MIRA INFORM REPORT

Report No. :	307619
Report Date :	17.02.2015

IDENTIFICATION DETAILS

Name :	SHELL MDS (MALAYSIA) SDN. BHD.

Registered Office :	Lot 6.05, Kpmg Tower, 8 First Avenue, Bandar Utama, Level 6, 47800 Petaling Jaya, Selangor

Country :	Malaysia

Financials (as on) :	31.12.2013

Date of Incorporation :	07.04.1986

Com. Reg. No.:	152396-W

Legal Form :	Private Limited (Limited By Share)

Line of Business :	Manufacture of Middle Distillates and Waxes.

No. of Employees :	400 [2015]

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums.	Fairly Large

Status :	Good

Payment Behaviour :	Regular

Litigation :	Clear

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – December 31, 2014

Country Name

Previous Rating

(30.09.2014)

Current Rating

(31.12.2014)

Malaysia

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

MALAYSIA - ECONOMIC OVERVIEW

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with sustained budget deficits, has forced Kuala Lumpur to begin to address fiscal shortfalls, through initial reductions in energy and sugar subsidies and the announcement of the 2015 implementation of a 6% goods and services tax. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies about 32% of government revenue in 2013. Bank Negara Malaysia (central bank) maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited Malaysia's exposure to riskier financial instruments and the global financial crisis. Nevertheless, Malaysia could be vulnerable to a fall in commodity prices or a general slowdown in global economic activity because exports are a major component of GDP. In order to attract increased investment, NAJIB earlier raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but retreated in 2013 after he encountered significant opposition from Malay nationalists and other vested interests. In September 2013 NAJIB launched the new Bumiputra Economic Empowerment Program (BEEP), policies that favor and advance the economic condition of ethnic Malays.

Source : CIA

EXECUTIVE SUMMARY

REGISTRATION NO.

152396-W

COMPANY NAME

SHELL MDS (MALAYSIA) SDN. BHD.

FORMER NAME

N/A

INCORPORATION DATE

07/04/1986

COMPANY STATUS

EXIST

LEGAL FORM

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

REGISTERED ADDRESS

LOT 6.05, KPMG TOWER, 8 FIRST AVENUE, BANDAR UTAMA, LEVEL 6, 47800 PETALING JAYA, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

P.O.BOX 1084, JALAN TANJONG KIDURONG, 97008 BINTULU, SARAWAK, MALAYSIA.

TEL.NO.

086-292404/292222

FAX.NO.

086-252211

CONTACT PERSON

TOM WONG ( GENERAL MANAGER )

INDUSTRY CODE

35201

PRINCIPAL ACTIVITY

MANUFACTURE OF MIDDLE DISTILLATES AND WAXES

AUTHORISED CAPITAL

MYR 1,050,000,000.00 DIVIDED INTO
ORDINARY SHARE 1,017,000,000.00 OF MYR 1.00 EACH.
PREFERENCE SHARE 33,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

MYR 500,000,000.00 DIVIDED INTO
ORDINARY SHARES 500,000,000 CASH OF MYR 1.00 EACH.

SALES

MYR 1,913,549,000 [2013]

NET WORTH

MYR 1,290,661,000 [2013]

M1000 OVERALL RANKING

242[2008]

M1000 INDUSTRY RANKING

18[2008]

STAFF STRENGTH

400 [2015]

BANKER (S)

MALAYAN BANKING BHD

LITIGATION

CLEAR

DEFAULTER CHECK

CLEAR

FINANCIAL CONDITION

STRONG

PAYMENT

PROMPT

MANAGEMENT CAPABILITY

GOOD

COMMERCIAL RISK

LOW

CURRENCY EXPOSURE

MODERATE

GENERAL REPUTATION

GOOD

INDUSTRY OUTLOOK

AVERAGE GROWTH

HISTORY / BACKGROUND

The Subject is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the Subject must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the Subject is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the Subject is insolvent. The Subject is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.

The Subject is principally engaged in the (as a / as an) manufacture of middle distillates and waxes.

The Subject is not listed on Bursa Malaysia (Malaysia Stock Exchange).

According to the Malaysia 1000 publication, the Subject's ranking are as follows:

YEAR	2008	2004
OVERALL RANKING	242	325
INDUSTRY RANKING	18	9

The ultimate holding company of the Subject is ROYAL DUTCH SHELL PLC, a company incorporated in UNITED KINGDOM.

Share Capital History

Date	Authorised Shared Capital	Issue & Paid Up Capital
16/06/2014	MYR 1,050,000,000.00	MYR 500,000,000.00
17/04/1998	MYR 550,000,000.00	MYR 528,934,260.00
31/07/1996	MYR 500,000,000.00	MYR 463,000,000.00
10/06/1996	MYR 500,000,000.00	MYR 423,000,000.00
12/08/1991	MYR 500,000,000.00	MYR 363,000,000.00
04/05/1989	MYR 500,000,000.00	MYR 60,000,002.00
22/07/1988	MYR 500,000,000.00	MYR 50,000,002.00

The major shareholder(s) of the Subject are shown as follows :

Name	Address	IC/PP/Loc No	Shareholding	(%)
SHELL GAS HOLDINGS (MALAYSIA) LIMITED	30, CAREL VAN BYLANDTLAAN, THE HAGUE	XLZ000001858	360,000,000.00	72.00
DIAMOND GAS HOLDINGS SDN. BHD.	MENARA 3 PETRONAS, PERSIARAN KLCC, KUALA LUMPUR CITY CENTRE, LEVEL 18, 50088 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.	186545T	70,000,000.00	14.00
PERBADANAN KEMAJUAN NEGERI SELANGOR	KWSP BUILDING, JALAN RAJA LAUT, 16TH FLOOR, 50350 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.	000000003T	35,000,000.00	7.00
PETROLIAM NASIONAL BERHAD (PETRONAS)	MENARA 1, PETRONAS TWIN TOWER, KUALA LUMPUR CITY CENTRE, 50088 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.	20076K	35,000,000.00	7.00
			---------------	------
			500,000,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MR. WONG KONG HUNG
Address	:	4018 TAMAN MATAHARI, TG KIDURONG, 97000 BINTULU, SARAWAK, MALAYSIA.
IC / PP No	:	K699358
New IC No	:	580207-13-5433
Date of Birth	:	07/02/1958

Nationality	:	MALAYSIAN
Date of Appointment	:	09/04/2014

DIRECTOR 2

Name Of Subject	:	TAKUJI KONZO
Address	:	3-16-3, KITASENZOKU, OTA-KU, TOKYO, JAPAN 145-0062, JAPAN.
IC / PP No	:	TK1707619



Nationality	:	JAPANESE
Date of Appointment	:	01/04/2014

DIRECTOR 3

Name Of Subject	:	MR. SHAHNAZ BIN MOHD.YUSOF
Address	:	4,JALAN PIMPING KIRI, UKAY HEIGHTS, 68000 AMPANG, SELANGOR, MALAYSIA.
IC / PP No	:	A1735827
New IC No	:	701201-10-5995
Date of Birth	:	01/12/1970

Nationality	:	MALAYSIAN
Date of Appointment	:	01/05/2013

DIRECTOR 4

Name Of Subject	:	OSAMU NAGAI
Address	:	A-18-2 PANAROMA PERSIARAN HAMPSHIRE, OFF JALAN AMPANG, 50450 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	TK0705303



Nationality	:	JAPANESE
Date of Appointment	:	01/04/2014

DIRECTOR 5

Name Of Subject	:	MR. LIANG KOK SIANG
Address	:	120, JALAN DATUK SULAIMAN TIGA, TAMAN TUN DR ISMAIL, 60000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	4941170
New IC No	:	560304-04-5183
Date of Birth	:	04/03/1956

Nationality	:	MALAYSIAN
Date of Appointment	:	15/10/2001

DIRECTOR 6

Name Of Subject	:	MR. NICHOLAS SIA
Address	:	78,LORONG 6, JALAN HUA JOO PARK, 93200 KUCHING, SARAWAK, MALAYSIA.
IC / PP No	:	K654011
New IC No	:	601205-13-5405
Date of Birth	:	05/12/1960

Nationality	:	MALAYSIAN
Date of Appointment	:	13/07/2001

DIRECTOR 7

Name Of Subject	:	MARNIX ALBERT BOORSMA
Address	:	MK-11, APARTMENT E-40-02, JALAN KIARA 1, 50480 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	NXDK7D858



Nationality	:	DUTCH
Date of Appointment	:	24/09/2012

DIRECTOR 8

Name Of Subject	:	KOICHI WADA
Address	:	23 JALAN LANGGAK GOLF, 55000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	TH7571135



Nationality	:	JAPANESE
Date of Appointment	:	02/05/2011

DIRECTOR 9

Name Of Subject	:	KENJI OTA
Address	:	23, JALAN LANGGAK GOLF, 55000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	TK5676029



Nationality	:	JAPANESE
Date of Appointment	:	01/04/2014

DIRECTOR 10

Name Of Subject	:	KEIICHIRO SEGAWA
Address	:	B-27-6 PANAROMA, PERSIARAN HAMPSHIRE, OFF JALAN AMPANG, 50450 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	TH8866373



Nationality	:	JAPANESE
Date of Appointment	:	01/04/2014

DIRECTOR 11

Name Of Subject	:	MR. JUMASTAPHA BIN LAMAT
Address	:	LOT 1246 LORONG BENTARA 1, KAMPUNG SEMARIANG JAYA 2, JALAN SULTAN TENGAH, 93050 KUCHING, SARAWAK, MALAYSIA.
IC / PP No	:	K547007
New IC No	:	550902-13-5163
Date of Birth	:	02/09/1955

Nationality	:	MALAYSIAN
Date of Appointment	:	29/04/1999

DIRECTOR 12

Name Of Subject	:	MR. IZWAN BIN ISMAIL
Address	:	26, JALAN AWAN DARAT U8/74A, BUKIT JELUTONG, 40150 SHAH ALAM, SELANGOR, MALAYSIA.
IC / PP No	:	A9489153
New IC No	:	750825-06-5195
Date of Birth	:	25/08/1975

Nationality	:	MALAYSIAN
Date of Appointment	:	01/05/2013

DIRECTOR 13

Name Of Subject	:	HIROYUKI KITAHARA
Address	:	3-10-10-606,, YOGA SETAGAYA-KU, TOKYO, JAPAN, JAPAN.
IC / PP No	:	TH2585471



Nationality	:	JAPANESE
Date of Appointment	:	01/04/2014

DIRECTOR 14

Name Of Subject	:	MR. IAIN JOHN LO
Address	:	APARTMENT 3-4-3, SRI KIA PENG KONDOMINIUM, 3, CHANGKAT KIA PENG, 5040 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	K764841
New IC No	:	611107-13-5451
Date of Birth	:	07/11/1961

Nationality	:	MALAYSIAN
Date of Appointment	:	01/07/2012

DIRECTOR 15

Name Of Subject	:	HILARY ANN MERCER
Address	:	13 THE OLD COLLEGE, WILKINSON COURT, RIPON, NORTH YORKSHIRE HG4 2TW, UNITED KINGDOM.
IC / PP No	:	761285887



Nationality	:	BRITISH
Date of Appointment	:	09/04/2014

DIRECTOR 16

Name Of Subject	:	CLARE ELIZABETH HARRIS
Address	:	RHIJNGEESTERSTRAWEG 3, 2342 AN OEGSTGEEST, THE NETHERLANDS, NETHERLANDS.
IC / PP No	:	761218534



Nationality	:	BRITISH
Date of Appointment	:	16/05/2014

MANAGEMENT

1)	Name of Subject	:	CLARE ELIZABETH HARRIS
	Position	:	MANAGING DIRECTOR

2)	Name of Subject	:	LIANG KOK SIANG
	Position	:	DIRECTOR

3)	Name of Subject	:	TOM WONG
	Position	:	GENERAL MANAGER

4)	Name of Subject	:	MOHD AZLAN
	Position	:	FINANCE MANAGER

5)	Name of Subject	:	ATE SJOERD VISSER
	Position	:	MANAGER

AUDITOR

Auditor	:	PRICEWATERHOUSECOOPERS
Auditor' Address	:	1 SENTRAL, JALAN TRAVERS,K.L. CENTRAL, P.O.BOX 10192, LEVEL 15, 50706 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. TAI YUEN LING

	New IC No	:	700402-03-5036
	Address	:	30, JALAN SEPAH PUTERI 5/7, PJU 5, SERI UTAMA, KOTA DAMANSARA, 47810 PETALING JAYA, SELANGOR, MALAYSIA.

2)	Company Secretary	:	MS. TAI YIT CHAN
	IC / PP No	:	A1167797
	New IC No	:	690118-10-6160
	Address	:	56, JALAN SS 22/29, DAMANSARA JAYA, 47400 PETALING JAYA, SELANGOR, MALAYSIA.

BANKING

Banking relations are maintained principally with:

1)	Name	:	MALAYAN BANKING BHD

ENCUMBRANCE (S)

No encumbrance was found in our databank at the time of investigation.

LITIGATION CHECK AGAINST SUBJECT

* A check has been conducted in our databank againt the Subject whether the Subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

No legal action was found in our databank.

No winding up petition was found in our databank.

DEFAULTER CHECK AGAINST SUBJECT

* We have checked through the Subject in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection.

No blacklisted record & debt collection case was found in our defaulters' databank.

PAYMENT RECORD

SOURCES OF RAW MATERIALS:
Local	:	YES
Overseas	:	YES
Import Countries	:	ASIA,EUROPE

The Subject refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that:

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

CLIENTELE

Local	:	YES
Domestic Markets	:	MALAYSIA
Overseas	:	YES
Export Market	:	EUROPE ASIA AUSTRALIA
Credit Term	:	30 - 60 DAYS

Payment Mode	:	LETTER OF CREDIT (LC) CHEQUES

OPERATIONS

Products manufactured

MIDDLE DISTILLATES AND WAXES

Award

1 ) MS ISO 14001 Year :2000

Competitor(s)

AIR PRODUCTS MALAYSIA SDN BHD
MOX-LINDE INDUSTRIAL GASES (MALAYSIA) SDN BHD
NIG GASES SDN BHD
PETRONAS GAS BHD
SOUTHERN INDUSTRIAL GAS SDN BHD

Member(s) / Affiliate(s)

CHEMICAL INDUSTRIES COUNCIL OF MALAYSIA (CICM)

Ownership of premises

OWNED

Total Number of Employees:
YEAR	2015	2014	2013	2012	2011	2010

GROUP	N/A	N/A	N/A	N/A	N/A	N/A
COMPANY	400	400	400	400	378	320

Branch

Other Information:

The Subject is principally engaged in the (as a / as an) manufacture of middle distillates and waxes.

The Subject owns and operates the Shell Middle Distillate Synthesis plant in Bintulu, the world's first commercial plant of its kind.

The Subject's plant convert natural gas into high quality synthetic oil products and specialty chemicals which are paraffinic and colourless.

According to the Subject the plant costing more than RM 2 billion to build converts 100 mmscfd (million standard cubic feet per day) of natural gas into 470,000 tonnes per annum of middle distillates (gasoil,kerosene, naphtha) and specialty products (detergant feedstocks,solvent feedstocks, various grades of waxes). The SC added that the plant began operation in 1993.

The Subject is an operating company of the Royal Dutch/Shell group and has its head quarter in Kuala Lumpur which managed the Subject's finance and marketing.

The Subject's plant is the culmination of over 20 years research into the utilisation of alternative raw material for the product of fuels and specialty chemicals.

The SMDS technology converts natural gas to long chain paraffins which are subsequently either hydro cracked to produce liquid fuels or fractionated to produce chemical feedstocks and waxes.

The Subject's laboratory performs a wide range of analysis in process and product samples. These include feed and process gases, water and effluent discharge, distillates, specialties and waxes.

The Subject's process incorporates state-of-art safety, energy conservation and environmental protection system.

The waxes are produced in accordance with Good Manufacturing Practises as defined by the United States Food & Drugs Administration (FDA).

The Subject is the world's first commercial project to employ Gas to Liquids (GTL) technology, which can be used to produce petroleum products, chemical products, wax, and other materials from natural gas. The technology is seen to have huge potential as an effective way for utilizing natural gas. The project uses a process based on Shell's GTL technology. Products produced from natural gas are much more environmental-friendly than other petroleum products, and therefore a higher market-evaluation is expected.

RECENT DEVELOPMENT

02 SEPTEMBER 2009

Shell MDS (Malaysia) Sdn Bhd is investing US$90 million (about RM317.6 million) to build a new wax facility at its gas-to-liquids (GTL) plant in Bintulu, Sarawak."The wax plant expansion project is a key development project for Shell MDS as it will enable us to double our current wax output," said managing director Dick Benschop in a statement Wednesday.

"This expansion project further demonstrates Shell's continued commitment to Shell MDS and Malaysia," he said.He said the majority of the contracts and jobs involved in the project would be awarded to local Malaysian companies. About 30 Malaysian companies and 500 Malaysians acting as design consultants, vendors, material suppliers and building contractors would involve in the project.

The expansion project was launched by Shell executive vice president (Upstream International Asia) Michiel Kool.The Shell MDS GTL plant, started up in 1993, is the world's first commercial GTL plant of its kind. It has the capacity to covert three million cubic metres of natural gas into 14,700 barrels of GTL products per day.

The wide range of high quality waxes, specialty chemicals and transport fuels the plant produces are marketed to over 40 countries.

According to the statement, Shell MDS' GTL waxes are used in a wide range of industrial applications such as hot-melt adhesives, printing inks, packaging, fibreboards, PVC lubricants, plastic processing, candles and coatings.

"There is a growing market for this unique product. We will strengthen our position as a leading producer of high quality waxes," Benschop said.

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	N/A
Current Telephone Number	:	086-292404/292222
Match	:	N/A

Address Provided by Client	:	MENARA SHELL, NO 211, JALAN TUN SAMBANTHAN 50470 KUALA LUMPUR
Current Address	:	P.O.BOX 1084, JALAN TANJONG KIDURONG, 97008 BINTULU, SARAWAK, MALAYSIA.
Match	:	NO

Latest Financial Accounts	:	YES

Other Investigations

We contacted one of the staff from the Subject and she provided some information.

The address provided belongs to the Subject's Group.

FINANCIAL ANALYSIS

Profitability
Turnover	:	Increased	[	2009 - 2013	]
Profit/(Loss) Before Tax	:	Decreased	[	2009 - 2013	]
Return on Shareholder Funds	:	Favourable	[	34.37%	]
Return on Net Assets	:	Acceptable	[	27.15%	]

The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The dip in profit could be due to the stiff market competition which reduced the Subject's profit margin. Generally the Subject was profitable. The favourable return on shareholders' funds and return on net assets indicate that the Subject's management was efficient in utilising the assets to generate returns.

Working Capital Control
Stock Ratio	:	Favourable	[	25 Days	]
Debtor Ratio	:	Favourable	[	26 Days	]
Creditors Ratio	:	Favourable	[	23 Days	]

The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The favourable debtors' days could be due to the good credit control measures implemented by the Subject. The Subject had a favourable creditors' ratio where the Subject could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

Liquidity
Liquid Ratio	:	Favourable	[	2.76 Times	]
Current Ratio	:	Favourable	[	3.33 Times	]

A minimum liquid ratio of 1 should be maintained by the Subject in order to assure its creditors of its ability to meet short term obligations and the Subject was in a good liquidity position. Thus, we believe the Subject is able to meet all its short term obligations as and when they fall due.

Solvency
Interest Cover	:	Favourable	[	12,142.44 Times	]
Gearing Ratio	:	Favourable	[	0.51 Times	]

The interest cover showed that the Subject was able to service the interest. The favourable interest cover could indicate that the Subject was making enough profit to pay for the interest accrued. The Subject was lowly geared thus it had a low financial risk. The Subject was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the Subject being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.


Overall Assessment :
Although the Subject's turnover had increased, its profits had declined over the same corresponding period. This could be due to the stiffer market competition and / or higher operating costs which lowered the Subject's profit margin. The Subject was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the Subject should be able to repay its short term obligations. With the favourable interest cover, the Subject could be able to service all the accrued interest without facing any difficulties. The Subject as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.

Overall financial condition of the Subject : STRONG

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

Major Economic Indicators:	2011	2012	2013	2014*	2015**

Population ( Million)	28.7	29.3	29.8	30.3	30.5
Gross Domestic Products ( % )	5.1	5.6	5.3	6.0	6.0
Domestic Demand ( % )	8.2	9.4	5.6	6.4	6.2
Private Expenditure ( % )	8.2	8.0	8.6	7.9	6.9
Consumption ( % )	7.1	1.0	5.7	6.5	5.6
Investment ( % )	12.2	11.7	13.3	12.0	10.7
Public Expenditure ( % )	8.4	13.3	4.4	2.3	4.2
Consumption ( % )	16.1	11.3	(1.2)	2.1	3.8
Investment ( % )	(0.3)	15.9	4.2	2.6	4.7

Balance of Trade ( MYR Million )	116,058	106,300	71,298	52,314	-
Government Finance ( MYR Million )	(45,511)	(42,297)	(39,993)	(37,291)	-
Government Finance to GDP / Fiscal Deficit ( % )	(5.4)	(4.5)	(4.0)	(3.5)	(3.0)
Inflation ( % Change in Composite CPI)	3.1	1.6	2.5	3.3	4.0
Unemployment Rate	3.3	3.2	3.0	3.0	3.0

Net International Reserves ( MYR Billion )	415	427	-	417	-
Average Risk-Weighted Capital Adequacy Ratio ( % )	3.50	2.20	-	-	-
Average 3 Months of Non-performing Loans ( % )	14.80	14.70	-	-	-
Average Base Lending Rate ( % )	6.60	6.53	6.53	-	-
Business Loans Disbursed( % )	15.3	32.2	-	-	-
Foreign Investment ( MYR Million )	23,546.1	26,230.4	38,238.0	-	-
Consumer Loans ( % )	-	-	-	-	-

Registration of New Companies ( No. )	45,455	45,441	46,321	-	-
Registration of New Companies ( % )	3.0	(0.0)	1.9	-	-
Liquidation of Companies ( No. )	132,485	17,092	26,430	-	-
Liquidation of Companies ( % )	417.8	(87.1)	54.6	-	-

Registration of New Business ( No. )	284,598	324,761	329,895	-	-
Registration of New Business ( % )	5.0	14.0	2.0	-	-
Business Dissolved ( No. )	20,121	20,380	18,161	-	-
Business Dissolved ( % )	1.9	1.3	(10.9)	-	-

Sales of New Passenger Cars (' 000 Unit )	535.1	552.2	576.7	598.4	610.3
Cellular Phone Subscribers ( Million )	35.3	38.5	43.0	43.8	-
Tourist Arrival ( Million Persons )	24.7	25.0	25.7	28.0	-
Hotel Occupancy Rate ( % )	60.6	62.4	62.6	-	-

Credit Cards Spending ( % )	15.6	12.6	-	-	-
Bad Cheque Offenders (No.)	32,627	26,982	28,876	-	-
Individual Bankruptcy ( No.)	19,167	19,575	21,984	-	-
Individual Bankruptcy ( % )	5.8	2.1	12.3	-	-

INDUSTRIES (% of Growth ):	2011	2012	2013	2014*	2015**

Agriculture	5.8	1.0	2.1	3.8	3.1
Palm Oil	10.8	(0.3)	2.6	6.7	-
Rubber	6.1	(7.9)	(10.1)	(10.4)	-
Forestry & Logging	(7.6)	(4.5)	(7.8)	(4.2)	-
Fishing	2.1	4.3	1.6	2.7	-
Other Agriculture	7.1	6.4	8.2	6.2	-
Industry Non-Performing Loans ( MYR Million )	634.1	-	-	-	-
% of Industry Non-Performing Loans	3.2	-	-	-	-

Mining	(5.4)	1.4	0.9	(0.8)	2.8
Oil & Gas	(1.7)	-	-	-	-
Other Mining	-	-	-	-	-
Industry Non-performing Loans ( MYR Million )	46.5	-	-	-	-
% of Industry Non-performing Loans	0.1	-	-	-	-

Manufacturing #	4.7	4.8	3.4	6.6	5.5
Exported-oriented Industries	4.1	6.5	3.3	5.6	-
Electrical & Electronics	(4.0)	12.7	6.9	13.3	-
Rubber Products	20.7	3.0	11.7	(0.3)	-
Wood Products	(5.1)	8.7	(2.7)	5.1	-
Textiles & Apparel	13.2	(7.1)	(2.6)	11.5	-
Domestic-oriented Industries	10.7	1.7	6.8	9.4	-
Food, Beverages & Tobacco	4.80	2.70	3.60	6.13	6.13
Chemical & Chemical Products	10.0	10.8	5.6	-	-
Plastic Products	3.8	-	-	-	-
Iron & Steel	2.2	(6.6)	5.0	0.1	-
Fabricated Metal Products	21.8	13.8	9.9	2.9	-
Non-metallic Mineral	12.1	2.9	(2.0)	5.4	-
Transport Equipment	12.0	3.4	13.8	22.9	-
Paper & Paper Products	9.5	3.1	1.8	4.7	-
Crude Oil Refineries	9.3	-	-	-	-
Industry Non-Performing Loans ( MYR Million )	6,537.2	-	-	-	-
% of Industry Non-Performing Loans	25.7	-	-	-	-

Construction	4.7	18.6	10.9	12.7	10.7
Industry Non-Performing Loans ( MYR Million )	3,856.9	-	-	-	-
% of Industry Non-Performing Loans	10.2	-	-	-	-

Services	7.1	6.4	5.9	5.9	5.6
Electric, Gas & Water	3.5	4.4	4.2	3.6	3.9
Transport, Storage & Communication	6.50	7.10	7.30	7.50	7.15
Wholesale, Retail, Hotel & Restaurant	5.2	4.7	5.9	6.9	6.5
Finance, Insurance & Real Estate	6.90	9.70	3.70	4.65	4.25
Government Services	12.4	9.4	8.3	6.1	5.6
Other Services	5.1	3.9	5.1	4.8	4.5
Industry Non-Performing Loans ( MYR Million )	6,825.2	-	-	-	-
% of Industry Non-Performing Loans	23.4	-	-	-	-


* Estimate / Preliminary
** Forecast
# Based On Manufacturing Production Index

INDUSTRY ANALYSIS

MSIC CODE
35201 : Manufacture of gaseous fuels with a specified calorific value, by purification, blending and other processes from gases of various types including natural gas

INDUSTRY :	OIL & GAS


Malaysia has some 28.35 billion barrels of oil (BBOE) reserves and about 1.2 per cent of the world's natural gas reserves (2.35 trillion cubic metres) of proven reserves. Malaysia has a current production rate of 730,000 barrels per day of crude oil products. It is the fourth-highest reserves in Asia-Pacific after China, India, and Vietnam. Nearly all of Malaysia's oil comes from offshore fields. The continental shelf is divided into three producing basins: the Malay basin offshore peninsular Malaysia in the west and the Sarawak and Sabah basins in the east. In 2011, the contribution from petroleum was 35.8% from total government revenue, followed by 33.7% in 2012 and 31.2% in 2013.

In 2014, production of crude oil is estimated to rebound by 2.1% to 588,000 bpd (2013: -1.6%, 576,000 bpd). However, during the first seven months of 2014, production of crude oil declined marginally by 0.7% to 582,156 barrels per day (bpd) (January - July 2013: 1%, 586,296 bpd), due mainly to lower production from the maturing oil fields during the first quarter. Nevertheless, output of crude oil expanded by 4% in the second quarter of year 2014, driven by production enhancement efforts and commencement of production from new oil fields.

Furthermore, Malaysia's gas production is estimated to increase 0.4% to 6,298 mmscfd in 2014 (2013: 6,271 mmscfd). However, production of natural gas declined marginally by 0.4% to 6,275 million standard cubic feet per day (mmscfd) during the first seven months of 2014 (January - July 2013: 7.9%, 6,303 mmscfd) due to the sharp decline in natural gas production in July 2014 (-17.3%). The gas consumption over the first six months in year 2014 has increased 5.8% to 71.5 million British thermal unit (Btu) (January - June 2013: 8.8%, 67.6 million Btu) with gas sales rising 12.8% to RM1.2 million (January - June 2013: 8.8%, Rm1.1 million).

Moreover, Gas Malaysia Berhad will build a natural gas pipeline in two new industrial areas in 2014, which are Terengganu and Johor. The availability of natural gas pipeline in new industries areas will encourage investors to use natural gas, hence increasing its usage. In addition, the shift from oil-based fuels such as diesel and medium fuel oil to natural gas by the industry will also help reduce air pollution. On the other hand, Petronas continues to actively explore new fields in Malaysia, as at end of March 2014, exploration activity involved six fields in Sarawak and one in Peninsular Malaysia.

The Pengerang oil storage terminal in Johor, Malaysia's largest commercial oil storage facility has started operations in early 2014. It will have a storage capacity of more than 10 million barrels to house crude oil and oil products by the end of 2014 with a potential to expand to 41 million barrels in the future. This terminal bolstered southern Malaysia's oil storage capacity by 70% to more than 25 million barrels.

The Government of Malaysia also contributes significantly towards policy and macro-economic planning to secure a sustainable and long-term success of the oil and gas industry. The Government's main objective is to increase aggregate production capacity by 5% every year up to 2020 to meet domestic demand growth while sustaining crude oil and LNG exports to overseas markets. In the Asia Pacific region, Malaysia aims to be the number one oil and gas hub by 2017, taking advantage of its strategic location at key shipping lanes as well as strong economic fundamentals in China, India and within Southeast Asia.

Starting from Dec 1, 2014, Malaysia will abolish subsidies for gasoline and diesel due to the falling oil prices. The cost of the widely used RON 95 grade of gasoline and diesel will be based on a managed float system. According to Prime Minister Datuk Seri Najib Razak, the savings from fuel subsidies following the introduction of the managed float system can be used for socio-economic development to benefit the people. Citing the recent drop in the price of RON97 petrol as an example, Najib said the managed float system would enable the government to make fuel-price adjustments quicker to help the rakyat. He said the savings from fuel subsidies could be channeled to other sectors, such as agriculture, education and health, which would directly benefit the people.

OVERALL INDUSTRY OUTLOOK : Average Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 1986, the Subject is a Private Limited company, focusing on manufacture of middle distillates and waxes. The Subject has been in business for over two decades. It has built up a strong clientele base and good reputation will enable the Subject to further enhance its business in the near term. The Subject is expected to enjoy a stable market shares. The Subject is a large entity with strong capital position of MYR 500,000,000. We are confident with the Subject's business and its future growth prospect. Having strong support from its shareholders has enabled the Subject to remain competitive despite the challenging business environment.

Over the years, the Subject has penetrated into both the local and overseas market. The Subject has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the Subject to further enhance its business in the near term. The Subject is a fairly large and rapidly growing company with over 400 staff in its operations The Subject has a good management capability. Its capable management team has enabled the Subject to keep its business on going. Hence, the future prospect of the Subject is bright. To improve its quality products and services, we noted that the Subject has received a number of certifications & awards. This will improve the customer's confidence level to the Subject.

Financially, the Subject registered a higher turnover compared to previous year. However, its profits showed a reverse trend. The lower profit achieved was a result of higher operating cost and increased competition. Based on the higher profitability, the Subject has generated a favourable return based on its existing shareholders' funds which indicated that the management was efficient in utilising its funds to generate income. The Subject is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a lowly geared company, the Subject is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 1,290,661,000, the Subject should be able to maintain its business in the near terms.

Having a strong assets backing, the Subject possesses latent assets as collateral for further financial extension. Hence, it has good chance of getting loans if the needs arises. The Subject's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. Overall the Subject has a good control over its resources.

We regard that the Subject's overall payment habit is prompt. The Subject had a favourable creditors' ratio as evidenced by its favourable collection days.

The industry shows an upward trend and this trend is very likely to sustain in the near terms. Hence, the Subject is expected to benefit from the favourable outlook of the industry.

In view of the above favourable condition, we recommend credit be proceeded to the Subject with favourable term.

PROFIT AND LOSS ACCOUNT

THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIAN FINANCIAL REPORTING STANDARDS(FRS)

SHELL MDS (MALAYSIA) SDN. BHD.

Financial Year End	2013-12-31	2012-12-31	2011-12-31	2010-12-31	2009-12-31
Months	12	12	12	12	12
Consolidated Account	Company	Company	Company	Company	Company
Audited Account	YES	YES	YES	YES	YES
Unqualified Auditor's Report (Clean Opinion)	YES	YES	YES	YES	YES
Financial Type	FULL	FULL	FULL	FULL	SUMMARY
Currency	MYR	MYR	MYR	MYR	MYR

TURNOVER	1,913,549,000	1,889,083,000	1,438,540,000	1,368,574,000	1,083,983,000
	----------------	----------------	----------------	----------------	----------------
Total Turnover	1,913,549,000	1,889,083,000	1,438,540,000	1,368,574,000	1,083,983,000
Costs of Goods Sold	(1,259,840,000)	(1,228,939,000)	(896,647,000)	(765,494,000)	-
	----------------	----------------	----------------	----------------	----------------
Gross Profit	653,709,000	660,144,000	541,893,000	603,080,000	-
	----------------	----------------	----------------	----------------	----------------

PROFIT/(LOSS) FROM OPERATIONS	608,796,000	643,092,000	515,099,000	568,939,000	378,106,000
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	608,796,000	643,092,000	515,099,000	568,939,000	378,106,000
Taxation	(165,214,000)	(96,750,000)	(130,477,000)	(143,049,000)	(96,076,000)
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	443,582,000	546,342,000	384,622,000	425,890,000	282,030,000
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	865,654,000	819,312,000	934,690,000	1,058,800,000	1,326,770,000
	----------------	----------------	----------------	----------------	----------------
As restated	865,654,000	819,312,000	934,690,000	1,058,800,000	1,326,770,000
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	1,309,236,000	1,365,654,000	1,319,312,000	1,484,690,000	1,608,800,000
TRANSFER TO RESERVES - General	(1,325,000)	-	-	-	-
DIVIDENDS - Ordinary (paid & proposed)	(550,000,000)	(500,000,000)	(500,000,000)	(550,000,000)	(550,000,000)
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	757,911,000	865,654,000	819,312,000	934,690,000	1,058,800,000
	=============	=============	=============	=============	=============

INTEREST EXPENSE (as per notes to P&L)
Term loan / Borrowing	43,500	(22,100)	-	-	-
Others	6,642	7,643	6,358,000	-	-
	----------------	----------------	----------------	----------------	----------------
	50,142	(14,457)	6,358,000	-	-
	=============	=============	=============

BALANCE SHEET

SHELL MDS (MALAYSIA) SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	1,703,864,000	1,866,632,000	2,002,379,000	1,676,420,000	1,567,025,000

Investments	-	-	-	73,000	-
Others	5,136,000	5,655,000	6,425,000	7,579,000	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	5,136,000	5,655,000	6,425,000	7,652,000	73,000

	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	1,709,000,000	1,872,287,000	2,008,804,000	1,684,072,000	1,567,098,000

Stocks	131,071,000	131,496,000	126,487,000	141,124,000	-
Trade debtors	138,342,000	151,941,000	97,599,000	83,657,000	-
Other debtors, deposits & prepayments	5,642,000	2,701,000	4,074,000	8,592,000	-
Short term deposits	296,770,000	37,100,000	14,370,000	-	-
Deposits with financial institutions	-	-	-	8,770,000	-
Amount due from related companies	15,365,000	69,789,000	7,020,000	50,953,000	-
Cash & bank balances	175,429,000	174,713,000	242,417,000	79,052,000	-
Others	-	176,000	311,000	157,000	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	762,619,000	567,916,000	492,278,000	372,305,000	362,982,000
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	2,471,619,000	2,440,203,000	2,501,082,000	2,056,377,000	1,930,080,000
	=============	=============	=============	=============	=============

CURRENT LIABILITIES
Trade creditors	80,156,000	54,329,000	56,060,000	34,454,000	-
Other creditors & accruals	70,952,000	56,131,000	221,410,000	192,835,000	-
Short term borrowings/Term loans	146,000	144,000	70,000	-	-
Amounts owing to related companies	29,304,000	23,905,000	41,610,000	50,619,000	-
Provision for taxation	48,266,000	-	-	-	-
Other liabilities	-	2,860,000	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	228,824,000	137,369,000	319,150,000	277,908,000	192,346,000
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	533,795,000	430,547,000	173,128,000	94,397,000	170,636,000
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	2,242,795,000	2,302,834,000	2,181,932,000	1,778,469,000	1,737,734,000
	=============	=============	=============	=============	=============

SHARE CAPITAL
Ordinary share capital	500,000,000	500,000,000	500,000,000	500,000,000	500,000,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	500,000,000	500,000,000	500,000,000	500,000,000	500,000,000

Retained profit/(loss) carried forward	757,911,000	865,654,000	819,312,000	934,690,000	1,058,800,000
Capital redemption reserve	28,934,000	28,934,000	28,934,000	28,934,000	28,934,000
Others	3,816,000	2,939,000	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	790,661,000	897,527,000	848,246,000	963,624,000	1,087,734,000

	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	1,290,661,000	1,397,527,000	1,348,246,000	1,463,624,000	1,616,668,000

Long term loans	655,100,000	611,600,000	633,700,000	246,680,000	-
Deferred taxation	297,034,000	293,707,000	197,126,000	66,665,000	-
Retirement benefits provision	-	-	2,860,000	1,500,000	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	952,134,000	905,307,000	833,686,000	314,845,000	150,000,000
	----------------	----------------	----------------	----------------	----------------
	2,242,795,000	2,302,834,000	2,181,932,000	1,778,469,000	1,737,734,000
	=============	=============	=============	=============	=============

FINANCIAL RATIO

SHELL MDS (MALAYSIA) SDN. BHD.

TYPES OF FUNDS
Cash	472,199,000	211,813,000	256,787,000	79,052,000	-
Net Liquid Funds	472,199,000	211,813,000	256,787,000	79,052,000	-
Net Liquid Assets	402,724,000	299,051,000	46,641,000	(46,727,000)	170,636,000
Net Current Assets/(Liabilities)	533,795,000	430,547,000	173,128,000	94,397,000	170,636,000
Net Tangible Assets	2,242,795,000	2,302,834,000	2,181,932,000	1,778,469,000	1,737,734,000
Net Monetary Assets	(549,410,000)	(606,256,000)	(787,045,000)	(361,572,000)	20,636,000
BALANCE SHEET ITEMS
Total Borrowings	655,246,000	611,744,000	633,770,000	246,680,000	-
Total Liabilities	1,180,958,000	1,042,676,000	1,152,836,000	592,753,000	342,346,000
Total Assets	2,471,619,000	2,440,203,000	2,501,082,000	2,056,377,000	1,930,080,000
Net Assets	2,242,795,000	2,302,834,000	2,181,932,000	1,778,469,000	1,737,734,000
Net Assets Backing	1,290,661,000	1,397,527,000	1,348,246,000	1,463,624,000	1,587,734,000
Shareholders' Funds	1,290,661,000	1,397,527,000	1,348,246,000	1,463,624,000	1,587,734,000
Total Share Capital	500,000,000	500,000,000	500,000,000	500,000,000	500,000,000
Total Reserves	790,661,000	897,527,000	848,246,000	963,624,000	1,087,734,000
LIQUIDITY (Times)
Cash Ratio	2.06	1.54	0.80	0.28	-
Liquid Ratio	2.76	3.18	1.15	0.83	-
Current Ratio	3.33	4.13	1.54	1.34	1.89
WORKING CAPITAL CONTROL (Days)
Stock Ratio	25	25	32	38	-
Debtors Ratio	26	29	25	22	-
Creditors Ratio	23	16	23	16	-
SOLVENCY RATIOS (Times)
Gearing Ratio	0.51	0.44	0.47	0.17	-
Liabilities Ratio	0.92	0.75	0.86	0.40	0.22
Times Interest Earned Ratio	12,142.44	(44,482.09)	82.02	0.00	-
Assets Backing Ratio	4.49	4.61	4.36	3.56	3.48
PERFORMANCE RATIO (%)
Operating Profit Margin	31.82	34.04	35.81	41.57	34.88
Net Profit Margin	23.18	28.92	26.74	31.12	26.02
Return On Net Assets	27.15	27.93	23.90	31.99	21.76
Return On Capital Employed	27.15	27.93	23.90	31.99	21.40
Return On Shareholders' Funds/Equity	34.37	39.09	28.53	29.10	17.45
Dividend Pay Out Ratio (Times)	1.24	0.92	1.30	1.29	1.95
NOTES TO ACCOUNTS
Contingent Liabilities	0	0	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.62.20
UK Pound	1	Rs.95.99
Euro	1	Rs.71.00

INFORMATION DETAILS

Analysis Done by :	RAS

Report Prepared by :	NIT

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.