Licence Holder: Kwa Zulu Natal Petroleum (Pty) Ltd t/a "BP Drakensberg"
Tarriff Period: 1 July 2011 to 30 June 2013
Address: 27 Van Eck Place, Mkondeni
Pietermaritzburg
3201
Contact Person: Mario Redlinghys
Designation: Financial manager
E-mail address: [email protected]
Telephone no.: 033 346 1017
BP Drakensberg Confidential 11/22/2011 Page 1
Preamble:
BP Drakensberg ("BPD") was established in 2000 as a BP Southern Africa (Pty) Ltd BEE initiative. It is currently
wholly owned by Darin Samuels in his personal capacity. The nature of the company is the distribution of
petroleum, gas and lubricant products.
BPD has a staff compliment of 180 employees based at our various LPG, lubricant and fuel depots, with a senior
management team of 7 members. Please refer to BPD organogram, regarding the detail . We have 3 fuel
storage facilities as defined in terms of the Pipelines Petroleum Act (2003). The locations of these facilities include
the following:
1. Vryheid
2. Ladysmith
3. Pietermaritzburg
As mentioned earlier, our primary business is the distribution of petroleum products, hence transport is our core
business whilst the storage of petroleum products are a secondary function of BPD. The assets located at each of
our storage facilities are as follows:
1. Vryheid:-
> Land and administration buildings (BPD owned);
> - m3 petrol tank capacity;
> - m3 diesel tank capacity;
> - m3 IP tank capacity.
2. Ladysmith:-
> Land and buildings are leased and not owned;
> - m3 diesel tank capacity.
3. Pietermaritzburg:-
> Land and buildings of the depot are leased and not owned.
> - m3 diesel tank capacity;
> - m3 petrol tank capacity;
> - m3 IP tank capacity.
BP Drakensberg Confidential 11/22/2011 Page 2
Kwa Zulu Natal Petroleum (Pty) Ltd t/a "BP Drakensberg"
Acronym listing
TOC - Trended Original cost (Original cost adjusted for inflation)
3
Kwa Zulu Natal Petroleum (Pty) Ltd t/a "BP Drakensberg"
Storage model- FY 2012/2013:- LDS
2012 2013
R'm R'm
Trended Original cost (TOC) 6 - 28 6 - 28
Less: Depreciation (d) 6 - 28 6 - 28
Add: Net working capital (w) 2.6 - 11.3 2.8 - 13.1
Regulated Asset Base (RAB) 2.6 - 11.3 2.8 - 13.1
WACC
Return on Investment − −
Operating and maintenance expenditure 1 - 8.3 1.9 - 4.49
Taxation 0.4 - 2.2 0.5 - 2.4
Depreciation (d) - -
Recovery on investment − −
Allowable Revenue 2.3 11.6 2.6 - 5.2
Projected Volumes (litres- million) for period − −
Cost per litre (CPL) 9.94 9.78
BP Drakensberg confidential versionA100-3 Allow Rev (Summary)- LDS
Kwa Zulu Natal Petroleum (Pty) Ltd t/a "BP Drakensberg"
Storage model- FY 2012/2013:- PMB
2012 2013
R'm R'm
Trended Original cost (TOC) 1.72 - 4.85 1.72 - 4.85
Less: Depreciation (d) 1.72 - 4.85 1.72 - 4.85
Add: Net working capital (w) 3.8 - 10.8 3.5 - 19.2
Regulated Asset Base (RAB) 3.8 - 10.8 3.9 - 16.9
WACC − −Return on Investment − −
Operating and maintenance expenditure 2.7 - 11.7 2.8 - 11.9
Taxation 0.7 - 3.3 0.9 - 4Depreciation (d) − −
Recovery on investment − −
Allowable Revenue 3.8 - 17.3 4.5 - 20
Projected Volumes (litres- million) for period − −
Cost per litre (CPL) 11.32 10.94
BP Drakensberg confidential versionA100-2 Allow Rev (Summary)-PMB
Kwa Zulu Natal Petroleum (Pty) Ltd t/a "BP Drakensberg"
Storage model- FY 2012/2013:- VRY
2012 2013
R'm R'm
Trended Original cost (TOC) 2.5 - 12.8 2.3 - 11.8
Less: Depreciation (d)
Add: Net working capital (w) 2.9 - 12.3 3 - 16.2
Regulated Asset Base (RAB) 5.6 - 25.8 5.7 - 23.7
WACC − −Return on Investment − −
Operating and maintenance expenditure 1.5 - 7.5 1.7 - 8.6
Taxation 0.4 - 2 0.4 - 2.4Depreciation (d) − −
Recovery on investment − −
Allowable Revenue 2.6 - 13.3 2.8 - 12.4
Projected Volumes (litres- million) for period − −
Cost per litre (CPL) 9.38 9.24
BP Drakensberg confidential versionA100-2 Allow Rev (Summary)- VRY
Kwa Zulu Natal Petroleum (Pty) Ltd
Trend original cost calculation- LDS
Tariff period 1 July 2011 to 30 June 2013 Tariff Period
2012 2013
Inflation rate (CPIX) 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6%
Historic cost
Asset description Acquisition dateOriginal cost
Inflated
cost- Year
1
Inflated
cost- Year
2
Inflated
cost- Year
3
Inflated
cost- Year
4
Inflated
cost- Year
5
Inflated
cost- Year
6
Inflated
cost- Year
7
Inflated
cost- Year
8
Inflated
cost- Year
9
Inflated
cost- Year
10
Inflated
cost- Year
11
Inflated cost-
Year 12
Inflated cost-
Year 13
23 m3 Diesel tank − − − − − − − − − − − − − − −23 m3 Diesel tank − − − − − − − − − − − − − − −23 m3 Diesel tank − − − − − − − − − − − − − − −
TOC − − − − − − − − − − − 9 058 - 39 749 9 270 - 47 188
Depreciation- current year 5 year useful life
23 m3 Diesel tank − − − − − −23 m3 Diesel tank − − − − − −23 m3 Diesel tank − − − − − −
− − − − − −
Total Accumulated depreciation − − − − − −
RAB − − − − − −
100-1C Trend Original cost- LD
Kwa Zulu Natal Petroleum (Pty) Ltd
Trend original cost calculation- PMB
Tariff period 1 July 2011 to 30 June 2013 Tariff Period
2012 2013
Inflation rate (CPIX) 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6%
Historic cost
Asset description Acquisition date Original cost
Inflated cost-
Year 1
Inflated cost-
Year 2
Inflated cost-
Year 3
Inflated cost-
Year 4
Inflated cost-
Year 5
Inflated cost-
Year 6
Inflated cost-
Year 7
Inflated cost-
Year 8
Inflated cost-
Year 9
Inflated cost-
Year 10
Inflated cost-
Year 11
Inflated cost-
Year 12
Inflated cost-
Year 13
83 m3 Paraffin 97 tank − − − − − − − − − − − − − − −83 m3 Diesel tank − − − − − − − − − − − − − − −83 m3 Diesel tank − − − − − − − − − − − − − − −83 m3 Diesel tank − − − − − − − − − − − − − − −83 m3 Petrol 97 tank − − − − − − − − − − − − − − −
TOC − − − − − − − − − − −
3 292 493 -
10 204 992
3 373 514 -
17 857 081
Depreciation- current year 5 year useful life
83 m3 Paraffin 97 tank − − − − − −83 m3 Diesel tank − − − − − −83 m3 Diesel tank − − − − − −83 m3 Diesel tank − − − − − −83 m3 Petrol 97 tank − − − − − −
− − − − − −
Total Accumulated depreciation − − − − − −
RAB − − − − − −
100-1B Trend Original cost- PM
Kwa Zulu Natal Petroleum (Pty) Ltd
Trend original cost calculation- VRY
Tariff period 1 July 2011 to 30 June 2013 Tariff Period
2012 2013
Inflation rate (CPIX) 6% 6% 6% 6% 6% 6% 6% 6%
Historic cost
Asset description
Acquisition
date Original cost
Inflated cost-
Year 1
Inflated cost-
Year 2
Inflated cost-
Year 3
Inflated cost-
Year 4
Inflated cost-
Year 5
Inflated cost-
Year 6 Inflated cost- Year 7 Inflated cost- Year 8
(4) 83 m3 Petrol LRP tank - 1 1 1 1 1 1 1 1 1
(8) 210 m3 Petrol HMF tank - 1 1 1 1 1 1 1 1 1
(10) 217 m3 Petrol HMF tank - 1 1 1 1 1 1 1 1 1
(11) 400 m3 Petrol LRP tank - 1 1 1 1 1 1 1 1 1
(15) 1,300 m3 DSL tank - 1 1 1 1 1 1 1 1 1
(17) 396 m3 Petrol HMF tank - 1 1 1 1 1 1 1 1 1
(12) 84 m3 Dsl tank - 1 1 1 1 1 1 1 1 1
(13) 84 m3 Dsl tank - 1 1 1 1 1 1 1 1 1
(14) 84 m3 Dsl tank - 1 1 1 1 1 1 1 1 1
(16) 84 m3 IP tank - 1 1 1 1 1 1 1 1 1
(7) 84m3 IP tank - 1 1 1 1 1 1 1 1 1
(9) 84 m3 IP tank - 1 1 1 1 1 1 1 1 1
Land and buildings
TOC
Depreciation- current year -
(4) 83 m3 Petrol LRP tank
(8) 210 m3 Petrol HMF tank - - - - - - - -
(10) 217 m3 Petrol HMF tank - - - - - - - -
(11) 400 m3 Petrol LRP tank - - - - - - - -
(15) 1,300 m3 DSL tank - - - - - - - -
(17) 396 m3 Petrol HMF tank - - - - - - - -
(12) 84 m3 Dsl tank - - - - - - - -
(13) 84 m3 Dsl tank - - - - - - - -
(14) 84 m3 Dsl tank - - - - - - - -
(16) 84 m3 IP tank - - - - - - - -
(7) 84m3 IP tank - - - - - - - -
(9) 84 m3 IP tank - - - - - - - -
Land and buildings - - - - - - - -
- - - - - - - -
Total Accumulated depreciation - - - - - - - -
RAB 2 444 714 - 12 687 933 2 790 714 - 13 666 933
100-1A Trend Original cost- VRY
Kwa Zulu Natal Petroleum (Pty) Ltd
Net working capital calculation
Tariff period 1 July 2011 to 30 June 2013
Throughput volume per storage facility:
2010 2011 2012
litres litres litres
Vryheid − − −
Pietermaritzburg − − −
Ladysmith − − −
− − −
Total sales throughput volume − − −% increase − −
2010 2011 2012
R'000 R'000 R'000
Inventory − − −
Add: Receivables − − −
Add: Operating cash − − −
Add: Minimum cash balance - - -
Less: Trade payables − − −
Net working capital balance − − −
Allocation to storage facilities:
Vryheid 278 - 14 578
Pietermartizburg 3 777 - 17 932
Ladysmith 2 584 - 12 011
Actual
Estimate
Estimate
Audited AFS
100-2 Net working capital-All
2013
litres
−
−
−
−
−
2013
R'000
−
−
−
-
−
−
Estimate
Estimate
100-2 Net working capital-All
Inflation rate 6%
FYE 2011 Audited AFS FYE 2012 FYE 2013
Ledger YTD Actual YTD Plan YTD Variance YTD Actual(CPL) YTD Plan(CPL) YTD Variance(CPL) YTD Estimate YTD Estimate
Utility Rates - - - - - - - -
Security - - - - - - - -
Salaries - - - - - - - -
Rent Property - - - - - - - -
Lease Cost - - - - - - - -
Cleaning Services - - - - - - - -
Travel - - - - - - - -
Training - - - - - - - -
Telephone land lines - - - - - - - -
Subscriptions - - - - - - - -
Stationery- Pre printed costs - - - - - - - -
Stationery- Consumables - - - - - - - -
Salaries-leave payout - - - - - - - -
R&M Equipment - - - - - - - -
R&M Building - - - - - - - -
Price Difference Account - - - - - - - -
PPE - - - - - - - -
Postage - - - - - - - -
Overtime - - - - - - - -
Office&Admin Expenses - - - - - - - -
HSE Operating costs - - - - - - - -
HSE- Incident costs - - - - - - - -
Engineering Cost - - - - - - - -
Computer Consumables - - - - - - - -
Cell Phones - - - - - - - -
Allowances/bonus - - - - - - - -
1 532 011 - 8
028 943
1 801 652 -
8 131 940
300-1C Ops and Maintenance -LDS
Inflation rate 6%
FYE 2011 Audited AFS FYE 2012 FYE 2013
Ledger YTD Actual YTD Plan YTD Variance YTD Actual(CPL) YTD Plan(CPL) YTD Variance(CPL) YTD Estimate YTD Estimate
Utility Rates - #VALUE! #VALUE!
Storage and Handling - - - - - - - -
Security - - - - - - - -
Salaries - - - - - - - -
Rent Property - - - - - - - -
Lease Cost - - - - - - - -
Cleaning Services - - - - - - - -
Training - - - - - - - -
Telephone land lines - - - - - - - -
Stationery- Pre printed costs - - - - - - - -
Stationery- Consumables - - - - - - - -
Salaries-leave payout - - - - - - - -
R&M Equipment - - - - - - - -
R&M Building - - - - - - - -
PPE - - - - - - - -
Postage - - - - - - - - Overtime - - - - - - - - Office&Admin Expenses - - - - - - - - Meetings - - - - - - - -
Computer Consumables - - - - - - - -
Allowances/bonus - - - - - - - -
All vehicle hiring fees - - - - - - - -
2 798 715 -
13 364 800
312 114 -
1 445 238
300-1B Ops and Maintenance-PMB
Inflation rate 6%
FYE 2011 Audited AFS FYE 2012 FYE 2013
Ledger YTD Actual YTD Plan YTD Variance YTD Actual(CPL) YTD Plan(CPL) YTD Variance(CPL) YTD Estimate YTD Estimate
Utility Rates - - - - - - - -
Security - - - - - - - -
Salaries - - - - - - - -
Lease Cost - - - - - - - -
Cleaning Services - - - - - - - -
Travel - - - - - - - -
Training - - - - - - - -
Telephone land lines - - - - - - - -
Stationery- Pre printed costs - - - - - - - -
Stationery- Consumables - - - - - - - -
Salaries-leave payout - - - - - - - -
Rates & taxes - - - - - - - -
R&M Equipment - - - - - - - -
R&M Building - - - - - - - -
PPE - - - - - - - -
Postage - - - - - - - -
Overtime - - - - - - - -
Office&Admin Expenses - - - - - - - -
Meetings - - - - - - - -
HSE Operating costs - - - - - - - -
HSE- Incident costs - - - - - - - -
Engineering Cost - - - - - - - -
Computer Consumables - - - - - - - -
Cell Phones - - - - - - - -
Allowances/bonus - - - - - - - -
1 475 854 -
8 121 600
1 678 166 -
8 190 422
300-1A Ops and Maintenance-VRY
Kwa Zulu Natal Petroleum (Pty) Ltd
Weighted Average Cost Capital (WACC) calculation
Tariff period 1 July 2011 to 30 June 2013
Cost of equity (Ke) determination:
Risk free interest rate (Rf) 9%
Country risk adjustment −Market risk premium 11%Debt ratio % −Equity ratio % −
Beta 0.8 - 1.6
Small stock premium −
Specific risk −Liquidity premium −
Ke −
Kd −
WACC −
200-1 WACC calculation