Distell : Annual financial statement 2022

Creating memorable moments. Crafting a better future.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2022

1. Consolidated Annual Financial Statements 2022

CONTENTS

IFC WHO WE ARE

IFC OUR VISION, OUR PURPOSE, OUR VALUES

01 CURRENCY OF FINANCIAL STATEMENTS

01 SALIENT FEATURES

02 DIRECTORS' RESPONSIBILITIES FOR FINANCIAL REPORTING

03 GROUP CHIEF EXECUTIVE OFFICER AND GROUP CHIEF FINANCIAL OFFICER RESPONSIBILITY STATEMENT

04 CERTIFICATE BY THE COMPANY SECRETARY

05 AUDIT COMMITTEE REPORT

07 REPORT OF THE BOARD OF DIRECTORS

12 INDEPENDENT AUDITOR'S REPORT

1. STATEMENTS OF FINANCIAL POSITION
2. INCOME STATEMENTS
3. STATEMENTS OF COMPREHENSIVE INCOME
4. STATEMENTS OF CHANGES IN EQUITY

1. STATEMENTS OF CASH FLOWS
2. NOTES TO THE ANNUAL FINANCIAL STATEMENTS

106 REPORT ON THE ASSURANCE ENGAGEMENT ON THE COMPILATION OF PRO FORMA FINANCIAL INFORMATION

1. ANALYSIS OF SHAREHOLDERS
2. DEFINITIONS AND RATIOS
3. DATES OF IMPORTANCE TO SHAREHOLDERS

IBC ADMINISTRATION

WHO WE ARE

Distell is a business with deep roots in South Africa and a growing African and international presence. We are Africa's leading producer and marketer of ciders, ready-to-drink (RTD) beverages, spirits and wines, enjoyed responsibly by people across the world. Our brand portfolio offers consumers a choice for every occasion and provides unique moments of social enjoyment. The value we create enriches the lives of our employees, shareholders and the communities in which we live and work.

OUR VISION

Making a difference by creating shared value in our chosen markets. We aim to build the Distell of tomorrow, while helping to regenerate economies and communities, and allowing the environment to thrive.

OUR PURPOSE

Creating memorable moments, crafting a better future. Our purpose captures the customer and consumer experience associated with our award- winning brands. It recognises our role as a corporate citizen and our obligation to act responsibly and pursue excellence in everything we do.

OUR VALUES

Our values reflect what we stand for as an organisation and act as guiding principles. At the foundation of these values is a total commitment to our consumers and customers, characterised by an unwavering passion to serve their needs with integrity and excellence.

Customer and consumer focus:

We are passionate about our customers and consumers.

Excellence:

We are committed to excellence in everything we do.

One Distell:

We win by collaborating with integrity, honesty and respect.

1. wwwConsolidated.distellAnnual Financial.co.zaSt tements 2022

CURRENCY OF FINANCIAL STATEMENTS

The annual financial statements are expressed in South African rand (R).

The rand cost of a unit in the following major currencies at 30 June was:

	2022	2021
US dollar		14,33
16,24
UK pound	19,72	19,84
Euro	16,98	17,05
Canadian dollar	12,59	11,56
Botswana pula	1,31	1,31
Australian dollar	11,19	10,77
Kenyan shilling	0,14	0,13
Chinese yuan	2,42	2,22
Angolan kwanza	0,04	0,02

SALIENT FEATURES

Group revenue

Excise duty

20,8%	26,9%
on 17,6% higher volumes	to R10,5 billion
EBITDA	Headline earnings
20,8%	36,8%
Reported	Reported
EBITDA	Headline earnings
25,4%	34,8%
Normalised and adjusted	Normalised and adjusted
for forex1,2	for forex1,2
Domestic revenue	Africa revenue
24,4%	16,0%
on 18,7% higher volumes,	alongside volume growth of
driven by premium RTD and	19,9% outside SACU3 despite
spirits growth	prolonged channel closures
	and export challenges

International revenue	Return on invested capital
7,9%	(ROIC) 370bps
on 9,4% higher volumes

Dividend payments remain suspended due to the Heineken transaction

Notes:

1. Normalised headline earnings and earnings before interest, tax, depreciation and amortisation (EBITDA) refer to adjustments for the: (a) profit or loss on disposal of property, plant and equipment (PPE), investments, subsidiaries and intangible assets; reversal of impairment of investments; and
   (b) retrenchment, legal disputes and regulatory and acquisition-related costs related to the Heineken transaction.
2. Foreign currencies and abnormal transactions affect the Group's performance. Where relevant in this report, adjusted non-IFRS measures are presented. These adjusted measures represent pro forma financial information. A reconciliation of the pro forma financial information to the equivalent IFRS metrics is provided in the report of the board of directors.

3 SACU = the Southern African Customs Union ("Distell" or "the Group" or "the Company")

Consolidated Annual Financial Statements 2022	01

DIRECTORS' RESPONSIBILITIES

for financial reporting

The South African Companies Act, No. 71 of 2008, as amended (the Companies Act) requires the directors to prepare annual financial statements for each financial year which fairly present the state of affairs of the Company and the Group and the profits or losses for the period. In preparing these annual financial statements, they must:

• select suitable accounting policies and apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether set accounting standards have been followed, subject to any material departures disclosed and explained in the annual financial statements; and
• prepare the annual financial statements on the going concern basis unless it is inappropriate to presume the Group will continue in business.

The directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Company, to ensure the financial statements comply with the Companies Act. They have general responsibility for taking such steps as are reasonably accessible to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

These annual financial statements are prepared in accordance with International Financial Reporting Standards and incorporate full and responsible disclosure in line with the accounting policies of the Group, supported by reasonable and prudent judgements and estimates.

The board of directors approves any change in accounting policy, with their effects fully explained in the annual financial statements.

The directors have reviewed the Group's budget and cash flow projections for the	period to 30 June	2023. Based	on these projections and
considering the Group's current financial position and the financing facilities available to it, they are	satisfied it	has adequate resources to
continue its operations in the foreseeable future. The annual financial statements	were prepared on	a going concern basis.

No event, material to the understanding of this report, has occurred between the financial year-end and the date of this report.

A copy of the annual financial statements of the Group is available on the Company's website. The directors are responsible for the maintenance and integrity, including implementing controls and security, of statutory and audited information on the Company's website.

The annual financial statements as set out on pages 3 to 105 were supervised by the Group chief financial officer, Lucas Verwey CA(SA), approved by the board of directors and are signed on its behalf:

JJ Durand	RM Rushton
Chairman	Group chief executive officer
Stellenbosch
23 September 2022

02 Consolidated Annual Financial Statements 2022

GROUP CHIEF EXECUTIVE OFFICER AND GROUP CHIEF FINANCIAL OFFICER RESPONSIBILITY STATEMENT

Each of the directors, whose names are stated below, hereby confirm that:

• the annual financial statements set out on pages 3 to 105, fairly present in all material respects the financial position, financial performance and cash flows of Distell Group Holdings Limited (the Group and issuer) in terms of IFRS;

• to the best of our knowledge and belief, no facts have been omitted or untrue statements made that would make the annual financial statements false or misleading;
• internal financial controls have been put in place to ensure that material information relating to the Group and its consolidated subsidiaries

	have been provided to effectively prepare the financial statements	of the Group;
•	the internal financial controls are adequate and effective and can	be relied upon in	compiling the annual	financial statements, having fulfilled
	our role and function as executive directors with primary responsibility for implementation and execution of controls;
•	where we are not satisfied, we have	disclosed to the audit committee and the auditors any deficiencies	in design and operational
	effectiveness of the internal financial	controls, and have taken steps to remedy the	deficiencies; and

• we are not aware of any fraud involving directors.

RM Rushton	LC Verwey
Group chief executive officer	Group chief financial officer
Stellenbosch
23 September 2022

Consolidated Annual Financial Statements 2022	03