Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 44

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 3
Chunk 44
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 on our business, financial condition, results of operations and prospects.

Exchange controls may restrict the ability of our
subsidiaries to convert or transfer sums in foreign currencies.

Our ability to generate operating
cash flows at the holding company level depends on the ability of our subsidiaries, including Cartrack Holdings Proprietary Limited, to
upstream funds. In particular, companies operating in South Africa are subject to exchange control limitations. Exchange controls in South
Africa are administered by the South African Reserve Bank (“ SARB”) pursuant to the Exchange Control Regulations, 1961, as
amended, which regulates transactions between South African residents and non-residents. While exchange controls have been relaxed in
recent years and may continue to be relaxed, South African companies remain subject to restrictions on their ability to export capital
outside of the Common Monetary Area, which includes South Africa, Namibia, Lesotho and Eswatini. In addition, as the cash flows of certain
countries are highly dependent on the export of certain raw materials, the ability to convert such currencies can be limited by the timing
of payments for such exports, which may require us to organize our currency conversions around such constraints. These restrictions may
affect the manner in which we finance our transactions outside South Africa and the geographic distribution of our debt.

We can offer no assurance that
additional restrictions on currency exchange will not be implemented in the future or that these restrictions will not limit the ability
of our subsidiaries to transfer cash to us, which could have a material adverse effect on our business, financial condition, results of
operations and prospects.

The markets in which we operate
are exposed to high inflation and interest rates which could increase our operating costs and thereby reduce our profitability.

The economies of countries in
which we operate, including South Africa, Mozambique, Tanzania and Kenya in the past have been, and in the future may continue to be,
characterized by rates of inflation and interest rates that are substantially higher than those prevailing in the United States and other
highly developed economies. High rates of inflation could increase our costs in such regions and decrease our operating margins. In particular,
the inflation rate in South Africa, where we have significant operations, is relatively high compared to developed, industrialized countries.
As at February 2025, the annual CPI stood at 3.2% compared to 5.6% in February 2024. Inflation in South Africa generally results in an
increase in our operational costs in rand. Higher and sustained inflation in the