Annual Report 2020 Brighter together Delta Corporation Limited Annual Report 2020 Contents OUR VISION IS TO BE THE MOST ADMIRED 03 Values Statements BEVERAGE BUSINESS IN THE REGION 04 Company Profile Brighter OUR MISSION IS TO BRING ENJOYMENT AND REFRESHMENT TO OUR 06 Principal Risks Update CONSUMERS BY NURTURING OUR 08 Financial Highlights BRANDS AND GROWING OUR BUSINESS 10 Chairman’s Letter to Shareholders SUSTAINABLY FOR THE BETTERMENT OF together 14 Review of Operations OUR EMPLOYEES AND COMMUNITIES. 38 Report of the Directors We value the accountability of our people, Our Vision teamwork, our local communities, our 40 Corporate Governance customers and our reputation. 42 Report of the Remuneration Committee To be the most Our Strategic And this means that together we can prosper, 44 Report of the Audit Committee creating a thriving, sociable, resilient, cleaner, 46 Annual Financial Statements admired Beverage Priorities and productive world. Creating a balanced portfolio of businesses We Are Delta Corporation. Company in the Building and nurturing strong brand Supplementary portfolios that earn the support and Information Region. affection of our customers and consumers Growing the profitability of the business Brighter 110 Group Statistics on a sustainable basis Building and sustaining alliances with 112 Sustainable Development Report Our Mission business partners together 129 Group Structure 130 Portfolio of Businesses We bring enjoyment and BRIGHTER TOGETHER IN THREE WAYS: 131 Directorate and Management refreshment to our consumers by Our Values 132 Board of Directors nurturing our brands and growing People get more from life when they come 136 Group Management Committee People are our enduring advantage together – our products make those moments our business sustainably for the shine BRIGHTER Accountability is clear and personal Our people shine brighter when they work betterment of our employees and We work and win in teams TOGETHER in teams We are customer and consumer communities Our involvement in communities helps to Shareholder focused create a BRIGHTER future Information We do our best for local communities Our reputation is indivisible 140 Notice to Members 142 Shareholders Analysis OPERATIONAL REVIEW OF SMART HIGHLIGHTS OPERATIONS AGRICULTURE To view the Online Annual Report, please visit our website at 08 14 113 www.delta.co.zw 02 01 Delta Corporation Limited Annual Report 2020 Employee Values Declaration Statements OUR PEOPLE ARE OUR WE WORK AND OUR REPUTATION ENDURING ADVANTAGE WIN IN TEAMS IS INDIVISIBLE The calibre and commitment We actively develop and share Our reputation relies on the As an employee of of our people set us apart knowledge within the Group actions and statements of We are a diverse and dynamic We foster trust and integrity in every employee Delta Corporation…. team internal relationships We build our reputation for We select and develop people We encourage camaraderie and the long term for the long term a sense of fun We are fair and ethical in all Performance is what counts our dealings Health and Safety issues I VALUE ….......BECAUSE….. receive priority attention I am accountable for the things I do every day. MYSELF Personally and professionally, my reputation is what defines me. What I do matters to those I work with and OTHERS what they do matters to me. As colleagues we ACCOUNTABILITY IS WE UNDERSTAND WE DO OUR BEST FOR can achieve higher goals. CLEAR AND PERSONAL AND RESPECT OUR LOCAL COMMUNITIES CUSTOMERS AND We favour decentralised CONSUMERS We consciously balance local I want the best for the people I love. I do work management and a practical and group interests safely and with passion, so we can enjoy health MY COMMUNITY maximum of local autonomy We are endlessly concerned We benefit the local and fun. Goals and objectives are with our customers’ needs and communities in which we aligned and clearly articulated perceptions operate We prize both intellectual We build lasting relationships, We endeavour to conduct OUR CUSTOMERS I know that happy customers mean security rigour and passion for our based on trust our business in an and prosperity for my future. work We aspire to offer the preferred environmentally sustainable We are honest about choices of product and service manner performance We innovate and lead in a We require and enable self- changing world management 02 03 Delta Corporation Limited Annual Report 2020 Company Profile It is principally a beverages company African Distillers Limited, diversified its brewing base. In 1978 the the plastic packaging entity, MegaPak, company with a diverse which also manufactures branded name was changed to Delta Corporation was demerged. The Company retains a portfolio of local and ciders. Limited and the Company assumed minority shareholding in the packaging Delta Corporation is a international brands in lager the mantle of a holding company for a group, Nampak Zimbabwe. The Company is listed on the Zimbabwe broad range of interests serving the mass beer, traditional beer, wines modern Zimbabwean Stock Exchange and was first listed in consumer market. These included lager On 1 January 2018, the Company and spirits, Coca-Cola company poised for 1946 as Rhodesia Breweries Limited. and sorghum beer brewing, bottling acquired a majority stake in National franchised sparkling and Its origins, however, date back to of carbonated and non-carbonated Breweries Plc, a Zambian traditional growth in all facets of alternative non-alcoholic 1898 when the country’s first brewery soft drinks, supermarket and furniture beer entity which is listed on the Lusaka its business beverages. was established in Cameroon Street, retailing, tourism and hotels and various Stock Exchange. This is part of a journey (Salisbury) Harare, from where the agro-industrial operations. to consolidate the traditional beer The Coca-Cola franchise covers the brewing industry developed into a major franchises and businesses in the region, activities of associate entity Schweppes industrial and commercial operation. The hotel, supermarket and furniture a sector in which the Company boasts of Holdings Africa Limited which focuses retailing businesses were demerged significant competences. The Company on cordials, juice drinks, water and By 1950, the Company had built the from the Group in 2001 to 2002 acquired United National Breweries Pty agricultural value chain activities under Sable Brewery in Bulawayo, producing resulting in the Group focusing on the Limited, the leading traditional beer Beitbridge Juice Company and Best pale ale, milk stout and Sable Lager. core beverages sectors. Some supply business in South African with effect Fruit Processors. In addition, wines Over the years the Company continued chain related investments remained from 1 April 2020. and spirits portfolio is under subsidiary to expand its portfolio of businesses and part of the Group until 2014 when 04 05 Delta Corporation Limited Annual Report 2020 Increased Competitor Activity c) Distorted Currency Default by counterparty Principal Both the alcoholic and non-alcoholic and Asset Values financial institutions or beverage sectors are highly competitive. The Monetary Authorities formalised customers Competition is from local alternative the Zimbabwe Dollar and outlawed The Group normally has significant Risks Update beverages, imports of own franchise the multicurrency regime in June amounts of cash, cash equivalents and brands by retailers, private label brands 2019. The distortions in the exchange other investments on deposit with and across beverage categories. The rates used by market players in banks and financial institutions. We cost, price and import duty disparities in setting prices of goods and services also extend both secured and unsecured The principal risks facing Unfavourable general economic The specific risk related to the legacy Zimbabwe compared to the region will which are based on the manner and credit to our retail customers. The risk the Group and considered and political conditions in the foreign liabilities is articulated in the put pressure on local pricing of certain form of payment; whether in local of counterparty default or failure may be country notes to the financial statements. brands and packs. We continue to bond notes, via an electronic payment heightened during economic downturns by the board and group The economic environment continues strengthen our capabilities in marketing platform or foreign currency notes or and periods of uncertainty. Losses could management committee to deteriorate and this increases Concerns about perceived and innovation and to review value transfer; makes it difficult to establish arise from the bankruptcy or insolvency are detailed below. These the overall risk of doing business. negative health and social chain costs. the true value of products and of of these counterparties. The political environment, although consequences of both alcoholic the local ZWL. The measurement are not the only risks peaceful, remains turbid. The general and non-alcoholic beverages. Regulatory or Policy Risks of financial performance is difficult Instability in the supply of facing the Group. There election held in July 2018, though There is growing global concern a) Indirect Taxes in a hyperinflationary environment. utilities and agricultural raw may be additional risks not peaceful, was contested and did not and high profile debate over alcohol Our business is subject to numerous The tight regulations on accessing