PRESS RELEASE

Following the Shell Refining Company (FOM) Berhad Board of Directors’ Meeting, held in Kuala Lumpur on 19th February 2001, the Chairman, Datuk Lim Haw-Kuang made the following announcement.

DIVIDEND
The Directors recommend a second and final dividend based on 2000’s performance of 15 sen per unit stock of RM1.00 each, less tax at 28%, payable on 8th June 2001 to the stockholders appearing in the Register of Stockholders at the close of business on 23rd May 2001. The final total dividend reflects the much-improved operational earnings of the company in 2000 and takes into account the Company’s cash position at year-end.

Registrable transfers received by the registrars of the Company up to 5.00pm on 23rd May 2001 will be registered before entitlement to dividends is determined.

An interim dividend of 3 sen per unit stock of RM1.00 each, less tax at 28%, was paid on 20th October 2000. Total dividends declared in respect of the year ended 31 December 2000 amount to 18 sen per unit stock of RM1.00 each (1999: 13 sen). 

PERFORMANCE

During the year 2000, 38.6 million barrels of Crude and feedstock were processed at the Shell Refining Company (FOM) Bhd., Port Dickson, which equalled the amounts processed in 1999. The volume of sales reached 41.9 million barrels, up marginally on the year 1999. Turnover for the period increase by 63%, due to higher product prices and a full year of operation of the Company’s Long Residue Catalytic Cracking Unit (LRCCU), which began operation in June 1999.

The full year of LRCCU operation contributed much to the improvement of the Company’s Gross margins as prices for Propylene, LPG and Motor Gasoline, the major products from this unit, remained robust throughout most of 2000.

The Company continued its excellent record in Safety in 2000, achieving 14 million man-hours without a Lost Time Injury on 7th January 2001. The Company was also awarded ISO14001 certification for its Environmental Management Systems by SIRIM, Sdn. Bhd. in September 2000 in recognition of its continued commitment to environmental protection and sustainable development.

OUTLOOK FOR 2001

The economic recovery experienced in the region sets the scene for continued growth in the demand for petroleum products. The economic sentiment, however remains a cautious one, influenced by the direction of the world economy.
Refining capacity in the region is expected to remain in surplus and refinery margins can be expected to continue to be volatile in the short-term future. The company is nonetheless well placed to meet these challenges with its continued focus on operational excellence and producing maximum value.

	 
	NOTES TO THE QUARTERLY REPORT ‑ 31 DECEMBER 2000 

1	ACCOUNTING POLICIES

The quarterly financial statements under review have been prepared using the same accounting policies and methods of computation as were used in preparation of the Company’s published 1999 annual accounts except in the treatment of deferred exchange differences on translation of foreign currency loans.

During the year 2000, the Company changed its accounting policy with respect to recognition of exchange differences on translation of long term foreign currency loans in compliance with the new MASB Standard 6 “The Effect of Changes in Foreign Exchange Rates”. The Company did not take advantage of the transitional period offered by MASB Standard 6.

In previous years, the exchange differences arising from the translation of long term foreign currency loan of the Company at a rate different from that at which it was initially reported were deferred and charged to the income statement on a systematic basis over the remaining life of the loan.

The Company have changed this accounting policy to recognise the exchange differences arising on translating the long term foreign currency loan as income or expense in the period in which they arise. This change in accounting policy has been accounted for retrospectively.

	Comparative information have been restated to conform with the changed accounting policy. This change in accounting policy has the effect of increasing net profit attributable to shareholders for the year ended 2000 by RM30,912,000 (1999: RM6,182,000). The retained earnings balance as at 1 January 1999 has been decreased by RM37,094,000 being the cumulative effect of the change relating to periods prior to 1999.

2	EXCEPTIONAL ITEMS

	The Company has nothing to disclose as regards exceptional items in the quarterly financial statements under review.
	
3	EXTRAORDINARY ITEMS

	The Company has nothing to disclose as regards extraordinary items in the quarterly financial statements under review.

4	TAXATION 

	Taxation for the period ending 31 December 2000 comprises RM19k of income tax and RM3,013k of deferred tax. The deferred tax includes an adjustment of (credit) RM1,424k in respect of prior years.

5	PRE-ACQUISITION PROFITS

	The Company has nothing to disclose with respect to pre-acquisition profits in the quarterly financial statements under review.

6	PROFIT ON SALE OF INVESTMENTS AND PROPERTIES

	The Company has nothing to disclose with respect to profit on sale of investments and/or properties (other than fixed assets in the normal course of business) in the quarterly financial statements under review.

7	INVESTMENT IN, AND PURCHASE AND DISPOSAL OF QUOTED SECURITIES

a) 	The Company has not undertaken any purchase or disposal of quoted securities during the current financial period ending 31 December 2000.
b) 	The Company does not have any investments in quoted shares as at end of the 31 December 2000. 

8	CHANGES IN COMPOSITION OF COMPANY

	There has been no change to the composition of the Company including business combination, acquisition, disposal of subsidiaries and long term investments, restructuring and discontinuing operations.

9	CORPORATE PROPOSALS

	The Company does not have anything to report as regards the status of corporate proposals.

10	SEASONALITY AND CYCLICALITY

	The Company’s operation is not affected by any seasonal or cyclical factors.

11	DEBT AND EQUITY SECURITIES
	
	The Company has nothing to disclose with respect to issuance and repayment of debt and equity securities, share buy-backs, share cancellations, shares held as treasury shares and resale of treasury shares for the current financial year to date.

12	BORROWINGS 
			
	The Company has a USD290,000,000 term loan outstanding which is used to finance a capital expenditure project. The current 	(payable within 12 months) portion of the loan is RM304,000,000. The loan is not secured 	against any of the Company’s assets. Details of the Company’s borrowings as at end of the period are as follows:

		RM'000	

	Short term borrowings	203,766
	Current portion of term loan	304,000	
	Term loan (unsecured) less current portion	798,000

13	CONTINGENT LIABILITIES

	The Company has provided guarantees for the principal of third party loans granted to its employees amounting to RM84,000.        

	Arising from the transfer of assets from the Shell Malaysia Retirement Benefit Fund to the Shell Malaysia Provident Fund on 1 May 1997, the Company has provided guarantees in relation to:

a) 	the capital sum transferred;
b) 	a minimum return of 2.5% per annum on that capital sum; and
c) 	the associated death in service benefits.

These guarantees are not secured against any of the Company’s assets.

14	OFF BALANCE SHEET FINANCIAL INSTRUMENTS

	The Company does not have any off-balance sheet financial instruments to disclose.

15	MATERIAL PENDING LITIGATION

	There is no material pending litigation against the Company.

16 	SEGMENTAL INFORMATION

	The Company is principally engaged in the oil and gas industry namely refining and manufacturing of petroleum products. Accordingly, no segmental information is considered necessary for analysis by industry segments.

17	QUARTERLY PROFIT BEFORE TAXATION

	The decrease in quarterly profit before taxation as compared to the previous quarter is due to the weaker refinery margins in the region (see accompanying Press Release).

18	COMPANY PERFORMANCE

	A review of the Company’s performance in the reporting period is provided for in the accompanying Press Release.

19	CURRENT YEAR PROSPECTS
	
	A commentary on the Company’s current year prospects is provided for in the accompanying Press Release.

20	FINAL QUARTER NOTES

a) 	The Company has nothing to disclose with respect to variance of actual profit from forecast profit.
b) 	The Company does not provide any guarantee of profits.

21	DIVIDEND

	The Board of Directors resolved to recommend to the stockholders the payment of a final dividend for the year ended 31 December 2000 of 15 sen per RM1.00 unit of stock less income tax at 28% to be payable on 8th June 2001 to stockholders appearing in the register of stockholders at the close of business on 23rd May 2001 (1999: 10 sen). 

	The quarterly financial statements under review do not reflect this final gross dividend which will be accounted for in the shareholders’ equity as an appropriation of retained earnings in the year ending 31 December 2001 when approved by stockholders, in compliance with the requirements of the MASB.