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: marior@bpdrakensberg.co.za

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