Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 201

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 19
Chunk 201
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, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the
lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion
of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the lease payments (e. g. changes to future payments resulting from a change in an
index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

The Group’s lease liabilities are presented separately
in the consolidated statement of financial position and in Note 16.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption
to not recognize right-of-use assets and lease liabilities that have a lease term of 12 months or less and leases of low-value assets.
The lease payments associated with these leases are charged directly to profit on a straight-line basis over the lease term.

F-20

ii.
As Lessor (Finance lease)

Leases where the Group has transferred substantially all
risks and rewards incidental to ownership of the leased assets to the lessees are classified as finance leases.

The leased asset is derecognized and
the present value of the lease receivable is recognized on the balance sheet and included in “trade and other receivables and prepayments”.
The difference between the gross receivable and the present value of the lease receivable is recognized as finance income.

Each lease payment received is applied
against the gross investment in the finance lease receivable to reduce both the principal and the unearned finance income. The finance
income is recognized in profit or loss on a basis that reflects a constant periodic rate of return on the net investment in the finance
lease receivable.

Initial direct costs incurred by the
Group in negotiating and arranging finance leases are added to finance lease receivables and reduce the amount of income recognized over
the lease term.

l)
Inventories

Inventories are stated at the lower
of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale. The cost of inventories comprises of all costs of purchase, costs
of conversion and other costs incurred in bringing the inventories to their present location and