Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 221

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 19
Chunk 221
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 of the Group’s risk management framework. The Directors have established the Audit and risk committee which is responsible
for developing and monitoring the Group’s risk management policies. The committee reports regularly to the Directors on its activities.

The Group’s risk management policies are established
to identify and analyze the risk faced by the Group, to set appropriate risk limits, implement controls to enforce limits to monitor risk
and adherence to limits.

The committee is assisted in its oversight role by internal
audit. Internal audit reviews risk and management controls and procedures, the results of which are reported to the committee.

29.1 Capital management

The Group’s policy is to maintain a strong capital
base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors
return of capital, as well as the level of dividends to shareholders.

The capital structure of the Group consists of debt, which
includes the borrowings and lease obligations disclosed in Note 15 and 16 respectively, cash and cash equivalents and bank overdraft disclosed
in Note 13, and equity as disclosed in the consolidated statement of financial position.

There were no changes in the Group’s approach to the
capital management during the financial year.

In order to maintain or adjust the capital structure, the
Group may adjust the amounts of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce
debt.

F-45

29.2 Financial risk management

The Group has exposure to the following
risks arising from financial instruments: credit risk, liquidity risk, currency and interest rate risk.

29.2 (a) Credit risk

Credit risk is the risk of financial
loss to the Group if a customer or financial institution where deposits are held fail to meet the contractual obligations, and arises
principally from the Group’s receivables from customers, cash deposits and cash equivalents.

Credit risk is managed by each subsidiary
subject to the Group’s established policy and procedure. The Group has a general credit policy of only dealing with credit worthy
customers. A significant element of its individual customers is on debit-order payment method to assess credit risk.

Trade receivables comprise a widespread
customer base. Management evaluates credit risk relating to customers on an ongoing basis. If customers are independently rated, these
ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into
account its financial position, past experience and other factors. Individual risk limits are set based on internal