2018 REVIEW OF OPERATIONS LEVERAGING OUR SUPPLY CHAIN AND LOGISTICS

Our procurement team interacts with local, regional and global suppliers to source the goods and services our business needs to produce and sell our beverages. Our Supplier Partnering Program aims to collaborate with each supplier to ensure that they at least meet minimum requirements of the United Nations Framework and Guiding Principles on Business and Human Rights and the Company’s code of business ethics. The guiding principles relate to work place safety, avoiding child labour, basic labour standards, human rights and good manufacturing practice.

Suppliers must act ethically and with integrity at all times and comply with local, national and international laws and regulations. They should avoid situations where a conflict of interest may occur, and must immediately disclose to Delta any conflict of interest that arises.

Most of the Company’s inputs and services are sourced from the local market. The contract farming arrangements for sorghum, barley and maize ensure sustainable sourcing of these key brewing materials whilst providing livelihoods to the Zimbabwean communities. The supplier partnering program aims to achieve gains in quality, cost and service levels through reduction in waste and poor materials performance.

The current year has been challenging due to the hurdles faced by our supplies in securing imported raw materials. The distortions arising from the emergence of the parallel markets for hard currency have created disparities in pricing. The Company’s financial dealings have strictly been in accordance with the laws of the land.

IMPROVING THE EFFICIENCY OF OUR DISTRIBUTION LOGISTICS

The Company operates an internal fleet comprising over 220 prime mover vehicles and over 400 trailers, primarily for secondary distribution, which allows the Company to deliver its products directly to retail and wholesale customers.

There are ongoing initiatives to build internal capacity for primary freighting from the production centres to benefit from enhanced efficiencies. Over 50% of the freighting volume was moved by the internal fleet, an increase from the 34% achieved in the previous year. We travelled a combined 14,9 million kilometres this financial year.

We continue to explore opportunities for improving both vehicle and driver performance in order to improve vehicle productivity and distribution efficiency. The road network continues to deteriorate worsened by road congestion in urban areas and poor driving practices.

With over two hundred delivery vehicles and five hundred light motor vehicles plying our roads each day, it is a safety imperative for the Company to uprate driver skills. The division continues to invest in driver training and safety awareness.

We work collaboratively with the Traffic Safety Council in furtherance of programmes to reduce drinking and driving while promoting defensive driving. Our drivers continue to participate in the annual driving competitions within the Company and against other fleet operators.