Distell : King IV Compliance Statement 2021

Distell Group Holdings Limited

(Distell)

Application of the KING IV Code Principles

The Board is committed to complying with the requirements of the Companies Act, 71 of 2008, as amended, the JSE Listings Requirements and the King Report on Corporate Governance for South Africa 2016 (King IV) which it does through processes and frameworks which ensure the on-going sustainability of the business and maximise value for shareholders and other key stakeholders, while also contributing to national prosperity.

The principles of King IV are adopted and applied by Distell as disclosed in this document.

Distell Group Holdings Limited

Application of the KING IV Code Principles

Leadership, Ethics and Corporate Citizenship

Principle 1

Leadership

The Board should lead ethically and effectively.

Distell Board governance philosophy

By consistently adhering to the values of good corporate governance, we provide a platform from which Distell's management and employees can pursue and achieve the Groups strategic ambitions and goals. This leads to long term value creation for all stakeholders. Our governance processes and principles contribute to an ethical culture that stretches beyond compliance to true accountability, transparency and fairness. The board applies integrated thinking as promoted by King IV, and application is achieved through appropriate policies, processes and controls.

The Board of Directors leads ethically and effectively, adhering to the duties of a director by acting with due care and diligence. The Board commits to maintain sufficient working knowledge of Distell and its industry and to remain informed about matters for decision making.

The Board is competent to steer and set the strategic direction of Distell. The board strives to act in the best interests of the Group. Prior to endorsing the strategy, the Board challenge it constructively with reference to, amongst others, the timelines and parameters which determine the meaning of short, medium and long-term respectively, availability of resources and relationships connected to the various forms of capital, the expectations of material stakeholders and the impact on transformation that may result from the execution of the proposed strategy.

The Board is mindful of the impact of Distell's activities on society and the environment, considering key risks and opportunities, and seeks to ensure sustained value creation for all stakeholders.

Distell Group Holdings Limited

Application of the KING IV Code Principles

Principle 1 (continued)

Leadership

The Board should lead ethically and effectively.

(continued)

Conflict of interest

The directors are required by the Companies Act to annually disclose their personal financial interests in material contracts or other matters, including interest by persons related to them. This process is facilitated by the company secretary around year- end.

Where a potential conflict of interest exists, directors must recuse themselves from relevant discussions and decisions.

All directors are required to comply with the Code of Ethics and Conduct, the Financial Markets Act, No. 19 of 2012, and the requirements of the JSE Limited and the adopted Group-wide Price Sensitive Information policy, regarding inside information, dealings in securities and the disclosure of such dealings.

Every year a Group-wide study of potential conflicts of interest is conducted, which is audited by Distell internal audit. No material conflicts of interest were identified in 2021.

Evaluation & Transparency

The Board, its Committees, its chair and individual members are subject to a formal evaluation process, either externally facilitated or self-evaluation at least every 2 years. The results are discussed and actioned by all concerned and a summary is published in our integrated annual report.

Distell Group Holdings Limited

Application of the KING IV Code Principles

Principle 2

Organisational

Ethics

The Board should govern the ethics of the organisation in a way that supports the establishment of an ethical culture.

The Board ensures that Distell's ethics are managed effectively and provides effective leadership based on an ethical foundation.

An ethical corporate culture is promoted and sustained through:

• endorsing the purpose and values of the Group;
• endorsing the principles documented in the Code of Ethics and Conduct ("the Code");
• monitoring and reporting on the measures taken by the Group to achieve adherence thereof; and
• all business conducted by the Board and management aligns with the values of the Group;
• the Code is published on the website and incorporated by reference in employee contracts;
• the Group has a supplier code of conduct;
• endorsing internal policies, specifically around Anti-bribery and Corruption, Gifts and Entertainment and Whistle- blowing to tackle practices inimical to ethical conduct more efficiently;
• the Board has allocated the oversight of, and reporting on, organisational ethics to the social and ethics committee, whose mandate includes monitoring and reporting on the Group's social performance and bringing material matters to the attention of the board; and
• all business conducted by the Board and management aligns with the values of the Group.

The implementation and execution of the Code of Ethics and Conduct and related policies are delegated to management.

In addition, management drafted an ethics strategy in 2021 which provides the broad outline of the focus areas and activities the organisation should pursue to deal with risk and build an ethical culture. It starts with the formulation of a statement of strategic

To increase our ethics awareness and behaviour and in accordance with the requirements of this 2nd principle, the Distell Ethics Strategy is imperative to ensure that the Social and Ethics Committee fulfils not only its mandate and responsibilities, but also contribute to the enhancement of Distell's organisational culture.

Distell Group Holdings Limited

Application of the KING IV Code Principles

Principle 3

Responsible

Corporate

Citizenship

The Board should ensure that the organisation is and is seen to be a responsible corporate citizen.

The Board ensures that the Group is, and is seen to be, a responsible corporate citizen. The Board endorse the values, strategy and conduct which are congruent with being a responsible corporate citizen.

The Board assesses the consequences of the Group's activities by monitoring performance against measures and targets in the following areas:

• workplace [including, but not limited to, employment equity, fairness of remuneration principles, development of and the health and safety of employees];
• economy (including, but not limited to, economic transformation, fraud and corruption practices and policies, approving a responsible and transparent tax policy);
• society (including, but not limited to, public health and safety, consumer protection, protection of human rights); and
• environment (including, but not limited to, responsibilities in respect of pollution and waste disposal).

The monitoring of above activities is delegated to the Social and Ethics Committee.