Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 202

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 19
Chunk 202
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 condition.

Cost is determined on a weighted average cost basis.

Management considers the condition and usability of inventories
on an annual basis to determine whether an allowance for obsolete inventory is required.

m)
Cash and cash equivalents

Cash and cash equivalents comprise
cash balances and short-term deposits with maturities of three months or less from the date of acquisition that are subject to an insignificant
risk of changes in their fair value, and are used by the Group in the management of its short-term commitments.

For the purpose of the statement of
cash flows, bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included in
cash and cash equivalents. Bank overdrafts are included within current liabilities on the statement of financial position.

n)
Borrowing costs

Borrowing costs directly attributable
to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended
use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period they occur. Borrowing
costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

o)
Employee benefits

i.
Defined contribution plans

The Group participates in the national
pension schemes as defined by the laws of the countries in which it has operations. In particular, the Singapore companies in the Group
make contributions to the Central Provident Fund scheme in Singapore, a defined contribution pension scheme. Contributions to defined
contribution pension schemes are recognized as an expense in the period in which the related service is performed.

ii.
Employee leave entitlement

Employee entitlements to annual leave
are recognized as a liability when they are accrued to the employees. The undiscounted liability for leave expected to be settled wholly
before twelve months after the end of the reporting period is recognized for services rendered by employees up to the end of the reporting
period.

F-21

p)
Provisions

Provisions are recognized when the
Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation can be estimated reliably.

Provisions are reviewed at the end
of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources
will be required to settle the obligation, the provision is reversed. If the effect of