TOTAL South Africa (Proprietary) Limited Tariff Application Alrode, Bethlehem, East London, Island View Terminal, Nelspruit, Ohrigstad, Polokwane, Waltloo Sannieshof & Pietermaritzburg 213 Address: PO Box 579, Saxonwold, 2132 Contact person: Designation: Email: Gadibolae Dihlabi Industry Analyst gadi.dihlabi@total.co.za Telephone no: 11 778 3343
Table of contents 1. Acronyms and Abbreviations... 2 2. Executive Summary... 3 3. Background... 4 4. Scope... 6 5. Approach... 8 6. Regulatory Asset Base (RAB)... 8 6.1. Net Working Capital (W)... 1 6.2. Deferred Tax... 11 7. Weighted Average Cost of Capital (WACC)... 11 7.1 Cost of Equity (Ke)... 12 7.2 Cost of Debt (Kd)... 13 7.3 WACC Calculation... 14 8. Expenses Operational and Maintenance (E)... 14 8.1 Direct Expenses... 14 8.2 Indirect Expenses... 15 8.3 Cumulative Expenses... 16 9. Depreciation and Amortisation of Inflation Write-up (D)... 17 1. Tax Expense (T)... 18 11. Clawback Adjustment (C)... 19 12. Volumes... 19 13. Allowed Revenue (AR)... 2 14. Conclusion... 21 Annexure A - Detail calculation of direct expenses (table 12)... 22 Annexure B - Detail calculation of indirect expenses (tables 13 & 14)... 23 Annexure C - Detail calculation of tax expense (table 18)... 24 Annexure D - Detail calculation of allowable revenue (table 2)... 25 Annexure E request... Error! Bookmark not defined. Tariff Application 213 1
1. Acronyms and Abbreviations Table 1: Acronyms and abbreviations Abbreviation ALSI AR BEE BFP C CPI CPIf CRA d D Dt dtax E Eq IFRS JSE Kd Ke l LP Description All share total return index Allowable revenue Black economic empowerment Basic fuel price Claw back adjustment Consumer price index Consumer price index forecast Country risk adjustment Accumulated depreciation and accumulated amortisation of inflation write-up Depreciation and amortisation of inflation write-up: charge for the tariff period under review Interest bearing debt Deferred tax Expenses Shareholders equity International financial reporting standards Johannesburg Stock Exchange Post tax, real cost of debt Post-tax, real cost of equity Litres Liquidity premium to accommodate companies which are not publicly traded m3 Metric tons (equals 1, litres) MRP Market risk premium NERSA National Energy Regulator of South Africa NRBTA Net revenue before tax allowance PAIA Promotion of Access to Information Act, 2 (Act No. 2 of 2) pg Page PIR Prime interest rate PPR Petroleum Pipelines Act, 23 (Act No 6 of 23) R Rands RAB Regulatory asset base Rf Risk free rate SSP Small stock premium t Prevailing corporate tax rate of the licensee T Tax expense Tariff Application 213 2
Abbreviation TOC V VAT w WACC α Β Description Trended original cost Value of property, plant, vehicles and equipment Value added tax Net working capital Weighted average cost of capital Project specific risk if the circumstances warrant such an adjustment Beta is the systematic risk parameter for regulated entities providing pipeline, storage and loading facility services 2. Executive Summary TOTAL South Africa (Proprietary) Limited ( TSA ) submits its 213 petroleum storage and loading tariff application in terms of section 28(2) of the Petroleum Pipelines Act, 23( Act No. 6 of 23). This tariff application has been guided by: National Energy Regulator of South Africa (NERSA) Tariff Methodology for the Approval of Tariffs for Petroleum Loading Facilities and Petroleum Storage Facilities (2 nd edition) approved on the 31 st of March 211 (the tariff methodology); NERSA s Guidelines for Annual Assessment of Storage and Loading Facilities Tariff Applications Version 9 July 213; and Correspondence between NERSA and TSA. This tariff application has been prepared in respect of 8 in scope active licensed storage and loading facilities and 2 closed licensed facilities, through the Republic of South Africa which are operated by TSA. The information utilised for the tariff calculation was obtained from the audited financial statements for the period to 31 December 212, and the budgeted figures for 213. Information was extrapolated in respect of the in scope facilities based on forecasted volume. All information utilised in this application is true and correct at time of preparation (refer to Annexure E - Section E: Solemn declaration). The Regulatory Asset Base (RAB) for the application was determined by applying the Trended Original Cost (TOC) to all operating and related assets at storage and loading facilities. Zero based assets were revalued and useful lives were reassessed. Assets that will be brought into use during the tariff period were included on a pro rata basis. Tariff Application 213 3
TSA applies for the following 213 tariffs for in scope storage and loading facilities: Table 2: Maximum tariff per in scope facility excluding of VAT (value added tax) Trading name Maximum tarrif (cpl) Alrode 12.99 Bethlehem 24.77 East London 22.5 Island View Terminal 13.27 Nelspruit 19.52 Ohrigstad 25.45 Polokwane 18.26 Waltloo 1.61 Sannieshof Pietermaritzburg The following variables were applied in respect of this tariff application and are addressed in this document: Table 3: Assumption variables Assumption variable Value Source Inflation (CPI) - December 212 5.7% Statistics South Africa Forecasted mean 213 CPI 5.6% NERSA Real risk Free rate of interest (Rf) 4.49% NERSA economic data as at 31 December 211 Market Risk Premium (MRP post tax real) 4.68% NERSA economic data as at 31 December 211 interest rate % Real cost of equity after tax (Ke) % Refer to calculation in document Real cost of debt after tax (Kd) % Refer to calculation in document Real WACC % Refer to calculation in document 3. Background The TOTAL Group is the fifth largest publicly traded integrated international energy company in the world and has the largest retail service station network on the African continent. Founded in 1924 the Paris based company has been delivering excellent products and services the world over for more than 85 years. With operations in more than 13 countries world-wide and employing over 17 people, the TOTAL Group is actively involved in every aspect of the petroleum industry. Tariff Application 213 4
The TOTAL Group has exploration and production operations in more than 4 countries and is a producer of oil and gas in 3 countries. International business activities include both upstream operations and such as oil and gas exploration, development and production, liquefied natural gas and downstream interventions involving refining and marketing, together with the trading and shipping of crude oil and other petroleum products. The TOTAL Group is also involved in the production of base chemicals, inclusive of petrochemicals and fertilisers and specialty chemicals. TSA was established in 1954, and forms part of a leading multi-national French energy company. Our business is the manufacturing, sales and marketing of a range of petroleum products for the retail, commercial, agricultural and industrial markets. The benefit of being part of a larger international group for TSA is that the company benefits from shared access to internationally acclaimed best practice, technological expertise and top flight business innovation. It was in 1956 that TOTAL embarked on the development of a service station network. Today we have a strategically positioned network of service stations along with our Bonjour stores as flagship sites. With a portfolio of 53 service stations located throughout South Africa and 5 in neighbouring countries, the company is a key player in the South African petrochemical market, with products such as jet fuel and liquid petroleum gas, lubricants, grease and all grades of diesel and petrol. The company s French parent holds a 5.1% interest in the local operation. The remaining shares are held by black economic empowerment (BEE) partner Main Street 87 (Pty) Ltd (25%) and Remgro Limited (24.9%). Tariff Application 213 5
TSA enjoys a 36.6% share in the Natref Refinery and has wholly owned subsidiaries in Namibia, Botswana, Letsotho and Swaziland (NBLS). The company has its head office in Johannesburg and 22 facilities, two regional sales offices one in Cape Town and one in Durban and a staff compliment of 779. TSA prides itself on the fact that it has structured its Board of Directors to bring a diversity of individual skills, collective experience and expertise to the company in the broad-based business sectors in which it operates. The Executive Committee, headed by the Chief Executive Officer and Managing Director Mr. Christian Marie Regis Joret des Closieres, is responsible for implementing board directives, for steering the company towards meeting its strategic objectives and for carrying out the day-today business of the company. TSA is a privately owned company and does not publish financial statements. Ernst & Young are the appointed auditors for TSA. Refer to Financial Statements submitted to NERSA for income statement, balance sheet and cash flow statements for the financial year end of 31 December 212. 4. Scope In accordance with Section 28(1) of the Petroleum Pipelines Act, 23 (Act No.6 f 23) - (The Authority must set as a condition of license the tariffs to be charge by a licensee in the operation of a petroleum pipeline and approve the tariffs of storage facilities and loading facilities) TSA hereby applies for approval of storage and loading tariffs for the 213 financial year (1 January 213 to 31 December 213). TSA is in possession of 14 licensed storage and loading facilities through the Republic of South Africa: 8 facilities are operated by TSA and are addressed in this tariff application. 2 facilities are not currently in operation and are addressed in this tariff application. 1 facility is a joint venture and a separate tariff application will be completed; and 3 facilities are operated by TSA customers with the aim of selling these products to their respective customers: A separate tariff applications will be submitted regarding these facilities. Tariff Application 213 6
Table 4: Operational facilities which relate to this tariff application Facility name License number Issue date Physical address 1 Alrode PPL.sf.F3/11/3/26 18/8/28 25-27 Potgieter Street, Alrode, Alberton, Gauteng 2 Bethlehem PPL.sf.F3/11/7/26 18/8/28 4 Robertson Street, Industrial Sites, Bethlehem, Free State 3 East PPL.sf.F3/11/11/26 18/8/28 16 Mako Drive, Military London Road, Westbank, East 4 Island View Terminal London, Eastern Cape PPL.sf.F3/11/2/26 18/8/28 Corner Cause Way and Wharfide Road, Island View, Bluff, Durban, Kwazulu Natal 5 Nelspruit PPL.sf.F3/11/5/26 18/8/28 3 Wolfaardt Street, Nelspruit, Mpumalanga 6 Ohrigstad PPL.sf.F3/11/1/26 18/8/28 6 Carl Trichardt Street, Ohrigstad, Mpumalanga 7 Polokwane PPL.sf.F3/11/8/26 18/8/28 57 Goud Street, Polokwane, Limpopo 8 Waltloo PPL.sf.F3/11/2/26 18/8/28 Erf 114 Corner Petroleum & Alwyn Street Waltloo, Pretoria, Gauteng Land ownership Owner Owner Leased from TNPA Leased from TNPA Owner Owner Owner Owner Operator TOTAL South Africa TOTAL South Africa TOTAL South Africa TOTAL South Africa TOTAL South Africa TOTAL South Africa TOTAL South Africa TOTAL South Africa Table 5: Storage facilities that are not in operation Facility name License number Issue date Physical address 1 Pietermaritzburg PPL.sf.F3/11/14/26 18/8/28 8 Willowton Road, Pietermaritzburg, Kwazulu Natal 2 Sannieshof PPL.sf.F3/11/9/26 18/8/28 58 De Klipdrift Street, Sanniehof, North West Land ownership Owner Owner Operator TOTAL South Africa TOTAL South Africa Notes: These facilities were closed due to optimisation efforts in the group and the huge investment that would be required to operate the facilities to group specified standards. Existing customers were moved to surrounding storage and loading facilities. The above sites are not currently viable due to volumes but licenses will be retained due to location of the facilities. There are ongoing discussions with the BEE 3 rd parties to lease the facilities in Pietermaritzburg Tariff Application 213 7
5. Approach Section 28 (2) of the Petroleum Pipelines Act, 23 (Act No.6 f 23) requires that tariffs must be: (i) (ii) (iii) (iv) (v) (vi) Based on a systematic methodology applicable on a consistent and comparable basis; Fair; Non-discriminatory; Simple and transparent; Predictable and stable; and Such as to promote access to affordable petroleum products. Further, Section 28 (3) of that Act requires that: The tariffs set or approved by the Authority must enable the licensee to: (a) Recover the investment; (b) Operate and maintain the system; and (c) Make a profit commensurate with the risk. Allowable Revenue has been determined by applying the allowable revenue formula as per the tariff methodology: AR = (RAB x WACC) + E + D ± C+ T Where: AR = Allowable revenue RAB = Regulatory asset base WACC = Weighted average cost of capital E = Expenses: operating and maintenance expenses for the tariff period under review D = Depreciation and amortisation of inflation write-up: the charge for the tariff period under review C = Clawback adjustment: to correct for differences between actuals and forecasts in formula elements from a preceding tariff period in relation to the actual estimates for that tariff period. T = Tax: estimated tax expense for the tariff period under review 6. Regulatory Asset Base (RAB) According to the tariff methodology, TSA have calculated the inflation adjusted TOC of all operating and related assets at storage and loading facilities less accumulated depreciation. The assets included were only assets that are in use and usable to operate the facility. Tariff Application 213 8
The following formula was used as per the methodology: RAB = (V d) + w ± dtax Where: V = Value of operating property, plant, vehicles and equipment d = Accumulated depreciation and accumulated amortisation of inflation write-up for the period up to the commencement of the tariff period under review w = Net working capital dtax = Deferred tax Assets in use that are carried at zero book value have been restated to reflect residual value based on indexed historical cost. A pro rata portion of new or additional assets anticipated to be brought into use during the period that this application relates too, have been included in the RAB. Table 6: Pro rata portion of fixed asset additions Summary Amount Alrode Bethlehem East London Island View Terminal Nelspruit Ohrigstad Polokwane Waltloo Sannieshof Pietermaritzburg Total Depreciation rates are aligned with the expected useful lives of the assets. The historical consumer price index (CPI) data has been obtained from Statistics South Africa and NERSA up to December 212. Projected CPI figures have been obtained from Statistics South Africa. The annual average CPI of 5.6% for 213 has been applied to the net book value of all assets included in property, plant vehicles and equipment for the 213 tariff application. Tariff Application 213 9
Table 7: Asset trended original cost Trading name Trended original cost (V) - Accumulated depreciation (d) - Net working capital (w) - Deferred tax (dtax) Regulatory asset base (RAB) Alrode - Bethlehem East London Island View Terminal Nelspruit Ohrigstad Polokwane Waltloo Sannieshof Pietermaritzburg Total - 6.1. Net Working Capital (W) Net working capital is included in the RAB and is calculated according to the formula provided in the methodology which is as follows: Net working capital = inventory + receivables + operating cash + minimum cash balance trade payables The components are recognised as follows: Inventory is based on the volumes of stock at the facilities as at December 212 and the prevailing basic fuel price (BFP) at December 212. The BFP calculated (R7.6 per litre) was compared to the published BFP for the corresponding period for reasonableness. Trade receivables directly linked to the depots are only in respect of co-hosting agreements relating to the Alrode, Bethlehem, East London, Island View Terminal and Nelspruit depots. The income earned is based on volume throughput (cpl). TSA s general terms for payment of accounts is 3 days thus trade payables have been calculated as 3 days of operating expenses. Operating cash requirements were calculated as 45 days of operating expenses in respect of the in scope facilities. Tariff Application 213 1
Table 8: Net working capital Trading name Inventory Receivables Operating cash Less: Payables Net working capital (w) Alrode - Bethlehem - East London - Island View Terminal - Nelspruit - Ohrigstad - Polokwane - Waltloo - Sannieshof - - - Pietermaritzburg - - - Total - 6.2. Deferred Tax TSA has adopted the national tax approach as discussed in section 9 of this application. Timing differences occurred when the useful life for accounting and tax purposes differs for an asset. The deferred taxation liabilities have been deducted from the RAB. 7. Weighted Average Cost of Capital (WACC) The allowed rate of return was calculated by using the expected efficient WACC. A single WACC was calculated as TSA reports on a company basis. The average cost of debt is calculated in line with NERSA s calculation of this parameter as is the cost of equity by applying the capital asset pricing model (CAPM). The WACC formula is: WACC = [(Eq/Dt + Eq)*Ke]+[(Dt/Dt+Eq)*Kd] Where: Eq = Shareholders equity Dt = Interest bearing debt Ke = Real cost of equity derived from the Capital Asset Pricing Model (CAPM) Kd = Post tax, real cost of debt Tariff Application 213 11
7.1 Cost of Equity (Ke) As per the methodology, the cost of equity was determined accordingly to the capital asset pricing model (CAPM) in real terms: Ke = (Rf +CRA) + (MRP * β) + SSP+ α+lp Where: Ke = Post-tax, real cost of equity Rf = Real risk free rate of interest This is the average of the real monthly marked-to-market risk free rate for the preceding 3 months for all government bonds with at least a 1 year maturity as at twelve months before the commencement of the tariff period under review CRA = Country risk adjustment. The real CRA will be added to risk free rate. The CRA is for assets in another country outside South Africa that are an integral part of the same assets within South Africa. The adjustment is for that other country concerned MRP = Post-tax, real market risk premium The proxy used for the market is the Johannesburg Stock Exchange (JSE) All Share Total Return Index (ALSI) for the preceding 3 months as at twelve months before the commencement of the tariff period under review β = Beta is the systematic risk parameter for regulated entities providing pipeline, storage and loading facility services. The licensee will propose a beta, along with details of proxies used and its calculation of the proposed beta. The Energy Regulator will approve an appropriate beta SSP = Small Stock Premium α = Project specific risk if the circumstances warrant such an adjustment LP = Liquidity premium to accommodate companies which are not publicly traded if the circumstances warrant such an adjustment An average shareholders equity of R3 91 993 and long term interest bearing debt of R1,5 million based on the 212 audited balance sheet and the statutory accounts as at 31 December 212, was used to calculate a 27.7% debt to equity ratio. Tariff Application 213 12
Table 9: Real cost of equity after tax Description Rate Comment Real risk free rate of interest (Rf) 4.49% As per economic data published on NERSA website for 31 December 211 Market Risk Premium (MRP post tax, real)% 4.68% As per economic data published on NERSA website for 31 December 211 Beta (β) Cost of equity (Ke after tax, real) % 7.2 Cost of Debt (Kd) The Kd for the WACC calculation is the prevailing Interest Rate () of % when the application was prepared (). The forecasted CPI for 213 as published by NERSA is 5.6%, resulting in a real post-tax cost of debt of.%. Kd post - tax,nominal = [1+ (Kd pre tax,nom * (1- t))]/[1+cpif] - 1 Where: Kd pre-tax,nominal = Projected cost of debt, pre-tax, nominal, for the tariff period under review t = Prevailing corporate tax rate of the licensee CPIf = Consumer price index forecast: most recent forecast for the tariff period under review Table 1: Real cost of debt after tax Description Rate Comment Prime interest rate (PIR) % Prevailing PIR rate as per the South African Reserve Bank Tax rate (t) 28% Per financials Post tax nominal Kd (effective Kd) % CPI forecast (CPIf) 5.6% Obtained from 'CPI forecasts for be applied by NERSA in tariff decisions made in 212' Cost of debt (Kd after tax, real) % Tariff Application 213 13
7.3 WACC Calculation The cost of equity is %, and the cost of debt is %, which results in a real WACC of 5.9% for TSA. TSA s actual interest bearing debt is R and the equity pertaining to the regulated assets for the tariff period under review is R which equates to a % debt to equity ratio. Table 11: WACC calculation Description Rate Comment Cost of equity (Ke after tax, real) % Cost of debt (Kd after tax, real) % Capital composition: Debt % Equity % Real WACC % Based on long-term interest bearing debt and average shareholders' interest as per the 212 financial statements 8. Expenses Operational and Maintenance (E) Expenses include only those operating expenses required for the efficient operation and maintenance required in relation to storage and loading of in scope license facility. The TSA budget 213 process is a bottom-up approach and was determined taking the following into consideration: Variable and fixed expenses for the whole year were derived from the trend experienced during the first part of 212. The 213 budget is in line with the TSA long term plan. Expected volumes for 213 is derived from expecting results for 212 and take into account the objectives and action plans for the following year. 8.1 Direct Expenses Direct expense categories relate to the following expense types: Personnel expenses consists of: Wages and salaries Payroll charges Training Tariff Application 213 14
Miscellaneous (for e.g. medical expenses) Travel, missions, receptions: Domestic travels Other Maintenance: Network maintenance Other maintenance Fees and services: Study fees and other fees Taxes: Trading dues or property taxes Others Purchase of supplies not for stock: Energy and water Office stationery Others Table 12: Direct expenses Trading name Amount Alrode Bethlehem East London Island View Terminal Nelspruit Ohrigstad Polokwane Waltloo Sannieshof Pietermaritzburg Total Note: Refer to Annexure A for detail calculation. 8.2 Indirect Expenses Loading and storage facilities receive support and services from Head Office and Logistics. Approximately 1% of Head Office expenses were attributable to in scope facilities based on the head count of staff at these locations compared to the total staff complement. The Logistics department expenses were allocated per the support provided to the storage and loading facilities. The combined indirect expense was then allocated to the in scope storage and loading facilities based on the forecasted volumes for 213. Tariff Application 213 15
Table 13: Total Head Office expenses Description Amount Advertising & Sales promotions DSI Reinvoicing Equipment rentals Fees and services Insurance Maintenance Office rentals Other property rents Outside IT, telecom and postal services Personnel expenses Purchases of Supplies not for Stock Taxes Travels, missions, receptions Total Table 14: Logistics expenses Cost Percentage Amount Logistics Support 1% Hseq 3% GM 35% Transport 6% Technical 4% Total Note: Refer to Annexure B for detail calculation of indirect expenses. 8.3 Cumulative Expenses Cumulative expenses were determined for each facility in respect of direct and indirect expenses. Tariff Application 213 16
Table 15: Cumulative expenses Trading name Amount Alrode Bethlehem East London Island View Terminal Nelspruit Ohrigstad Polokwane Waltloo Sannieshof Pietermaritzburg Total 9. Depreciation and Amortisation of Inflation Write-up (D) Depreciation is calculated on a straight line basis over the useful lives of the assets as per the methodology. Depreciation commences when the asset is available for use. Assets carried at zero book value but still being used has been restated. The cumulative residual between the indexed historical cost and the actual cumulative depreciation charge to date has formed part of the RAB and is being depreciation over the future expected useful life of these assets. All items are derecognised upon disposal or when no further economic benefits are expected to arise. Table 16: Applicable depreciation rates for each class of asset Active asset classes Book useful life in years Active asset classes Book useful life in years Servitude rentals A 1 Piping equipment 1 Land Pumping equipment 7 Land preparation 15 Loading/canning equipment 7 Buildings freehold 15 Miscellaneous tools 3 Buildings fencing 1 Signs/advert. equipment 5 Infrastructure construction 1 Fire fighting equipment 3 Leasehold buildings 1 Electrical equipment 8 Tanks - Coops 15 Laboratory equipment 4 Tariff Application 213 17
Active asset classes Book useful life in years Active asset classes Book useful life in years Tanks Depots 15 Vehicles other specif 5 Tanks Network ins 15 Comp. Equip Depots 3 Pumps Network 5 Comp. Equip - Diesel C 3 Pumps Supply & pro 5 Comp. Equip Networks 3 I/CST Pumps/tanks-ne 15 Furn./Fittings-Office 8 I/CST Tanks Depot 15 Training equipment 3 Foundations Tanks De 15 Photographic equipment 8 Fixed equipment 5 Dining room equipment 5 Other equipment 5 Office improve. - other 8 Table 17: Depreciation applicable to tariff period Trading name Historical depreciation Revaluation depreciation Total depreciation Alrode Bethlehem East London Island View Terminal Nelspruit Ohrigstad Polokwane Waltloo Sannieshof Pietermaritzburg Total 1. Tax Expense (T) TSA elects to use the notional tax approach which refers to the notional tax expense with respect to the regulated activity for this tariff period. The tax expense is calculated, based on a corporate tax rate of 28%, as per the guidelines in the NERSA tariff methodology. Tax = {(NRBTA) / (1-t)}*t Where: NRBTA = Net revenue before tax allowance Tariff Application 213 18
= {(RAB*WACC) + E + D(historic & write up) + F ±C} - {E + D(historic)}. t = Prevailing corporate tax rate Table 18: Tax allowances for the 213 tariff period Trading name Amount Alrode Bethlehem East London Island View Terminal Nelspruit Ohrigstad Polokwane Waltloo Sannieshof Pietermaritzburg Total Note: Refer to Annexure C for detail calculation. 11. Clawback Adjustment (C) This is TSA is not applying for clawback for this tariff application. 12. Volumes Expected volumes for 213 is derived from expecting results for 212 and take into account the objectives and action plans for the following year. The total expected volume for TSA for 213 is litres. Tariff Application 213 19
Table 19: Expected volumes Trading name Volume Sales (m3) Volume Sales (l) % of total budgeted volume (l) Alrode Bethlehem East London Island View Terminal Nelspruit Ohrigstad Polokwane Waltloo Sannieshof Pietermaritzburg Total 13. Allowed Revenue (AR) The following formula was used to determine AR as per the methodology: AR = (RAB x WACC) + E + D ± C+ T Where: AR = Allowable revenue RAB = Regulatory asset base WACC = Weighted average cost of capital E = Expenses: operating and maintenance expenses for the tariff period under review D = Depreciation and amortisation of inflation write-up: the charge for the tariff period under review C = Claw back adjustment: to correct for differences between actuals and forecast in formula elements from a preceding tariff period in relation to the actual estimates for that tariff period T = Tax: estimated tax expense for the tariff period under review Tariff Application 213 2
Table 2: Allowed revenue Trading name Amount Alrode Bethlehem East London Island View Terminal Nelspruit Ohrigstad Polokwane Waltloo Sannieshof Pietermaritzburg Total Note: Refer to Annexure D for detail calculation. 14. Conclusion TSA has endeavoured to meet NERSA s requirements in the 213 tariff application by applying the methodology. Capacity allocation will be applied as per the NERSA s approved capacity allocation mechanism dated June 211. Total SA has not determined penalties and or discounts due to the limited capacity available to 3 rd parties. TOTAL South requests the approval of the following maximum tariffs per litre which is exclusive of VAT: Table 21: Maximum tariff Trading name Allowed revenue (AR) Volume (l) Maximum tarrif (cpl) (cents) Alrode 12.99 Bethlehem 24.77 East London 22.5 Island View Terminal 13.27 Nelspruit 19.52 Ohrigstad 25.45 Polokwane 18.26 Waltloo 1.61 Sannieshof Pietermaritzburg Total Tariff Application 213 21
Tariff Application 213 22 Annexure A - Detail calculation of direct expenses (table 12) Trading name Alrode Bethle hem East Londo n Island View Termin al Nelspr uit Ohrigs tad Polokw ane Waltl oo Sannie shof Pieter= maritz burg Personnel expenses Office rent Travels, missions, receptions Advertising & sales promotions Maintenance Other property rents Equipment rentals Fees & services External dataprocessing & telecom services Taxes Purchase of supplies not for stock HSEQ
Insurance Total Annexure B - Detail calculation of indirect expenses (tables 13 & 14) Depot Volume Sales (m3) Volume Sales (l) % of total budgeted based on volume Indirect cost allocation Alrode Bethlehem East London Island View Nelspruit Ohrigstad Polokwane Waltloo Sannieshof Pietermaritzb urg Total Tariff Application 213 23
Annexure C - Detail calculation of tax expense (table 18) Trading name Alrode Bethle hem East Londo n Island View Termin al Nelspr uit Ohrigs tad Polokw ane Waltlo o Sannies hof Pieter= maritzb urg RAB WACC Return (RAB x WACC) Expenses Depreciatio n (historic & write up) Sub total Expenses Depreciatio n (historic) Sub total (1-tax) Total taxable revenue Tax @ 28% Tariff Application 213 24
Annexure D - Detail calculation of allowable revenue (table 2) Trading name Alrode Bethleh em East London Island View Termina l Nelspr uit Ohrigs tad Polokw ane Waltlo o Sannie shof Pieter= maritzb urg RAB WACC Return (RAB x WACC) Expenses (E) Depreciati on (D) Clawback Profit before tax Notional tax (t) Total Tariff Application 213 25