Broad Based Black Ownership Initiative

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Broad Based Black Ownership Initiative
June 12, 2008
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DUMISA NTSEBEZA

• Chairman

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Welcome and introductions

• Clive Thomson CEO
• Dominic Sewela Gandaganda
• Ciko Thomas Zwavhudi
• Yunus Akoo The YJ Family Trusts
• Thandeka Mgoduso Ayavuna
• Bheki Sibiya Moty Capital Partners Consortium
• Ashley Ally Izingwe
• Mike du Toit DEC Investment Holding Company
• Paul Harris The Shalamuka Foundatiion
• Ikamva Labantu Empowerment Trust

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Empowerment Strategy

• Broad-based black economic empowerment is key to
  the long term success of South Africa
• As a corporate citizen of South Africa,
  Barloworld has an important role to play in
  transforming and growing South Africas economy
• Barloworld is committed to an empowerment
  transaction that achieves
• Meaningful and sustainable wealth creation for
  black individuals and communities
• Empowerment of South African employees and black
  managers
• Is in accordance with the letter and spirit of
  the DTI Codes of Good Practiceon BBBEE

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Broad Based BEE transaction

• Achieves effective 29 empowerment of
  Barloworlds South African Operations
• 10 of Barloworld Group
• Transaction value of R2,4 billion
• Broad Based - strategic black partners,
  employees, education trust, community service
  groups
• Acceptable cost to shareholders
• Creating value for all stakeholder groups
• Participating in success of local and
  international operations

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CLIVE THOMSON

• CEO

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Strategic Focus Areas
Integrated customer solutions
People
Empowermentandtransformation
Financial returns
Profitable growth
Commitment to lead
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Barloworld Delivering on Empowerment and
Transformation

• BEE transactions at subsidiary level
• Enterprise development Barloworld Siyakhula
• Senior black executive appointments
• Black non-executive appointments
• Affirmative procurement
• Skills development and training
• Socio-economic development
• BEE transaction at holding company level
  addresses equity ownership

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Four Beneficiary Groups Structured to be
Broad-Based
Employees (including black managers and
non-executive directors)
Community ServiceGroups
Education Trust
StrategicBlack Partners
2.39
0.78
0.95
5.88
10.00
Barloworld
Effective 29
Barloworld South African operations
NB In terms of the DTI codes
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Four Beneficiary Groups
Based on 30 day VWAP of R103.87 _at_ 6 June 2008
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Strategic Black Partner and Community Service
Group Selection process

• A considerable number of parties expressed an
  interest
• An initial partner screening process was
  conducted based on rating scale devised from the
  DTI Codes, with following characteristics
• Ability to add value to Barloworld
• BEE credentials
• Broad-based black shareholding level
• Women shareholding level
• Access to equity funding
• Short listed participants presented credentials
  to Barloworlds EXCO
• Empowerment and Transformation Committee made
  final recommendation for approval by Barloworld
  board

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Strategic Black Partners 5.88 R1 384m
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Employees 1 R235m General Staff Trust

• Empower all current general employees of
  Barloworld employed by the South African
  operations and managers who do not participate in
  another share incentive scheme
• Aimed at empowering and retaining the general
  employees of Barloworld

Objective

• Over 60 employees are Black
• 2.3 million shares allocated

Number

• Voting rights exercisable from the allocation
  date
• Proposed that beneficiaries be entitled to
  dividends on shares in respect of which have
  satisfied employment requirements
• Able to sell, cede, encumber after five years
• 35 will vest immediately. Another 35 after 3
  years and the balance 5 years

Rights attributable

• Beneficiaries will be entitled to vote on the
  resolutions proposed at general meetings by
  instructing the trustees how to vote

Voting of shares

• Cash contribution to trust to acquire shares

Funding
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Black Managers and Black Non-Executive
Directors 1.39 R327m

• Empower current and future black managers and
  current black non-executive directors of
  Barloworld
• Aimed at attracting, incentivising and retaining
  Black managers

Objective

• Approximately 140 current black managers future
  black managers 3.1 million shares (1.35)
• 3 black non-executive directors 86 650 shares
  (0.04)

Number

• Economic and voting rights vest on the allocation
  date
• 1/3 vests after 3 years, 1/3 after 4 years and
  1/3 after 5 years

Rights attributable

• Beneficiaries will be entitled to vote on the
  resolutions proposed at general meetings by
  instructing the trustees how to vote (Non-execs
  voting rights limited by the JSE rules)

Voting of shares

• Notional Vendor Facilitation involving
  contribution to the Black Managers Trust with
  buy-back rights for black managers
• Cash contribution to Black Non-Executive
  Directors Trust to acquire shares

Funding
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Education Trust 0.78 R184m

• The income of the Education Trust is to be
  applied to provide bursaries and educational
  assistance to promising black students

Objective

• The trustees will ensure that the Barloworld
  ordinary shares held by the Education Trust are
  voted in the best interests of the beneficiaries
  at general meetings of Barloworld

Voting of shares

• Notional Vendor Facilitation involving
  contribution to Education Trust with buy-back
  rights for Barloworld

Funding
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Community Service Groups 0.95 R224m

• Equity contribution
• Term loan funding

Funding
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Gandaganda

• Dominic Sewela

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SBP Gandaganda 1.33 R313m
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Zwavhudi

• Ciko Thomas

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SBP Zwavhudi 0.44 R104m
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The YJ Family Trusts

• Yunus Akoo

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SBP YJ Family Trusts 0.67 R158m
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Ayavuna Women's Investments

• Thandeka Mgoduso

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SBP Ayavuna Womens Investments 1.50 R353m
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Moty Capital Partners Consortium

• Bheki Sibiya

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SBP Moty Capital 0.75 R176m
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Izingwe

• Ashley Ally

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SBP Izingwe 0.75 R176m
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DECInvestment Holding Company

• Mike du Toit

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DEC Investment Holding Company 0.32 R74.5m

• The Thabo Mbeki Development Trust for Disabled
  People
• The Deaf Federation of South Africa
• Disabled People South Africa
• National Council for Persons with Physical
  Disabilities in South Africa
• South African Federation for Mental Health
• South African National Council for the Blind
• Epilepsy South Africa

Beneficiaries
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Ikamva Labantu
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Ikamva Labantu 0.32 R74.5m

• Ikamva Labantu organisation
• community based organisations serving community
  groupings
• benefiting disadvantaged, disabled, indigent,
  unskilled and poor people
• Ikamva Labantu trust
• Set up to benefit the Ikamva Labantu organisation

Beneficiaries
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The Shalamuka Foundation

• Paul Harris

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The Shalamuka Foundation 0.32 R74.5m

• Trust formed in 2006
• Raises long-term, sustainable funding for the
  Penreach Whole School Development Programme

Background
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Clive Thomson

• CEO

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Funding Structure and Barloworld facilitation
R2 298m Total
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Financial impact and economic cost

• Balance sheet
• Approximately R1.5 billion bullet loan from the
  SBP and CSG Funding SPVs
• Convert existing short-term funding to long-term
  funding
• Dividends
• Dividends paid expected to be in line with
  current dividend policy
• Economic cost
• Estimated IFRS2 share-based payment charge of R
  682 m
• Equates to 3.2 of market cap (based on 30 day
  VWAP)

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Financial effects at 31 March 2008
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Timetable approximate timelines

• Circular and notice of general meeting posted to
  shareholders Monday, 21st July 2008
• General meeting of shareholders at 1030 am
  Tuesday, 12th August
  2008
• Expected listing date of the new Barloworld
  ordinary shares on the JSE Monday,
  25th August 2008
• Effective date of black ownership initiative on
  or about Monday, 25th August 2008

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Summary

• Diverse and Broad Based BEE partners including
  our employees
• Addresses the equity ownership component of our
  empowerment and transformation strategy
• Detailed and complex process
• Exceeds the requirements of the DTI Codes of Good
  Practice on Broad Based Black Economic
  Empowerment
• Of long term benefit to the company and its
  stakeholders

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Broad Based Black Ownership Initiative
June 12, 2008