Notes to the Group Annual Financial Statements | Note 1.3

1. RESULTS OF OPERATIONS
1.3 OPERATING (LOSS)/ PROFIT
  Notes  2026 
R'000 		   2025 
R'000 
THE FOLLOWING HAS BEEN CHARGED/(CREDITED) IN ARRIVING AT OPERATING (LOSS)/ PROFIT:         
Advertising and promotional expenses1    211 961    54 275 
Audit fees – services as auditors relating to the year-end audit2    26 989    19 379 
Audit fees – other3    1 677    – 
Consulting fees4    146 702    50 201 
Foreign exchange (gain)/loss    (892)   1 578 
Gain on effective settlement of pre-existing relationships upon obtaining control of Cell C  2.2.1  (480 707)   – 
Gain on settlement by Cell C of leases with Dark Fibre Africa5  1.1  (355 832)   – 
Impairment of inventory    17 424    8 034 
Insurance6    34 137    27 600 
IT infrastructure costs and computer-related costs7    85 136    76 831 
Legal fees8    4 417    11 569 
Licence fees9    150 291    87 076 
Loss on disposal of property, plant and equipment    3 163    1 998 
Loss on disposal of intangible assets    37 092    – 
Loss on disposal of subsidiary – Cell C (including CEC) 2.2.2  6 027 454    – 
Loss on disposal of subsidiary – other    105 060    – 
Loss on in-substance written call option over Cell C shares issued to Sisonke Growth Partners Proprietary Limited  3.5  140 000    – 
Loss on written put option over Cell C shares issued to Nedbank and Lesaka  3.5  141 117    – 
Motor vehicle expenses10    11 578    11 450 
Software development and IT project costs    56 999    70 390 
Staff training11    45 528    52 492 
Transaction costs related to the restructuring, unbundling and the listing of Cell C12    318 992    – 
Travel – local and overseas13    24 837    17 544 
IMPAIRMENTS OF GOODWILL COMPRISE THE FOLLOWING:         
Impairment of goodwill arising on Glocell Distribution Proprietary Limited  4.1  161 697    – 
Impairment of goodwill – other  4.1  38 895    – 
    200 592    – 
FAIR VALUE MOVEMENTS COMPRISE THE FOLLOWING:         
Fair value gain on surety receivable  3.5  (2 200)   (2 883)
Net fair value gain on financial instruments  3.5  21 896    (171 433)
Fair value gain on Preference shares B  3.5  (242 637)   – 
    (222 941)   (174 316)
BAD DEBTS AND EXPECTED CREDIT LOSS COMPRISE THE FOLLOWING:         
Bad debts and expected credit loss on loans    (9 469)   (284 981)
Bad debts and expected credit losses on trade receivables, other receivables and advances to customers    224 994    520 505 
    215 525    235 524 
MODIFICATION/DERECOGNITION OF FINANCIAL INSTRUMENTS COMPRISE THE FOLLOWING:         
TPC         
(Gain)/loss on modification of financial liability – Class A Preference Shares  3.4.2  (43 238)   18 769 
Gain on derecognition of financial liability – SPV5  3.4.2  (165 216)   – 
Loss on modification of financial liability – Gramercy  3.4.2  15 792    – 
CEC         
Loss on derecognition of financial assets measured at amortised cost    –    34 103 
    (192 662)   52 872 
1 Included in 2026 is R150.6 million incurred by Cell C for the three-month period consolidated September to November 2025.
2 Included in 2026 is R4.8 million incurred by Cell C for the three-month period consolidated September to November 2025.
3 Included in 2026 is R1.7 million incurred by Cell C for the three-month period consolidated September to November 2025.
4 Included in 2026 is R76.6 million incurred by Cell C for the three-month period consolidated September to November 2025.
5 Included in 2026 is R355.8 million incurred by Cell C for the three-month period consolidated September to November 2025.
6 Included in 2026 is R8.9 million incurred by Cell C for the three-month period consolidated September to November 2025.
7 Included in 2026 is R6.2 million incurred by Cell C for the three-month period consolidated September to November 2025.
8 Included in 2026 is R0.9 million incurred by Cell C for the three-month period consolidated September to November 2025.
9 Included in 2026 is R59.6 million incurred by Cell C for the three-month period consolidated September to November 2025.
10 Included in 2026 is R1.9 million incurred by Cell C for the three-month period consolidated September to November 2025.
11 Included in 2026 is R2.0 million incurred by Cell C for the three-month period consolidated September to November 2025.
12 Included in 2026 is R232.5 million incurred by Cell C for the three-month period consolidated September to November 2025.
13 Included in 2026 is R2.1 million incurred by Cell C for the three-month period consolidated September to November 2025.