CREDIT APPRAISAL REPORT

Credit Appraisal Report



Credit Appraisal Report

Introduction

Credit evaluations are not based on a single factor but upon how an applicant matches up to a set of lending criteria laid down by the lender. These lending criteria inherently reflect the risk attitudes and risk tolerance levels of the credit grantor concerned. In short, these criteria reflect how the lenders want to do business, their business policies, strategies, their risks propensity, etc. The risk attitudes, tolerance, business philosophy, policies and strategies however vary from one financier to the next. What one financier finds unacceptable may well is within another's tolerable limits. Ultimately, lenders will only assume risks that they find comfortable and acceptable within the limits set by their organisations.

Company information

British American Tobacco (Malaysia) Berhad (BAT Malaysia) manufactures imports and sells cigarettes and other tobacco products. Its brand portfolio includes include Dunhill, Kent, Lucky Strike and Pall Mall. The company primarily operates in Malaysia, where it is headquartered in Selangor Darul Ehsan and employs around 1,600 people. The company recorded revenues of MYR3, 965.4 million (approximately $1,236.3 million) in the fiscal year ended December 2010, an increase of 1.1% over 2009. The company's operating profit was MYR986.6 million (approximately $307.6 million) in fiscal 2010, a decrease of 4.5% compared to 2009. Its net profit was MYR731.1 million (approximately $227.9 million) in fiscal 2010, a decrease of 2.1% compared to 2009. British American Tobacco (Malaysia) Berhad (BAT Malaysia) was established in 1999, following the merger Rothmans of Pall Mall (Malaysia) Berhad and Malaysian Tobacco Company Berhad. In 2000, the company purchased Brunei business from British American Tobacco (Singapore) Private Limited. British American Tobacco (Malaysia) Berhad sold its entire equity interest in Tien Wah Press Holdings to AMB Packaging, in 2003. The disposal of its stake in Tien Wah Press was part of a move to dispose of its non-core business and enhance the management's focus on its core tobacco business (Cox, 2000, pp. 41). In 2010, the company appointed Hendrik Stoel as the Marketing Director of the Netherlands. BAT Malaysia appointed Dato' Chan Choon Ngai as its Executive Director in February 2011. In the following month, Andreas Michael Thompson was appointed as the Finance Director of the company.

Business Description

British American Tobacco (Malaysia) Berhad (BAT Malaysia) is engaged in manufacturing, importing and selling cigarettes and tobacco products. The company primarily operates in Malaysia. BAT Malaysia has 45 cigarette factories in 39 countries, processing approximately 460,000 tones of leaf and producing 708 billion cigarettes a year. Its portfolio of more than 200 brands includes international brands such as Kent, Dunhill, Lucky Strike and Pall Mall. The company operates its business through its subsidiaries. The company's wholly owned subsidiaries include the following: Commercial Importers and Distributors Sdn Bhd, Tobacco Importers and Manufacturers Sdn Berhad, The Leaf Tobacco Development Corporation of Malaya Sdn Berhad, Rothmans Brands Sdn Bhd, Commercial Marketers and Distributors Sdn. Bhd. Commercial Importers and Distributors Sdn Bhd is engaged in investment holding; and Commercial Marketers and Distributors Sdn Bhd markets and ...