11. Contingent liabilities for the year ended 28 February 2023

Datatec and its subsidiaries have issued, in the ordinary course of business, guarantees and letters of comfort to third parties in respect of finance and trading facilities, performance commitments to customers and lease commitments.

At 28 February 2022, Logicalis Latin America reported a contingent liability in respect of a possible tax liability at its subsidiary in Brazil. This related to an April 2012 tax assessment issued by a Brazilian state tax authority stating that PromonLogicalis should have paid a higher rate of state tax on its equipment sales up to October 2010 than actually paid. During this year, a favourable administrative court ruling was obtained and the state tax authority confirmed that the tax assessment was cancelled. This decision is final, and no further action is required. This is therefore no longer considered to be a contingent liability.

Logicalis International has a contingent tax liability at its Indonesian subsidiary PT. Packet Systems Indonesia. The Indonesian Tax Authority has raised withholding tax assessments in relation to purchases of vendor software and warranties which have been resold to customers. Withholding tax notices have been issued for each month in the calendar year 2016 and the first two months of the calendar year 2018. Objections have been filed by the company in respect of these periods with the Indonesian Tax Court.

The Group has certain contingent liabilities resulting from litigation and claims. Management believes, after taking legal advice where appropriate on the probable outcome of these contingencies, that none of these contingencies will materially affect the financial position or the results of operations of the Group.