Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 105

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 4A
Chunk 105
---
 (1))                              (in R thousands)                                                     
  Research and Development                                     (12,200                            (226,935                (212,235               

  (1)      For convenience purposes only, amounts in South African rand as at February 28,                                                                

Karooooo’s research and
development operating expenses increased by ZAR 14.7 million or 7% for the financial year ended February 28, 2025 compared to financial
year ended February 29, 2024, primarily due to an increase in Cartrack’s research and development operating expenses by ZAR 18.1
million, or 9%, as we continued our investment in innovation to improve and expand the capabilities of our Operations Cloud and internal
management system. Karooooo Logistics’s research and development operating expenses were ZAR 11.5 million incurred in the financial
year ended February 28, 2025 as compared to ZAR 12.9 million incurred in financial year ended February 29, 2024. For the financial year
ended February 29, 2024, Carzuka’s research and development operating expenses were ZAR 2.0 million.

Expected Credit Losses on Financial Assets

Expected credit losses on financial
assets increased ZAR 5.1 million, or 5%, for the financial year ended February 28, 2025 compared to financial year ended February 29,
2024. The method in providing for expected credit losses is consistent with prior years.

Finance Income

Finance income increased ZAR 4.8 million, or 12%, for
the financial year ended February 28, 2025 compared to the financial year ended February 29, 2024. This was primarily driven by higher
interest earned on positive bank balances during the year.

Finance Costs

Finance costs increased ZAR 35.0 million, or 221%,
for the financial year ended February 28, 2025 compared to financial year ended February 29, 2024. This was primarily due to interest
incurred for an overdraft facility utilised for working capital purposes and a term loan obtained to finance the construction of the South
Africa central office in Johannesburg, South Africa.

Taxation

Our total effective tax rate for the financial year ended
February 28, 2025 was 24.8%, which decreased from 29.2% for the financial year ended February 29, 2024. This was primarily due to the
rec