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Annual
Report 2014
Shell Refining Company
CONTENTS
1
19 Financial Summary
Corporate Information
Financial Calendar
88 Company Properties
12 Management Team
13 Chairmans Statement
15 Managing Directors Review
Proxy Form
VISION
TO BE THE TOP PERFORMING AND
MOST ADMIRED REFINERY IN ASIA
MISSION
OBJECTIVE
To continuously deliver
shareholder value by:
CORPORATE INFORMATION
Board of Directors
Iain John Lo
Chairman
Non-Independent and Non-Executive Director
Member of Remuneration Committee and Nominating Committee
SMW, DSNS
Independent and Non-Executive Director
Chairman of Audit Committee
Member of Remuneration Committee and Nominating Committee
Secretaries
Main Board of
Bursa Malaysia Securities Berhad
Stock Name : SHELL
Stock Code : 4324
Sector
: IND-PROD
(Industrial Products)
Auditors
Messrs.
PricewaterhouseCoopers (AF 1146)
1 Sentral, Jalan Rakyat
Kuala Lumpur Sentral
P.O. Box 10192
50706 Kuala Lumpur
Tel : 03-2173 1188
Fax : 03-2173 1288
Share Registrar
Symphony Share Registrars Sdn Bhd
(378993-D)
Level 6, Symphony House
Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301 Petaling Jaya
Selangor Darul Ehsan
Tel : 03-7849 0777
Fax : 03-7841 8151/8152
Registered Office
Level 8, Symphony House
Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301 Petaling Jaya
Selangor Darul Ehsan
Tel : 03-7841 8000
Fax : 03-7841 8199
Business Address
Batu 1, Jalan Pantai
71000 Port Dickson
Negeri Sembilan
Tel : 06-647 1311
Fax : 06-647 4622
FINANCIAL CALENDAR
2014
27 May
14 August
12 November
2015
17 February
18 May
29 May
30 June
AGENDA
AS ORDINARY BUSINESS
1.
2.
3.
4.
To receive the Audited Financial Statements of the Company for the financial year ended
31 December 2014 and the Reports of the Directors and Auditors thereon.
To re-elect the following Director who is retiring in accordance with Article 81(2) of the
Companys Articles of Association and being eligible, offers himself for re-election:
a. Mr Michael John Carey
To re-elect the following Directors who are retiring in accordance with Article 81(3) of the
Companys Articles of Association and being eligible, offer themselves for re-election:
a. Mr Iain John Lo
b. Dato Seri Talaat Bin Haji Husain
To re-appoint Messrs. PricewaterhouseCoopers as auditors and to authorise the Directors to
fix the auditors remuneration.
AS SPECIAL BUSINESS
To consider and, if thought fit, pass the following ordinary resolution:
5.
Proposed Renewal of the Existing Shareholders Mandate for Recurrent
Related Party Transactions of a Revenue or Trading Nature
THAT pursuant to paragraph 10.09 of the Main Market Listing Requirements of Bursa
Malaysia Securities Berhad, approval be and is hereby given for the Renewal of the
Existing Shareholders Mandate for the Company to enter into and give effect to the
category of the recurrent arrangements or transactions of a revenue or trading nature
from time to time with the Related Parties, as specified in Section 2.2 of the Circular to
Shareholders dated 29 May 2015 provided that such transactions are:
i. recurrent transactions of a revenue or trading nature;
ii. necessary for the Companys day-to-day operations;
iii. carried out in the ordinary course of business on arms length basis and normal
commercial terms which are not more favourable to the Related Parties than those
generally available to the public; and
iv. not to the detriment of minority shareholders,
(the Proposed Shareholders Mandate);
THAT such authority shall commence upon the passing of this resolution and shall continue
to be in force until:
i. the conclusion of the next Annual General Meeting of the Company following the
Annual General Meeting at which such mandate was passed, at which time it will
lapse, unless the authority is renewed by a resolution passed at the general meeting;
ii. the expiration of the period within which the next Annual General Meeting of the
Company is required to be held pursuant to Section 143(1) of the Companies Act,
1965 but shall not extend to such extension as may be allowed pursuant to Section
143(2) of the Companies Act, 1965; or
iii. revoked or varied by resolution passed by the shareholders in a general meeting;
whichever is the earlier.
AND FURTHER THAT the Directors of the Company be authorised to complete and do all
such acts and things (including executing all such documents as may be required),
as they may consider expedient or necessary to give effect to the Proposed Shareholders
Mandate.
6.
To transact any other business for which due notice has been given.
Ordinary Resolution 1
Ordinary Resolution 2
Ordinary Resolution 3
Ordinary Resolution 4
Ordinary Resolution 5
Iain John Lo
Chairman, Non-Independent
Non-Executive Director
Member of Remuneration Committee
and Nominating Committee
Senior Independent
Non-Executive Director
Chairman of Nominating Committee
Member of Audit Committee and
Remuneration Committee
DPMW
10
Amir Hamzah
Bin Abu Bakar
Managing Director and
Executive Director
11
MANAGEMENT TEAM
Maarten Stals
Zulhazmi Mohamad
Johan Jainudin
Zackaria Abdulah
12
Ang Eu Swan
Cecilia Ng
Isham Ismail
Thitiporn Phansopha
CHAIRMANS STATEMENT
Dear Shareholders,
For Shell Refining Company (SRC), 2014 proved to be a challenging year,
largely due to the plummeting oil price and increasing global refining capacity.
Your Companys attempts to return to
profitability were hindered by high
stockholding losses as well as tight
refining margins from continued over
capacity in the marketplace.
However, SRC continued to advance
operational excellence and cost
effectiveness whilst maintaining a
strong Health, Safety, Security and
Environment performance.
FINANCIAL PERFORMANCE
Your Company posted a net loss aftertax of RM1.19 billion for the year in
review compared to an after-tax loss of
RM155.9 million in 2013, as a result
of stockholding losses of RM625.1
million, impairment losses of RM460.9
million, and operational losses of
RM102.6 million.
The impairment which was in respect
of the refinery assets and reflects
your Boards updated views on future
refining margins for the region. We
anticipate the future earnings of
the company to be affected by the
downward outlook in margin and
accordingly have taken an impairment
charge to the refinery assets to
bring it to its recoverable amounts.
The impairment loss is a non cash
transaction and is further described in
the financial statements.
No dividends were declared for the
year in review.
2014 IN REVIEW
Falling oil prices placed severe strains
on refining margins, especially in Asia
Pacific, after more than three years of
relatively strong and fairly stable oil
prices. Brent crude oil price averaged
US$99 per barrel in 2014, down from
US$109 per barrel in 2013.
However, a 50 percent decline in oil
price from June onwards significantly
affected your Companys performance.
This decline can be attributed to an
abundant oil supply from new shale
resources, most notably in the US,
coupled with a slowdown in China and
the persistent economic sluggishness in
the Eurozone and Japan.
There was also strong growth in
refining capacity in the Middle East,
creating an environment of stiffer
competition for Asian refiners.
The declining oil price led to a
stockholding loss of RM625.1 million in
2014. The loss refers to the difference
between the current cost of inventories
at the date of sale and the amount
charged as the cost of goods sold in
computing the historical cost profit.
Your Company also faced reliability
issues due to incidents involving the
Long Residue Catalytic Cracking Unit
and the Crude Distiller Unit, causing
a higher unplanned down time,
falling short of 2014 business plan
target of 1.4 percent. Causal learning
investigations have been carried out to
identify root causes of the incidents and
gain learnings from the incident.
13
STRATEGIC ANALYSIS
A significant challenge was raised in
2014 when the Malaysian Department
of Environment confirmed the Euro 4M
and Euro 5 implementation timeline, in
phases from 2018 to 2025.
This impacts your Company in the
longer term as substantial capital
investment will be required to meet the
fuel specification in that time period.
Simultaneously, margins are expected
to remain depressed for the rest of the
decade.
As at 31 December 2014, your
Company has significant outstanding
borrowings amounting to of RM1.757
billion representing a rise in your
Companys gearing levels to 84
percent, as compared to 53 percent
in 2013. These borrowings include a
short term loan amounting to RM450
million which was originally due on
15 June 2015, and a long term loan
amounting to US$240 million which
will be due in September 2016. I
would like to highlight to you that your
Board had successfully negotiated for a
six month extension of the maturity date
for the short term loan, to 31 December
2015.
Notwithstanding the extension for the
short term loan, the Board is cognisant
of the reality that internally generated
cash flows will not be adequate to
14
ACKNOWLEDGEMENT
Underlining our commitment to
shareholder returns, I would like to
reassure you that the Board and I have
worked diligently over the course of the
year to determine the way forward for
your Company.
Iain John Lo
Chairman
2014 was undoubtedly one of your Companys toughest years in recent times,
testing the mettle of even the most resilient workforce.
It is a true testament of the employees
sheer determination that your
Company is prevailing in the face of
unprecedented challenges and external
factors beyond our control.
Through this period of adversity, your
Company embarked on a refinerywide continuous improvement journey
towards delivering positive cash result,
through four areas, namely Safety,
Reliability, Managing Margins & Costs
and People, which I will discuss below.
HIGHLIGHTS AND
LOWLIGHTS
Your Company achieved some notable
highs in safety and energy efficiency
in 2014. We received the Malaysian
Society for Occupational Safety &
Health Grand Award for Superior
Occupational Safety and Health for
the third consecutive year a clear
affirmation for our continued focus on
uplifting occupational safety and health
standards.
We also executed our largest ever
multi-scenario oil spill and major
emergency response exercise,
involving 400 personnel from Shell
and government agencies. The success
of the two-day exercise validated our
ability to respond with speed and
efficiency in the event of a crisis.
Our focus on energy efficiency
paid off as your Companys Hydro
Desulphuriser (HDS HIJAU) unit was
named in the top three most energy
efficient units in the Shell manufacturing
portfolio in 2014. Your Company
improved on its Energy Intensity Index
(EII) 2014 by 4.2 points, compared to
EII of 116.4 in 2013.
Nonetheless, your Company also faced
several setbacks. On the forefront is
the ending of our 13-year run of non
loss-time injury (LTI) performance when
SAFETY
In ensuring a safe workplace for our
people, your Company has continued
to routinely schedule safety campaigns,
training programmes, Be Well health
programmes, HSSE walkabouts as
part of the annual HSSE plan. Key
interventions include re-energising the
12 Life-Saving Rules, H2S (hydrogen
sulphide) awareness road show,
Safety Day and series of structured
positive safety stand downs aimed
to proactively engage our people on
safety.
Your Company regretfully recorded
23 Loss of Primary Containments
(LOPC) incidents in 2014 (2013:
14 cases).
For these incidents, immediate
corrective actions have been taken
and followed through. Deeper Causal
Learning type investigations were done
for all significant incidents ensuring
that we have proper identification of
systemic causes and clear actions to
address and prevent recurrence. We
remained steadfast on our focus to
strengthen critical work processes and
shaping the right behaviours on-site,
striving towards operational excellence.
15
2.2%
1.4%
1.5%
1.0%
1.7%
3.
2.4%
3.
0.7%
150
10
RELIABILITY
With plant availability at 94.8 percent
in 2014 (Figure 1), your Company
has stepped up efforts to manage
and improve the overall reliability
performance by looking at four main
focus areas:
94.8%
97.7%
13
14
5.06%
83.7%
98.8%
1.4%
2.2%
98.8%
1.5%
1.7%
1.0%
3.0%
2.4%
0.7%
3.1%
Q214
10
Q314
11
35%
Motor Gasoline
MANAGING MARGINS
12
Q414
13
14
Q214
Mogas
Diesel
Q314
13
Q414
Crude (Brent)
32%
Far
onEast,
tightened operation
6 East & Africa
Middle
discipline to
drive business optimisation. With a
focus on affordability, the refinery
5
prioritised
projects that delivered value
35% in the shorter term and with immediate
Malaysia
4
returns.
Through this lens, the
refinery launched the DRIVE initiative
(Deliver
Robust Integrated Value and
3
Enhancement) where targeted tactics
were executed, bringing additional
2
value to the refinery of RM77 million
on top of the base plan.
1
Q114
3%Crude
Propylene
is the
3% Tops
Q214 largest
Q314
single
cost toQ414
the
refinery. The procurement of crude
is driven by its relative economic
attractiveness to ensure that we
optimise our refining margin. In 2014,
five new crudes were secured and
42%
added
to our crude basket. The refinery
Gasoil
used its advantage in having a high
crude flexibility, coupled with the new
HIJAU asset, to capture US$37.4
million in crude optimisation in 2014.
70
16
12
94.8%
12
14
6%
11
97.7%
10
98.8%
83.7%
98.8%
Figure 1
SRCs Refinery Availability
11
Actual
Figure
2
Target
Russia
Far East,
Middle East & Africa
35%
Malaysia
32%
Far East,
refinery
also
Middle East & Africa
35%
Motor Gasoline
6%
LPG
42%
Gasoil
9%
Jet Fuel
2% LCO/HCO
MANAGING COSTS
PEOPLE
17
18
LOOK AHEAD
Despite better margins in the first
quarter of 2015, the overall outlook for
Asian refineries remains challenging
and uncertain, mostly because of
regional geopolitical activities and
overcapacity due to start-ups of new
refineries.
On supply and balance, the Middle
East refineries currently account for
around 27 percent of the new refining
capacities, and the region is expected
to shift from a net gasoil importer to
exporter in 2015.
At your Company, safe and reliable
operations continue to remain a key
must win for everyone. Safety is
about working safely and going home
to loved ones without any injuries,
while reliability is about running the
operations steadily and smoothly,
simultaneously capturing good margin
opportunities.
In addition to safety and reliability, we
will continue to focus on margin uplift
initiatives such as procuring cheaper
feedstocks, yielding improvements,
energy efficiency and cost optimisation.
In the third quarter of 2015, your
Company will undergo a seven-week
maintenance shut down for a major
turnaround event. This is a critical event
and will be another must win for the
site.
Financial Summary
OVERVIEW
In the year under review,
your Company posted a loss of
RM1,188.7 million.
Weak refining margins were
amplified by high stockholding
losses incurred towards the end
of the year due to falling crude
prices.
In 2014, the crude oil supply
balance hit a correction point
with the growth in crude oil
production from the United
States. Organisation of Petroleum
Exporting Countries (OPEC)
producers did not reduce quotas
in compensation which resulted
in a decline in crude prices from
heights of US$108 per barrel in
early 2014 to US$55 per barrel at
the close of the year.
2014 also marked the start of
the go-live of the Middle Eastern
refineries, with Ruwais in United
Arab Emirates first off the block in
quarter four. This is expected to
add product length in the market
when it fully stabilises.
REVENUE AND
GROSS MARGIN
Revenue of RM14.3 billion was
recorded for your Company in 2014,
3 percent lower than the same period
last year. The decrease is attributable
to lower product prices in 2014.
The refining margin in 2014 was
US$2.65 per barrel on current
cost of supplies (CCS) basis in
comparison to a lower margin
of US$1.10 per barrel in 2013.
The margin is further affected by
stockholding losses of US$4.99
per barrel in 2014 compared to
stockholding gain of US$0.80
per barrel in 2013.
PROFIT
Your Company posted after-tax loss
of RM1,188.7 million in 2014 as
compared to after-tax loss of
RM155.9 million in 2013.
CASHFLOW
Your Company closed the year end
with cash balances of RM8.7 million,
contributed by:
Cash surplus from operations
of RM115.5 million upon
management of lower inventories
level and lower oil prices.
Interest paid on loans
(RM57.4 million)
Repayment of borrowings
(RM35.7 million)
Net cash outflow from capital
expenditure (RM54.8 million)
19
FINANCIAL PERFORMANCE
2010
2011
2012
2013
2014
Growth
Rate
10,376
9,901
151
106
102
11,213
11,074
(164)
(126)
85
15,086
14,901
(122)
(95)
110
14,696
14,519
(223)
(156)
110
14,263
14,571
(1,223)
(1,189)
111
(3%)
0%
448%
662%
1%
3,546
1,230
1,001
3,408
4,204
1,234
1,315
3,494
4,170
1,248
1,134
3,000
4,491
1,302
1,387
3,613
2,811
772
801
3,350
(37%)
(41%)
(42%)
(7%)
1,454
838
2,092
2,350
1,386
1,854
2,465
1,168
1,705
2,977
1,191
1,513
2,486
728
325
(16%)
(39%)
(79%)
175
172
114
392
(74)
370
(252)
165
116
55
(146%)
(67%)
35
697
50
(42)
618
40
(32)
568
20
(52)
504
0
(396)
108
0
662%
(79%)
0
84%
84%
53%
53%
41%
41%
18%
31%
31%
18%
18%
19%
31%
41%
53%
Gearing Ratio
101010111111121212131313141414
Liquidity Ratios
2.85
2.85
2.85
2.05
2.05
2.05
1.60
1.60
1.60
1.95
1.95
1.95
1.66
1.66
1.66
1.09
1.09
1.09
1.00
1.00
1.00
0.960.96
0.96
0.79
0.79
0.79
0.48
0.48
0.48
10 1010
11 1111
12 1212
13 1313
14 1414
Quick Ratio
Current Ratio
20
Refinery Intake
(thousand barrels per day)
96.9
96.9101.9
96.9
101.9
76.9101.9
76.985.2
76.9
85.2
85.2 101.7
101.7110.2
101.7
110.2
101.7
110.2
103.35
109.7
103.35
109.68
103.9
109.68
103.88
110.8
103.88
110.85
110.85
Earnings/(Loss)
Net assets
Gross Dividends
101010111111121212131313141414
Intake
Sales
COMMUNITY
Amidst the tough market environment,
our endeavour to be a good
neighbour and responsible operator
to the community of Port Dickson (PD)
remained. We maintained a good
balance in our Social Investment or
Corporate Social Responsibility by
responding to the communitys needs
where warranted.
In 2014, we partnered with Port
Dickson Residents Association, Port
Dickson Women Association, schools
and many more in our community
outreach programmes. This included
extending assistance in the livelihood
of communities through provision of
fish and prawn seedlings; promoting
healthy lifestyle to the community
through cycling; a breaking of fast
event with underprivileged families
from our fenceline communities;
contributing to Yayasan Munarah, a
charity which supports underprivileged
youths in Negeri Sembilan and
distributing rations to underprivileged
communities during Deepavali.
WORKPLACE
People are your Companys greatest
assets and we want everyone who
works for us to go home safely every
day, more so during this challenging
period that we are operating in. Your
Company continues to aspire to create
a safe and conducive workplace
that nurtures collaboration and team
work; drives passion and motivation in
individuals and provides learning and
development opportunities at all levels.
In the aspect of Health, Safety, Security
and Environment, we embarked on
campaigns to increase knowledge on
personal and process safety. We make
genuine efforts to organise positive
intervention initiatives through periodic
walkabouts and safety stand down to
encourage safety leadership behaviour
and intervention culture.
In the area of learning and
development, your Company invests
in formal multi-skilling training
and semi-formal learning sessions
focusing on personal and leadership
effectiveness and commercial mindset.
ENVIRONMENT
Your Company makes a conscious
effort to conduct business in a safe and
environmentally sustainable manner.
This is apparent through compliance
of environmental regulations and
Company policies and programmes.
In 2014, we continued to manage
emissions, improve energy efficiency,
reduce flaring and conserve
biodiversity. Our ability in this aspect
was regarded as the best practice by
the industry when your Company was
invited to present at the Prime Minister
Hibiscus Award (PMHA) Briefing and
Sharing of Best Practices with Minister
of Natural Resources and Environment
and other industry players.
Our neighbouring communities
continue to be our important partners.
Through an open feedback channel,
members of these communities can
report observations of the plant
instantaneously. Through timely
resolutions of these reports, this
channel has improved our awareness
of the impact of our operations on the
environment.
21
22
23
24
BOARD OF DIRECTORS
Board Composition and Balance
For the period up to 14 April 2015,
your Board comprised the NonIndependent Non-Executive Chairman,
Iain John Lo, the Managing Director,
Amir Hamzah bin Abu Bakar, and
seven other Directors, five (5) of
whom are Independent Non-Executive
Directors, which is in compliance
with paragraph 15.02 of the Listing
Requirements of Bursa Malaysia
Securities Berhad (Bursa Securities)
and the MCCG 2012 which states
that the Board must comprise a
majority of Independent Directors
where Chairman of the Board is not an
Independent Director. To-date none of
the Independent Directors tenure has
exceeded a cumulative term of nine (9)
years.
Michael John Carey who was
appointed as Non-Independent NonExecutive Director on 6 February 2015
and his position will remain until the
56th Annual General Meeting and his
profile is set out on page 10.
Roles of Directors
The roles of the Non-Independent
Non-Executive Chairman and the
Managing Director are distinct and
separate with their responsibilities
clearly defined to ensure a balance
of power and authority. The NonIndependent Non-Executive Chairman
is the Country Chairman of Shell
Malaysia and contributes extensive
knowledge and experience to your
Board. He is responsible for the
Conflicts of Interest
The Company Secretaries require each
Director to complete detailed conflict of
interest questionnaire in the Directors
Declaration updated annually and if
there are any changes, as and when
required. The completed Directors
Declarations are reviewed by the
Remuneration Committee relating to
remuneration and fees received and
the Board for any conflict of interest
declaration. Conflicts of interest and
gifts and hospitality received and
provided by the Non-Independent
Non-Executive Directors are kept under
review in accordance with the SGBP
processes implemented by the Shell
Group.
Responsibility
Your Board has the overall
responsibility for corporate governance
and strategic direction of your
Company and is entrusted to exercise
reasonable and proper care in utilising
your Companys resources for the best
interests of its shareholders and to
safeguard your Companys assets. In
carrying out this responsibility, your
Board oversees whether the internal
processes set up to maintain and
manage high corporate governance
standards are implemented, and
in doing so, frequent updates and
information are sought from the
management of your Company.
25
Seminars, training programmes and conferences attended by the Directors in 2014 are summarised as follows:
Name
Training/Seminar
Iain John Lo
1.
2.
3.
4.
26
Board Meetings
Your Board meetings are held at
least four (4) times a year scheduled
in advance before the end of the
preceding financial year, so that the
Directors are able to plan ahead.
Additional meetings may be convened
as and when necessary to consider
urgent matters that require the Boards
expeditious consideration. During Board
meetings, the Managing Director, and
members of the Management team
will table and present comprehensive
reports for your Boards consideration,
deliberation and direction. The
Chairman of the Audit Committee,
Remuneration Committee and
Nominating Committee would inform
the Directors at each Board meeting
of any salient findings noted by the
respective Committees which require the
Boards notice, direction or approval.
Board Meeting
Name of Directors
Audit Committee
Meeting
Nominating
Committee
Meeting
Remuneration
Committee
Meeting
General
Meeting
#Held
Attended
#Held
Attended
#Held
Attended
#Held
Attended Attended
Iain John Lo
NonMember
NonMember
Yes
Amir Hamzah
bin Abu Bakar
NonMember
NonMember
NonMember
NonMember
NonMember
NonMember
Yes
Yes
Yes
Yes
NonMember
NonMember
NonMember
NonMember
Yes
NonMember
NonMember
NonMember
NonMember
Yes
NonMember
NonMember
NonMember
NonMember
NonMember
NonMember
Yes
27
Board Meeting
Nominating
Committee
Meeting
Audit Committee
Meeting
Remuneration
Committee
Meeting
General
Meeting
Name of Directors
#Held
Attended
#Held
Attended
#Held
Attended
#Held
Attended Attended
NonMember
NonMember
NonMember
NonMember
No
NonMember
NonMember
NonMember
NonMember
NonMember
NonMember
No
NonMember
NonMember
NonMember
NonMember
NonMember
NonMember
No
*
^
Number of meetings held during tenure as Director and/or Board Committee member.
Amir Hamzah bin Abu Bakar was appointed as Director on 2 April 2014.
Arnel Lamco Santos was appointed as Director on 21 January 2014.
Michael John Carey was appointed as Director on 6 February 2015 and subsequently as Audit Committee Member on
17 February 2015.
^^ Datuk Yvonne Chia was appointed as Audit Committee Member on 26 February 2014.
Number of Directorships
28
Social Responsibility
Your Board takes a particular interest in
your Companys role as a responsible
and caring member of the community.
To this end, your Board has adopted
various initiatives set out on page 21
of this Annual Report.
Board Committees
Your Board has delegated specific
responsibilities to three (3) subcommittees, namely the Audit
Committee, Nominating Committee and
Remuneration Committee, consisting
29
a Non-Independent Non-Executive
Director. However, your Board must
justify and seek shareholders approval
in the event it retains an Independent
Director, a person who has served in
that capacity for more than nine (9)
years. As at the date of this statement
and up to the forthcoming Annual
General Meeting, none of the existing
Directors has served your Company as
Independent Directors for more than
nine (9) years.
During the financial year under
review, the Directors who are due for
re-election have been assessed by the
Nominating Committee and thereafter
approved by the Board.
The Board then makes
recommendations to the shareholders
concerning the re-election of Directors
at the Annual General Meeting.
Evaluation Process
The Board carries out annual
performance evaluation on itself, its
Board Committees and each of the
Directors including the assessment
of training needs for the Board. The
summary of results was presented to the
Nominating Committee and the Board
at its meeting held on 12 November
2014 and the Directors Evaluation
Forms and summary of the results were
properly documented. The performance
evaluation provided feedback on
a wide range of Board and Board
Committee matters including on some
processes and a number of issue was
highlighted for ongoing focus during
2015 with specific follow up actions to
be tracked and assessed periodically.
Meetings
The Nominating Committee has set at least two (2) meetings a year and in 2014, four (4) meetings were held and two (2) other
meetings were held in 2015 up to the date of the issuance of the Annual Report. Details of the Committee members attendance at
the Nominating Committee meetings are summarised as follows:
Directors
#Held
Attended
Iain John Lo
30
Remuneration Committee
Your Companys Remuneration
Committee was instituted on
27 August 2009 following a review
of the existing remuneration processes
which are in accordance with the Shell
Groups remuneration policy to set the
remuneration of the Managing Director.
The purpose of the Remuneration
Committee can be found in its terms of
reference which is available at www.
shell.com/src.
The Remuneration Committee
consists of the Chairperson held by
Datuk Zainun Aishah binti Ahmad,
an Independent Non-Executive Director,
Details of the Committee members attendance at the Remuneration Committee meetings are summarised as follows:
Directors
#Held
Attended
Iain John Lo
Directors Benefits
Independent Non-Executive
Directors: They are paid based
on the fees approved by the
shareholders at the general
meeting held on 12 May 2010.
Non-Independent Non-Executive
Director: They are paid wages by
the respective employing company
(which is a Shell Group affiliate)
and includes the Shell Groups
performance share plan.
Managing Director: He is paid
wages by the Company and
includes the Shell Groups
performance share plan.
31
A analysis of the aggregate Directors remuneration paid by your Company for the financial year ended 31 December 2014 is set
out below:
Directors
Basic
Salary
RM000
Directors Attendance
and Audit and Other
fees
Fees
RM000
RM000
Contribution
to Provident
Fund
Bonus
RM000
RM000
Total
RM000
Executive
Dato Haji Rozano bin Saad
(Resigned on 2 April 2014)
220
189
55
464
600
81
681
Iain John Lo
93
93
97
97
93
93
82
82
100
100
Non-Executive
* Please note certain Directors interest under Shells Performance Share Plan as disclosed in the Directors Benefits in the
Companys Financial Statements.
The Non-Independent Non-Executive Directors of your Company who receive their remuneration from their respective employing
companies (which is a Shell affiliate) do not receive any form of remuneration from your Company.
32
Relationship with
External Auditors
Your Board via the Audit Committee
has established a formal and
transparent professional relationship
with the external auditors of your
Company. The role of your Board and
the Audit Committee in relation to the
auditors is described on pages 38 and
42. The Independent Directors had
three (3) meetings with the External
Auditors to discuss the external audit
findings, without the presence of any
Non-Independent Directors, Executive
Director and Management.
Non-standard audit services would
encompass services outside the
statutory financial audit, and all
standard services are contained in
the Statutory Letter of Engagement.
For audit engagements outside the
standard scope, specific approval is
required from the Audit Committee
consistent with the internal governance
on the appointment of the External
Auditor.
The External Auditors were also
invited to attend the Annual General
Meeting of the Company to answer
shareholders questions on the
conduct of the statutory audit and the
preparation and content of their audit
report.
STRENGTHEN
RELATIONSHIP BETWEEN
COMPANY AND
SHAREHOLDERS
Annual Report and
Annual General Meeting
Your Company believes that the
Annual Report and Annual General
Meeting embody the characteristics
laid down by Bursa Securities of
transparency, accuracy, accountability,
simplicity and reliability, among others
that are required in a shareholders
communication policy of a public listed
company.
33
Investor Relations
Your Companys website is another
communication tool to add depth to
the governance reporting and keep
shareholders updated throughout the
year. The updated information on
the website includes, among others,
financial results, investor presentations,
capital structure information, press
releases, Board Charter and relevant
information.
Financial Reporting
Your Board is committed to provide
a balanced, clear and meaningful
assessment of the financial position
and prospect of your Company in
all the reports to shareholders and
investors and this is reflected by timely
release of quarterly public financial
announcements, which include
details of your Companys business
performance and current issues and
concerns. The Directors scrutinise these
announcements at their Board Meetings
prior to publication to ensure that they
are accurate and present a balanced
assessment of your Companys affairs.
Your Board is assisted by the Audit
Committee to oversee the financial
reporting process and the quality of
financial reporting of your Company.
The Statement by Directors pursuant
to Section 169 of the Companies Act,
1965, is set out on page 49 of this
Annual Report.
Statement of Directors
Responsibility for Preparing the
Financial Statements
The Directors are required by the
Companies Act, 1965, to prepare
financial statements for each financial
year which have been made in
accordance with the applicable
approved accounting standards in
Malaysia and the provisions of the
Companies Act, 1965, which give a
true and fair view of the state of affairs
of your Company at the end of the
financial year and of the results and
cash flows of your Company for the
financial year.
34
OTHER INFORMATION
Conflict of Interest
None of the Directors have any family
relationship with other Directors and/or
major shareholders of your Company,
nor any personal interest in any
business arrangement involving your
Company. None of the Directors have
had convictions for any offences within
the past ten (10) years.
Material Contracts Awarded
to Directors and Substantial
Shareholders
None of the Directors and substantial
shareholders had any material contract
with your Company during the financial
year under review.
35
36
37
COMPOSITION
Members of the Audit Committee
(Committee) are:
Datuk Seri Saw Choo Boon
Chairman
Independent Non-Executive Director
Dato Seri Talaat bin Haji Husain
Senior Independent
Non-Executive Director
ATTENDANCE AT MEETINGS
The details of attendance of each member at the Committee meetings held during the financial year ended 31 December 2014
are as follows:
No of Committee Meetings
Name of Member
#Held
Attended
38
ACTIVITIES OF THE
AUDIT COMMITTEE
Internal Audit
Name of Audit/Review
Period
Conducted
Q1
Q1
Q2
Q2
Q2
Q2
Q3
Q3
Q4
Focused Asset Integrity Review MS for Pressure Equipment Integrity Management FAIR
Q4
Q4
Q4
Q4
Q4
The Committee monitored the corrective actions on outstanding audit issues to ensure that all the key risks and control lapses were
covered and have been addressed in a timely and comprehensive manner.
39
Financial Reporting
Whistle Blowing
a.
b.
Provisions of the
Companies Act, 1965;
ii.
Listing Requirements;
iii.
Applicable approved
accounting standards;
iv.
Compliance to new
accounting standards;
v.
External Audit
a.
b.
c.
40
TERMS OF REFERENCE
In line with the best practice of
Corporate Governance, the Committee
is governed by the following terms of
reference:
Constitution
a.
b.
Membership
a.
b.
c.
Must be a member of
the Malaysian Institute of
Accountants (MIA); or
ii.
d.
b.
c.
d.
e.
f.
Secretary
The Company Secretary (or any
one or more of, if more than one
Company Secretary) or such other
approved person shall be the secretary
of the Committee (the Committee
Secretary). The Committee Secretary
shall provide assistance to the members
of the Committee, including but
not limited to assist the Committee
Chairman in planning the work of
the Committee, formulating meeting
agendas, maintenance of Committee
minutes, collation and distribution of
information required by the Committee
and provide practical support, as and
when needed.
b. Financial Reporting
i.
Authority
The Committee is authorised by the
Board to investigate any activity within
its terms of reference and shall have full
and unrestricted access to information
it requires from any employee of the
Company, and all employees are
directed to co-operate with any request
made by your Committee.
The Committee is authorised by the
Board to obtain outside legal or other
independent professional advice and
to secure the attendance of outsiders
with relevant experience and expertise
whenever deemed necessary.
Duties and Responsibilities
The following are the main duties and
responsibilities of the Committee, and
where appropriate, your Committee
reports to your Board on the following:
a.
ii.
ii.
Any changes in or
implementation of
accounting policies
and practices;
Significant or material
adjustments with
financial impact
arising from the audit;
Significant unusual
events or exceptional
activities;
The appropriateness
of Managements
selection of
accounting policies
and disclosures in
compliance with
approved accounting
standards, stock
exchange and
other regulatory
requirements.
41
c.
External Audit
i.
ii.
42
d. Internal Audit
Recommend the
appointment or reappointment of the external
auditors and audit fee
to your Board, after
reviewing the suitability,
resources, competency and
independence of external
auditors and the accounting
firm.
Make appropriate
recommendations to
your Board on matters
of resignation, dismissal
or cessation of office of
the external auditors and
secure the reason of such
resignation, dismissal or
cessation of office.
iii.
iv.
e.
i.
ii.
iii.
Ensure co-ordination
between the internal and
external auditors.
iv.
v.
Annually assess
performance of services
provided by the internal
audit function.
f.
Other Matters
i.
To report to Bursa
Securities, if the Committee
views that a matter resulting
in a breach of the Listing
Requirements reported by
the Committee to the Board
has not been satisfactorily
resolved by the Board.
ii.
iii.
To announce to Bursa
Securities, if there is any
related party transactions
which exceed the Existing
Shareholders Mandate and
provide full reasoning and
detailed explanations.
Financial
Statement
44 Directors Report
49 Statement By Directors
50 Statutory Declaration
51 Independent Auditors Report
53 Statement of Comprehensive Income
54 Statement of Financial Position
55 Statement of Changes in Equity
56 Statement of Cash Flows
57 Notes to the Financial Statements
43
Directors Report
DIRECTORS REPORT
The Directors hereby submit their annual report to the members together with the audited financial statements of the Company for the
financial year ended 31 December 2014.
PRINCIPAL ACTIVITIES
The principal activities of the Company consist of refining and manufacturing of petroleum products. There has been no significant
change in these activities during the financial year.
FINANCIAL RESULTS
The results of the operations of the Company for the financial year were as follows:
RM000
Loss for the financial year
(1,188,768)
DIVIDENDS
Since the end of the previous financial year, the Directors do not recommend the payment of any dividend for the financial year
ended 31 December 2014.
DIRECTORS
The Directors who have held office during the period since the date of the last report are as follows:
Iain John Lo
Dato Seri Talaat bin Haji Husain
Datuk Seri Saw Choo Boon
Datuk Zainun Aishah binti Ahmad
Lau Nai Pek
Datuk Yau Ah Lan @ Fara Yvonne
Arnel Lamco Santos
Amir Hamzah Bin Abu Bakar
Michael John Carey
In accordance with Articles 81(2) of the Companys Articles of Association, Michael John Carey retires by rotation at the forthcoming
Annual General Meeting and, being eligible, offers himself for re-election.
In accordance with Article 81(3) of the Companys Articles of Association, Dato Seri Talaat bin Haji Husain and Iain John Lo, retire
by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.
44
DIRECTORS BENEFITS
During and at the end of the financial year, no arrangements subsisted to which the Company is a party, being arrangements with
the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures
of, the Company or any other body corporate except for awards of shares under the Performance Share Plan (PSP) granted by
Royal Dutch Shell plc to eligible senior executives including certain Directors of the Company.
Since the end of the previous financial year, no Director of the Company has received or become entitled to receive any benefit
(other than benefits disclosed as Directors remuneration in Note 13 to the financial statements) by reason of a contract made by the
Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which
the Director has a substantial financial interest.
Long-term incentives
Following the unification of Shell Transport and Trading Company plc and Royal Dutch Petroleum Company (N.V. Koninklijke
Nederlandsche Petroleum Maatschappij) in 2005, the share option grants were discontinued and in its place, an amended Long
Term Incentive Plan was introduced. The purpose of the changes was to ensure a closer link between the remuneration of Directors
and executives and the performance of the Royal Dutch Shell plc relative to its peers.
Long-Term Incentive Plan (LTIP)
Under the LTIP, performance shares are awarded conditionally once a year as shown below.
TSR Rank Performance shares received
1st
2nd
3rd
4th or 5th
2 x award
1.5 x award
0.8 x award
Nil
Awards will have a face value between zero and two times base award. Awards are subject to performance over a period of at
least three years.
The actual number of shares that Directors received in 2014 is based on the TSR performance of Royal Dutch Shell plc over the
period from year 2011 to 2013. The face value of the conditional performance share award is the number of shares as referred to
in Directors Long-term Incentive Interest below multiplied by the share price at the time of the award.
45
11,600
(11,600)
RDSA
RDSA
1
RDSA
1
RDSA
1
1
30,925
1,360
6,315
8,000
12,650
0
2,875
8,500
(8,500)
(1,360)
(1,840)
0
35,075
0
7,350
16,500
8,111
961
1,756
11,543
* A face value of 95% of the LTIP awards granted in 2011 was vested during the financial year.
(ii) Direct interest in vested shares of **PSP and ***GESPP
Balance
as at
1.1.2014/
since
Class of
date of
Shares appointment
Iain John Lo
Datuk Seri Saw Choo Boon
Lau Nai Pek
Amir Hamzah bin Abu Bakar
RDSA
RDSB
1
RDSA
2
RDSB
1
RDSA
1
RDSA
1
26,964
97
21,810
23
3,938
2,208
Shares
added to
vested
Shares
share
sold/
Balance
account
Dividend transferred
as at
in 2014
share
in 2014 31.12.2014
8,111
0
0
0
961
1,756
485
0
0
2
241
27
(29,361)
(97)
(21,810)
0
0
(3,988)
6,199
0
0
25
5,140
3
1
2
46
47
AUDITORS
The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.
Signed on behalf of the Board of Directors in accordance with their resolution dated 31 March 2015.
48
Statement By Directors
We, Amir Hamzah Bin Abu Bakar and Iain John Lo, being the Directors of Shell Refining Company (Federation of Malaya) Berhad,
state that, in the opinion of the Directors, the accompanying financial statements set out on pages 53 to 86 are drawn up in
accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the provisions of the
Companies Act, 1965 in Malaysia so as to give a true and fair view of the state of affairs of the Company as at 31 December 2014
and of the results and cash flows for the financial year ended on that date.
The supplementary information set out in Note 35 on page 87 have been prepared in accordance with the Guidance of Special
Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia
Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.
Signed on behalf of the Board of Directors in accordance with their resolution dated 31 March 2015.
49
Statutory Declaration
I, Michael John Carey, the Director primarily responsible for the financial management of Shell Refining Company (Federation of
Malaya) Berhad, do solemnly and sincerely declare that the financial statements set out on pages 53 to 86 are, in my opinion,
correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the
Statutory Declarations Act, 1960.
50
51
OTHER MATTERS
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965
in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
PRICEWATERHOUSECOOPERS
(No. AF: 1146)
Chartered Accountants
Kuala Lumpur
31 March 2015
52
Note
2014
2013
RM000 RM000
Restated
6
Revenue
Purchases
Other income
7
Manufacturing expenses
Administrative expenses
Depreciation and amortisation
Other expenses
Finance cost
8
Impairment
9
9
10
Loss for the financial year/Total comprehensive expense for the financial year
Loss per RM1 unit of share (sen) - basic
12
14,262,773
(14,571,039)
(308,266)
14,440
(191,576)
(53,917)
(151,435)
(3,148)
(68,693)
(460,878)
14,696,086
(14,519,448)
176,638
13,653
(188,198)
(43,384)
(146,700)
(2,261)
(33,084)
0
(1,223,473)
34,705
(223,336)
67,353
(1,188,768)
(155,983)
(396)
(52)
The notes set out on pages 57 to 86 form an integral part of these financial statements.
53
Note
2014
2013
RM000 RM000
NON-CURRENT ASSETS
Property, plant and equipment
Prepaid lease payments
Long-term receivables
Derivative financial assets
1,104,821
1,864
0
118,565
1,667,822
1,885
287
75,331
1,225,250
1,745,325
801,183
26,971
1,404
4,376
1,386,826
68,649
743
4,378
737,976
5,193
8,737
1,226,301
5,930
41,009
1,585,840
2,733,836
TOTAL ASSETS
2,811,090
4,479,161
300,000
1,306
23,378
300,000
1,237
1,212,146
324,684
1,513,383
75,558
89,949
634,937
17,636
919,115
1,060,288
41,203
503,513
1,647,246
1,694,953
14
15
16
17
CURRENT ASSETS
Inventories
18
19
Trade receivables
Other receivables and prepayments
20
Tax recoverable
Amounts receivable from related companies
21
Trade
Non-trade
Bank balances
22
CURRENT LIABILITIES
Trade and other payables
25
Amounts payable to related companies
21
Trade
Non-trade
Borrowings
17
NET CURRENT (LIABILITIES)/ASSETS
NON-CURRENT LIABILITIES
Borrowings
Deferred tax liabilities
(61,406)
839,160
0
1,236,120
34,705
839,160
1,270,825
2,811,090
4,479,161
17
26
The notes set out on pages 57 to 86 form an integral part of these financial statements.
54
1,038,883
300,000
300,000
1,237
1,212,146
1,513,383
(1,188,768)
(1,188,768)
0
0
0
0
(1,144)
1,213
0
0
(1,144)
1,213
At 31 December 2014
300,000
300,000
1,306
23,378
324,684
At 1 January 2013
Total comprehensive expense
for the financial year
PSP from RDS
24
re-charge by parent
charge during the year
Dividends for the financial year ended:
31 December 2012
11
300,000
300,000
1,996
1,402,749
1,704,745
(155,983)
(155,983)
0
0
0
0
(719)
(40)
(870)
0
(1,589)
(40)
(33,750)
(33,750)
At 31 December 2013
300,000
300,000
1,237
1,212,146
1,513,383
The notes set out on pages 57 to 86 form an integral part of these financial statements.
55
Note
2014
2013
RM000 RM000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before taxation
Adjustments for:
Property, plant and equipment
depreciation
write-off
impairment
Interest expense
Interest income
Net foreign exchange loss - unrealised
Fair value gain on derivative financial instruments
Allowance/(reversal) of inventories write-down to net realisable value
(Reversal)/allowance for doubtful debts
Amortisation of prepaid lease payments
PSP from RDS
(1,223,473)
(223,336)
151,435
134
460,878
58,755
(92)
50,652
(43,236)
80,167
(891)
21
1,213
146,700
0
0
42,546
(271)
60,384
(61,798)
(2,955)
1,307
21
40
Changes in working capital:
Inventories
Trade and other receivables
Trade and other payables
Related companies
(464,437)
(37,362)
505,476
41,574
(8,921)
41,760
(250,331)
(45,463)
(8,832)
89,684
115,452
92
(252,304)
271
115,544
(252,033)
(54,827)
(164,899)
(54,827)
(164,899)
(35,730)
0
(57,423)
0
0
502,540
(43,874)
(33,750)
(93,153)
424,916
(32,436)
41,009
164
7,984
32,932
93
22
8,737
41,009
During the financial year ended 31 December 2014, the Company acquired property, plant and equipment with an aggregate
cost of RM49,445,737 (2013: RM89,763,000). During the year, cash payments of RM54,826,737 (2013: RM164,899,000)
were made for acquisitions of property, plant and equipment. The balance unpaid at the financial year end of RM13,283,000
(2013: RM18,664,000) is included in accruals for capital expenditure under Note 25.
The notes set out on pages 57 to 86 form an integral part of these financial statements.
56
GENERAL INFORMATION
The principal activities of the Company consist of refining and manufacturing of petroleum products. There has been no
significant change in these activities during the financial year.
The Directors regard Royal Dutch Shell plc, a company incorporated in England and Wales, as the Companys ultimate holding
company.
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market
of the Bursa Malaysia Securities Berhad (Bursa Malaysia).
The address of the registered office of the Company is:
Level 8, Symphony House
Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301 Petaling Jaya
Selangor Darul Ehsan
The address of the principal place of business of the Company is:
Batu 1, Jalan Pantai
71000 Port Dickson
Negeri Sembilan
57
There is no significant impact on the financial results and position of the Company upon adoption of the above new
standards, amendments to published standards and interpretation.
(b) Standards, amendments to published standards and interpretations to existing standards that are
applicable to the Company but not yet effective
The Company will apply the new standards, amendments to standards and interpretations in the following period:
(i)
58
2.5% 5.0%
9.0% 33.3%
20%
During the financial year, the Company revised the estimated useful lives of the refinery to the shorter of 11 years, or the
remaining useful lives of the respective assets (refer to Critical accounting estimates and judgments Note 3 (ii)).
Depreciation on work-in-progress commences when the assets are ready for their intended use.
Plant, machinery and equipment comprise components of the refinery which are subject to different refurbishment cycle.
59
60
61
62
63
64
It becomes probable that the customers will enter bankruptcy or other financial reorganisation.
The amount of the loss is measured as the difference between the assets carrying amount and the present value
of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the
financial assets original effective interest rate. The assets carrying amount is reduced and the amount of the loss is
recognised in profit or loss. If loans and receivables have a variable interest rate, the discount rate for measuring
any impairment loss is the current effective interest rate determined under the contract. As a practical expedient,
the Company may measure impairment on the basis of an instruments fair value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised (such as an improvement in the debtors credit rating),
the reversal of the previously recognised impairment loss is recognised in profit or loss.
When an asset is uncollectible, it is written off against the related allowance account. Such assets are written off
after all the necessary procedures have been completed and the amount of the loss has been determined.
(e)
De-recognition
Financial assets are de-recognised when the rights to receive cash flows from the investments have expired or have
been transferred and the Company has transferred substantially all risks and rewards of ownership.
65
66
Market research
11%
Management estimate
Refinery margin
Refinery margin
Refinery margin
Availability of export markets
Recoverable
amount
(RM million)
Impairment
loss
(RM million)
1,303
212
828
687
Nil
Full Impairment
of RM1,515
521
994
It is reasonably possible that the estimate of expected future cash flows may change in the near term resulting in the
need to adjust the resulting cash flow projections to support the recoverable amount of the refinery. The cash flow
forecast is dependent on the achievability of the refinery margins and assumptions and the corresponding sensitivities as
indicated above.
Refinery margins are subject to cyclical fluctuations resulting from an over-supply and supply tightness in various global
and regional markets. Fluctuations in the short term may result in significant changes in monthly/quarterly profit and loss
resulting in significant loss or profits.
(ii) Change in accounting estimates over estimated useful life of refinery
The Board has reviewed the remaining useful lives of the refinery. As described in the accounting policy stated in
note 2.4, the depreciation of the refinerys assets is revised to the shorter of 11 years, or the remaining useful lives of
respective assets as a result of a review performed over the future margin outlook of the Company. The impact of the
change in estimate on the Companys comprehensive expense is an additional depreciation charge of RM1.9 million for
the year ended 31 December 2014.
67
(109,409)
109,409
(136,671)
136,671
68
(13,187)
13,187
(13,047)
13,047
2014
2013
RM000 RM000
Derivative financial assets
Counterparties with external credit rating
AAA
118,565
75,331
Trade receivables
Counterparties without external credit rating
Group B
24,723
68,649
24,723
68,649
8,737
41,009
740,825
1,227,545
Cash at bank
Counterparties with external credit rating
AAA
Amounts receivable from related companies
Counterparties without external credit rating
Group B
None of the financial assets that are fully performing have been renegotiated in the current financial year.
The Company generally has no significant concentration of credit risk other than as set out below:
(i)
90% (2013: 83%) of the Companys total trade receivables at the reporting date were receivable from major
customers within the oil and gas industry in Malaysia. The Directors are of the view that such credit risk is minimal
in view of the strength of the customers financial position.
(ii)
91% (2013: 84%) of the Companys total intercompany receivables at the reporting date was receivable from
Shell Malaysia Trading Sendirian Berhad and Shell Timur Sendirian Berhad. The Directors are of the view that the
exposure to credit risk is minimal in view of the stability of the fellow subsidiaries financial position. Sales to the
above mentioned related companies constitute 89% (2013: 82%) of the Companys revenue.
(iii) majority of the Companys deposits, bank and cash balances were placed with major financial institutions in
Malaysia. The Directors are of the view that the possibility of non-performance by these financial institutions is
remote on the basis of their financial strength.
69
Between
Within
1 to
1 year
3 years Total
RM000 RM000 RM000
At 31 December 2014
Trade and other payables excluding statutory liabilities
Amounts due to related companies
Short term borrowings
Term loan
Cross currency interest rate swaps (Outflow)
Cross currency interest rate swaps Inflow
73,668
652,573
469,115
467,773
(23,295)
9,744
0
0
0
845,495
(717,799)
851,398
73,668
652,573
469,115
1,313,268
(741,094)
861,142
At 31 December 2013
Trade and other payables excluding statutory liabilities
Amounts due to related companies
Short term borrowings
Term loan
Cross currency interest rate swaps (Outflow)
Cross currency interest rate swaps Inflow
86,334
1,101,491
503,513
36,075
(19,737)
8,324
0
0
0
1,221,460
(723,324)
809,853
86,334
1,101,491
503,513
1,257,535
(743,061)
818,177
1,758,275
324,684
1,739,633
1,513,383
Total capital
2,082,959
3,253,016
84%
53%
Gearing ratio
70
118,565
118,565
At 31 December 2013
Derivatives Cross currency interest rate swaps
75,331
75,331
The valuation technique used to derive the Level 2 fair value is as disclosed in Note 17.2.
During the year, there were no transfers between Level 1 and Level 2 fair value measurements and no transfers into and out of
Level 3 fair value measurement.
6 REVENUE
2014
2013
RM000 RM000
Sale of oil products:
refined
crude oil
14,259,287
14,693,340
3,486
2,746
14,262,773
14,696,086
71
7 OTHER INCOME
2014
2013
RM000 RM000
14,348
92
13,382
271
14,440
13,653
FINANCE COST
2014
2013
RM000 RM000
Interest expense:
term loan
(24,930)
(23,758)
short-term borrowings
(19,513)
(9,106)
cross-currency interest rate swap (CCIRS)
(14,312)
(10,939)
Total interest expense
Foreign exchange loss on term loan:
unrealised
Fair value gain on derivative financial instruments
Others
(58,755)
(43,803)
(53,040)
43,236
(134)
(52,199)
61,798
(137)
Less: Amounts capitalised in property, plant and equipment
(68,693)
0
(34,341)
1,257
(68,693)
(33,084)
72
220
18
13,826,673
51,119
7,525
5,382
(40)
(2,955)
41,387
8,278
146,700
21
0
0
1307
10 TAXATION
2014
2013
RM000 RM000
Current tax:
(under) accruals in prior years
(3)
Deferred taxation (Note 26)
origination and reversal of temporary differences (Note 26)
(3)
34,705
67,356
34,705
67,353
The numerical reconciliation between the effective tax rate and the applicable statutory tax rate is as follows:
Applicable tax rate
Tax effects in respect of:
expenses not deductible for tax purposes
previously unrecognised temporary differences
under accruals in prior years current tax
tax losses and deductible temporary differences for which no deferred tax asset was recognised
2014
%
2013
%
25
25
(1)
0
0
(21)
3
(1)
3
3
0
30
11 DIVIDENDS
2014
2013
Amount of Amount of
Gross
dividends,
Gross
dividends,
dividends
net of
dividends
net of
per share
per share
tax at 25%
tax at 25%
Sen RM000
Sen RM000
Interim dividends paid in respect of the financial
year ended
31 December 2012
15
33,750
15
33,750
The Directors do not recommend the payment of any dividend for the current financial year.
73
2014
(1,188,768)
300,000
(396)
2013
(155,983)
300,000
(52)
13 DIRECTORS REMUNERATION
2014
2013
RM000 RM000
Fees
Salaries, bonus and allowances
Defined contribution plan
Share based payment
465
1,009
136
291
387
1,041
158
359
1,901
1,945
The estimated monetary value of benefits provided to Directors during the year by way of usage of the Companys assets and
the provision of accommodation and other benefits amounted to RM3,125 (2013: RM12,500).
74
50,598
0
0
0
15,654
0
0
0
109,242 3,300,642
0
0
0
(3,428)
0
38,809
55,939 3,532,075
49,446
49,446
0
(3,428)
(38,809)
0
At 31 December
50,598
15,654
109,242 3,336,023
66,576 3,578,093
Accumulated depreciation
At 1 January
Charge for the financial year
Write-off
0
0
0
13,157
339
0
54,211 1,796,885
2,487
148,609
0
(3,294)
0 1,864,253
0
151,435
0
(3,294)
At 31 December
13,496
56,698 1,942,200
0 2,012,394
0
0
0
0
0
0
0
460,878
0
0
0
460,878
At 31 December
460,878
460,878
50,598
2,158
52,544
932,945
66,576 1,104,821
50,598
0
0
0
15,700
0
0
(46)
109,266 2,470,432
0
1,498
0
836,821
(24)
(8,109)
At 31 December
50,598
15,654
109,242
Accumulated depreciation
At 1 January
Charge for the financial year
Write off
0
0
0
At 31 December
Net book value
At 31 December
804,495 3,450,491
88,265
89,763
(836,821)
0
0
(8,179)
3,300,642
55,939
3,532,075
12,864
339
(46)
51,744 1,661,124
2,491
143,870
(24)
(8,109)
0
0
0
1,725,732
146,700
(8,179)
13,157
54,211
1,796,885
1,864,253
50,598
2,497
55,031
1,503,757
55,939
1,667,822
1,885
(21)
1,906
(21)
As at 31 December
1,864
1,885
75
16 LONG-TERM RECEIVABLES
2014
2013
RM000 RM000
Staff car loan
Less: Current portion (Note 20)
Staff car loan (Non-current portion)
273
(273)
0
494
(207)
287
Staff car loans are interest free and are repayable within 1 year (2013: 1 to 3 years). The fair value of the staff car loan
is RM93,566 (2013: RM274,781). Fair value of the staff car loan is computed by discounting the future cash flows using
discount rate of 3.23% per annum (2013: 3.6%).
The staff car loan does not contain impaired assets.
452,375
839,160
1,043
1,236,120
1,291,535
1,237,163
466,740
502,470
As at 31 December 2014, the Company has in place revolving credit facilities with local banks for working capital
purposes. The facilities carry interest rates at a range of COF+0.25% to COF+0.35% (Cost of Funds), and KLIBOR+0.26%
(Kuala Lumpur Interbank Offer Rate).
The Company obtained a RM450 million loan for working capital financing in 2010. The term loan carries interest at
rates which varies according to prevailing KLIBOR+0.30% starting from 15 June 2010. The repayment of the term loan is
through 20 quarterly interest repayments and a bullet repayment of the entire principal balance which is due on 15 June
2015. Subsequent to the financial year end, the Company had successfully negotiated for an extension to the maturity
date to 31 December 2015 on the same terms.
In 2011, the Company obtained a USD240 million 5-year term loan facility primarily to finance a capital expenditure
project. The term loan carries interest based on LIBOR+0.75% (London Interbank Offered Rate). The loan will be maturing
on 14 September 2016. The repayment of the term loan is through 20 quarterly interest payments and a bullet repayment
of the entire principal balance on 14 September 2016.
The fair value of the non-current borrowing approximates the carrying value. The fair values are based on cash flows
discounted using a rate based on the borrowing rate of 3.74% on the RM450 million loan and 0.94% on the USD240
million loan per annum (2013: 3.50%; 1.01%).
76
75,331
The Company entered into CCIRS to hedge against the fluctuations in USD/RM exchange rate on its USD term loan. The
fair values were obtained from the counterparty banks. Details are as follows:
Principal
Contract Amount
exchange rate Interest rate swapped Period entered
USD 60 Million
USD 1 = RM 3.03
USD 60 Million
USD 1 = RM 3.03
USD 120 Million
USD 1 = RM 3.05
27
14
27
14
14
14
February 2012 to
September 2016
February 2012 to
September 2016
September 2011 to
September 2016
1
2
The effective interest rates of the Companys term loans at the end of the reporting period ranged from 1.01% to 4.16%
(2013: 0.99% to 3.53%) per annum. After executing the swap, the Companys effective interest rate at the end of the
reporting period ranged from 3.18% to 3.30% per annum (2013: 2.64% to 2.76%).
Effective interest
Financial
Functional currency/ Applicable Total carrying
rate at end of
instruments
currency exposure
interest rate
amount
reporting date
RM000
%
As at 31 December 2014
1
Term loan RM/RM
KLIBOR + 0.30% 450,874
4.16
2
RM/USD
LIBOR + 0.75% 840,661
1.01
1
CCIRS RM/USD
KLIBOR 0.56%
57,829
3.30
1
KLIBOR 0.62% 30,379
3.24
1
KLIBOR 0.68%
30,357
3.18
STRC RM/RM COF + 0.35% 250,000
3.63
1
RM/RM
KLIBOR 0.26% 140,000
3.69
RM/RM COF + 0.35%
76,740
3.73
As at 31 December 2013
Term loan
RM/RM
RM/USD
CCIRS
RM/USD
STRC
RM/RM
RM/RM
RM/RM
KLIBOR +
2
LIBOR +
1
KLIBOR
1
KLIBOR
1
KLIBOR
COF +
COF +
COF +
0.30%
0.75%
0.56%
0.62%
0.68%
0.35%
0.35%
0.25%
450,380
786,783
36,067
19,556
19,708
250,000
102,470
150,000
3.53
0.99
2.76
2.70
2.64
3.36
3.46
3.30
77
18 INVENTORIES
2014
2013
RM000 RM000
Crude oil
Less: Allowance for inventories write-down to net realisable value
393,132
(12,990)
789,131
(543)
Petroleum products
Less: Allowance for inventories write-down to net realisable value
380,142
462,282
(67,720)
788,588
572,613
0
Materials
394,562
26,479
572,613
25,625
801,183
1,386,826
Included within crude oil is stock in transit as at 31 December 2014 of RM5,495,211 (2013: RM406,091,826).
19 TRADE RECEIVABLES
2014
2013
RM000 RM000
Trade receivables
Less: Allowance for doubtful debts
26,980
(9)
68,930
(281)
26,971
68,649
78
2,969
0
1,489
0
166
281
4,624
281
281
(272)
0
9
298
(298)
281
281
Amounts charged to allowance account are generally written off, when there is no expectation of recovering additional cash.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.
The Company does not hold any collateral as security.
653
273
478
270
207
266
1,404
743
The carrying amounts of financial assets (excluding prepayments) at the end of reporting date approximated their fair values.
The other receivables and staff car loan do not contain impaired assets.
79
16
1,244
589
437
1,739
3,005
2,344
4,686
The fair values of related party balances approximate the carrying value as the impact of discounting is not significant. The fair
values are based on cash flows discounted using a rate based on the weighted average borrowing rate of 2.97% per annum
(2013: 1.96%). The discount rate equals to KLIBOR plus appropriate credit rating.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.
The Company does not hold any collateral as security.
As of 31 December 2014 receivables from related companies of RM407,714 (2013: RM1,026,265) was impaired. The
individually impaired receivables mainly relate to long-outstanding balances with related host companies.
Movement on the allowance for impairment of amounts receivables from related Companies is as follows:
2014
2013
RM000 RM000
As at 1 January
Reversal of doubtful debts
Receivables provided during the year
As at 31 December
1,026
(619)
0
407
0
0
1,026
1,026
Amounts charged to allowance account are generally written off, when there is no expectation of recovering additional cash.
80
8,737
41,009
23 SHARE CAPITAL
2014
2013
RM000 RM000
At 1 January/At 31 December
Authorised 300,000,000 units of ordinary shares of RM1 each
300,000
300,000
300,000
300,000
At 1 January/At 31 December
Issued and fully paid 300,000,000 units of ordinary shares of RM1 each
22,213
26,492
13,570
13,283
30,662
25,058
15,565
18,664
75,558
89,949
The Companys trade payables are unsecured. The credit terms for trade payables range from 30 to 45 days (2013: 30 to
45 days).
81
26 DEFERRED TAXATION
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current
tax liabilities and when the deferred taxes relate to the same tax authority.
The following amounts, determined after appropriate offsetting, are shown in the statement of financial position.
2014
2013
RM000 RM000
Deferred tax liabilities
To be settled within 12 months
To be settled after more than 12 months
0
0
(210)
(34,495)
(34,705)
82
(34,705)
(102,061)
75,812
(68)
19,235
(51,580)
(8,698)
4
37,462
(5)
(738)
21,630
8,698
309
34,705
67,356
(34,705)
(19,686)
19,686
(95,498)
60,793
(34,705)
2
19,370
0
0
314
70
136
51,580
8,698
309
19,686
(19,686)
60,793
(60,793)
706,491
297,419
35,043
The benefits of unutilised tax losses, capital allowances, and reinvestment allowances can be carried forward indefinitely and
will be obtained when the Company derives future assessable income of a nature and of an amount sufficient for these carried
forward tax losses, capital allowances, other temporary differences and reinvestment allowance to be utilised respectively.
11,228,285
530,532
1,485,178
364,856
11,174,392
830,261
1,684,212
368,173
14,166
12,906
(b) Expenses:
(i) Purchase of crude and products from:
Shell International Eastern Trading Company
Sarawak Shell Berhad
Sabah Shell Petroleum Company Limited
Shell Eastern Trading Pte Limited
Shell Lubricants Supply Company
(ii) Central management and administrative expenses:
Shell Global Solutions International B.V.
Shell Global Solutions (Malaysia) Sendirian Berhad
Shell International Petroleum Company Limited
(13,851,885)
0
0
(226,191)
(47,726)
(13,093,113)
(1,111,541)
(314,326)
(283,533)
(70,938)
(1,384)
(1,113)
(28,088)
(8,937)
(12,923)
(33,711)
83
Dividends paid:
Shell Overseas Holdings Limited
17,213
628,622
49,157
46,393
1,005,999
147,516
40,853
(597,686)
(30,413)
(7,418)
(1,029,863)
(28,502)
(6,822)
(e) Capital commitments as at 31 December 2014 include unsecured commitment for purchase of
catalysts amounting to RM1,103,707 (2013: RM Nil) with Criterion Marketing Asia Pacific Pte. Ltd.
(wholly owned subsidiary of Royal Dutch Shell plc).
Key management personnel are the persons who have authority and responsibility for planning, directing and controlling
the activities of the Company either directly or indirectly. Key management personnel of the Company include the Board of
Directors (disclosed in Note 13) and senior management personnel of the Company.
2014
2013
RM000 RM000
Compensation for key management personnel:
salaries, bonus and allowances
fees
defined contribution plan
benefits in kind
shared based payments
5,111
465
1,019
377
514
5,262
387
1,070
554
806
28 CONTINGENT LIABILITIES
The Company is a member of an oil spill fund, namely the International Oil Pollution Compensation (IOPC) 1992 Fund. The
purpose of the Fund is to help compensate parties that suffer financial loss as a result of oil spill from tankers. The members
make contributions to the Fund depending on specific global oil spill incidents, which give rise to payments of compensation
by the Fund. The contingent liability is unsecured, and as at the date of this report, there are no material claims outstanding.
84
29 CAPITAL COMMITMENTS
Approved capital expenditure for property, plant and equipment not provided for in the financial statements are as follows:
2014
2013
RM000 RM000
Approved and contracted for
Approved but not contracted for
6,604
64,611
23,207
56,947
30 SEGMENTAL INFORMATION
Segmental reporting is not separately presented as the Company is principally engaged in the oil and gas industry namely
refining and manufacturing of petroleum products in Malaysia, which are substantially within a single business segment. The
Company operates primarily in Malaysia. Accordingly, no segmental information is considered necessary for analysis by
industry segments or by geographical segment.
Additionally, the chief operating decision-maker also reviews the EBITDA margin of the Company. EBITDA margin is defined
as earnings before interest, tax, depreciation and amortisation which amounted to a loss of RM1,013.36 million (2013: loss
of RM34.36 million).
0
27,897
743,169
8,737
287
69,126
1,232,231
41,009
779,803
1,342,653
118,565
75,331
73,668
652,573
1,758,275
86,334
1,101,491
1,739,633
2,484,516
2,927,458
85
32 COMPARATIVES
Certain comparatives for the financial year ended 31 December 2013 were reclassified to better reflect the underlying nature
and classification of these transactions. The effects of these transfers are as follows:
As previously Re
stated classifications As restated
RM000 RM000 RM000
86,867
(11,536)
(11,536)
11,536
75,331
0
(14,798,226)
(58,381)
0
0
0
14,798,226
56,120
(14,519,448)
(188,198)
(146,700)
0
(2,261)
(14,519,448)
(188,198)
(146,700)
Foreign exchange gain or losses arising from translation differences are directly related to trade payables of the Company.
Based on this principle, foreign exchange differences relating to trading activities, e.g. arising from the purchase of raw
materials such as crude or products are best disclosed as part of purchases.
The Directors are of the opinion that these reclassifications accurately reflect the nature of the relevant transactions.
The Companys prior year results are not affected by these reclassifications.
Structured review
As announced on 9 January 2015 to Bursa Malaysia, the Board has completed the structured review of Shell Refining
Companys resilience in the current poor margin environment as announced in September 2014. The Board has concluded
that refining margins are expected to remain depressed due to overcapacity in the global refining industry. Given the
poor margin environment, the Board is proactively investigating long-term options in the best interest of the Company.
These will include, but are not limited to, the potential sale of the assets, or conversion of operations to a storage terminal
and/or other viable options. The focus near-term is to secure and sustain the safe and reliable operation of the Refinery
while long-term options are being pursued. Once the final option has been selected, the Company will seek the necessary
approval from shareholders in compliance with regulatory requirements. Further details on the selected option shall be
disclosed and announced to Bursa Malaysia in due course.
86
96,958
(73,580)
1,253,595
(41,449)
23,378
1,212,146
The unrealised losses disclosed above are charges relating to the recognition of deferred tax liabilities, fair value gain on
derivative financial instruments and unrealised foreign exchange losses.
The disclosure of realised and unrealised profits above is solely for compliance with the directive issued by the Bursa Malaysia
Securities Berhad and should not be used for any other purpose.
87
Company Properties
As At 31 December 2014
No Tenure
1
Freehold
88
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
10
Freehold
11
Freehold
12
Freehold
13
Freehold
14
Freehold
15
Freehold
Address
1236 1238
GRN 62766 62768
87, Jln Resthouse
Port Dickson
Lot 3 HS(D) 1310
Jln Pantai, Port Dickson
Lot 138
GRN 51925
Port Dickson
Lot 798 GM 1458
Kg Arab, Port Dickson
Lot 196 GM 1522
Kg Gelam, Port Dickson
Lot 195 GM 1521
Kg Gelam, Port Dickson
PT 1369, PT 1370
PT 10747, PT 1371
HSD 35655, 35656
35658, 35657
Port Dickson
PT 1369, PT 1370
PT 10747, PT 1371
HSD 35655,35656
35658, 35657
Port Dickson
Lot 12284 &12290
GM 1961 1962
Port Dickson
Lot 596 GRN 244911
Port Dickson
PT 1369, PT 1370
PT 10747, PT 1371
HSD 35655,35656
35658, 35657
Port Dickson
PT 1369, PT 1370
PT 10747, PT 1371
HSD 35655, 35656
35658, 35657
Port Dickson
PT 1369, PT 1370
PT 10747, PT 1371
HSD 35655, 35656
35658, 35657
Port Dickson
PT 1369, PT 1370
PT 10747, PT 1371
HSD 35655, 35656
35658, 35657,
Port Dickson
PT 1369, PT 1370,
PT 10747, PT 1371
HSD 35655, 35656
35658, 35657
Port Dickson
Land area
(square
feet)
Description
76,964
A club house
and training
centre
Age of
properties/ Date of last
buildings
valuation
49 years 01.01.1991
Land
NBV
RM000
1,077
Land
Improvement
NBV
RM000
2,158
Building
Net
NBV book value
RM000
RM'000
1,614
2,691
6,284,183 Refinery
50 years
01.01.1991
22,194
42,350
66,702
39,116
49 years
01.01.1991
262
49,959
Oil Spill
Response
Centre
Refinery
401
663
25 years
01.01.1991
140
140
242,847
Refinery
26 years
01.01.1991
687
687
247,072
Refinery
26 years
01.01.1991
694
694
98,010
Refinery
27 years
01.01.1991
314
314
112,490
Refinery
27 years
01.01.1991
360
360
112,019
Refinery
18 years
31.08.2000
480
480
100,729
Crude Tank
Farm
18 years
31.08.2000
593
593
132,030
Crude Tank
Farm
26 years
01.01.1991
423
423
212,590
Crude Tank
Farm
26 years
01.01.1991
681
681
118,439
Crude Tank
Farm
27 years
01.01.1991
379
379
141,570
Crude Tank
Farm
27 years
01.01.1991
454
454
124,146
Crude Tank
Farm
27 years
01.01.1991
398
398
No Tenure
16 Freehold
17 Freehold
18 Freehold
19 Freehold
20 Freehold
21 Freehold
22 Freehold
23 Freehold
24 Freehold
25 Freehold
26 Freehold
27 Freehold
28 Freehold
29 Freehold
30 Freehold
31 Freehold
32 Freehold
33 Freehold
Address
PT 1369, PT 1370
PT 10747, PT 1371
HSD 35655, 35656
35658, 35657
Port Dickson
PT 1369, PT 1370
PT 10747, PT 1371
HSD 35655, 35656
35658, 35657
Port Dickson
PT 1369, PT 1370
PT 10747, PT 1371
HSD 35655, 35656
35658, 35657
Port Dickson
Lot 5471 5494
GM 994 1017
Lot 5496 5540
GM 1019 1063
Port Dickson
Lot 950 GM 2721
Port Dickson
Lot 12425 12456
GRN 146936
146967
Lot 5441 HSD 4418
Lot 12458 12486
GRN 146968
146996
Port Dickson
Lot 834 GRN 70791
Port Dickson
Lot 6674 GM 2774
Port Dickson
Lot 1323 GM 1167
Port Dickson
Lot 6671 GM 2771
Port Dickson
Lot 6672 GM 868
Kg Gelam
Port Dickson
Lot 192 GM 1398
Kg Gelam
Port Dickson
Lot 247 GM 1241
Port Dickson
Lot 191 GM 1505
Kg Gelam
Port Dickson
Lot 190 GM 1289
Kg Gelam
Port Dickson
Lot 909 GRN 69309
Port Dickson
Lot 178 180
Grant 10871089
Port Dickson
Lot 1300 GM 867
Kg Gelam
Port Dickson
Land
Improvement
NBV
RM000
Land area
(square
feet)
Description
141,047 Crude Tank
Farm
Age of
properties/ Date of last
buildings
valuation
27 years 01.01.1991
Land
NBV
RM000
451
27 years 01.01.1991
331
331
123,884 Crude
Tank Farm
27 years 01.01.1991
397
397
16 years 31.08.2000
1,259
1,259
17 years 31.08.2000
727
727
17 years 31.08.2000
1,216
1,216
18 years 31.08.2000
1,705
1,705
24 years 01.01.1991
585
585
24 years 01.01.1991
907
907
24 years 01.01.1991
466
466
24 years 01.01.1991
359
359
25 years 01.01.1991
443
443
25 years 01.01.1991
332
332
26 years 01.01.1991
620
620
26 years 01.01.1991
577
577
86,766
For Pipeline
to Jetty
448,668 For Pipeline
to Jetty
22 years 01.01.1991
431
431
22 years 01.01.1991
2,172
2,172
88,481
23 years 01.01.1991
403
403
For Pipeline
to Jetty
Building
Net
NBV book value
RM000
RM'000
451
89
No Tenure
34 Freehold
35 Freehold
36 Freehold
37 Freehold
38 Freehold
39 Freehold
40 Freehold
41 Freehold
42 Freehold
43 Freehold
44 Freehold
45 Freehold
46 Freehold
47 Freehold
48 Freehold
49 Freehold
50 Freehold
51 Freehold
52 Freehold
53 Freehold
54 Freehold
55 Freehold
56 Freehold
57 Freehold
58 Freehold
90
Address
PT 1369, PT 1370
PT 10747, PT 1371
HSD 35655, 35656
35658, 35657
Port Dickson
Lot 3948 GM 2619
Port Dickson
Lot 3949 GM 2620
Port Dickson
Lot 3950 GM 2621
Port Dickson
Lot 3951 GM 2622
Port Dickson
Lot 3974 GM 2632
Port Dickson
Lot 3975 GM 2633
Port Dickson
Lot 3976 GM 2634
Port Dickson
Lot 3977 GM 2635
Port Dickson
Lot 4961 GM 475
Port Dickson
Lot 4962 GM 476
Port Dickson
Lot 4963 GM 477
Port Dickson
Lot 4964 GM 478
Port Dickson
Lot 4965 GM 479
Port Dickson
Lot 4966 GM 480
Port Dickson
Lot 4967 GM 481
Port Dickson
Lot 4968 GM 482
Port Dickson
Lot 5402 GM 345
Port Dickson
Lot 5403 GM 346
Port Dickson
Lot 5404 GM 347
Port Dickson
Lot 5405 GM 348
Port Dickson
Lot 5406 GM 349
Port Dickson
Lot 5407 GM 350
Port Dickson
Lot 10533 GM 1653
Kg Gelam
Port Dickson
Lot 9196 9214
GM 1770 1788 &
PT4540 HSM 1655
Kg Gelam
Port Dickson
Land area
(square
feet)
Description
153,810 LPG Vessel
1,259
1,259
1,259
1,259
1,259
1,259
1,259
1,259
5,769
4,058
6,060
463
4,736
5,726
3,326
151
1,066
4,026
4,176
4,176
4,176
4,176
2,002
40,236
Land
Improvement
NBV
RM000
Age of
properties/ Date of last
buildings
valuation
27 years 01.01.1991
Land
NBV
RM000
492
Building
Net
NBV book value
RM000
RM'000
492
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
Refinery
Buffer Zone
17 years 30.04.2001
86
86
17 years 30.04.2001
86
86
17 years 30.04.2001
86
86
17 years 30.04.2001
86
86
17 years 30.04.2001
86
86
17 years 30.04.2001
86
86
17 years 30.04.2001
86
86
17 years 30.04.2001
86
86
17 years 30.04.2001
210
210
17 years 30.04.2001
148
148
17 years 30.04.2001
221
221
17 years 30.04.2001
181
181
17 years 30.04.2001
173
173
17 years 30.04.2001
209
209
17 years 30.04.2001
121
121
17 years 30.04.2001
17 years 30.04.2001
44
44
17 years 30.04.2001
166
166
17 years 30.04.2001
172
172
17 years 30.04.2001
172
172
17 years 30.04.2001
172
172
17 years 30.04.2001
172
172
20 years 31.08.2000
20
20
Refinery
Buffer Zone
20 years 31.08.2000
398
398
No
59
60
61
62
63
64
65
66
67
68
69
70
71
72
Land area
(square
Tenure
Address
feet)
Description
Freehold Lot 12104 GM 2859 6,135
Refinery
Kg Gelam
Buffer Zone
Port Dickson
Freehold PT 1369, PT 1370
97,738
Reserved
PT 10747, PT 1371
Land
HSD 35655, 35656
35658, 35657
Port Dickson
Freehold PT 1369, PT 1370
86,858
Reserved
PT 10747, PT 1371
Land
HSD 35655, 35656
35658, 35657
Port Dickson
Freehold PT 1369, PT 1370
78,952
Reserved
PT 10747, PT 1371
Land
HSD 35655, 35656
35658, 35657
Port Dickson
Freehold PT 1369, PT 1370
148,626 Reserved
PT 10747, PT 1371
Land
HSD 35655, 35656
35658, 35657
Port Dickson
Freehold PT 1369, PT 1370
99,360
Reserved
PT 10747, PT 1371
Land
HSD 35655, 35656
35658, 35657
Port Dickson
Freehold PT 1369, PT 1370
216,449 Reserved
PT 10747, PT 1371
Land
HSD 35655, 35656
35658, 35657
Port Dickson
Freehold PT 1369, PT 1370
104,805 Reserved
PT 10747, PT 1371
Land
HSD 35655, 35656
35658, 35657
Port Dickson
Freehold Lot 580 GM 1274
107,539 Reserved
Port Dickson
Land
Freehold Lot 581 GM 1275
98,010
Reserved
Port Dickson
Land
Freehold Lot 1312 1314
47,866
Reserved
GM 1600 1602
Land
Lot 1317 1318
GM 1605 1606
Lot 764 GRN 65945
Port Dickson
Freehold Lot 256 GM 1276
62,614
Reserved
Port Dickson
Land
Freehold Lot 9060 GM 2720 17,739
Reserved
Port Dickson
Land
Leasehold PT 9451 HM 29075 2,822,688 Jetty Land
Port Dickson
15,172,283
Land
Improvement
NBV
RM000
Age of
properties/ Date of last
buildings
valuation
20 years 31.08.2000
Land
NBV
RM000
61
25 years 01.01.1991
313
313
26 years 01.01.1991
278
278
26 years 01.01.1991
253
253
27 years 01.01.1991
475
475
27 years 01.01.1991
318
318
27 years 01.01.1991
688
688
27 years 01.01.1991
336
336
21 years 03.09.1991
311
311
21 years 03.09.1991
283
283
49 years 01.01.1991
397
397
6 years 28.03.2008
600
600
50 years 01.01.1991
21 years 10.04.2004
1,845
52,443
2,158
Building
Net
NBV book value
RM000
RM'000
61
8,179
10,024
52,544
107,145
91
Analysis of Shareholdings
As at 30 April 2015
Authorised Capital
: RM300,000,000.00
Voting right
Size of Holdings
No. of Holders
Malaysian
Foreign
1 99
100 1,000
1,001 10,000
10,001 100,000
100,001 14,999,999(*)
15,000,000 and above(**)
Total
No. of Shares
Malaysian
Foreign
%
Malaysian
Foreign
821
2,937
3,172
408
43
2
6
143
478
120
19
1
6,720
2,152,532
11,699,638
10,493,507
42,764,500
66,975,300
75
113,500
2,033,195
3,227,047
7,533,986
153,000,000
0.00
0.72
3.90
3.50
14.25
22.33
0.00
0.04
0.68
1.08
2.51
51.00
7,383
767
134,092,197
165,907,803
44.70
55.30
No. of Holders
Grand Total
8,150
No. of Shares
300,000,000
100.00
92
No. Name
Investor ID
Shareholdings
1.
263875D
153,000,000
51.00
2.
267011M
47,118,700
15.71
3.
766894T
19,856,600
6.62
4.
766894T
11,036,500
3.68
5.
KWAPACT6622007
3,772,400
1.26
6.
274740T
3,364,500
1.12
7.
267011M
3,364,500
1.12
8.
038218X
3,364,500
1.12
9.
766894T
2,356,400
0.79
10.
4381U
2,338,100
0.78
No. Name
Investor ID
Shareholdings
11.
EPFACT1991
1,500,000
0.50
12.
766894T
1,270,900
0.42
13.
42234H
1,269,600
0.42
14.
581130-10-6646
1,200,000
0.40
15.
9969D
860,000
0.29
16.
6193K
790,000
0.26
17.
42234H
757,600
0.25
18.
262422A
720,750
0.24
19.
47697U
700,800
0.23
20.
263875D
646,491
0.22
21.
501025-10-5403
573,000
0.19
22.
4381U
570,000
0.19
23.
Yap Ah Fatt
461229-10-5209
500,000
0.17
24.
265422M
483,400
0.16
25.
750W
450,000
0.15
26.
227430A
444,100
0.15
27.
265449P
390,700
0.13
28.
389,000
0.13
29.
263367W
369,900
0.12
30.
750W
339,000
0.11
263,797,441
87.93
Total
93
Direct
Indirect
153,000,000
51%
1.
2.
47,118,700
15.71%
3.
19,856,600
6.62%
219,975,300
73.33
Direct
Indirect
Total
Directors Shareholdings
No. Name
94
1.
Iain John Lo
2.
3.
4.
5.
6.
7.
8.
9.
Proxy Form
Original only
_________________________________________________________________________________________________________________
(full address)
_________________________________________________________________________________________________________________
being a Member/Members of Shell Refining Company (Federation of Malaya) Berhad, hereby appoint _________________________
______________________________________________________ NRIC No./Passport No. _____________________________________
of _______________________________________________________________________________________________________________
OR failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Fifty-Sixth Annual
General Meeting of the Company to be held at Nexus Ballroom 2 & 3, Connexion@Nexus, Bangsar South City, No. 7,
Jalan Kerinchi, 59200 Kuala Lumpur on Tuesday, 30 June 2015 at 10.30 a.m. and at any adjournment thereof.
Please indicate with an X in the boxes provided how you wish your vote to be cast. If this proxy form is returned without any
indication as to how the proxy shall vote, the proxy shall vote and abstain as he/she thinks fit.
Resolution No.
Resolution
For
Ordinary Resolution 1
Ordinary Resolution 2
Ordinary Resolution 3
Ordinary Resolution 4
Ordinary Resolution 5
Against
5.
A proxy need not be a Member of the Company and the provisions of Section 149(1)
(b) of the Companies Act, 1965 shall not apply to the Company. There shall be no
restriction as to the qualification of the proxy.
The instrument appointing a proxy and the power of attorney or other authority (if
any) under which it is signed or notarised must be deposited at the Companys Share
Registrar Office, Symphony Share Registrars Sdn Bhd, Level 6, Symphony House,
Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul
Ehsan, not less than forty-eight (48) hours before the time for holding the Meeting or
adjourned meeting.
6.
3.
The instrument appointing a proxy shall be in writing and signed by the appointor
or by his attorney who is authorised in writing. In the case of a corporation, the
instrument appointing a proxy or proxies must be made under seal or signed by an
officer or an attorney duly authorised.
Only an original proxy form deposited at Symphony Share Registrars Sdn Bhd, will
entitle the proxy holder to attend and vote at the Meeting. Photocopies of proxy
form will not be accepted for the purposes of the Meeting. Additional original
proxy forms are available to Members upon request in writing to the Company.
7.
4.
8.
The Date of Record of Depositors for the purpose of determining Members entitlement to
attend, vote and speak at the Meeting is 24 June 2015.
1.
2.
www.shell.com/src
Annual
Report 2014
Shell Refining Company