Notes to the Group Annual Financial Statements | Note 4.5

Inventories comprise prepaid airtime, handsets and other related products.

Inventories are stated at the lower of cost (net of rebates and discounts) or net realisable value. The cost of inventory is based on the weighted average cost basis. Net realisable value is the estimate of the selling price in the ordinary course of business, less selling expenses. Provisions are made for obsolete, unusable and unsaleable inventory and for latent damage first revealed when inventory items are taken into use or offered for sale. Where unused PINs have been recycled and included in inventory for resale, the Group recognises the inventory at no value.

* Other inventory mainly consists of accessories, starter packs, consumables and gym equipment.

Inventories with a cost of R11.0 billion (2023: R15.1 billion) were sold during the year and have been included in direct operating costs.

Included in the above balances are provisions for obsolete, unusable and unsalable inventory and for latent damage to the value of Rnil (2023: R0.3 million).

Restricted inventory

Refer to note 2.4 for the details of restricted inventory.