INVESTING IN SOUTH AFRICAN PETROLEUM AND REAL ESTATE ASSETS

INVESTOR PRESENTATION ANDINFORMATION DOCUMENT

Executive Summary

• CARDINAL is an investment holding company focused on the acquisition, trading and development of strategic investment opportunities;

• The company focuses on investments in the petroleum and related real estate sectors;

• The strategic objective of the company is to acquire and develop a diverse portfolio of petroleum storage, wholesale depots and retail outlets, together with related real estate assets in various locations throughout South Africa, enabling it to deliver a national footprint of wholesale petroleum supply to customers under one brand;

• The long term vision of the company is to incorporate LNG (gas) and water related assets to its’ portfolio of investments;

• Cardinal’s business model is designed to offer investors an opportunity to achieve capital growth and regular, reliable income from the petroleum sector;

• Managements’ core focus is to consistently deliver above average returns to its investors;

• Cardinal will deliver a combination of security, cash flow, growth and liquidity to its investors;

• Business activities:

• Management’s focus is to source and acquire investment and development opportunities in wholesale depots, retail sites, storage, truck-stops and the real estate associated with these activities;

• Cardinal’s wholly-owned subsidiary, CPTC, focuses on the trading of liquid product only. This includes petrol, diesel, lubricants, anti-freeze, gas and water;

• A division of CPTC will deliver an electronic trading platform to market, and a customer / supplier transaction enablement platform;

• Cardinal’s unique value proposition is based on the liquidity and strong revenue flows arising out of fuel trading, coupled with the security arising out of fixed assets;

• Management are confident that there are no JSE listed competitors offering investors the benefits of such a combination;

• Management are fully committed to delivering absolute value to their stakeholders;

SEGMENT 1 – OUR MODEL

• Rationale:

• Petroleum is a finite product with seemingly infinite demand. It is a necessity and diesel is the product which drives the South African economy;

• Investors are seeking high quality returns globally;

• Cardinal management believes that its investment portfolio will escalate substantially in capital value, and provide a safe haven for investors seeking a low to moderate risk investment environment, security, longevity of investment, and consistent cash flows.

• Real estate provides the comfort and security of tangible net asset value, underpinning the trading cash flows and the investment model;

• To put the size of the market and the viability of Cardinal’s model into perspective, according to the Department of Energy’s consumption statistics, more than 27bn litres of liquid fuel energy was consumed in South Africa between the period January – December 2012 (see table on slide 6 for breakdown of this consumption);

• Of total consumption, approximately 42% was attributable to diesel sales;

• Cardinal’s model focuses on the diesel market, but does not exclude petrol, gas, lubricants, bitumen, HFO, and marine, bunker and aviation fuel;

2012 JANUARY TO DECEMBER SA FUEL SALES VOLUME / CONSUMPTION

VOLUME IN LITRES

Product name Q1- January to March Q2 - April to June Q3 - July to September Q4 - October to December Grand Total

Petrol (All grades) 2 922 145 396 2 817 141 682 3 126 928 699 2 847 548 631 11 713 764 408

Diesel (All grades) 2 739 245 640 2 650 614 279 3 073 206 485 2 798 992 221 11 262 058 625

Jet Fuel 636 682 733 564 044 889 612 840 227 553 832 401 2 367 400 250

Paraffin 117 630 268 133 438 124 168 121 598 118 611 877 537 801 867

LPG 154 469 285 154 706 634 167 610 167 179 556 291 656 342 377

Furnace Oil 164 788 183 154 126 504 122 351 940 127 216 124 568 482 751

Aviation Gasoline 6 731 779 7 904 043 9 664 719 7 176 749 31 477 290

Grand Total 6 741 693 284 6 481 976 155 7 280 723 835 6 632 934 294 27 137 327 568

NOTE: Paraffin sales includes illuminating paraffin and power paraffin

Table of consumption

Petrol/Diesel Consumption Growth Ratio

SECURE PAYMENT TECHNOLOGY IN

ASSOCIATION WITH BANKS

SHAREHOLDERS

CARDINAL PETROLEUM HOLDINGS LIMITED

SECURE PAYMENT TECHNOLOGY IN

ASSOCIATION WITH BANKS

CARDINAL PETROLEUM

TRADING COMPANY

PETROLEUMRELATED ASSETS

(WHOLESALE DEPOTS, STORAGE, TRUCK-STOPS)

DISTRIBUTION NETWORK

INVESTMENT IN

SUBSIDIARY INTEREST

PREF SHARE /DEBENTURE HOLDERS

5YR, CONVERTIBLE REDEEMABLE

DEBENTURES WITH A FIXED RATE OF 9.00%

RELATIONSHIP FLOW CHART

CUSTOMER NETWORK

PROPOSED OPERATIONAL HOLDINGS AND RELATIONSHIPS

 

100%

 

100%

 

100%

 

100%

 

100%

 

100%  100%

 

C A R D I N A L P E T R O L E U M

T R A D I N G C O M PA N Y ( P R O P R I E TA RY )

L I M I T E D

 

 

  

 

 

100% 

PETROLEUM MANAGEMENT SERVICES (PROPRIETARY)

LIMITED

 

CARDINAL PETROLEUM HOLDINGS L IMITED

SHAREHOLDERS

OUTSOURCED SERVICES

WHOLESALE DEPOT 1

TRUCK-STOP 1

WHOLESALE DEPOT 2

TRUCK-STOP 2 STORAGE

V I RT U A L T R A D I N G P L AT F O R

M

100% 

100% 

P R O D U C T T R A D I N G

RETAIL SITES

Our shareholder philosophySEGMENT 2 – RELATIONSHIPS

Ethics statement – our shareholders come first!

• Cardinal shareholders are winners!

• Our task is to serve those winners, our shareholders, with integrity, respect and transparency;

• In your relationship with Cardinal, we have an entrenched shareholder relationship philosophy which is based on a core value system of four principles. These are what we believe our stakeholders are looking for in a relationship with us:

• Security of capital: “Is my money safe?”

• Good quality cash flow: “Will I receive income?”

• Increase in investment value: “Will my investment grow?”

• A pre-determined and simple exit strategy: “When can I get my money back?”

Our value philosophy:

• Preserving and building wealth for our stakeholders is FIRST in mind!

• We recognise and believe that: • Wealth is not easily created;

• Our first priority is the security of stakeholder interests – the preservation of value;

• Inflation erodes wealth – therefore we seek to grow value;

• Growth by acquisition is finite – organic growth is true growth;

• Value is not necessarily reflected in price;

• We invest in people, locations, and with proof of market demand;

Our people

Key individuals - Non-Executive Directors:Independent Non-Executive Chairman:

Abel is a highly competent futurist and financial sector expert with extensive experience spanning more than two decades in the professions of retirement fund administration, asset management, regulation and policy development. Abel has held a number of high profile executive and leadership roles, including: Chief Executive Officer, Eskom Pension and Provident Fund; Managing Director, Metropolitan Asset Managers Ltd; Executive Director, Metropolitan Holdings Ltd; Chief Executive Officer, Metropolitan Employee Benefits.

He has invaluable policy and regulatory experience having served as a board member of the Financial Services Board (FSB) for seven years, five of which he served as Deputy Chairperson. He has served as Principal Officer and administrator of the Mineworkers Provident Fund, two terms as Chairman of the Institute of Retirement Funds and has served on the Boards of the Financial Planning Institute (FPI) and Savings Institute of South Africa.

Abel brings immeasurable skills and expertise to Cardinal, and with his key areas of focus being futures studies, policy and regulation, shareholders are assured of receiving absolute best practices from the Company in relation to corporate governance, investor and shareholder protection, and regulatory compliance. Abel’s years of leadership experience is of great benefit to the Board of Directors of the Company which has adopted an all-inclusive and consultative standard of implementing its’ strategic direction.

Abel Sithole - MPhil (Futures Studies), University of Stellenbosch; MBA, Wits Business School; Chartered Financial Planner (CFP) - Fellow of the Institute of Life and Pension Advisors (FILPA); Professional Development Programme (PDP) City University of New York, USA; B.A (Mathematics & English), Lawrence University, Wisconsin, USA;

Abel is Deputy Director of the Institute for Futures Research (IFR) at the University of Stellenbosch. He currently serves as Chairman of the Financial Services Board (‘FSB’).

Key individuals - Non-Executive Directors:Non-Executive Director:

Zwelibanzi Sapula - B.Eng. (Chem.Eng; MBA (UCT)

Zweli completed his Undergraduate degree in Chemical Engineering at the University of Pretoria in 2000, following which he obtained diverse experience as a plant and research engineer and business analyst. He completed an MBA while working for BP Southern Africa, during which time he fulfilled numerous roles including Refinery Economist and Supply Strategist Sub Saharan Africa.

Zweli joined Barclays Capital UK PLC, and later transferred to work in South Africa for Absa Capital. The capital markets experience took him to the position of Head: Venture Capital Fund - National Empowerment Fund. He is an Alternate Director of SA Metals Equity Pty. Ltd.

Granwell Smith - B.A, B Ed, HDE, LLM (Intl Trade Law)

Granwell is a legal professional who began his professional career as a teacher and lecturer before qualifying as an attorney. He was Contracts Manager in the procurement division of multi-national, Sasol Oil (Pty) Ltd. He thereafter advanced to Sasol Ltd where he headed up the Employment Equity and Accelerated Leadership Development Centre for Excellence for the Sasol Group of Companies.

Granwell has experience with Mediation and Conflict Resolution, as well as Company and Property Law. His specialist pursuit is International Trade Law, in particular with International Trade Agreements. Granwell is currently heading the office of the Disabled People Inclusion Institute in Cape Town, an organisation seeking to create a world-class synchronous disability sector enabling all South Africans with a disability to have access to equal opportunity.

Key individuals - Non-Executive Directors:Non-Executive Director:

Ken Morison – B.Com ACA CA (SA)

After completing his articles, Ken went on to become the Group Financial Director for TrenTyre (Pty) Ltd, a wholly owned subsidiary of NYSE listed Good Year Tyre & Rubber Co. He is a Member of the South African Institute of Chartered Accountants (SAICA) and the Institute of Chartered Accountants of England & Wales.

Ken is responsible for financial systems, management and reporting of Cardinal and its’ subsidiaries, ensuring profitability, and overseeing forecasts and viability of transactions introduced to Cardinal.

Ken currently holds positions in a number of property owning companies, is a Director of Continuiti Real Estate Asset Management (Pty) Ltd, and a member of Merkurius Capital Solutions CC.

Key individuals - Executive Directors:Chief Financial Officer:

Daryl Ducasse CCPP (UPE)

With 24 years of commercial property experience in marketing, trading, transaction advisory, finance and banking, Daryl is dedicated to the creation and preservation of shareholder wealth. He is an active equities, warrants and futures trader, with a keen focus on energy and resources counters.

Daryl is responsible for overseeing and driving the implementation of Cardinal’s strategy, transactions and growth. He serves on the board of Continuiti Real Estate Asset Management (Pty) Ltd, and is a member of Merkurius Capital Solutions CC, a private client advisory firm.

Key individuals - Executive Directors:Chief Executive Officer:

Professional team

• JSE ACCREDITED SPONSOR: QUESTCO

• JSE ACCREDITED AUDITORS: MAZARS

• TRANSFER SECRETARY: LINK MARKET SERVICES

• BANKERS: STANDARD BANK

• ATTORNEYS: VAN WYK & PRELLER

• GLOBAL CAPITAL RAISING PARTNER DEEVOIR

• BRAND & COMMUNICATIONS GREYMATTER & FINCH

Key short & mid term objectives

SEGMENT 3 – OBJECTIVES

• Identify and reach agreement in respect of primary acquisitions;

• List on main board of JSE and / or SEM;

• Introduce capital for primary acquisitions, product trading, and key developments;

• Consolidate;

• Drive profitability;

• Grow asset base;

• Source strategic B³E² partner;

• Grow cash reserves;

• Develop strategic sites for long term growth;

• Deliver consistent performance;

• Ensure security of capital;

Investment philosophySEGMENT 4 – INVESTMENT PHILOSOPHY, CRITERIA, ALLOCATION, PROJECTIONS

Our investment philosophy delivers a unique value proposition to market

• Cardinal employs liquidity arising from a high demand product and service to growth and distributions;

• It underpins this liquidity with tangible net asset value from real estate;

• In a low interest rate environment, investors are chasing returns. To the investor with a moderate risk appetite, the Cardinal offering provides:

• A unique investment formula;• Security of capital;• A reliable source of income;• Capital growth;• Liquidity;

• There is an ability to leverage value by separating asset classes in transactions;

• Real estate portfolio can be securitised in future;

• Exit strategy clearly defined;

Our four basic investment criteria:

• Is the business sustainable?

• Does it provide security of capital?

• Does it deliver consistent cash flow?

• Does it have reasonable prospects for capital growth?

Growth

How is growth achieved?

• Developments - truck-stops, storage, wholesale depots;

• Increasing customer base and sales;

• Diversification and product creation;

• Pricing;

• Economies of scale;

Investment allocation

• Total capital raising objective: R’s

• Target: 2,300,000,000

• Product trading: 300,000,000 13.04%

• Storage development: 350,000,000 15.22%

• Truck-stop developments: 280,000,000 12.17%

• Acquisition of wholesale operations: 600,000,000 26.09%

• Acquisition of retail operations: 380,000,000 16.52%

• Land site & assembly: 200,000,000 8.70%

• Provision for interest: 170,000,000 1.39%

• Overheads: 20,000,000 0.87%

Composition of capital

CLASS R’s TERM DIV % INT % SECURITY TYPE

ORDINARY SHARES R2.3bn - 12.50% forecast - SHARES ORDINARY

The merits of our offeringSEGMENT 5 – PROPOSAL

• The quantum of capital required to have an effective position in the industry is significant;

• This capital can be raised far more successfully in a listed environment;

• Obtaining a broad shareholder spread is important, and this is not usually obtained in the private equity environment;

• Empowering individuals – communities, management, employees – is far more effective when their interests can be sold by way of a recognised exchange, rather than by attempting to sell minority interests in an unlisted private company;

• There is little competition with the same model;

• Developing a national footprint under one brand would represent much progress after decades of control in the markets by the major suppliers;

• Our model delivers a far better return on investment and assets than comparable instruments;

Our commitment – absolute valueSEGMENT 6 – VALUE COMMITMENT

What is ‘absolute value’ ?

“In order for us to deliver security and returns to our stakeholders, absolute value is very simply, to us, pure value - the ability for us to price the qualities of sustainability and consequential future earnings potential from the opportunity, which are generated from a specific product with high demand, in a dominant location, operated by experienced management, and situated on a trade route which has demonstrated huge historic growth, with realistic future growth”.

We are not acquiring an opportunity because its is cheaper than others…..we are not chasing high returns with consequential risk. We have considered the financial history of the company in relation to its future earnings growth and believe that the fundamentals exist for value in a reasonable risk investment environment.”

in·vest    [in-vest] verb (used with object)1.to put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.

in·vest·ment [in-vest-muhnt] noun1.the investing of money or capital in order to gain profitable returns as interest, income, or appreciation in value.

Mission & core value statementsSEGMENT 7 – DECLARATIONS

• Mission statement: to be an investment holding company focused on petroleum & related real estate assets – a national footprint assembled under one brand;

• Purpose: to deliver consistent lifestyle enhancing returns and value to our

stakeholders; • Vision: to contribute meaningfully to the needs of our stakeholders, staff,

families, community and society at large; • Core values: to deliver exceptional customer service, conduct our business in an

ethical and transparent manner, and do what we know to be right – always;

• Ethics statement: act now - act with integrity;

• Goal: to invest in assets that have characteristics of sustainable demand, security of capital, good quality cash flow, and capital growth ;

S E C U R I T Y, L I Q U I D I T Y, P E R F O R M A N C E

What we expect to create for our stakeholders