121 / 166
2017
R’000
2016
R’000
31.
COMMITMENTS
Capital expenditure approved:
Contracted for
675 164
568 683
Not contracted for
873 494
939 434
1 548 658
1 508 117
Capital expenditure amounting to R1 516 million (2016: R1 459 million) is in respect of property, plant and equipment and the remaining
balance is in respect of computer software. It is anticipated that capital expenditure will be financed out of existing cash resources.
32.
CONTINGENT LIABILITIES
The group has outstanding legal and other claims arising out of its normal ongoing operating activities which have to be resolved. None of
these claims are significant.
33.
FINANCIAL INSTRUMENTS
33.1 Risk management overview
The group has exposure to the following risks from its use of financial instruments: credit risk; liquidity risk; foreign currency risk; interest
rate risk and equity price risk.
This note presents information about the group’s exposure to each of the aforementioned risks, the group’s objectives, policies and
processes for measuring and managing risk, and the group’s management of capital. IFRS 7 requires certain disclosures by class of
instrument which the group has determined would be the segments as disclosed in the segmental report.
The group’s major financial risks are mitigated in the way that it operates firstly through diversification of geography and secondly through
decentralisation of the business model. Bid Corporation Limited (Bidcorp) is an international group with operations in United Kingdom,
Europe, Asia, Australia, New Zealand, South America, Middle East and various southern African countries.
Bidcorp’s philosophy has always been to empower management through a decentralised structure thereby making operational
management responsible and accountable for the performance of their operations, including managing the financial risks of the operation.
The operational management report to the CE who in turn reports to the Bidcorp board of directors. Operational management’s
remuneration is based on their operation’s performance resulting in a decentralised and entrepreneurial environment.
Due to the diverse structure and decentralised management of the group, the group audit and risk committee has implemented guidelines
of acceptable practices and basic procedures to be followed by divisional and operational management. The information provided below
for each financial risk has been collated for disclosure based on the manner in which the business is managed and what is believed to be
useful information for stakeholders.
The overall process of risk management in the Bidcorp group, which includes the related system of control, is the responsibility of the
Bidcorp board of directors. The Bidcorp group audit and risk committee is governed by a charter and reports regularly to the board of
directors on its activities.
The Bidcorp group audit and risk committee’s (GARC) primary risk responsibilities include:
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■
review of the group’s risk policies and approach to risk management;
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■
to consider all material risks to which the group is exposed, ensuring that the requisite risk management culture, policies and systems
are progressively implemented and functioning effectively;
■
■
management is accountable to the board for implementing and monitoring the processes of risk management and integrating this into
day-to-day activities; they confirm these processes through the completion of the quarterly Bidcorp management representation letter
submitted to the Bidcorp GARC;
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■
performance of ongoing monitoring of the enterprise-wide risk assessment process to ensure risks and opportunities are adequately
identified, evaluated and managed at the appropriate level in each business, and that the individual and joint impact of risks identified on
the group is considered;
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to review legal matters that could have a material impact on the group, as well as considering the adequacy and effectiveness of the
group’s procedures to ensure compliance with legal and regulatory responsibilities; and
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consideration of reports provided by management, internal assurance providers and the independent auditors regarding compliance
with legal and regulatory requirements.
117
Annual integrated report 2017
Bid Corporation Limited