Oakbay Investments Release Maiden Annual Results: 8% of Revenue from Government Business in 2015/16

Annual Results for the year ended 29 February 2016

8 September 2016

Oakbay Investments announces its annual, audited results for the year ended 29 February 2016.

Growth in revenue driven by private sector contracts:

- Group Revenue increased by 7% to 2.62 billion Rand (2015: 2.44 billion Rand)

- Government contracts accounted for 8.9% of the Group’s revenue

- Mining division contributed 1.17 billion Rand of revenue and is the Group’s largest division (44.5% of revenue)

- Mining division’s largest company is JIC Mining Services, a loss-making business prior to Oakbay’s acquisition in 2006. JIC has never had a government contract

- Sahara is the second highest contributor to the Group reporting 1.1 billion Rand of revenues – (44% of Group revenue). Sahara also does not have anygovernment contracts, following a deliberate decision taken by its Board in 2008

- The Brakfontein coal mine received its water use licence in December 2014, enabling it to commence mining and supply Eskom with coal from April 2015.This is the first time that any Oakbay business has mined coal and is a major milestone for the Group

- For the period, Brakfontein supplied 1.49 million mt of coal to Eskom. This constituted just 1.25% of Eskom’s total coal supply. Oakbay’s 29% share in Tegeta equates to 0.43 million tonnes of supply and just 0.36% of Eskom’s total coal supply. This coal was sold to Eskom at a rate of of c. 270 Rand a ton

- Oakbay’s media businesses, The New Age and ANN7, are profitable and through innovative new platforms, such as the ‘TNA Business Breakfast’ with SABC and ANN7’s ‘SA Decides’ programmes, both have grown revenue for a mix of government and private sector advertising and sponsorships

- 3,991 jobs sustained despite South Africa’s wider economic challenges and 3,719 jobs in the mining sector

Nazeem Howa, Chief Executive of Oakbay Investments, said: 

"I am proud to share with wider audiences some insight into Oakbay’s business model, strategy and turnover levels. I hope this will help audiences understand our operations and dispel some of the myths that have been built up about our Group – especially the myth that we are heavily reliant on Government business, when nothing could be further from the truth.

“Following the herd is not what Oakbay is about and we do things slightly differently. We seek to disrupt industries and this makes us unpopular amongst the establishment. We also take a long-term perspective on opportunities. This is all done with two goals in mind: profit and job creation, which we believe are equally important.

“We’ve been around for 20 years now in South Africa and in that time have grown from just 8 employees to almost 8,000 today. We also paid 141 million Rand as Corporate Income Tax for the financial year. Both the workforce we sustain and the taxes we pay benefit the South African people. I honestly believe that we are a force for good in this country and we look forward to continuing to grow our business and create more jobs for our country – it is what South Africa desperately needs.”

Issued by APO on behalf of Oakbay Investments, 8 September 2016

CHIEF EXECUTIVE’S STATEMENT

Introduction

I am delighted to introduce an update on Oakbay’s performance for the financial period 1 March 2015 to 29 February 2016.

This is a new initiative for Oakbay. Despite being a private company and having no obligation to release details of our financial performance, we recognise that many myths have built up about the Group. Other Chief Executives have publicly commented that companies who disrupt the South African establishment do so at their reputational peril and we have found ourselves in a similar situation. We hope that providing some insight into our business model, strategy and turnover levels will help audiences understand our operations.

In particular, I look forward to dispelling the myth that our Group is heavily reliant on Government business, either directly or indirectly. Nothing could be further from the truth.

History

Contrary to some misperceptions, Oakbay has been operating successfully in South Africa for 20 years and has a track record of strong business performance in a number of sectors.

Operations began in the IT sector with Sahara Computers and have since diversified into a variety of sectors including: mining, media and engineering. This diversification has enabled consistent growth and job creation throughout times of both economic boom and bust.

Sahara has a special place in Oakbay’s journey. Not only was it the Group’s first company, but it is the division in which many of our current senior personnel were schooled in the Group’s business philosophy. Whilst some audiences may think that Oakbay is a relatively recent arrival in South Africa, the Sahara notebook was the number one South African-branded notebook as far back as 2005.

We began to diversify operations beyond IT a decade or so ago. In 2006, we acquired JIC, a mining services company and in 2007, we established Tegeta, a mining exploration company. In 2010, we acquired another mining asset in Klerksdorp which is now known as Shiva Uranium.

In 2010, we also launched The New Age national newspaper and followed this with the launch of ANN7 news network in 2013. Finally, in 2014 we acquired an indirect minority stake in engineering company VR Laser.

We started off with just 8 employees in 1997 and we now employ almost 8,000. 99% of the Group’s workforce is from Southern Africa and 76% is South African.

Business philosophy

Oakbay’s main focus is on two key deliverables: profit and job creation. These targets co-exist alongside each other with equal importance attached to them by the Group’s shareholders.

The Group’s business philosophy is not an exact science, but follows several consistent principles.

Five main principles are:

- Managing its strategy and asset portfolio for the long-term;

- Turning around performance in under-performing or distressed assets;

- Adopting a managerial structure that is un-bureaucratic, allowing for rapid decision-making;

- Seeking to disrupt established industries; and

- Very hard work

Following the herd is not what Oakbay is about. Non-conventional approaches are welcomed. The Group has always strived to foster an entrepreneurial culture and to avoid the perils of managerial ‘group think’.

Oakbay executives are encouraged to take risks. Where our competitors see risk, we try to see an opportunity and we promote the mentality of finding innovative solutions to business problems.

The Group has a collegiate culture of responsibility taking. Management prides itself in being on-the-ground, literally, with the Group’s assets. The organisation is also fiercely meritocratic. Many of today’s senior personnel have risen through the ranks from entry-level positions.

Many of the individual divisions’ chief executives are from a career background quite different to their current area of responsibility. This enables a fresh perspective on a division’s challenges and solutions. Whilst this approach will be complemented by a supporting team heavily experienced in a particular sector, Oakbay does not seek to replicate a strategy merely because that strategy has been implemented for the previous few years. Therein lies the path to less innovation and slower growth.

The Group will always seek to disrupt established industries and extract greater efficiencies and better performance levels. Sometimes this might be via an innovative solution, or simply working harder than its competitors. The Group’s first business, Sahara, disrupted the IT market in the 1990s, The New Age has disrupted the newspaper market since 2010, and the Group’s recent entry into the mining industry has shown that previously loss-making mines such as Optimum and loss-making businesses such as JIC Mining Services can be turned around. Disruption equals opportunity and growth.

Central to Oakbay’s strategy is playing the long game. An advantage of not being publicly-listed is its ability to take long term decisions in the best interest of the Group, without being answerable to shareholders on a short-term basis in the way a traditional listed company might be.

Some market entries are strategised several years in advance and are then executed at the opportune time. The Group’s flat management structure and rapid decision-making philosophy means the Group can also move with rapidity when an opportunity presents itself. This hybrid model of long term planning and ability to be fleet-of-foot is a significant differentiator and has served the Group very well.

Permeating all of the aforementioned principles, is hard work. Not all of Oakbay’s entrepreneurial efforts are perfect, although the Group would like to believe it succeeds more than it fails. However, in the area of hard work, Oakbay is confident that it will not be outworked by any other domestic competitor. It is quite simply what defines the company and always has done.

These principles have enabled Oakbay to grow its workforce for the benefit of ordinary South Africans since 1997, and all profits (after drawings and retained working capital balances) have been reinvested in South Africa.

Outlook

Our South African bank accounts remain closed and we remain none the wiser as to why that is the case, despite asking the four relevant banks multiple times, for reasons. In the light of the majority shareholders’ announcement on 27 August regarding their intention to dispose of their Oakbay shareholdings, we intend to reach out in the coming weeks, again, to the four banks, and implore them to reopen our accounts.

Separately, our shareholders hold us to account by two primary performance indicators: profit and job creation, so I’m seeking to increase both in this next financial year. We will stand by the principles that have served us well over the last 20 years: disrupting industries that need disrupting and planning for the long-term.

Within this wider context of job creation and profit, three strategic imperatives for our business are: developing our uranium plan, developing an export capacity within our coal mining facilities for which the current coal price is encouraging and finally, establishing a free-to-air presence for our media business.

This is both the right strategy for Oakbay and will continue the job creation that South Africa so desperately needs.

Nazeem Howa, Chief Executive, 8 September 2016

OPERATIONAL REVIEW

MINING

Overview

Oakbay Investments’ mining operations include extraction and prospecting licences for a number of coal, uranium and gold ore bodies, as well as a mining services business. The Group’s mining businesses are:

Mining:

- Oakbay Resources & Energy (listed on the Johannesburg Stock Exchange) – the owners and operators of Shiva Uranium and the Brakfontein mine; and

- Tegeta – the owners and operators of the Optimum and Koornfontein coal mines

The CEO of the listed entity is Jacques Roux, while the Optimum and Koornfontein entities are run by George Van Der Merwe, the former CEO of Oakbay Resources.

Mining services:

- JIC Mining Services – a provider of mining services for over 25 years

- The CEO of the Group’s mining services operations is JP Arora.

The Group’s operations in the sector have a demonstrable track record in turning around performance, driving greater efficiencies and delivering profitable businesses. In 2015-16, Oakbay’s mining division has sustained 3,719 jobs. This contrasts with South Africa’s wider mining sector which has seen tens of thousands of job lost.

During the financial year, Tegeta supplied 1.49 million tonnes of coal to Eskom. This constituted just 1.25% of Eskom’s total coal supply. Oakbay’s 29% share in Tegeta equates to 0.43 million tonnes of supply and just 0.36% of Eskom’s total coal supply.

JIC is the second largest individual business unit in the Oakbay Investments group by revenue. The nature of JIC’s business, working with mine operators across South Africa, means that it has never had a government contract.

Financial performance

In the financial year 1 March 2015 to 29 February 2016, the Group’s mining businesses reported total revenues of 1.17 billion Rand. This contributed 44.5% of Oakbay Investments’ revenues in the period.

Operations

Mining:

In December 2014, the Brakfontein coal mine received its water use licence from the South Africa Department of Water & Sanitation. This licence approval was a welcome conclusion to a process which took several years, far longer than even our most pessimistic expectations, and is at odds with the view that some commentators have regarding Oakbay’s perceived influence over government departments. This meant that from April 2015, Brakfontein was clear to begin supplying coal to Eskom. Brakfontein is the first Oakbay Investments-owned mine to begin producing coal and was a significant milestone for the business.

During the period, Shiva Uranium has invested in its gold plant to improve the overall condition and increase capacity. Gold production at Shiva Uranium continues to be a large contributor to the fixed costs at the mine while the uranium mills are under care and maintenance.  The mine currently employs over 700 workers and no employees have been retrenched since the business was acquired in 2010.

Mining services:

JIC employs 2,780 people and performs highly specialised work for a number of major players in South African mining and some of JIC’s customer relationships have been in place for over 18 years. The nature of demand for JIC’s services changes with the commodities cycle and historically has been heavily focused on gold mining. Currently, demand is particularly strong from platinum producers.

JIC, which is the largest business unit within the mining division, has no revenue at all from any government source.

JIC’s customers are based around the Rustenburg area and they rely on JIC to perform both efficiently and safely to provide the specialised mining and support services they need. JIC’s work also enables increased production levels, which it facilitates with safety as the highest priority.

During the period, JIC cemented its position as one of the top three mining support services providers in the country. Whilst JIC is not immune to the commodities cycle, efficient operations and an embracing of the wider Oakbay philosophy of finding and exploiting opportunities mean that revenues have been more than maintained.

JIC’s operations are compliant with the internationally renowned ISO 9000 quality management system and the company has a dedicated programme to upskill its employees. This complements Oakbay’s wider philosophy of meritocracy and promoting from within. As a result, employee churn levels at JIC are extremely low.

As well as upskilling its employees, JIC makes a material contribution back into the communities in which it operates. Its MQA-accredited training academy provides training for the wider mining industry and its other training programmes assist local individuals (both employed and unemployed) around its operations. This increases the chances of inclusion in the economy for those currently excluded and adds to the skill set of those already in work.

Outlook

Mining:

Shiva Uranium is one of the most significant and advanced uranium projects in the world and is poised to take full advantage of an anticipated increased in the global price of uranium. The significant quantities of gold found in the ore body means that while the uranium mills are under care and maintenance the mine continues to be profitable and can continue to employ over 700 workers. At a time when uranium mining becomes commercially viable once again, the uranium that will be produced at the mine is currently intended for export.

To be very clear, as there has been much misunderstanding about this matter, our uranium operations have nothing to do with the wider South African nuclear story. Our expectation is that our life of mine will have comfortably passed before South Africa is ready for nuclear.

Post period-end, in April 2016, Tegeta completed its 2.15 billion Rand acquisition of the Optimum coal mine (and other assets) from Glencore. The acquisition was formally approved in February 2016 by the Competition Tribunal of South Africa, who found that the transaction was unlikely to substantially prevent or lessen competition in the thermal coal market. The Tribunal noted that the merging parties were small players in the market and face competition from larger rivals such as: Anglo American, Exxaro Coal and South 32 Ltd, who are credible alternative suppliers of thermal coal.

At this time, Tegeta took full operational control of the Optimum and Koornfontein coal mines. Since then, Tegeta has been able to grow production and enhance efficiencies to bring down the cost of coal production at both sites. For example, at Koornfontein, between April 2016 and July 2016 coal production increased from 170,000 tonnes to 250,000 tonnes per month. At the same time, the cost of production per tonne has been reduced by 21%. Plans are now being developed to launch an open-cast operation at the mine, which will create further jobs in the area.

At Optimum, a second drag line is now operational and a third is expected to come on-stream in Q3 2016. Open cast coal production has increased from 180,000 tonnes per month in December 2015, to 440,000 tonnes in July 2016 and the cost of production has been reduced by 28%.

Similarly, underground coal production has increased from 370,000 tonnes to 420,000 tonnes and the cost of production has been reduced by 10.2%,

Optimum was released from its ‘business rescue’ status on 31 August 2016, a mere five months after its acquisition by Tegeta, a fantastic achievement.

Export quality coal is being produced at both Optimum and Koornfontein, and with increased production both mines are exploring opportunities to open up export markets.

Mining services:

Opportunities exist for JIC to cross-sell with existing customers. Further afield, the division has a major strategic focus on coal. Platinum demand will remain, but coal has the potential to be a significant driver of growth.

ICT

Overview

Sahara was established in 1997 and was Oakbay Investments’ first business in South Africa. Sahara’s focus since inception has always been IT hardware. Its CEO is Stephan Nel.

Sahara has always been a very visible, public face of Oakbay’s operations. In 2005, the Sahara notebook was the number one South African-branded notebook. Sahara also revolutionised the traditional dealer channel in South Africa by changing the standard dynamics of how distribution was handled, via: the best prices, a Tier One product, easy access and unique distribution country-wide.

Sahara has always moved with the times and anticipated future customer demand. In 2010, the division made a strategic shift and embraced increasing levels of connectivity by becoming more retail and technology focused. This involved going more direct to retail customers and embracing tablets and smartphones. This shift has continued and now the focus on laptops and tablets is being superseded by a concentration on mobile and two-in-one devices. Sahara has recently partnered with the international brand Alcatel where it will focus on telecoms companies and the data industry.

Importantly, Sahara has undertaken no Government business since 2008.

Financial performance

In the financial year 1 March 2015 to 29 February 2016, Sahara reported revenues of 1.1 billion Rand. This contributed 44% of Oakbay Investments’ revenues in the period.

Operations

Sahara’s customer base is:

- 60% - Retail

- 30% - Channels

- 10% - Corporate

The aforementioned shift to mobile product sales has continued throughout the period, reflecting demand. The customer mix has not changed, rather customers are just buying more mobile-specific goods.

Other strategic priorities during the period were exiting lower margin contracts and also increasingly partnering with technology partners/general retailers who are the most progressive in the mobile area. These partners include: the likes of Alcatel and Edcon.

Outlook

Looking forward, the Sahara business will become 100% mobile-focused by the end of this financial year.

The division will be launching a variety of new products, many of which will be cellphone accessories as well as more innovative ideas such as a ‘child-proximity’ watch, which will take a normal time piece and turn it into a location-based security device giving parents increased peace of mind about where their children are.

It is also anticipated that more and more transactions will be executed direct with the retail consumer. Sahara will subsequently use the data derived from those transactions, to give customers more of what they want.

Sahara, as Oakbay’s first company, has always embraced the Group’s philosophy of never standing still – always pushing boundaries and/or disrupting markets to extract value.

The division’s future is all about being online, focusing on mobile products, aligning itself with the best partners, and using data for the benefit of both consumers and Sahara.

MEDIA

Overview

Oakbay has a successful and growing media business which includes: The New Age (TNA) national newspaper and the ANN7 news network. Its Editor-in-Chief is Moegsien Williams.

Since its launch in 2010, TNA’s business model has always been to achieve its share of private/public advertising revenue. It has also attempted to provide balance to debate around government and government policy, given most of the media landscape in terms of ownership and political inclinations, is little changed since 1994.

Currently, the position of TNA is supportive of government, whilst remaining editorially independent and scrutinising of the ruling party.

TNA is sold and distributed in all nine of South Africa’s provinces with six daily regional editions and a bureau in every province. As such, TNA is the only truly national, broadsheet daily that also has an element of regional focus.

In partnership with the South African Broadcasting Corporation, TNA also hosts its Business Briefings which aims to stimulate public debate and make public figures more visible and accessible to ordinary South Africans. This innovation is unprecedented in South African broadcasting and has welcomed high-profile guests as varied as Government Ministers and the President of the Russian Federation, Vladimir Putin. From TNA’s perspective, it represents a value-for-money activity and has contributed to the overall profitability of operations.

Launched in 2013, ANN7 is broadcast across Africa on DSTV. The network attracts more than 2.3 million monthly viewers, making it one of the more popular 24 hour news networks in South Africa.

As with other Oakbay companies, ANN7 is intently focused on skills development and job creation. ANN7 (in conjunction with TNA) has an existing Cadet Academy which has launched the careers of many South African journalists since its inception, both at ANN7/TNA and other media outlets. An apprenticeship-style experience is offered to groups of talented youngsters, some of whom are offered permanent roles with the businesses once the formal schooling period ends. Since 2012, the Cadet Academy has produced, on average, 40 young journalists per year.

In keeping with this philosophy, the launch of ANN7’s second ‘SA Decides’ programme for this year’s election also created opportunities for prospective young journalists to intern at the channel, with the best performers given the opportunity of permanent positions.

ANN7 also hosts the annual South African of the Year Awards, now in their third instalment. The awards celebrate the year’s most innovative, inspiring and entertaining work by South Africans. Nominations are taken from the public who, alongside a panel of judges, cast the final votes. Categories include: Music Artist of the Year, Personality of the Year (TV/Radio/ Film), Business Innovator of the Year, Sportsperson of the Year, Conservationist of the Year, Youth Leader of the Year, and South African of the Year.

Since inception, TNA and ANN7 have together created 783 jobs for South Africans.

Financial performance

In the financial year 1 March 2015 to 29 February 2016, the combined media businesses reported revenues of 275.6 million Rand, representing 10.5% of Oakbay’s revenues. Both businesses are profitable.

In the financial year, the media businesses generated 78.53 million Rand of advertising revenue from the state – 27.16% of the media division’s revenues.

Less than 9% of total government advertising spend is with TNA and ANN7 (based on data in the Nielsen Report 2015-16).

Operations

TNA is operating in a challenging environment, specifically a general decline in levels of commercial advertising.

The news content in competitors’ output is very urban-focused. In contrast, TNA is deliberately much more regionally-focused, reflecting that c. 50% of its readers are rurally located. TNA’s front page is frequently different depending on which province it is being read in. The pro-government stance and regional focus of TNA contrasts with the urban bias and Opposition-supporting focus of most other daily newspapers.

TNA believes the contribution it makes to the cross-section of views consumed by South Africa’s population is an important one.

TNA is also proud of its innovative Breakfast Business Briefing forum. Topics are wide and varied with attendees including many of South Africa’s executive branch as well as foreign dignitaries. The programme frequently reaches up to 2 million people and is South Africa’s biggest breakfast show. It is also broadcast across 43 countries in Africa.

The broadcast element of Oakbay’s operations is gradually following TNA’s model. ANN7 is present in is three provinces currently with an aggressive hiring process set to increase this to six provinces by early 2017.

Outlook

The future is exciting for Oakbay’s media businesses.

TNA is intent on having region-specific editions in all nine provinces, which would be an increase on current levels of six editions across those nine provinces. ANN7, as noted above, intends to mirror the roll-out model executed by TNA.

TNA will also continue to tackle, head-on, the challenge for all entities in its sector – how to optimally manage both its print and online content, with respect to overheads and the consumption trends of its readers.

ANN7 also has aspirations to add radio output to its broadcast content. Radio still has huge penetration in South Africa and it is listened to by 87% of the population. That means that for every person who uses Facebook in South Africa, there are three radio listeners. And for every person who reads a newspaper, there are two times as many listening to radio. This is a clear opportunity.

Oakbay’s media divisions will continue to be at the forefront of transforming and disrupting a media that essentially retains its pre-1994 structure – a structure that doesn’t represent the majority of the people.

Oakbay will continue to expand and become increasingly multi-channel. Its role will be to promote South Africa and effect real change that benefits ordinary South Africans.

STRATEGIC INVESTMENTS

VR LASER

Overview

Oakbay Investments has an indirect minority shareholding (17%) in VR Laser, a leading manufacturer of steel products for global, blue-chip customers in a range of industries including: defence, mining, rail and transport.

Its CEO is Pieter Van Der Merwe and its services include: laser cutting, plasma cutting, fabrication and armour services.

Unlike some of Oakbay’s businesses, VR Laser’s business model is not a newly-emerging one or that of an early stage disruptor. In contrast, it is already a very well-established name, with a 15 year track record. In its niche area of operations, VR Laser is often the only company who can fulfil contracts to the standard demanded by global, blue-chip companies.

In the last six months alone, VR Laser has created 100 jobs, taking its total headcount from 150 to 250.

Financial performance

Non-government contracts dominate VR Laser’s operations. Non-government work accounted for 68% in 2014-15 and in the financial year 2016-17 to date, 56%.

In the accounting period in question (2015-16), non-government work represented 47%.

VR Laser’s government revenue in 2015-16 was 118 million Rand, of which Oakbay’s 17% share was 20 million Rand.

By far the largest contributor of government work to VR Laser is Denel, which in the period in question contributed 39.1% (87 million Rand) of VR Laser’s revenue.

In terms of other government revenue (rail), Transnet contributed less than 0.1%.

Operations

VR Laser has been a well-known name in the defence industry for many years, however, in keeping with Oakbay’s culture it continues to grow in established industries such as rail, transport and mining.

Operations during the period in question included a contract to supply armoured vehicles for African peace keeping missions to the United Nations. In this regard, the United Nations insisted that the vehicles be manufactured at VR Laser.

The division has positioned itself for further expansion in the mining sector by increasing its supply of Load, Haul, Dump machines and low profile road graders for underground mining as well crusher components for the commercial mining sector.

It has also opened new branches in Middelburg from where it will manufacture dragline buckets and various mining equipment. This increases VR Laser’s footprint significantly in the mining centre of South Africa.

VR utilized its expertise in production of critical parts for various suppliers in the form of three axle bogies and fuel tanks for Main Line Diesel Electric Locomotives, as well as chassis rails for Main Line Locomotives.

VR also assisted in the design and manufacturing of the armouring of normal soft skin production vehicles, which has expanded the market beyond the defence sector.

During the period, VR Laser became the first company in Africa to obtain the very stringent and highly regulated EN15085 welding certification, which is a European Railway welding standard.

Outlook

VR Laser aims to become the market leader in steel manufacturing. With a dedicated and experienced design, fabrication and integration team, VR Laser is strategically positioned to provide a turn-key solution to each and every customer requiring precision engineering.

PROPERTY AND EQUIPMENT LEASING

The Group also has additional, associated but un-consolidated strategic investments in Islandsite Investments 180 and Confident Concepts. These entities are involved in the property and equipment leasing sectors. They generate total revenues of 189 million Rand, of which zero is generated from Government sources.

OTHER POST-PERIOD END EVENTS

Shareholders’ intended disposal

On 27 August 2016, Oakbay’s majority shareholders (the Gupta brothers) announced their intention to sell their shareholding in Oakbay. The shareholders’ full announcement read:

“Since our decision to step down from all executive and non-executive positions in all our South African business in April 2016, the local management team has grown our businesses from strength to strength, with turnover and profits showing good growth and more jobs created.

As a family, we now believe that the time is right for us to exit our shareholding of the South African businesses which we believe will benefit our existing employees, and lead to further growth in the businesses.

As such, we announce today our intention to sell all of our shareholding in South Africa by the end of the year.

We are already in discussions with several international prospective buyers and will soon be in a position to make further announcements.

We believe that this decision is in the best interests of our business, the country and our colleagues.”

Advisory relationships

- Audit

Following their ending of its 16 year relationship with KPMG, on 21 April 2016, the Group appointed new auditors – SizweNtsalubaGobodo (SNG) – the fifth largest auditing firm in South Africa.

At the time, Victor Sekese, Senior Partner at SNG, commented:

“We did a pre-engagement exercise, as we are required to do in terms of the code of conduct of the International Federation of Accountants and the Independent Regulatory Board for Auditors. We did this exercise with rigour, and we were comforted with what we found.”

- JSE-approved sponsor

Following the ending of its professional relationship with Sasfin Capita in April 2016, on 1 September 2016, Oakbay Resources and Energy announced a new JSE-approved sponsor – River Group.