Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 200

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 19
Chunk 200
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Leases

The Group assesses at contract inception whether a contract
is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration.

i.
As Lessee

The Group applies a single recognition and measurement approach
for all leases, except for short-term leases and leases of low-value assets. The Group recognizes lease liabilities representing the obligations
to make lease payments and right-of-use assets representing the right to use the underlying leased assets.

Rig ht-of-use assets

The Group recognizes right-of-use assets
at the commencement date of the lease (i. e. the date the underlying asset is available for use). Right-of-use assets are measured at cost,
less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement
date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term
and the estimated useful lives of the assets.

If ownership of the leased asset transfers
to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the
estimated useful life of the asset. The right-of-use assets are also subject to impairment. The accounting policy for impairment is disclosed
in Note 2.2(i).

The Group’s right-of-use assets are presented in property,
plant and equipment in the consolidated statement of financial position.

Lease liabilities

At the commencement date of the lease,
the Group recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments
include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend
on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price
of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease
term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognized
as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment
occurs.

In calculating the present value of
lease payments