hold any collateral as security.
Group Company2013
R’0002012
R’0002013
R’0002012
R’000
14. Loan to related partyMiX Telematics North America Incorporated – – – 15 087
– – – 15 087
During the prior financial year, the loan to MiX Telematics North America Incorporated was unsecured, bore interest at the South African prime interest rate plus 2.0% per annum and had no fixed date of repayment. Due to interest rates charged on the loan to the related party being market-related, the fair value of this loan was considered to approximate its book value at year-end. The loan was denominated in South African Rand. The maximum exposure to credit risk at the reporting date was the carrying value of the loan to the related party mentioned above. The Company did not hold any collateral as security. During the current financial year, this loan was reclassified to interest in subsidiaries based on an amendment to the terms of the loan agreement which became effective on 1 April 2012 (note 8).
15. Loan to external partyIntellichain Proprietary Limited (“Intellichain”) – 6 001 – –
Intellichain is a supply chain management software business that focuses on fleet management and supply execution. MiX Telematics Africa Proprietary Limited advanced a convertible loan of R5.5 million to Intellichain during the 2012 financial year, convertible at the option of the lender within 30 days after issuance of the audit certificate for the 2012 financial year into a minimum of 26% share. In terms of the agreement entered into, MiX Telematics Africa Proprietary Limited also had options to take up additional shareholding in Intellichain from April 2012 onwards, with the ultimate ability to own 100% of the company.
At 31 March 2012 the loan was ceded from MiX Telematics Africa Proprietary Limited to MiX Telematics International Proprietary Limited with all the terms and conditions of the agreement remaining unchanged.
The loan was denominated in South African Rands and was secured by the software (inclusive of all source code and object code comprised thereby). The fair value of the loan was deemed to approximate its book value at prior year-end and the maximum exposure to credit risk at that reporting date was the carrying value of the loan with interest being charged at a fixed 9% per annum.
In the 2013 financial year the business of Intellichain (constituting employees and specific assets and liabilities) was acquired for an amount equal to the outstanding loan balance at the effective date (note 36).
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MiX TelematicsIntegrated Annual Report 2013
Group Company2013
R’0002012
R’0002013
R’0002012
R’000
16. Restricted cashCash securing guarantee issued in terms of the Mobile Telephone Networks Proprietary Limited incentive agreement (denominated in South African Rand). 1 000 1 000 – – Cash securing guarantees issued in respect of lease agreements entered into (denominated in South African Rand). 393 – – – Cash securing guarantees issued in respect of employee visas in the UAE (denominated in US Dollar). 3 076 2 133 – – Cash held for purposes of distribution to MiX Telematics Enterprise BEE Trust and MiX Telematics Fleet Support Trust beneficiaries (denominated in South African Rand). 3 766 – – –
8 235 3 133 – –
17. Net cash and cash equivalentsNet cash and cash equivalents included in the cash flow statement comprise the following amounts included in the statement of financial position:Cash and cash equivalents 147 702 118 695 306 1 412 Bank overdraft (56 005) (50 165) – –
91 697 68 530 306 1 412
Included in the bank overdraft are overdraft facilities from Investec Bank Limited and Standard Bank Limited which are secured by the following at 31 March 2013:
Investec Bank Limited• cession of all rights, title and interest in and to the subscriber contracts of MiX Telematics Africa Proprietary Limited;• joint and several suretyships between the following Group companies:
– MiX Telematics Limited; and– MiX Telematics Africa Proprietary Limited.
Standard Bank Limited• cross suretyships between the following Group companies:
– MiX Telematics Africa Proprietary Limited;– MiX Telematics International Proprietary Limited; and– MiX Telematics Limited.
• an unrestricted cession of book debts by the following entities (note 13):– MiX Telematics Limited; and– MiX Telematics International Proprietary Limited.
At 31 March 2012 the overdraft facilities from Investec Bank Limited and Standard Bank Limited were secured by the following:
Investec Bank Limited• cession of all rights, title and interest in and to the subscriber contracts of MiX Telematics Africa Proprietary Limited;• joint and several suretyships between the following Group companies:
– MiX Telematics Limited; and– MiX Telematics Africa Proprietary Limited.
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17. Net cash and cash equivalents (continued)Standard Bank Limited• cross suretyships and cession of claims between the following Group companies:
– MiX Telematics Enterprise SA Proprietary Limited;– MiX Telematics Europe Limited;– MiX Telematics Technology Holdings Proprietary Limited; and– MiX Telematics Limited.
• the MiX Telematics International Proprietary Limited subscriber contracts• a reversionary right to the MiX Telematics Africa Proprietary Limited subscriber contracts• an unrestricted cession of book debts by the following entity (note 13):
– MiX Telematics Africa Proprietary Limited.
The credit quality of cash and cash equivalents, that are neither past due nor impaired can be assessed by reference to external credit ratings.
Group Company2013
R’0002012
R’0002013
R’0002012
R’000
Cash and cash equivalents:A 36 124 45 576 – – AA 5 989 4 962 – – BBB 105 589 68 157 306 1 412
147 702 118 695 306 1 412
18. Stated capital/share capital and premium Number
of shares R’000
Ordinary share capital
R’000
Share premium
R’000 Total R’000
Group and CompanyAt 1 April 2011 657 000 13 787 353 787 366 Shares issued in relation to share options exercised 200 * 236 236
Balance at 31 March 2012 657 200 13 787 589 787 602 Shares issued in relation to share options exercised 2 250 * 2 425 2 425 Share capital and share premium transferred to stated capital (659 450) (13) (790 014) (790 027)
Balance at 31 March 2013 – – – –* Amount less than R1 000
The ordinary shares with a par value of 0.002 cent were converted to ordinary shares with no par value on 25 October 2012, the date that the new Memorandum of Incorporation was accepted by the Companies and Intellectual Property Commission in South Africa.
Stated capital Number
of shares 000’s
Stated capital R’000
Group and CompanyBalance at 31 March 2012 – – Share capital and share premium transferred to stated capital 659 450 790 027 Shares issued in relation to share options exercised 513 464
Balance at 31 March 2013 659 963 790 491
The total authorised number of ordinary shares at the end of the 2013 year amounted to 1 billion shares (2012: 1 billion) with no par value (2012: par value of 0.002 cent per share). All issued shares are fully paid up and carry one vote per share and the right to dividends. There were no changes to the authorised number of ordinary shares during the 2013 or 2012 financial year.
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MiX TelematicsIntegrated Annual Report 2013
18. Stated capital/share capital and premium (continued)Share optionsShare options are granted to directors and certain key employees within the Group. The exercise price of the options granted is equal to the weighted average market value of ordinary shares for the 20 days preceding the date of the grant. The options vest in tranches of 25% per annum, commencing on the second anniversary of the grant date and expire six years after the grant date. In addition to these vesting periods, the vesting of the share options granted are conditional on certain performance conditions being met, namely the share price on the associated measurement date being in excess of the target, after being reduced by the aggregate amount of dividends paid, or an annual total shareholder return in excess of 10% and 5%, taking into account any dividends paid during the vesting period, being achieved. The Group has no legal or constructive obligation to repurchase or settle the options in cash.
Movements in the total number of share options outstanding and their related weighted average exercise prices are as follows: Weighted
average exercise
price 2013
cents per share
Number of options
2013000’s
Weighted average
exercise price 2012
cents per share
Number of options
2012000’s
Outstanding at the beginning of the year 113 57 250 107 47 350 Granted on 13 September 2011 – – 130 6 800 Granted on 3 January 2012 – – 154 4 000 Granted on 7 November 2012 246 12 350 – –Exercised 105 (2 763) 118 (200)Forfeited 131 (3 162) 118 (700)Outstanding at the end of the year 138 63 675 113 57 250
Exercisable at the end of the year 11 513 8 113
The weighted average remaining contractual life on share options outstanding at year-end is 3.11 years (2012: 3.53 years).
Options exercised in 2013 resulted in 2 762 500 shares (2012: 200 000 shares) being issued at a weighted average exercise price of 105.0 cents per share (2012: 118.0 cents per share). The related weighted average share price at the time of exercise was 245.0 cents per share (2012: 150.0 cents per share).
Share options outstanding at the end of the financial year have the following exercise prices:2013000’s
2012000’s
Annual shareholder return: Exercise price 5% 112 cents 12 025 12 650 5% 130 cents 2 200 3 200
10% 118 cents 6 550 8 250 10% 70 cents 2 700 3 550 10% 125 cents 250 400 10% 154 cents 4 000 4 000 10% 246 cents 12 100 –
Target share price:R5 70 cents 4 500 4 650 R5 112 cents 7 600 7 600 R5 130 cents 2 600 3 600
R10 118 cents 8 950 9 150 R10 125 cents 200 200
63 675 57 250
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18. Stated capital/share capital and premium (continued)Of the options in issue, none have expired during the 2013 or 2012 financial year.
The weighted average fair value of options granted during the current and prior year was determined using a combination of the Monte Carlo Simulation option pricing model and the Binomial Tree option pricing model. The key drivers and assumptions input into the valuation models used to determine these values are disclosed below.
As the shares were only listed on the JSE on 12 November 2007, the volatility was calculated using a mixture of the Group’s historical share data as well as the share data of comparable companies.
The salient details of options granted during the 2013 financial year are provided in the table below:
Total shareholder
return
Grant date 7 November 2012Fair value (cents per share) 114.4 Option strike price (cents per share) 246.0 JSE share price on grant date (cents per share) 300.0 Expiry date 7 November 2018Performance conditions– Total shareholder return of (%) 10.0 Remaining contractual life 5.61 Valuation assumptions and drivers:Volatility (%) 42.7 Anticipated forfeiture rate (%) 5.0 Anticipated dividend streams (cents per share)– year ending 31 March 2014 11.0 – year ending 31 March 2015 13.5 – year ending 31 March 2016 16.5 – year ending 31 March 2017 20.0 – year ending 31 March 2018 24.5 Anticipated dividend yield (%) 5.5Annual risk-free interest rate (%) 6.3
Refer to note 27 for the total expense recognised in the current year in respect of share options granted to employees and directors.
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18. Stated capital/share capital and premium (continued)MiX Telematics Group Executive Incentive Plan
Group executives held the following share options at 31 March 2013:17 March
2008000’s
17 March2008000’s
9 December 2008000’s
9 December 2008000’s
4 June2010000’s
4 June2010000’s
3 January2012000’s
7 November2012000’s
Total000’s
S Joselowitz1 1 500 2 000 500 1 000 1 500 3 000 – 2 500 12 000 R Botha1 375 2 000 250 1 000 1 500 – – – 5 125 T Buzer1 1 500 2 000 250 1 000 1 500 – – – 6 250 M Pydigadu1 – – – – 1 500 1 000 – 1 000 3 500 H Scott1 – – – – 1 500 1 000 – – 2 500 C Tasker1 1 500 2 000 500 1 000 1 500 – 2 000 2 000 10 500 B Horan 200 100 150 50 500 – 1 000 1 500 3 500 G Pretorius 500 200 – – 500 – 1 000 1 500 3 700
5 575 8 300 1 650 4 050 10 000 5 000 4 000 8 500 47 075
Option strike price (cents per share) 118 118 70 70 112 112 154 246JSE share price on grant date (cents per share) 118 118 58 58 104 104 160 300Expiry date 17 March 2014 17 March 2014 9 December 2014 9 December 2014 4 June 2016 4 June 2016 3 January 2018 7 November 2018Performance conditions:Share price of (Rand) n/a 10 n/a 5 n/a 5 n/a n/aMinimum shareholder return of 10% n/a 10% n/a 5% n/a 10% 10%
The following share options were exercised by members of the executive committee during the 2013 financial year:
Date of exercise
Options exercised Grant date
Strike price(cents per
share)Performance
condition
Exercise date share
price (cents
per share)
R Botha1 25/09/2012 1 125 000 17/03/2008 118 10% 23025/09/2012 250 000 09/12/2008 70 10% 230
T Buzer1 01/10/2012 250 000 09/12/2008 70 10% 221
Group executives held the following share options at 31 March 2012:17 March
2008000’s
17 March2008000’s
9 December 2008000’s
9 December 2008000’s
4 June2010000’s
4 June2010000’s
3 January2012000’s
Total000’s
S Joselowitz1 1 500 2 000 500 1 000 1 500 3 000 – 9 500R Botha1 1 500 2 000 500 1 000 1 500 – – 6 500 T Buzer1 1 500 2 000 500 1 000 1 500 – – 6 500 M Pydigadu1 – – – – 1 500 1 000 – 2 500 H Scott1 – – – – 1 500 1 000 – 2 500 C Tasker1 1 500 2 000 500 1 000 1 500 – 2 000 8 500 B Horan 200 100 150 50 500 – 1 000 2 000 G Pretorius 500 200 – – 500 – 1 000 2 200
6 700 8 300 2 150 4 050 10 000 5 000 4 000 40 200
Option strike price (cents per share) 118 118 70 70 112 112 154JSE share price on grant date (cents per share) 118 118 58 58 104 104 160Expiry date 17 March 2014 17 March 2014 9 December 2014 9 December 2014 4 June 2016 4 June 2016 3 January 2018Performance conditions:Share price of (Rand) n/a 10 n/a 5 n/a 5 n/aMinimum shareholder return of 10% n/a 10% n/a 5% n/a 10%1 Executive director
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18. Stated capital/share capital and premium (continued)MiX Telematics Group Executive Incentive Plan
Group executives held the following share options at 31 March 2013:17 March
2008000’s
17 March2008000’s
9 December 2008000’s
9 December 2008000’s
4 June2010000’s
4 June2010000’s
3 January2012000’s
7 November2012000’s
Total000’s
S Joselowitz1 1 500 2 000 500 1 000 1 500 3 000 – 2 500 12 000 R Botha1 375 2 000 250 1 000 1 500 – – – 5 125 T Buzer1 1 500 2 000 250 1 000 1 500 – – – 6 250 M Pydigadu1 – – – – 1 500 1 000 – 1 000 3 500 H Scott1 – – – – 1 500 1 000 – – 2 500 C Tasker1 1 500 2 000 500 1 000 1 500 – 2 000 2 000 10 500 B Horan 200 100 150 50 500 – 1 000 1 500 3 500 G Pretorius 500 200 – – 500 – 1 000 1 500 3 700
5 575 8 300 1 650 4 050 10 000 5 000 4 000 8 500 47 075
Option strike price (cents per share) 118 118 70 70 112 112 154 246JSE share price on grant date (cents per share) 118 118 58 58 104 104 160 300Expiry date 17 March 2014 17 March 2014 9 December 2014 9 December 2014 4 June 2016 4 June 2016 3 January 2018 7 November 2018Performance conditions:Share price of (Rand) n/a 10 n/a 5 n/a 5 n/a n/aMinimum shareholder return of 10% n/a 10% n/a 5% n/a 10% 10%
The following share options were exercised by members of the executive committee during the 2013 financial year:
Date of exercise
Options exercised Grant date
Strike price(cents per
share)Performance
condition
Exercise date share
price (cents
per share)
R Botha1 25/09/2012 1 125 000 17/03/2008 118 10% 23025/09/2012 250 000 09/12/2008 70 10% 230
T Buzer1 01/10/2012 250 000 09/12/2008 70 10% 221
Group executives held the following share options at 31 March 2012:17 March
2008000’s
17 March2008000’s
9 December 2008000’s
9 December 2008000’s
4 June2010000’s
4 June2010000’s
3 January2012000’s
Total000’s
S Joselowitz1 1 500 2 000 500 1 000 1 500 3 000 – 9 500R Botha1 1 500 2 000 500 1 000 1 500 – – 6 500 T Buzer1 1 500 2 000 500 1 000 1 500 – – 6 500 M Pydigadu1 – – – – 1 500 1 000 – 2 500 H Scott1 – – – – 1 500 1 000 – 2 500 C Tasker1 1 500 2 000 500 1 000 1 500 – 2 000 8 500 B Horan 200 100 150 50 500 – 1 000 2 000 G Pretorius 500 200 – – 500 – 1 000 2 200
6 700 8 300 2 150 4 050 10 000 5 000 4 000 40 200
Option strike price (cents per share) 118 118 70 70 112 112 154JSE share price on grant date (cents per share) 118 118 58 58 104 104 160Expiry date 17 March 2014 17 March 2014 9 December 2014 9 December 2014 4 June 2016 4 June 2016 3 January 2018Performance conditions:Share price of (Rand) n/a 10 n/a 5 n/a 5 n/aMinimum shareholder return of 10% n/a 10% n/a 5% n/a 10%1 Executive director
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for the year ended 31 March 2013
MiX TelematicsIntegrated Annual Report 2013
Group Company2013
R’0002012
R’0002013
R’0002012
R’000
19. Other reservesOpening balance (154 745) (179 844) 7 199 5 198 Foreign currency translation: 36 900 7 057 – – – Movement for the year 37 090 29 816 – – – Transfer from shareholder loan revaluation2 (190) (22 759) – – Shareholder loan revaluation:1 3 332 16 041 – – – Movement for the year 3 142 (6 718) – – – Transfer to foreign currency translation2 190 22 759 – – Share-based payments (notes 27, 35.2) 3 151 2 001 3 151 2 001
Closing balance (111 362) (154 745) 10 350 7 199 Comprised as follows:Foreign currency translation 13 426 (23 475) – – Reserve on transaction with non-controlling interest (137 895) (137 895) – – Share-based payments 10 350 7 199 10 350 7 199 Shareholder loan revaluation1 2 757 (575) – –
(111 362) (154 745) 10 350 7 199 1 Shareholder loan revaluation relates to the unrealised foreign exchange gains/(losses) on loans viewed as part of the Group’s net investment in foreign operations.
2 Upon capitalisation/settlement of certain net investment loans, amounts that were previously recognised in the shareholder’s loan revaluation reserve have been transferred to the foreign currency translation reserve.
Group Company2013
R’0002012
R’0002013
R’0002012
R’000
20. BorrowingsSecured loans– Long-term loans 3 472 22 941 3 472 11 199 Short-term portion payable within 12 months (3 472) (22 941) (3 472) (11 199)
Long-term portion payable after 12 months – – – –
Movement for the yearOpening balance 22 941 63 578 11 199 34 967 Net payments made (19 469) (40 647) (7 727) (23 768)Foreign currency translation differences – 10 – –
Closing balance 3 472 22 941 3 472 11 199
The Group and its subsidiaries and the Company have unlimited borrowing capacity as specified in their respective Memorandums of Incorporation.
No new borrowings were raised by the Group or Company during the 2013 and 2012 years.
The Group and Company however, have access to revolving credit facilities on which payments of R26.0 million (2012: R69.2 million) and R14.2 million (2012: R52.4 million) were made respectively, and draw downs on the borrowing facilities of R6.5 million (2012: R28.6 million) were raised for the Group and Company in the 2013 financial year. The net of these amounts have been included in the movement above.
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R’0002012
R’0002013
R’0002012
R’000
20. Borrowings (continued)Long-term loansLoans from Standard Bank Limited:– Loan 1 – 2 645 – – – Loan 2 – 9 097 – – Loans from Investec Bank Limited:– Loan 1 * 4 735 * 4 735 – Loan 2 3 472 6 464 3 472 6 464
Total long-term loans 3 472 22 941 3 472 11 199 Short-term portion payable within 12 months (3 472) (22 941) (3 472) (11 199)
Long-term portion payable after 12 months – – – –
* Amounts less than R1 000
The Standard Bank Loan 1 was repaid in full during the 2013 financial year. Interest was previously charged at prime less 1.2% and the loan was repayable in monthly instalments of R0.3 million.
The Standard Bank Loan 2 was repaid in full during the 2013 financial year. Interest was previously charged at prime less 1.2% and the loan was repayable in monthly instalments of R1.2 million.
The Standard Bank loans were denominated in South African Rand.
The Standard Bank loans and overdraft facility (note 17) previously contained financial covenants in respect of Group “Debt:EBITDA” and “value of subscriber base:debt” ratios. The Group met all required covenants during the 2012 financial year. During the 2013 financial year, these covenants were waived.
The above Standard Bank loans were secured by:
• cross suretyships and cession of claims between the following Group companies:– MiX Telematics Africa Proprietary Limited;– MiX Telematics Enterprise SA Proprietary Limited;– MiX Telematics International Proprietary Limited;– MiX Telematics Europe Limited;– MiX Telematics Technology Holdings Proprietary Limited; and– MiX Telematics Limited.
• the MiX Telematics International Proprietary Limited subscriber contracts
• a reversionary right to the MiX Telematics Africa Proprietary Limited subscriber contracts
• an unrestricted cession of book debts by the following entities (note 13):– MiX Telematics Limited;– MiX Telematics Africa Proprietary Limited; and– MiX Telematics International Proprietary Limited.
The Investec Loan 2 bears interest at prime less 0.5% and is repayable in monthly instalments of R0.6 million (2012: R0.6 million). The facility matures in September 2015.
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MiX TelematicsIntegrated Annual Report 2013
20. Borrowings (continued)The above Investec loan is secured by:
• cession of all rights, title and interest in and to the subscriber contracts of MiX Telematics Africa Proprietary Limited
• joint and several suretyships between the following Group companies:– MiX Telematics Limited; and – MiX Telematics Africa Proprietary Limited.
The Investec Loan 1 bears interest at prime less 0.5% and is repayable in monthly instalments of R0.5 million (2012: R0.5 million). The facility matures in September 2013.
The above Investec loan is secured by the cession and pledge of 100% of the shares held in MiX Telematics Australasia Proprietary Limited.
The Investec loans are denominated in South African Rand.
The carrying values of the variable rate loans are considered to be a reasonable approximation of the fair values of the respective loans as the variable interest rates approximate the market rate.
The Group or Company did not default on any payments or breach any loan agreement term during the 2013 or 2012 financial year.
Group Company2013
R’0002012
R’0002013
R’0002012
R’000
Undrawn borrowing facilities are:– Standard Bank Limited: Overdraft 46 289 19 174 – – Vehicle and asset finance 8 500 8 500 8 500 8 500
– Investec Bank Limited 32 931 48 060 15 224 17 400
87 720 75 734 23 724 25 900
Subsequent to year-end the Group obtained an overdraft facility of R10 million from Nedbank Limited. The facility is unsecured and bears interest at prime less 2% (note 40).
21. Trade and other payablesTrade payables 57 026 54 128 – – Accruals 96 176 74 348 1 849 1 722 Revenue received in advance 22 996 19 896 – – Value-added taxes 7 167 6 745 – – Other 1 032 1 921 171 123
184 397 157 038 2 020 1 845
The fair values of trade payables, accruals and other payables approximate their book values as the impact of discounting is not considered material due to the short-term nature of the payables.
22. Retirement benefitsIt is the policy of the Group to provide retirement benefits to all its South African, United Kingdom, United States and Australian employees.
All these retirement benefits are defined contribution plans and are held in separate trustee-administered funds. These plans are generally funded by both member and company contributions. The South African plan is subject to the Pension Funds Act of 1956, the UK plan is subject to the United Kingdom Pensions Act 2011 (Commencement No. 3) and the Australian plan is subject to the Superannuation Guarantee Administration Act of 1992. For the United States employees a voluntary Internal Revenue Service section 401(k) tax-deferred defined contribution plan is offered. No Group contribution is currently being made towards such plan. The full extent of the Group’s liability is the contributions made, which are charged to the income statement as they are incurred. The total Group contribution to such plans in 2013 was R14.5 million (2012: R12.8 million) (note 27).
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Group Company2013
R’000
2012(Restated)
R’000
1 April 2011(Restated)
R’000
2013
R’000
2012
R’000
23. Deferred taxDeferred tax liabilitiesCapital allowances for tax purposes 8 957 5 463 5 278 – – Intangible assets 12 755 17 570 21 050 – – Prepayments 796 477 426 – – Section 24C – future expenditure allowance – 9 748 9 748 – – Other 3 118 3 991 2 414 – –
Gross deferred tax liabilities 25 626 37 249 38 916 – – Set-off of deferred tax balances (17 021) (11 433) (10 746) – –
Net deferred tax liabilities 8 605 25 816 28 170 – –
Deferred tax assetsRevenue received in advance 4 763 3 151 2 204 – – Capital allowances for tax purposes 8 577 6 913 4 414 – – Provisions and lease straight-lining 15 799 14 294 14 556 – – Other 1 750 341 874 – –
Gross deferred tax assets 30 889 24 699 22 048 – – Set-off of deferred tax balances (17 021) (11 433) (10 746) – –
Net deferred tax assets 13 868 13 266 11 302 – –
Net deferred tax asset/(liability) 5 263 (12 550) (16 868) – – The gross movement in net deferred tax assets/(liabilities) is as follows:Beginning of the year (12 550) (16 868) (18 858) – – Foreign currency translations 361 193 (7) – – Income statement charge (note 32) 17 452 4 125 1 997 – –
End of the year 5 263 (12 550) (16 868) – –
During the current financial year it was resolved that all inventory installed and designated for installation in vehicles be classified as property, plant and equipment as opposed to being included under inventory held in client vehicles and inventory, respectively, as previously disclosed. This resulted in the portion of deferred tax liabilities previously classified as being attributable to inventory held in client vehicles being reclassified to capital allowances (note 44).
Deferred tax at year-end has been recognised using the following corporate tax rates:
• South Africa 28%
• United Kingdom 24% (2012: 26%)
• Germany 15%
• United States of America 34%
• Australia 30%
• Dubai 0%
• Brazil 34%
Deferred tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. The Group did not recognise deferred tax assets of R22.9 million (2012: R18.7 million) in respect of losses amounting to R91.7 million (2012: R61.1 million) at year-end.
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MiX TelematicsIntegrated Annual Report 2013
23. Deferred tax (continued)The movement in deferred tax assets and liabilities during the year, prior to taking into account the offsetting of balances within the same tax jurisdiction, is as follows:
2012(Restated)
R’000
Charged/(credited) to the income statement
(note 32)R’000
Foreign currency
translation differences
R’000
2013
R’000
GroupDeferred tax liabilitiesCapital allowances for tax purposes 5 463 3 494 – 8 957 Intangible assets 17 570 (4 824) 9 12 755 Prepayments 477 319 – 796 Section 24C – future expenditure allowance 9 748 (9 748) – – Other 3 991 (873) – 3 118
37 249 (11 632) 9 25 626
Deferred tax assetsRevenue received in advance (3 151) (1 612) – (4 763)Capital allowances for tax purposes (6 913) (1 549) (115) (8 577)Provisions and lease straight-lining (14 294) (1 250) (255) (15 799)Other (341) (1 409) – (1 750)
(24 699) (5 820) (370) (30 889)
The movement in deferred tax assets and liabilities during the prior year, prior to taking into account the offsetting of balances within the same tax jurisdiction, is as follows:
1 April 2011(Restated)
R’000
Charged/(credited) to the income statement
(note 32)R’000
Foreign currency
translation differences
R’000
2012(Restated)
R’000
GroupDeferred tax liabilitiesCapital allowances for tax purposes 5 278 185 – 5 463 Intangible assets 21 050 (3 491) 11 17 570 Prepayments 426 51 – 477 Section 24C – future expenditure allowance 9 748 – – 9 748 Other 2 414 1 577 – 3 991
38 916 (1 678) 11 37 249
Deferred tax assetsRevenue received in advance (2 204) (947) – (3 151)Capital allowances for tax purposes (4 414) (2 414) (85) (6 913)Provisions and lease straight-lining (14 556) 382 (120) (14 294)Other (874) 532 1 (341)
(22 048) (2 447) (204) (24 699)
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Group Company2013
R’0002012
R’0002013
R’0002012
R’000
24. ProvisionsProduct warrantiesBeginning of the year 9 342 8 975 – –Income statement charge 2 218 975 – –Utilised (2 228) (1 142) – –Foreign currency translation differences 840 534 – –
End of the year 10 172 9 342 – –Non-current portion – – – –
Current portion 10 172 9 342 – –
The Group provides warranties on certain products and undertakes to repair or replace items that fail to perform satisfactorily. Management estimates the related provision for future warranty claims based on historical warranty claim information, the product lifetime, as well as recent trends that might suggest that past cost information may differ from future claims.Maintenance provisionBeginning of the year 16 663 18 205 – –Income statement charge 7 642 11 184 – –Utilised (15 626) (12 726) – –Foreign currency translation differences 23 – – –
End of the year 8 702 16 663 – –Non-current portion 283 – – –
Current portion 8 985 16 663 – –
The Group provides for maintenance required, related to ongoing contracts when the obligation to repair occurs. Management estimates the related provision for maintenance costs per unit based on the estimated costs expected to be incurred to repair the respective units.Decommissioning provisionBeginning of the year 2 958 14 518 – –Income statement charge – unwinding of discount reflected as finance cost (note 29) – 221 – –Income statement reversal (263) (4 743) – –Utilised (224) (8 327) – –Foreign currency translation differences 399 1 289 –
End of the year 2 870 2 958 – –Non-current portion – – –
Current portion 2 870 2 958 – –
The Group provides for the anticipated costs associated with the restoration of leasehold property to its condition at inception of the lease, including the removal of items included in plant and equipment that is erected on leased land. The final cash outflow of these costs is expected to occur in the 2014 financial year.Total provisionsProduct warranties 10 172 9 342 – –Maintenance provision 8 702 16 663 – –Decommissioning provision 2 870 2 958 – –
Total provision 21 744 28 963 – –Non-current portion (283) – – –
Current provision 21 461 28 963 – –
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MiX TelematicsIntegrated Annual Report 2013
Group Company2013
R’0002012
R’0002013
R’0002012
R’000
25. RevenueSubscription revenue 686 720 577 330 – –Hardware sales 378 070 328 386 – –Other 106 690 112 766 – –
1 171 480 1 018 482 – –
26. Other (expenses)/income – netDividend income – subsidiary companies (note 35.2) – – 100 458 77 649 MIDP incentives 2 603 8 030 – –Foreign exchange (loss)/gain (4 681) (1 602) 312 922 Rental income – 113 – –Foreign currency translation reserve released due to liquidation of intermediary subsidiary holding company (notes 33, 35.2) (394) – – –Profit/(loss) on disposal of property, plant and equipment and intangible assets (note 35.2) 314 (430) – –Other 1 737 897 38 11
(421) 7 008 100 808 78 582
27. Operating profitOperating profit is stated after accounting for the following charges:Amortisation (notes 7, 35.2) 56 985 53 040 50 43 Depreciation (notes 6, 35.2) 41 201 36 792 – –Impairment of intangible assets (notes 5, 7, 33, 35.2) 5 158 1 332 – –Operating lease charges – premises and equipment 15 946 17 629 – –Write-down of inventory to net realisable value (notes 12, 35.2) 4 785 3 153 – –Research expenditure 1 300 817 – –Professional fees 15 707 12 795 349 588 Staff costs 347 103 294 764 3 151 2 866 – Salaries, wages and other costs 329 424 280 013 3 151 2 866 – Pension costs (note 22) 14 528 12 750 – – – Share-based payments (notes 19, 35.2) 3 151 2 001 – –Number of employees at the end of the year 937 824 – –
28. Finance incomeCash– Current accounts and short-term bank deposits 1 788 1 706 406 117 – Other 96 171 – –
1 884 1 877 406 117
Non-cash– Inter-company interest – – 498 2 109 – External loans – 515 – –– Finance lease receivable income 134 – – –
134 515 498 2 109
2 018 2 392 904 2 226
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R’0002012
R’0002013
R’0002012
R’000
29. Finance costsCash– Overdraft (2 507) (2 316) – –– Finance leases – (12) – –– Other long-term loans (425) (3 148) (165) (1 054)– Other (489) (73) – –
(3 421) (5 549) (165) (1 054)– Capitalisation of borrowing cost 304 837 – –
(3 117) (4 712) (165) (1 054)
Non-cash– Decommissioning provision (note 24) – (221) – –– Long-term loans (231) (332) (231) (332)
(231) (553) (231) (332)
(3 348) (5 265) (396) (1 386)
30. Auditor’s remunerationAuditor’s remuneration 4 207 3 113 1 177 1 013
31. Directors’ and executive committee emolumentsDirectors’
feesR’000
Salary and allowances
R’000
Other benefits
R’000
Retirement fund
R’000
Performance bonuses1
R’00012 months
R’000
Group2013Non-executive directorsR Bruyns 754 – – – – 754 H Brody2 240 – – – – 240 C Ewing2 365 – – – – 365 R Frew2 296 – – – – 296 R Friedman 296 – – – – 296 F Roji2 376 – – – – 376 R Shough3 325 – – – – 325 A Welton 320 – 30 – – 350
2 972 – 30 – – 3 002 Value-added tax2 179 179
Executive committee4
S Joselowitz6 – 3 678 – – 3 798 7 476 R Botha6 – 2 326 11 90 704 3 131 T Buzer6 – 1 898 19 150 2 013 4 080 M Pydigadu6 – 1 746 91 71 1 632 3 540 H Scott6 – 2 636 – – 2 134 4 770 C Tasker6 – 2 199 40 189 2 285 4 713 B Horan – 1 662 97 68 1 544 3 371 G Pretorius – 1 587 96 150 2 154 3 987
3 151 17 732 384 718 16 264 38 249
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MiX TelematicsIntegrated Annual Report 2013
31. Directors’ and executive committee emoluments (continued)Directors’
feesR’000
Salary and allowances
R’000
Other benefits
R’000
Retirement fund
R’000
Performance bonuses1
R’00012 months
R’000
Group (continued)2012Non-executive directorsR Bruyns 771 – – – – 771 H Brody2 240 – – – – 240 C Ewing2 61 – – – – 61 R Frew2 296 – – – – 296 R Friedman 296 – – – – 296 A Patel2 304 – – – – 304 F Roji2 389 – – – – 389 A Welton 328 – – – – 328
2 685 – – – – 2 685 Value-added tax2 181 181
Executive committee4
S Joselowitz6 – 2 972 – – 2 816 5 787 R Botha6 – 2 069 125 96 1 096 3 386 T Buzer6 – 1 770 25 245 1 001 3 041 M Pydigadu6 – 1 616 75 72 700 2 463 H Scott6 – 1 856 458 – 371 2 686 C Tasker6 – 2 160 37 152 1 297 3 646 B Horan5 – 401 34 15 – 450 G Pretorius5 – 382 22 46 – 450
2 866 13 226 776 626 7 281 24 775 1 Performancebonusesarebasedonactualamountspaidduringthefinancialyear.2 Value-addedtax(“VAT”)includedaspartofinvoicereceived.Directors’feesshownexcludeVAT.3 AppointedtotheBoardwitheffectfrom1June2012.4 AllprescribedofficersoftheCompanyareincludedaspartoftheexecutivecommitteeasnotedabove.5 Appointedtotheexecutivecommitteewitheffectfrom1January2012.Emolumentsdisclosedonlyincludeamountspaidfrom1January2012to 31March2012.
6 Executivedirector.
CompanyThe directors’ fees of R3.2 million (2012: R2.9 million) have been paid by the Company.
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Group Company2013
R’0002012
R’0002013
R’0002012
R’000
32. TaxationMajor components of taxation expenseNormal taxation (68 852) (44 400) – (3 942)– Current (67 641) (40 520) – –– (Under)/over-provision prior years (76) 428 – –– Foreign tax paid (702) – – –– Withholding tax (433) – – –– Secondary taxation on companies – (4 308) – (3 942)Deferred taxation (note 23) 17 452 4 125 – –– Current year 18 505 4 125 – –– Under-provision prior years (1 053) – – –
(51 400) (40 275) – (3 942)
Before tax R’000
Tax impact R’000
After tax R’000
Taxation recognised in other comprehensive incomeGroup2013Exchange differences on translating foreign operations 37 090 – 37 090 Exchange differences on net investments in foreign operations 3 142 – 3 142
40 232 – 40 232
2012Exchange differences on translating foreign operations 29 816 – 29 816 Exchange differences on net investments in foreign operations (6 718) – (6 718)
23 098 – 23 098
Group Company2013
R’0002012
R’0002013
R’0002012
R’000
Tax rate reconciliationThe tax on the Group’s/Company’s profit before taxation differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the entities as follows:Profit before taxation 179 866 143 515 94 725 73 523 Tax at the applicable tax rate of 28% 50 362 40 184 26 523 20 586 Tax effect of: 1 038 91 (26 523) (16 644)– Income not subject to tax (423) (107) (28 136) (21 745)– Expenses not deductible for tax purposes 3 362 2 639 1 394 1 349 – Secondary tax on companies – 4 308 – 3 942 – Withholding tax 433 – – –– Utilisation of prior year assessed losses (190) (4 005) – (190)– Foreign tax paid 702 34 – –– Foreign tax rate differential (3 153) (501) – –– Deferred tax not recognised on assessed losses 3 405 4 079 – –– Deferred tax previously not recognised 7 – – –– Under/(over)-provision prior years 1 129 (428) – –– Tax incentives in addition to incurred cost (4 485) (5 968) – –– Other 251 40 219 –
51 400 40 275 – 3 942
The Group’s weighted average tax rate is 28.6% (2012: 28.1%).
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for the year ended 31 March 2013
MiX TelematicsIntegrated Annual Report 2013
Group Company2013
R’0002012
R’0002013
R’0002012
R’000
33. Earnings per shareBasicBasic earnings per share is calculated by dividing the profit attributable to shareholders of the parent by the weighted average number of ordinary shares in issue during the year.Profit attributable to shareholders of the parent 128 471 103 240 94 725 69 581 Weighted average number of ordinary shares in issue (000’s) 658 456 657 045 658 456 657 045 Basic earnings per share (cents) 19.5 15.7 14.4 10.6 DilutedDiluted earnings per share is calculated by dividing the diluted profit attributable to shareholders of the parent by the diluted weighted average number of ordinary shares in issue during the year. The Company has one category of diluted potential ordinary shares – share options, for which a calculation is done to determine the number of shares that could have been acquired at fair value (determined at the closing market share price of the Company’s shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated is compared with the number of shares that would have been issued assuming the exercise of the share options.Profit attributable to shareholders of the parent 128 471 103 240 94 725 69 581 Diluted weighted average number of ordinary shares in issue (000’s) 674 772 662 322 674 772 662 322 Diluted earnings per share (cents) 19.0 15.6 14.0 10.5 Headline earnings per shareReconciliation of headline earningsProfit attributable to shareholders of the parent 128 471 103 240 94 725 69 581 (Profit)/loss on disposal of property, plant and equipment and intangible assets (notes 26, 35.2) (314) 430 – –Impairment of product development costs capitalised (notes 5, 7, 27, 35.2) 5 158 1 332 – –Foreign currency translation reserve released due to liquidation of intermediary subsidiary holding company (notes 26, 35.2) 394 – – –Tax effect on the above components (1 357) (323) – –
Headline earnings attributable to shareholders of the parent 132 352 104 679 94 725 69 581 BasicBasic headline earnings per share is calculated by dividing the headline earnings attributable to shareholders of the parent by the weighted average number of ordinary shares in issue during the year.Headline earnings attributable to shareholders of the parent 132 352 104 679 94 725 69 581 Weighted average number of ordinary shares in issue (000’s) 658 456 657 045 658 456 657 045 Basic headline earnings per share (cents) 20.1 15.9 14.4 10.6
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R’0002012
R’0002013
R’0002012
R’000
33. Earnings per share (continued)DilutedDiluted headline earnings per share is calculated by dividing the diluted headline earnings attributable to shareholders of the parent by the diluted weighted average number of ordinary shares in issue during the year.Diluted headline earnings attributable to shareholders of the parent 132 352 104 679 94 725 69 581 Diluted weighted average number of ordinary shares in issue (000’s) 674 772 662 322 674 772 662 322 Diluted headline earnings per share (cents) 19.6 15.8 14.0 10.5 Adjusted headline earnings per shareReconciliation of adjusted headline earningsHeadline earnings attributable to shareholders of the parent 132 352 104 679 94 725 69 581 Amortisation of intangible assets arising out of business combinations 10 421 18 500 – –Trading loss on business unit disposed of – 3 509 – –Tax effect on the amortisation of intangible assets arising out of business combinations (1 644) (3 235) – –
Adjusted headline earnings attributable to shareholders of the parent 141 129 123 453 94 725 69 581
BasicBasic adjusted headline earnings per share is calculated by dividing the adjusted headline earnings attributable to shareholders of the parent by the weighted average number of ordinary shares in issue during the year.Adjusted headline earnings attributable to shareholders of the parent 141 129 123 453 94 725 69 581 Weighted average number of ordinary shares in issue (000’s) 658 456 657 045 658 456 657 045 Adjusted headline earnings per share (cents) 21.4 18.8 14.4 10.6 DilutedAdjusted diluted headline earnings per share is calculated by dividing the adjusted diluted headline earnings attributable to shareholders of the parent by the diluted weighted average number of ordinary shares in issue during the year.Diluted adjusted headline earnings attributable to shareholders of the parent 141 129 123 453 94 725 69 581 Diluted adjusted weighted average number of ordinary shares in issue (000’s) 674 772 662 322 674 772 662 322 Diluted headline earnings per share (cents) 20.9 18.6 14.0 10.5
34. Dividend per shareFinal dividend declared 52 576 39 420 52 576 39 420 Shares in issue at dividend date (000’s) 657 200 657 000 657 200 657 000 Final dividend per share (cents) 8.0 6.0 8.0 6.0
Interim dividend declared 26 378 – 26 378 –Shares in issue at dividend date (000’s) 659 450 – 659 450 –Interim dividend per share (cents) 4.0 – 4.0 –
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MiX TelematicsIntegrated Annual Report 2013
Group Company2013
R’000
2012(Restated)
R’000
2013
R’0002012
R’000
35. Cash flow statement35.1 The following convention applies to figures other than
adjustments:Outflows of cash are represented by figures in brackets. Inflows of cash are represented by figures without brackets.
35.2 Reconciliation of profit for the year before taxation to cash generated from/(used in) operations:Profit before income taxation 179 866 143 515 94 725 73 523 Adjustments 131 123 114 294 (101 260) (79 379)– (Profit)/loss on disposal of property, plant and equipment and
intangible assets (notes 26, 33) (314) 430 – –– Dividend income – subsidiary companies (notes 26, 37) – – (100 458) (77 649)– Depreciation (notes 6, 27) 41 201 36 792 – –– Amortisation (notes 7, 27) 56 985 53 040 50 43 – Impairment of intangible assets (notes 5, 7, 27, 33) 5 158 1 332 – –– Finance income – cash (note 28) (1 884) (1 877) (406) (117)– Finance income – non-cash (note 28) (134) (515) (498) (2 109)– Finance costs – cash (note 29) 3 117 4 712 165 1 054 – Finance costs – non-cash (note 29) 231 553 231 332 – Share-based payments (notes 19, 27) 3 151 2 001 – –– Unrealised foreign exchange loss/(gain) 3 012 639 (312) (922)– Impairment of receivables (note 13) 6 159 7 050 – –– Write-down of inventory to net realisable value (notes 12, 27) 4 785 3 153 – –– Foreign currency translation reserve released due to
liquidation of intermediary subsidiary holding company (note 26) 394 – – –
– Increase in provisions 8 986 7 415 – –– Other (76) (11) (32) (11)– Lease straight-line adjustment 352 (420) – –Cash generated from operations before working capital changes 310 989 257 809 (6 535) (5 856)Changes in working capital (23 142) (65 332) 73 (263)– Increase in inventories (7 810) (12 698) – –– Increase in trade and other receivables (30 844) (54 877) (53) (22)– Increases in finance lease receivable (9 829) – – –– Increase/(decrease) in trade and other payables 24 876 23 571 126 (241)– Decrease in provisions (16 205) (20 371) – –– Foreign currency translation differences on working capital 16 670 324 – –– Increase in restricted cash – (1 281) – –
Cash generated from/(used in) operations 287 847 192 477 (6 462) (6 119)
During the 2013 financial year it was resolved that all inventory installed and designated for installation in vehicles be classified as property, plant and equipment. As a result, cash flows relating to the above have been moved from operating to investing activities. The comparatives were amended accordingly (note 44).
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36. Business combinations2013On 1 May 2012, the Group acquired the business of Intellichain Proprietary Limited (“Intellichain”) (constituting employees and specific assets and liabilities), a supply chain management software business. The services offered by Intellichain are compatible with the Group’s existing fleet management solutions and the acquisition broadens the array of services offered to current and future fleet management customers. The purchase consideration of the acquisition consisted of the outstanding loan advanced to Intellichain in the 2012 financial year, including interest accrued (note 15).
No material acquisition-related expenses were incurred in relation to the acquisition of the business.
The post-acquisition revenue earned during the year of R6.6 million and the post-acquisition loss of R1.6 million have been included in the consolidated results. Had Intellichain been consolidated from 1 April 2012, the consolidated income would show pro-forma revenue of R7.1 million and a net loss of R1.8 million in respect of this business.
The fair values of the assets and liabilities arising from the acquisition are as follows:
NoteFair value
R’000
Property, plant and equipment 6 182 Software 7 5 739 Trade receivables 13 756 Cash and cash equivalents 17 23 Trade and other payables 21 (654)
6 046
Acquisition date fair value of consideration paid 6 046
The Group has finalised the identification and allocation of fair values to all assets and liabilities acquired. The at-acquisition fair value of trade receivables was R0.8 million of which none is expected to be uncollectible as at 31 March 2013. Net cash inflow on acquisition of the businessConsideration paid in cash –Cash and cash equivalent balances acquired 23
23
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Notes to the Annual Financial Statements continued
for the year ended 31 March 2013
MiX TelematicsIntegrated Annual Report 2013
37. Related party transactionsDirectors’ and executive committee members’ interests
The list of directors and executive committee and their beneficial interests declared in the Company’s share capital at 31 March 2013 and 2012 held directly, indirectly and by associates were:
2013 2012Direct000’s
Indirect000’s
Associate000’s
Direct000’s
Indirect000’s
Associate000’s
Non-executiveH Brody – – – – – – R Bruyns – 3 931 653 – 3 931 653C Ewing – – – – – – R Frew – 79 847 90 261 – 79 847 90 262R Friedman1 12 318 1 656 2 779 12 318 1 656 3 279A Patel2 – – – 282 – –F Roji 250 – – 250 – – R Shough – – – – – – A Welton – – 200 – – 100 ExecutiveS Joselowitz 28 240 – – 28 240 – – R Botha 7 798 – 125 6 423 – 125 T Buzer 3 602 – – 3 352 – – M Pydigadu 33 – – 33 – – H Scott 13 465 – – 13 465 – – C Tasker – 1 138 – – 638 – G Pretorius – – – – – – B Horan – – 78 – – –
65 706 86 572 94 096 64 363 86 072 94 419 1 Resigned with effect from 31 March 2013.2 Resigned with effect from 30 January 2012.
Other than the allotment of 250 000 shares to R Botha, on 4 April 2013, for options exercised before year-end, there has been no change in the directors’ shareholdings between 31 March 2013 to the date of the release of the annual financial statements on SENS.
Interests in contractsDuring the year under review, the following were disclosed as contractual arrangements that existed between the Group and companies outside of the Group, in which certain of the directors and executive committee members had interests: Name of director Related company Nature of relationship with the Group
R Friedman3 Control Instruments Group Limited and subsidiaries
Provides contract manufacturing services to the Group
R Frew Thynk Property Fund Proprietary Limited Lease agreement: Midrand office premisesR Frew Thynk Capital Proprietary Limited Fees in respect of rental unit financingR Frew5 Radiospoor Management Services Proprietary
LimitedFees in respect of rental unit financing
R Frew Masalini Capital Proprietary Limited Provides directors’ servicesH Brody Imperial Group Limited Shareholder and distribution outlet through
motor dealer channel and provides director services
F Roji4 Imperial Group Limited Shareholder and distribution outlet through motor dealer channel and provides director services
C Ewing DLA Cliffe Dekker Hofmeyr Incorporated Provides director servicesB Horan Creative Space Media Provides media-related services3 As at 30 June 2012, R Friedman resigned as a director of Control Instruments Group Limited and as such the Group and its subsidiaries are no longer
considered a related party to the Group. The major subsidiaries include PI Shurlok Proprietary Limited and Control Instruments Automotive Proprietary Limited. Furthermore, R Friedman resigned as director of the Company on 31 March 2013.
4 As of 1 January 2013, F Roji was appointed an employee of Imperial Group Limited. 5 As of 31 March 2013, the company is no longer considered a related party to the Group.
A list of subsidiaries has been included in note 46.
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37. Related party transactions (continued) Group Company
2013R’000
2012R’000
2013R’000
2012R’000
Transactions with related parties and balances outstanding at year-end are as follows (excluding key management personnel emoluments):Sales of goods and services 42 155 20 693 – – – Control Instruments Automotive Proprietary Limited 236 213 – – – Imperial Group Limited 41 919 20 480 – –
Purchases of goods and services 25 516 98 284 – – – PI Shurlok Proprietary Limited 11 917 91 543 – – – Masalini Capital Proprietary Limited 27 42 – – – Thynk Capital Proprietary Limited 40 59 – – – Thynk Property Fund Proprietary Limited 5 796 6 208 – – – Creative Space Media 61 – – – – Imperial Group Limited 7 675 432 – –
Year-end balance of receivables 3 194 4 184 22 807 15 087
– Control Instruments Automotive Proprietary Limited * 123 – – – Imperial Group Limited 3 194 4 061 – – – MiX Telematics North America Incorporated (notes 8, 14) – – 15 585 15 087 – MiX Telematics Europe Limited (note 8) – – 7 222 –
Year-end balance of payables 124 10 777 – –
– PI Shurlok Proprietary Limited * 10 770 – – – Masalini Capital Proprietary Limited 2 3 – – – Thynk Capital Proprietary Limited 3 4 – – – Thynk Property Fund Proprietary Limited 74 – – – – Imperial Group Limited 45 – – –
Dividends received (notes 26, 35.2) – – 100 458 77 649
– MiX Telematics Africa Proprietary Limited – – 38 500 45 212 – MiX Telematics International Proprietary Limited – – 55 000 25 800 – Sunstore Limited – – 6 958 6 637
Interest received – 74 498 2 109
– PI Shurlok Proprietary Limited – 74 – – – MiX Telematics North America Incorporated – – 498 1 808 – MiX Telematics Europe Limited – – – 301
* No longer a related party at 31 March 2013.
Refer to note 31 for key management personnel emoluments disclosure.
Key management personnel includes executive committee members.
The related parties included above are related to the Group due to certain shares in these entities being held by the executive and non-executive directors of the Company or due to common directorships held.
The parties identified as related to the Company are mainly subsidiaries of the Group directly or indirectly controlled by the Company.
The receivables from related parties arise mainly from sales transactions and are unsecured and bear no interest. No provisions are held against receivables from related parties (2012: Nil).
The payables to related parties arise mainly from purchase transactions and the payables bear no interest.In June 2011, MiX Telematics Europe and Imperial Commercials Limited, a subsidiary of a significant shareholder, entered into an agreement whereby Imperial Commercials Limited purchased the business and assets of MiX Telematics Europe’s vehicle conversion business, One Stop Shop. The business and related assets were sold to Imperial Commercials Limited for R2.3 million. The trading loss from this business, which is not considered to be a discontinued operation in terms of IFRS 5, has been added back in determining adjusted headline earnings in the prior year (note 33).
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Notes to the Annual Financial Statements continued
for the year ended 31 March 2013
MiX TelematicsIntegrated Annual Report 2013
38. ContingenciesService agreementIn 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 in the event of early cancellation of the agreement or certain base connections not being maintained over the term of the agreement. Furthermore, no connection incentives will be received going forward. The maximum potential liability under the arrangement is R65.1 million. No loss is expected under this arrangement.
TaxationDuring the previous financial year, MiX Telematics Africa Proprietary Limited received a query and a subsequent reassessment of its tax liability relating to the claiming of tax allowances in respect of Section 24C of the South African Income Tax Act of 1962. In terms of this assessment, the South African Revenue Service (“SARS”) disallowed the Section 24C allowance going back to 2008 and charged interest thereon of approximately R4 million. MiX Telematics Africa Proprietary Limited had been claiming the Section 24C allowance on the basis of a legal opinion obtained from a prominent South African law firm. The Section 24C allowance had always been fully disclosed in its tax return and had been previously allowed by SARS. At 31 March 2013, after a successful appeal of the revised assessment, SARS issued a letter informing the Company that they will waive the amount of interest charged. As no connection incentives are received going forward, the Section 24C allowance is not claimed any longer. The deferred tax liability in respect of the Section 24C allowance was transferred to current tax payable and was paid over to SARS during the financial year.
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Group Company2013
R’0002012
R’0002013
R’0002012
R’000
39. CommitmentsCapital commitmentsAt 31 March, the Group had approved, but not yet contracted, capital commitments for:Property, plant and equipment 1 451 413 – – Intangible assets 31 341 26 396 – –
32 792 26 809 – – At 31 March, the Group had approved and contracted capital commitments for:Property, plant and equipment 2 240 1 330 – – Intangible assets 9 465 9 165 4 –
11 705 10 495 4 –
Capital commitments will be funded out of a mixture of working capital and available banking facilities.Operating leasesThe Group leases various offices under non-cancellable operating lease agreements. The leases have various terms and escalation clauses and renewal rights.The future minimum lease payments under non-cancellable operating leases are as follows:Land and buildingsWithin one year 12 653 8 316 – – One to five years 23 971 7 940 – –
36 624 16 256 – –
The Group leases various office equipment and vehicles under cancellable operating lease agreements. The lease terms are between one and five years with annual escalations between zero and 10% per annum. The Group is required to give up to three months’ notice for the termination of these agreements. The future minimum lease payments under cancellable operating leases are as follows:Office equipmentWithin one year 882 1 230 – – One to five years 490 1 082 – –
1 372 2 312 – – VehiclesWithin one year 1 802 1 362 – – One to five years 1 215 1 521 – –
3 017 2 883 – –
The lease expenditure charged to the income statement during the year is disclosed in note 27.
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Notes to the Annual Financial Statements continued
for the year ended 31 March 2013
MiX TelematicsIntegrated Annual Report 2013
40. Events after the reporting periodDividendsSubsequent to year-end, a cash dividend of 6 cents per share has been awarded to shareholders.
Banking facilitiesSubsequent to year-end the Group obtained an overdraft facility of R10 million from Nedbank Limited. The facility is unsecured and bears interest at prime less 2%.
DirectorsOn 13 May 2013, E Banda was appointed as an independent non-executive director and as a member of the audit and risk committee. F Roji has resigned as non-executive director of the Board of Directors and has been appointed as an alternate director to H Brody with effect from 13 May 2013.
RestructuringSubsequent to year-end, the Europe fleet solutions segment announced a restructuring plan. The total expected cost of the restructuring is approximately R2.7 million. The restructuring will result in operating cost savings for the segment.
Group Company
2013R’000
2012R’000
2013R’000
2012R’000
41. Financial risk sensitivity analysisInterest rate sensitivityA change of 100 basis points in the interest rate at the reporting date would have increased/(decreased) profit or loss before tax by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for the year ended 31 March 2012.Increase of 100 basis points 517 123 124 53 Decrease of 100 basis points (517) (123) (124) (53)
Foreign currency sensitivityThe Group has used a sensitivity analysis technique that measures the estimated change to profit or loss and equity of an instantaneous 5% strengthening or weakening in the functional currency against all other currencies, from the rate applicable at 31 March 2013, for each class of financial instrument with all other variables remaining constant. This analysis is for illustrative purposes only as, in practice, market rates rarely change in isolation.
The Group is exposed mainly to fluctuations in foreign exchange rates in respect of the South African Rand, Australian Dollar, US Dollar, the UK Pound and the Euro. This analysis considers the impact of changes in foreign exchange rates on profit or loss or equity, excluding foreign exchange translation differences resulting from the translation of the group entities that have a functional currency different from the presentation currency, into the Group’s presentation currency (and recognised in the foreign currency translation reserve).
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41. Financial risk sensitivity analysis (continued)A change in the foreign exchange rates to which the Group is exposed at the reporting date would have increased/(decreased) profit before taxation/equity by the amounts shown below.
The analysis has been performed on the basis of the change occurring at the end of the reporting period.
Increase/(decrease) in profit before taxation
Increase/(decrease) in equity
Change in exchange
rate
Result ofweakening in
functionalcurrency
Result ofstrengthening
in functional currency
Result ofweakening in
functionalcurrency
Result ofstrengthening
in functional currency
% R’000 R’000 R’000 R’000
Group2013Denominated currency:Functional currencyEUR:GBP 5 380 (380)USD:GBP 5 (35) 35 USD:ZAR 5 (61) 61 EUR:ZAR 5 147 (147)GBP:ZAR 5 11 (11) (361) 361 ZAR:USD 5 (84) 84 (779) 779 EUR:USD 5 603 (603)USD:AUD 5 (52) 52 AUD:USD 5 (42) 42 EUR:AUD 5 (2) 2 ZAR:GBP 5 (20) 20
2012Denominated currency:Functional currencyEUR:GBP 5 629 (629) – – USD:GBP 5 (40) 40 38 (38)USD:ZAR 5 (595) 595 – – EUR:ZAR 5 (183) 183 – – GBP:ZAR 5 19 (19) – – ZAR:USD 5 (21) 21 (754) 754 EUR:USD 5 39 (39) – – USD:AUD 5 (247) 247 – – AUD:USD 5 (53) 53 – – ZAR:GBP 5 (21) 21 – –
CompanyIn respect of the Company, a 5% weakening/(strengthening) in the GBP:ZAR foreign exchange rate would have resulted in an increase/(decrease) in profit before tax of R0.4 million. There were no foreign denominated financial assets or financial liabilities outstanding at the end of the prior financial year.
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Notes to the Annual Financial Statements continued
for the year ended 31 March 2013
MiX TelematicsIntegrated Annual Report 2013
42. Liquidity riskLiquidity risk is the risk that there will be insufficient funds available to settle obligations when they are due.
The Group has limited risk due to the recurring nature of its income. The Group meets its financing requirements through a mixture of cash generated from its operations and short- and long-term borrowings. In addition, the Group has access to undrawn borrowing facilities (note 20).
The following are the contractual maturities of financial liabilities, including estimated interest payments:
Payable within
1 month or on
demandR’000
Between 1month and 1
yearR’000
Between 1 year and
2 yearsR’000
Between 2 years and
5 yearsR’000
More than 5 years
R’000
Group2013Borrowings 595 3 112 – – – Trade payables 28 103 28 922 – – – Accruals and other payables 37 619 47 882 – – – Bank overdraft 32 294 23 711 – – –
Total 98 611 103 627 – – –
2012Borrowings 2 621 21 479 – – – Trade payables 23 908 30 220 – – – Accruals and other payables 23 073 42 477 – – – Bank overdraft 19 339 30 826 – – –
Total 68 941 125 002 – – –
Company2013Borrowings 595 3 112 – – – Accruals and other payables 2 019 – – – –
Total 2 614 3 112 – – – 2012Borrowings 1 110 10 905 – – – Accruals and other payables 1 845 – – – –
Total 2 955 10 905 – – –
There have been no significant changes in the Group’s financial risk management described above relative to the prior year.
The Company, together with other companies in the Group, has provided financial guarantees for loans listed in note 20 which would be payable on demand if called upon. Management considers the Company’s probable exposure relating to these financial guarantees as low.
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43. Fair value estimationEffective 1 April 2009, the Group adopted the amendment to IFRS 7 for financial instruments that are measured in the statement of financial position at fair value. This requires disclosure of fair value measurements by level of the following measurement hierarchy:• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly
(level 2).• Inputs for the asset or liability that are not based on observable market data (level 3).
For the Group, these instruments are available-for-sale financial assets – listed securities, in level 2 and comprise 1 288 920 ordinary shares held in Datatrak Malta Limited (note 10).
As there is no demonstrable active market for trading of these shares and no income is expected to be derived from this investment in the foreseeable future, these shares were fully impaired to the income statement in the 2011 financial year. The position has remained unchanged at the end of the current financial year.
44. RestatementThe Group has certain tracking devices which are installed in customer vehicles (“in-vehicle devices”). In prior years, the Group classified in-vehicle devices installed as inventory held in client vehicles, which was included as a separate financial statement line item under current assets in the statement of financial position. In addition, devices which were designated for installation in client vehicles were accounted for as inventory.
During the current year, the Group changed the classification of in-vehicle devices to property, plant and equipment, since they represent tangible items that are held for use in the supply of services, and are expected to be used for more than one period. Management have adjusted their accounting policy accordingly.
The reclassification has been adopted retrospectively and the comparative amounts have been restated accordingly.
The effect on the consolidated statement of financial position as at 1 April 2011 (beginning of the comparative financial year) is an increase in property, plant and equipment of R36.2 million (comprising both installed and uninstalled in-vehicle devices), the elimination of inventory held in client vehicles of R28.0 million (representing installed in-vehicle devices) and a decrease in inventory of R8.2 million (representing uninstalled in-vehicle devices).
The effect on the consolidated statement of financial position as at 31 March 2012 (comparative year) is an increase in property, plant and equipment of R39.8 million (comprising both installed and uninstalled in-vehicle devices), the elimination of inventory held in client vehicles of R29.7 million (representing installed in-vehicle devices) and a decrease in inventory of R10.1 million (representing uninstalled in-vehicle devices).
The Group’s income statement continues to include a systematic allocation of the cost of installed in-vehicle devices in cost of sales in the form of depreciation (previously rental units consumed), and the change in classification therefore has no impact on the Group’s income statement or statement of comprehensive income or any of the earnings per share measures (note 33) for the year ended 31 March 2012.
The Group classifies cash payments to acquire property, plant and equipment as investing activities, and the change in classification of in-vehicle devices from inventory to property, plant and equipment therefore resulted in a change in classification of cash flows associated with the acquisition of such items. This is because the Group now considers the expenditure associated with the acquisition of in-vehicle devices to have been made for resources intended to generate future income and cash flows. The effects on the consolidated statement of cash flows for the year ended 31 March 2012 is an increase in cash generated from operations of R26.7 million, and an increase in net cash used in investing activities of R26.7 million.
45. Exchange rates2013 2012
The following major rates of exchange were used in the preparation of the consolidated financial statements.SA Rand : United States Dollar – closing 9.24 7.69
– average 8.50 7.43 SA Rand : British Pound – closing 14.04 12.29
– average 13.43 11.84
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Notes to the Annual Financial Statements continued
for the year ended 31 March 2013
MiX TelematicsIntegrated Annual Report 2013
46. List of Group companiesMiX Telematics Limited is the parent company of the MiX Telematics Group of companies outlined below.
All of the entities listed have been consolidated apart from Matrixvtrack Nig. Limited which is a joint venture (note 9) and has been equity accounted for due to the remaining shareholder having significant participating rights in controlling the financial and operating policies of the entity.
Name Principal activityPlace of
incorporationLegal %
ownership
Loans from MiX Telematics
Limited2013
%2012
%2013
R’0002012
R’000
DirectMiX Telematics Africa Proprietary Limited
Vehicle tracking and recovery RSA 100 100 – –
MiX Telematics International Proprietary Limited
Fleet management services and research and development
RSA 100 100 – –
Sunstore Limited Liquidated during the 2013 financial year
Cyprus – 100 – –
MiX Telematics Europe Limited Fleet management products and services
UK 100 100 7 222 –
MiX Telematics North America Incorporated
Fleet management products and services
USA 100 100 15 585 15 087
MiX Telematics Australasia Proprietary Limited
Fleet management products and services
Australia 100 100 – –
MiX Telematics Serviços De Telemetria E Rastreamento De Veículos Do Brazil Limitada
Fleet management products and services
Brazil 99.9 – – –
IndirectMiX Telematics Technology Holdings Proprietary Limited
Dormant RSA 100 100 – –
MiX Telematics Europe GmbH Fleet management products and services
Germany 100 100 – –
MiX Telematics Middle East FZE
Fleet management products and services
UAE 100 100 – –
MiX Telematics Enterprise SA Proprietary Limited*
Fleet management products and services
RSA 85.1 85.1 – –
Matrixvtrack Nig. Limited Vehicle tracking and recovery Nigeria 60 60 – –MiX Telematics Fleet Support Services Proprietary Limited*
Fleet management products and services
RSA 49 49 – –
MiX Telematics East Africa Limited
Fleet management products and services
Uganda 99.9 99.9 – –
* The remaining shareholdings in these companies are owned by special purpose vehicles which have been fully consolidated.
131MiX TelematicsIntegrated Annual Report 2013
Financial Reports
Shareholder Informationas at 31 March 2013
Shareholder spreadNumber of
shareholdings% of total
shareholdingsNumber
of shares% of shares
in issue
1 – 1 000 shares 395 22.61 168 889 0.031 001 – 10 000 shares 707 40.47 3 137 580 0.4710 001 – 100 000 shares 473 27.07 15 558 159 2.36100 001 – 1 000 000 shares 128 7.33 37 763 736 5.721 000 001 shares and over 44 2.52 603 334 136 91.42
Total 1 747 100 659 962 500 100
Distribution of shareholdersPrivate companies 45 2.58 287 337 742 43.54Retail shareholders 1 474 84.37 144 758 570 21.93Trusts 103 5.90 101 920 316 15.44Custodians 8 0.46 52 223 676 7.91Collective investment schemes 12 0.69 40 945 101 6.20Hedge funds 15 0.86 23 327 415 3.53Close corporations 43 2.46 3 675 187 0.56Retirement benefit funds 21 1.19 2 472 750 0.38Investment partnerships 9 0.51 1 650 246 0.26Stockbrokers and nominees 5 0.29 1 269 397 0.19Other corporations 2 0.11 326 492 0.05Unclaimed scrip 5 0.29 43 578 0.01Foundations and charitable funds 5 0.29 12 030 0.00
Total 1 747 100 659 962 500 100
Shareholder typeNon-public shareholders 22 1.26 246 702 752 37.38– directors and executive committee members (direct holding) 7 65 706 304 9.96– directors, executive committee members and associates
(indirect holding) 13 180 669 956 27.37– other corporations and company holdings 2 326 492 0.05Holders holding more than 10% (excluding directors’ holding) 2 0.11 189 803 260 28.76– Imperial Corporate Services Proprietary Limited 1 109 803 260 16.64– Three Diamonds Trading 564 Proprietary Limited 1 80 000 000 12.12Public shareholders 1 723 98.63 223 456 488 33.85
Total 1 747 100 659 962 500 100
Beneficial shareholders with a holding greater than 5% of the shares in issue Total shareholding
% of shares in issue
Imperial Corporate Services Proprietary Limited 109 803 260 16.64GAF Family Trust* 90 261 440 13.68Three Diamonds Trading 564 Proprietary Limited 80 000 000 12.12Masalini Capital Proprietary Limited (director’s indirect holding) 72 410 880 10.97
Total 352 475 580 53.41*Mr Robin Frew has an indirect interest in the GAF Family Trust
Total number of shareholders 1 747Total number of shares in issue 659 962 500
Share price performance
Opening price 1 April 2012 R1.75Closing price 31 March 2013 R3.70Closing high for the period R4.00Closing low for the period R1.65Number of shares in issue 659 962 500Volume traded during period 33 575 224Ratio of volume traded to shares issued (%) 5.09
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Notice of Annual General Meeting
MiX TELEMATICS LIMITED
(Registration number 1995/013858/06)
JSE code: MIX
ISIN: ZAE 000125316
(“the Company” or “ MiX Telematics” or “the Group”)
Notice is hereby given that the annual general meeting of
shareholders (“the annual general meeting” or “the AGM”) of MiX
Telematics will be held at Matrix Corner, Howick Close, Waterfall
Park, Midrand on Thursday, 19 September 2013 at 11:30 for the
following purposes:
1. to consider and adopt the directors’ report, the annual financial
statements and the audit committee report of the Company for
the year ended 31 March 2013 contained in the Integrated
Annual Report to which this notice of annual general meeting
is attached;
2. to transact such other business as may be transacted at an
annual general meeting of a Company including the re-
appointment of the auditors and re-election of retiring directors;
and
3. to consider and, if deemed fit, to pass, with or without
modification, the special and ordinary resolutions set out below,
in the manner required by the Companies Act 71 of 2008, as
amended (“the Act” or “the Companies Act”).
Important dates to note 2013Record date for receipt of notice purposes
Friday, 21 June
Last day to trade in order to be eligible to participate in and vote at the annual general meeting
Friday, 6 September
Record date for voting purposes (“voting record date”)
Friday, 13 September
Last day to lodge forms of proxy by 11:30 on
Tuesday, 17 September
Annual general meeting held at 11:30 on
Thursday, 19 September
Results of AGM released on SENS
Thursday, 26 September
In terms of section 62(3)(e) of the Companies Act:
• A shareholder who is entitled to attend and vote at the annual
general meeting is entitled to appoint a proxy or two or more
proxies to attend and participate in and vote at the annual general
meeting in the place of the shareholder, by completing the form of
proxy in accordance with the instructions set out therein; and
• A proxy need not be a shareholder of the Company.
Kindly note that meeting participants (including proxies) are required
to provide reasonably satisfactory identification before being entitled
to attend or participate in a meeting. In this regard, all shareholders
recorded in the registers of the Company on the voting record date
will be required to provide identification satisfactory to the chairman
of the annual general meeting. Forms of identification include valid
identity documents, driver’s licences and passports.
Special Resolution Number 1: Share repurchases
“Resolved that the Company or any of its subsidiaries be and are
hereby authorised by way of a general authority to acquire ordinary
shares issued by the Company, in terms of sections 46 and 48 of the
Companies Act, and subject to the following provisions of the
Listings Requirements:
(a) any acquisition of shares shall be implemented through the
order book of the JSE and without prior arrangement;
(b) this general authority shall be valid until the Company’s next
annual general meeting, provided that it shall not extend beyond
15 months from the date of passing this special resolution;
(c) the Company (or any subsidiary) is duly authorised by its
Memorandum of Incorporation (“MOI”) to do so;
(d) acquisitions of shares in the aggregate in any one financial year
may not exceed 20% (or 10% where the acquisitions are effected
by a subsidiary) of the Company’s issued ordinary share capital
as at the date of passing this special resolution;
133MiX TelematicsIntegrated Annual Report 2013
Notice of Annual General Meeting
(e) in determining the price at which shares issued by the Company
are acquired by it or any of its subsidiaries in terms of this
general authority, the maximum premium at which such shares
may be acquired will be 10% of the weighted average of the
market value on the JSE over the five business days immediately
preceding the repurchase of such shares;
(f) at any point in time the Company (or any subsidiary) may
appoint only one agent to effect repurchases on its behalf;
(g) repurchases may not take place during a prohibited period (as
defined in paragraph 3.67 of the Listings Requirements) unless
a repurchase programme is in place (where the dates and
quantities of shares to be repurchased during the prohibited
period are fixed) and full details thereof have been announced
on SENS prior to commencement of the prohibited period;
(h) an announcement will be published as soon as the Company or
any of its subsidiaries have acquired shares constituting, on a
cumulative basis, 3% of the number of shares in issue prior to
the granting of the repurchase authority and pursuant to which
the aforesaid threshold is reached, and for each 3% in aggregate
acquired thereafter, containing full details of such repurchases;
and
(i) the Board of Directors of the Company must resolve that the
repurchase is authorised, the Company and its subsidiaries
have passed the solvency and liquidity test, as set out in section
4 of the Companies Act, and since that test was performed,
there have been no material changes to the financial position of
the Group.”
In accordance with the Listings Requirements the directors record that
although there is no immediate intention to effect a repurchase of the
shares of the Company, the directors will utilise this general authority
to repurchase shares as and when suitable opportunities present
themselves, which may require expeditious and immediate action.
The directors undertake that, after considering the maximum number
of shares that may be repurchased and the price at which the
repurchases may take place pursuant to the general authority, for a
period of 12 months after the date of notice of this annual general
meeting:
• the Company and the Group will, in the ordinary course of
business, be able to pay its debts;
• the consolidated assets of the Company and the Group fairly
valued in accordance with International Financial Reporting
Standards, will exceed the consolidated liabilities of the Company
and the Group fairly valued in accordance with International
Financial Reporting Standards; and
• the Company’s and the Group’s share capital, reserves and
working capital will be adequate for ordinary business purposes.
The following additional information, some of which may appear
elsewhere in the Integrated Annual Report of which this notice forms
part, is provided in terms of paragraph 11.26 of the Listings
Requirements for purposes of this general authority:
• Directors and management – pages 42 to 45, and page 136;
• Major beneficial shareholders – page 131;
• Directors’ interests in shares – page 122; and
• Capital structure of the Company – pages 103 to 107.
Litigation statement
In terms of section 11.26 of the Listings Requirements, save as
disclosed in the Integrated Annual Report of which this notice forms
part, the directors, whose names appear on pages 59 and 60 of the
Integrated Annual Report of which this notice forms part, are not
aware of any legal or arbitration proceedings including proceedings
that are pending or threatened, that may have or have had in the
recent past (being at least the previous 12 months) a material effect
on the Company’s financial position.
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Notice of Annual General Meeting
Directors’ responsibility statement
The directors whose names appear on pages 59 and 60 of the
Integrated Annual Report of which this notice forms part, collectively
and individually accept full responsibility for the accuracy of the
information pertaining to this special resolution and certify that, to
the best of their knowledge and belief, there are no facts that have
been omitted which would make any statement false or misleading,
and that all reasonable enquiries to ascertain such facts have been
made and that the special resolution contains all information required
by the Companies Act and the Listings Requirements.
Material changes
Other than the facts and developments reported on in the Integrated
Annual Report of which this notice forms part, there have been no
material changes in the affairs or financial position of the Company
and its subsidiaries since the date of signature of the audit report
for the financial year ended 31 March 2013 and up to the date of
this notice.
In order for Special Resolution Number 1 to be adopted, the support
of at least 75% of the total number of votes exercisable by
shareholders, present in person or by proxy, is required to pass
this resolution.
Reason for and effect of Special Resolution
Number 1
The reason for Special Resolution Number 1 is to afford the directors
of the Company (or a subsidiary of the Company) general authority
to effect a repurchase of the Company’s shares on the JSE. The
effect of the resolution will be that the directors will have the authority,
subject to the Listings Requirements and the Companies Act to
effect repurchases of the Company’s shares on the JSE.
Special Resolution Number 2: Financial
assistance to related and inter-related
companies
“Resolved that to the extent required by the Companies Act, the
Board of Directors of the Company may, subject to compliance with
the requirements of the Company’s MOI, the Companies Act and the
Listings Requirements, each as presently constituted and as
amended from time to time, authorise the Company to provide direct
or indirect financial assistance, as contemplated in section 45 of the
Companies Act, by way of loans, guarantees, the provision of
security or otherwise, to any of its present or future subsidiaries
and/or any other Company or incorporation that is or becomes
related or inter-related (as defined in the Companies Act) to the
Company for any purpose or in connection with any matter, such
authority to endure until the next annual general meeting provided
that such authority shall not extend beyond two years, and further
provided that inasmuch as the Company’s provision of financial
assistance to its subsidiaries will at any and all times be in excess of
one-tenth of 1% of the Company’s net worth, the Company hereby
provides notice to its shareholders of that fact.”
In order for Special Resolution Number 2 to be adopted, the support
of at least 75% of the total number of votes exercisable by
shareholders, present in person or by proxy, is required to pass
this resolution.
Reason for and effect of Special Resolution
Number 2
The Company would like the ability to provide financial assistance,
in appropriate circumstances and if the need arises, in accordance
with section 45 of the Companies Act. This authority is necessary for
the Company to provide financial assistance in appropriate
135MiX TelematicsIntegrated Annual Report 2013
Notice of Annual General Meeting
circumstances. Under the Companies Act, the Company will,
however, require the special resolution referred to above to be
adopted, provided that the Board of Directors of the Company are
satisfied that the terms under which the financial assistance is
proposed to be given are fair and reasonable to the Company and,
immediately after providing the financial assistance, the Company
would satisfy the solvency and liquidity test contemplated in the
Companies Act. In the circumstances and in order to, inter alia,
ensure that the Company’s subsidiaries and other related and inter-
related companies and corporations have access to financing and/or
financial backing from the Company (as opposed to banks), it is
necessary to obtain the approval of shareholders, as set out in
Special Resolution Number 2. Therefore, the reason for, and effect
of, Special Resolution Number 2 is to permit the Company to provide
direct or indirect financial assistance (within the meaning attributed
to that term in section 45 of the Companies Act) to the entities
referred to in Special Resolution Number 2 above.
Special Resolution Number 3: Approval of fees
payable to non-executive directors
To consider and, if deemed fit, to pass with or without modification,
the following special resolution:
“Resolved, as a special resolution, that the fees payable by the
Company to non-executive directors for their services as directors
(in terms of section 66 of the Companies Act) be and are hereby
approved for a period of two years from the passing of this resolution
or until its renewal, whichever is the earliest, as follows:
Fees for the 2013/2014 financial year RDirector’s fee 270 000Chairman (in addition to director’s fee)– Board 605 000– Audit and risk 168 000– Nomination and remuneration 95 000– Social and ethics 90 000Committee fees (in addition to director’s fee)– Audit and risk 140 000– Nomination and remuneration 63 000– Social and ethics 50 000
In order for Special Resolutions Number 3 to be adopted, the
support of at least 75% of the total number of votes exercisable by
shareholders, present in person or by proxy, is required to pass
this resolution.
Reason for and effect of Special Resolution
Number 3
The reason for Special Resolution Number 3 is to obtain
shareholder approval by way of special resolution in accordance
with section 66(9) of the Companies Act for the payment by
the Company of remuneration to each of the non-executive
directors of the Company for each non-executive director’s services
as a non-executive director in the amounts set out under Special
Resolution Number 3.
Ordinary Resolution Number 1: Control over
unissued ordinary shares
“Resolved that the authorised but unissued shares of the Company
be and are hereby placed under the control of the directors of the
Company until the next annual general meeting, with the authority to
allot and issue any of such shares at such time or times, to such
person or persons in respect of the MiX Telematics executive
incentive plan, subject to the Companies Act and the Listings
Requirements of the JSE Limited (the “Listings Requirements”).”
In order for Ordinary Resolution Number 1 to be adopted, the
support of more than 50% of the total number of votes exercisable
by shareholders, present in person or by proxy, is required to pass
this resolution.
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Notice of Annual General Meeting
Ordinary Resolution Number 2: Re-election of
H Brody as a director of the Company
“Resolved that H Brody who retires in terms of the Company’s
MOI and who, being eligible, offers himself for re-election, be re-
elected as a director of the Company.”
A brief curriculum vitae is set out on page 44 of the Integrated Annual
Report of which this notice forms part.
In order for Ordinary Resolution Number 2 to be adopted, the
support of more than 50% of the total number of votes exercisable
by shareholders, present in person or by proxy, is required to pass
this resolution.
Ordinary Resolution Number 3: Re-election of
A Welton as a director of the Company
“Resolved that A Welton who retires in terms of the Company’s
MOI and who, being eligible, offers himself for re-election, be re-
elected as a director of the Company.”
A brief curriculum vitae is set out on page 45 of the Integrated Annual
Report of which this notice forms part.
In order for Ordinary Resolution Number 3 to be adopted, the
support of more than 50% of the total number of votes exercisable
by shareholders, present in person or by proxy, is required to pass
this resolution.
Ordinary Resolution Number 4: Confirmation of
appointment of E Banda as a director of the
Company and as a member of the audit and
risk committee
“Resolved that the appointment of E Banda as a director of the
Company be confirmed.”
E Banda is a qualified lawyer, admitted in both the State of New York
and as an Advocate of the Supreme Court of South Africa, and is
also an investment and corporate banker. He has served on, and
continues to serve on, boards of private and public companies, as
well as having been appointed on three occasions by the Cabinet of
the South African government, once to serve as chairman of the
National Energy Regulator. He brings vast and diversified experience
to the Company.
In order for Ordinary Resolution Number 4 to be adopted, the
support of more than 50% of the total number of votes exercisable
by shareholders, present in person or by proxy, is required to pass
this resolution.
Ordinary Resolution Number 5: Reappointment of
members of the audit and risk committee
“Resolved that the members of the Company’s audit and risk
committee set out below be and are hereby reappointed, each by
way of a separate vote, with effect from the end of this annual
general meeting in terms of section 94(2) of the Companies Act. The
membership as proposed by the nominations and remuneration
committee is:
5.1 R Shough (Chairman);
5.2 R Bruyns, whose dual role as Chairman of the Board of Directors
and member of the audit and risk committee is hereby specifically
approved;
5.3 C Ewing; and
5.4 E Banda.
A brief curriculum vitae of each of the above audit committee
members with the exception of E Banda, is set out on pages 44 and
45 of the Integrated Annual Report of which this notice forms part.
A brief curriculum vitae of E Banda is included under Ordinary
Resolution Number 4.
In order for Ordinary Resolution Number 5 to be adopted, the
support of more than 50% of the total number of votes exercisable
by shareholders, present in person or by proxy, is required to pass
this resolution.
137MiX TelematicsIntegrated Annual Report 2013
Notice of Annual General Meeting
Ordinary Resolution Number 6: Reappointment
of auditors
“Resolved that PricewaterhouseCoopers Inc. be and are hereby
reappointed as auditors of the Company.”
The audit committee has nominated for appointment as auditors of
the Company under section 90 of the Companies Act,
PricewaterhouseCoopers Inc.
In order for Ordinary Resolution Number 6 to be adopted, the
support of more than 50% of the total number of votes exercisable
by shareholders, present in person or by proxy, is required to pass
this resolution.
Ordinary Resolution Number 7: Signature of
documentation
“Resolved that any director or the Company Secretary of the Company
be and is hereby authorised to sign all such documentation and do all
such things as may be necessary for or incidental to the implementation
of Special Resolution Numbers 1, 2 and 3, and Ordinary Resolution
Numbers 1, 2, 3, 4, 5, 6 and 7 which are passed by shareholders in
accordance with and subject to the terms thereof.”
In order for Ordinary Resolution Number 7 to be adopted, the
support of more than 50% of the total number of votes exercisable
by shareholders, present in person or by proxy, is required to pass
this resolution.
Voting and proxies
A shareholder of the Company entitled to attend and vote at the
general meeting is entitled to appoint one or more proxies (who need
not be a shareholder of the Company) to attend, vote and speak in
his/her stead.
On a show of hands, every shareholder of the Company present in
person or represented by proxy shall have one vote only. On a poll,
every shareholder of the Company present in person or represented
by proxy shall have one vote for every share held in the Company by
such shareholder.
A form of proxy is attached for the convenience of any shareholder
who cannot attend the annual general meeting. Forms of proxy may
also be obtained on request from the Company’s registered office.
The completed forms of proxy must be deposited at or posted to the
office of the transfer secretaries of the Company, Computershare
Investor Services Proprietary Limited, 70 Marshall Street,
Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) to be
received at least 48 hours prior to the meeting. Any member who
completes and lodges a form of proxy will nevertheless be entitled to
attend and vote in person at the general meeting should the member
subsequently decide to do so.
Shareholders who have already dematerialised their shares through
a Central Securities Depository Participant (“CSDP”) or broker
rather than through own-name registration and who wish to attend
the annual general meeting must instruct their CSDP or broker to
issue them with the necessary authority to attend.
Dematerialised shareholders, who have elected own-name
registration in the sub-register through a CSDP and who are unable
to attend but wish to vote at the annual general meeting, should
complete and lodge the attached form of proxy with the transfer
secretaries of the Company.
Dematerialised shareholders who have not elected own-name
registration in the sub-register through a CSDP and who are unable
to attend but wish to vote at the annual general meeting should
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timeously provide their CSDP or broker with their voting instructions
in terms of the custody agreement entered into between the
shareholder and his CSDP or broker.
Electronic participation
Shareholders or their proxies may participate in the meeting by way
of telephone conference call. Shareholders or their proxies who wish
to participate in the annual general meeting via the teleconference
facility will be required to advise the Company thereof by no later
than 10:00 on Monday, 2 September 2013 by submitting, by email to
Tanya de Mendonca at [email protected] or by fax to
be faxed to 086 685 1304, for the attention of Tanya de Mendonca
relevant contact details including email address, cellular number and
landline, as well as full details of the shareholder’s title to the shares
issued by the Company and proof of identity, in the form of copies of
identity documents and share certificates (in the case of certificated
shareholders), and (in the case of dematerialised shareholders)
written confirmation from the shareholder’s CSDP confirming the
shareholder’s title to the dematerialised shares. Upon receipt of the
required information, the shareholder concerned will be provided
with a secure code and instructions to access the electronic
communication during the annual general meeting.
Shareholders who wish to participate in the annual general meeting
by way of telephone conference call must note that they will not be
able to vote during the annual general meeting. Such shareholders,
should they wish to have their vote counted at the annual general
meeting, must, to the extent applicable,
(i) complete the form of proxy; or
(ii) contact their CSDP or broker, in both instances, as set out
above.
By order of the Board
Java Capital Trustees and Sponsors Proprietary Limited
Company Secretary
4 June 2013
Registered address Transfer secretariesMatrix CornerHowick CloseWaterfall ParkMidrand1686
Computershare Investor Services Proprietary Limited70 Marshall StreetJohannesburg2001(PO Box 61051, Marshalltown, 2107)
Notice of Annual General Meeting
139MiX TelematicsIntegrated Annual Report 2013
Company Information
MiX Telematics Limited(Incorporated in the Republic of South Africa)
Registration number 1995/013858/06
JSE code: MIX
ISIN: ZAE000125316 (previously ISIN: ZAE000104683)
Registered office of the CompanyMatrix Corner, Howick Close, Waterfall Park, Midrand, 1685
Postal address of the CompanyPO Box 12326, Vorna Valley, 1686
Transfer secretariesComputershare Investor Services Proprietary Limited
Registration number 2004/003647/07
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Company SecretaryJava Capital Trustees and Sponsors Proprietary Limited
Registration number 2002/031862/07
2nd Floor, 2 Arnold Road, Rosebank, 2196
PO Box 2087, Parklands, 2121
Corporate sponsorJava Capital
Registration number 2002/031862/07
2nd Floor, 2 Arnold Road, Rosebank, 2196
PO Box 2087, Parklands, 2121
AuditorsPricewaterhouseCoopers Inc.
Registration number 1998/012055/21
2 Eglin Road, Sunninghill, 2157
Private Bag X36, Sunninghill, 2157
BankersInvestec Bank Limited
Registration number 1969/004763/06
100 Grayston Drive, Sandton, 2196
PO Box 785700, Sandton, 2146
The Standard Bank of South Africa Limited
Registration number 1962/000738/06
3 Simmonds Street, Johannesburg, 2001
PO Box 61344, Marshalltown, 2107
140 MiX TelematicsIntegrated Annual Report 2013
South AfricaMidrandMatrix Corner
Howick Close
Waterfall Park
Bekker Road
Midrand
Tel: +27 (0)11 654 8000
www.mixtelematics.com
www.mixtelematics.co.za
StellenboschBlaauwklip Office Park 2
Corner Strand and Webers
Vallei Roads
Stellenbosch
Tel: +27 (0)21 880 5500
www.mixtelematics.com
UgandaKampala3rd Floor
Diamond Trust Building
Plot 17/19
Kampala Road
Uganda
Tel: +256 312 314 381
www.mixtelematics.com
EuropeBirmingham6180 Knights Court
Solihull Parkway
Birmingham Business Park
Birmingham, B37 7YB
Tel: +44 (1)121 717 5360
www.mixtelematics.co.uk
SwindonWiltshire House
Country Park
Shrivenham Road
Swindon, SN1 2NR
Tel: +44 (0)79 350 0100
www.mixtelematics.co.uk
Middle EastDubai6 EA 304 Dubai Airport
Free Zone
United Arab Emirates
Tel: +9714 204 5650
www.mixtelematics.ae
AustraliaPerthSuite 1, Ground Floor
1 Alvan Street
Subiaco
Western Australia 6008
Tel: +61 8 9388 5800
www.mixtelematics.com.au
MelbourneLevel 23, HWT Tower
40 City Road
Southbank
Melbourne
Victoria 3006
Tel: +61 3 9674 7162
www.mixtelematics.com.au
Brisbane1/28 Fortescue Street
Spring Hill
Brisbane
Queensland 4000
Tel: +61 7 3234 3500
www.mixtelematics.com.au
United States of AmericaBoca Raton750 Park of Commerce Blvd.
Suite 100
Boca Raton, FL 33487
Tel: +1 561 404 2934
www.mixtelematics.net
Dallas401 E.Corp Drive
Office 144, Suite 100
Lewisville, TX 75057
Tel: +1 877 585 1088
www.mixtelematics.net
BrazilSão PauloSalas 1505
Av. Marquês de São Vicente
446, 15°andar – Barra Funda
São Paulo, SP-CEP01139-000
Tel: +55 11 3393 8111
www.mixtelematics.com.br
Company Offices
141MiX TelematicsIntegrated Annual Report 2013
Form of Proxy
MiX TELEMATICS LIMITED(Registration number 1995/013858/06)JSE code: MIXISIN: ZAE 000125316(“MiX Telematics” or “the Company”)
For use by the holders of the Company’s certificated ordinary shares (“certified shareholders”) and/or dematerialised ordinary shares held through a Central Securities Depository Participant (“CSDP”) or broker who have selected “own-name” registration (“own-name dematerialised shareholders”), registered as such at the close of business on the voting record date, at the annual general meeting of the Company to be held at Matrix Corner, Howick Close, Waterfall Park, Midrand on Thursday, 19 September 2013 at 11:30 (the “annual general meeting”) or at any adjournment thereof, if required. Additional forms of proxy are available from the transfer secretaries of the Company.
Not for use by holders of the Company’s dematerialised ordinary shares who have not selected “own-name” registration. Such shareholders must contact their CSDP or broker timeously if they wish to attend and vote at the annual general meeting and request that they be issued with the necessary authorisation to do so or provide the CSDP or broker timeously with their voting instructions should they not wish to attend the annual general meeting in order for the CSDP or broker to vote in accordance with their instructions at the annual general meeting.
I/We (name in block letters)
of (address)
being the registered holder of ordinary shares in the capital of the Company hereby appoint
1. or failing him
2. or failing him
3. the chairman of the meetingas my/our proxy to act for me/us on my/our behalf at the annual general meeting, or any adjournment thereof, which will be held for the purpose of considering and, if deemed fit, passing with or without modification, the ordinary and special resolutions as detailed in the notice of annual general meeting, and to vote for and/or against such resolutions and/or abstain from voting in respect of the ordinary shares registered in my/our name(s), in accordance with the following instructions:
Number of votesIn favour of Against Abstain
To pass special resolutions:1. Share repurchases2. Financial assistance to related and inter-related companies3. Non-executive director fees: 2013/2014
To pass ordinary resolutions:1. Control over unissued ordinary shares2. Re-election of H Brody as a director of the Company3. Re-election of A Welton as a director of the Company4. Confirmation of appointment of E Banda as a director of the Company and as a member of
the audit and risk committee5. Reappointment of members of audit and risk committee
5.1 R Shough5.2 R Bruyns5.3 C Ewing5.4 E Banda
6. Reappointment of auditors7. Signature of documentation
(Indicate instructions to proxy in the spaces provided above.)(One vote per share held by MiX Telematics shareholders recorded in the register on the voting record date.)Unless otherwise instructed, my proxy may vote as he/she thinks fit.
Signed this day of 2013
Signature Assisted by (if applicable)
A shareholder entitled to attend and vote at the annual general meeting is entitled to appoint a proxy to attend, vote and speak in his/her stead. A proxy need not be a shareholder of the Company. Each shareholder is entitled to appoint one or more proxies to attend, speak and, on a poll, vote in place of that shareholder at the annual general meeting.
Forms of proxy must be deposited at Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) to be received no later than 11:30 on Tuesday, 17 September 2013.
Please read the notes on the reverse side hereof.
142 MiX TelematicsIntegrated Annual Report 2013
1. This form of proxy is only to be completed by those ordinary
shareholders who are:
(a) holding ordinary shares in certificated form; or
(b) recorded in the sub-register in electronic form in their “own
name”,
on the date on which shareholders must be recorded as such
in the register maintained by the transfer secretaries,
Computershare Investor Services Proprietary Limited, being
Friday, 13 September 2013, and who wish to appoint another
person to represent them at the annual general meeting.
2. Certificated shareholders wishing to attend the annual general
meeting have to ensure beforehand with the transfer secretaries
of the Company (being Computershare Investor Services
Proprietary Limited) that their shares are registered in their
name.
3. Beneficial shareholders whose shares are not registered in their
“own name”, but in the name of another, for example, a nominee,
may not complete a form of proxy, unless a form of proxy is
issued to them by a registered shareholder and they should
contact the registered shareholder for assistance in issuing
instruction on voting their shares, or obtaining a proxy to attend,
speak and, on a poll, vote at the annual general meeting.
4. A shareholder may insert the name of a proxy or the names of
two alternative proxies of the shareholder’s choice in the space,
with or without deleting “the chairman of the annual general
meeting”. The person whose name stands first on the form of
proxy and who is present at the annual general meeting will
be entitled to act as proxy to the exclusion of those whose
names follow.
5. A shareholder’s instructions to the proxy must be indicated by
means of a tick or a cross in the appropriate box provided.
However, if you wish to cast your votes in respect of a lesser
number of shares than you own in the Company, insert the
number of shares in respect of which you desire to vote. If: (i) a
shareholder fails to comply with the above; or (ii) gives contrary
instructions in relation to any matter, or any additional
resolution(s) which are properly put before the annual general
meeting; or (iii) the resolution listed in the proxy form is modified
or amended, the member will be deemed to authorise the
chairman of the annual general meeting, if the chairman is
the authorised proxy, to vote in favour of the resolutions at the
annual general meeting, or any other proxy to vote or to abstain
from voting at the annual general meeting as he/she deems fit,
in respect of all the member’s votes exercisable thereat. If
however, the member has provided further written instructions
which accompany this form of proxy and which indicate how the
proxy should vote or abstain from voting in any of the
circumstances referred to in (i) to (iii) above, then the proxy shall
comply with those instructions.
6. The forms of proxy should be lodged at Computershare
Investor Services Proprietary Limited, 70 Marshall Street,
Johannesburg, 2001 or posted to PO Box 61051, Marshalltown,
2107 so as to be received by not later than 11:30 on Tuesday,
17 September 2013.
7. The completion and lodgement of this form of proxy will not
preclude the relevant shareholder from attending the annual
general meeting and speaking and voting in person thereat to
the exclusion of any proxy appointed in terms hereof, should
such shareholder wish to do so. In addition to the aforegoing, a
shareholder may revoke the proxy appointment by (i) cancelling
it in writing, or making a later inconsistent appointment of a
proxy; and (ii) delivering a copy of the revocation instrument to
the proxy, and to the Company. The revocation of a proxy
appointment constitutes a complete and final cancellation of
the proxy’s authority to act on behalf of the shareholder as
at the later of the date stated in the revocation instrument, if any;
or the date on which the revocation instrument was delivered
in the required manner.
8. The chairman of the annual general meeting may reject or
accept any form of proxy which is completed and/or received,
other than in compliance with these notes provided that, in
respect of acceptances, he is satisfied as to the manner in which
the shareholder(s) concerned wish(es) to vote.
9. Any alteration to this form of proxy, other than a deletion of
alternatives, must be initialled by the signatory/ies.
10. Documentary evidence establishing the authority of a person
signing this form of proxy in a representative capacity must be
attached to this form of proxy unless previously recorded by the
Company or Computershare Investor Services Proprietary
Limited or waived by the chairman of the annual general
meeting.
11. A minor must be assisted by his/her parent or guardian unless
the relevant documents establishing his/her legal capacity are
produced or have been registered by Computershare Investor
Services Proprietary Limited.
12. Where there are joint holders of shares:
(a) any one holder may sign the form of proxy; and
(b) the vote of the senior (for that purpose seniority will be
determined by the order in which the names of shareholders
appear in the register of members) who tenders a vote
(whether in person or by proxy) will be accepted to the
exclusion of the vote(s) of the other joint holder(s) of shares.
Form of Proxy
Notes to the Form of Proxy
143MiX TelematicsIntegrated Annual Report 2013
Form of Proxy
13. If duly authorised, companies and other corporate bodies who
are shareholders of the Company having shares registered in
their own name may, instead of completing this form of proxy,
appoint a representative to represent them and exercise all of
their rights at the annual general meeting by giving written notice
of the appointment of that representative. This notice will not be
effective at the annual general meeting unless it is accompanied
by a duly certified copy of the resolution or other authority in
terms of which that representative is appointed and is received
at Computershare Investor Services Proprietary Limited,
70 Marshall Street, Johannesburg, 2001 or posted to PO Box
61051, Marshalltown, 2107 so as to be received by no later than
11:30 on Tuesday, 17 September 2013.
14. This form of proxy may be used at any adjournment or
postponement of the annual general meeting, including any
postponement due to a lack of quorum, unless withdrawn by
the shareholder.
15. The aforegoing notes contain a summary of the relevant
provisions of section 58 of the Companies Act, 2008 (the
“Companies Act”), as required in terms of that section. In
addition, an extract from the Companies Act reflecting the
provisions of section 58 of the Companies Act, is attached to this
form of proxy.
Extract from the Companies Act“58. Shareholder right to be represented by proxy
(1) At any time, a shareholder of a Company may appoint any
individual, including an individual who is not a shareholder of
that Company, as a proxy to
(a) participate in, and speak and vote at, a shareholders’
meeting on behalf of the shareholder; or
(b) give or withhold written consent on behalf of the shareholder
to a decision contemplated in section 60.
(2) A proxy appointment
(a) must be in writing, dated and signed by the shareholder; and
(b) remains valid for
(i) one year after the date on which it was signed; or
(ii) any longer or shorter period expressly set out in the
appointment,
unless it is revoked in a manner contemplated in subsection (4)(c),
or expires earlier as contemplated in subsection (8)(d).
(3) Except to the extent that the Memorandum of Incorporation of a
Company provides otherwise
(a) a shareholder of that Company may appoint two or more
persons concurrently as proxies, and may appoint more
than one proxy to exercise voting rights attached to different
securities held by the shareholder;
(b) a proxy may delegate the proxy’s authority to act on behalf
of the shareholder to another person, subject to any
restriction set out in the instrument appointing the proxy; and
(c) a copy of the instrument appointing a proxy must be
delivered to the Company, or to any other person on behalf
of the Company, before the proxy exercises any rights of the
shareholder at a shareholders’ meeting.
(4) Irrespective of the form of instrument used to appoint a proxy
(a) the appointment is suspended at any time and to the extent
that the shareholder chooses to act directly and in person in
the exercise of any rights as a shareholder;
(b) the appointment is revocable unless the proxy appointment
expressly states otherwise; and
(c) if the appointment is revocable, a shareholder may revoke
the proxy appointment by
(i) cancelling it in writing, or making a later inconsistent
appointment of a proxy; and
(ii) delivering a copy of the revocation instrument to the
proxy, and to the Company.
(5) The revocation of a proxy appointment constitutes a complete
and final cancellation of the proxy’s authority to act on behalf of
the shareholder as of the later of
(a) the date stated in the revocation instrument, if any; or
(b) the date on which the revocation instrument was delivered
as required in subsection (4)(c)(ii).
(6) If the instrument appointing a proxy or proxies has been
delivered to a Company, as long as that appointment remains in
effect, any notice that is required by this Act or the Company’s
Memorandum of Incorporation to be delivered by the Company
to the shareholder must be delivered by the Company to
(a) the shareholder; or
(b) the proxy or proxies, if the shareholder has
(i) directed the Company to do so, in writing; and
(ii) paid any reasonable fee charged by the Company for
doing so.
144 MiX TelematicsIntegrated Annual Report 2013
(7) A proxy is entitled to exercise, or abstain from exercising, any
voting right of the shareholder without direction, except to the
extent that the Memorandum of Incorporation, or the instrument
appointing the proxy, provides otherwise.
(8) If a Company issues an invitation to shareholders to appoint one
or more persons named by the Company as a proxy, or supplies
a form of instrument for appointing a proxy
(a) the invitation must be sent to every shareholder who is
entitled to notice of the meeting at which the proxy is
intended to be exercised;
(b) the invitation, or form of instrument supplied by the Company
for the purpose of appointing a proxy, must
(i) bear a reasonably prominent summary of the rights
established by this section;
(ii) contain adequate blank space, immediately preceding
the name or names of any person or persons named in
it, to enable a shareholder to write in the name and, if so
desired, an alternative name of a proxy chosen by the
shareholder; and
(iii) provide adequate space for the shareholder to indicate
whether the appointed proxy is to vote in favour of or
against any resolution or resolutions to be put at the
meeting, or is to abstain from voting;
(c) the Company must not require that the proxy appointment
be made irrevocable; and
(d) the proxy appointment remains valid only until the end of the
meeting at which it was intended to be used, subject to
subsection (5).
(9) Subsections (8)(b) and (d) do not apply if the Company
merely supplies a generally available standard form of proxy
appointment on request by a shareholder.”
Form of Proxy
Notes to the Form of Proxy continued
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