Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 100

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 4A
Chunk 100
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 Development

Research and development expenses
consist of wages and benefits for hardware engineers, product management and software development employees, technology experimental costs
and the amortization of intangible assets relating to capitalized development costs. We have focused our research and development efforts
on expanding and developing new offerings, improving customer experience and functionality and scalability of our platform. The majority
of our research and development employees are located in Singapore, South Africa and Portugal. Research and development costs that qualify
for capitalization, such as costs related to new generation smart devices and new stacks for our platform, are capitalized and amortized
over 3 years.

We expect research and development
expenses to increase, at a similar rate as subscription revenue growth.

Expected Credit Losses on Financial Assets

Expected credit losses on financial assets consist of bad
debts expensed, the movement on the expected credit loss provision and any reversals.

Offering costs

Costs relating directly to the proposed secondary public offering,
which was announced on July 24, 2024 and cancelled on July 26, 2024.

Finance Income

Finance income consists of interest earned on positive bank
balances.

Finance Costs

Finance costs consist of interest paid on bank overdraft
facilities, interest-bearing loans and lease obligations.

Taxation

Taxation consists primarily of current and deferred income
tax and a minimal component of withholding tax.

Non-Controlling Interest

Profit attributable to non-controlling interest, which represents
the share of profit belonging to holders of equity in Karooooo’s subsidiaries that are not wholly owned by the parent company.

Results of Operations

The following table sets forth our results of operations
for the periods presented.

                                                                                            Year ended February 28/29                                                                                   
                                                                                            2025                                                                                                        
  Consolidated Statement of Profit and Loss                                                 (U. S.$                                                                                                     
                                                                                            thousands (1))                                                                                              
 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Revenue                                                                                                                   245,547       4,567,459       4,205,511       3,507,067         9       20  
  Cost of revenue                                                                                                           (73,351      (1,364,407      (1,514,674      (1,234,672       (10       23  
  Gross profit                                                                                                              172,196       3,203,052       2,690,837       2,272