| 4. | Working capital | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4.2 | Inventories | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant accounting judgements, estimates and assumptionsManagement estimates the net realisable values of inventories, taking into account the most reliable evidence available at each reporting date. Net realisable 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. Judgement is involved in determining whether inventories need to be written off to net realisable value. Factors considered include the age of the stock, inventory turnover, exchange rates, new device models released and the ability to bundle devices with other value-added services, such as voice, data and SMSes. Inventory write-downs related to slow-moving stock are determined by considering the following: Slow-moving stockFor network build stock, the identification of obsolete and excess warehouse stock for build stock entails the running of quarterly reports by management detailing obsolete and excess stock:
New items not yet used and items planned for projects are excluded. The balance is then taken through the write-off process. The identification of obsolete and excess stock for maintenance spares entails the running of quarterly reports by management detailing obsolete and excess spares:
New items not yet used and items planned for projects are excluded. The balance is then taken through the write-off process. Summary of material accounting policiesStock valuation and work-in-progressInventory is measured at the lower of cost and net realisable value. The purchase cost of inventories comprises the purchase price, import duties and other taxes (other than those subsequently recoverable by the entity from the taxing authorities), transport, handling and other costs directly attributable to the acquisition of the finished goods, materials and services. Trade discounts, rebates and other similar items are deducted in determining the costs of inventory. Initial cost of inventories, where relevant, includes the transfer of gains and losses on qualifying fair value hedges recognised as firm commitments, in respect of foreign currency denominated purchases. Merchandise, installation material, maintenance material and network equipment inventories are stated at the lower of cost, determined on a weighted average basis and estimated net realisable value. Inventory is assessed for write-down to the net realisable value at each reporting date. The reversal of any write-downs is also considered where increases in the net realisable value have been identified.
During the current financial year, R4 million (31 March 2023: R123 million) for Group and R4 million (31 March 2023: Rnil) for Company were transferred from inventories to property, plant and equipment. The transfers only take place from CWIP. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||