Press Release

JCR-VIS Re-affirms Ratings of A /A-2 of Sapphire Textile Mills Limited

Karachi, May 22, 2009: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Sapphire Textile Mills Ltd. (STML) at A (Single A) for the medium to long-term and A-2 (A Two) for the short-term. Outlook on the medium to long-term rating is ‘Stable’.

The ratings take into account STML’s standing as one of the largest manufacturers and exporters in the textile industry of Pakistan. The company has maintained a strong capital structure over the years. Although the spinning division of STML continues to be under pressure with its narrowing margins, STML has diversified itself into the value-added segments of fabrics and home textiles and is now increasingly focusing on these segments. STML is also taking initiatives to expand its marketing efforts in the export market.

The recessionary pressures in the local and global economy are continuing to keep the local textile industry under stress with rising cost of input and falling exports. However, STML is not likely to face any significant pressure on liquidity due to the low level of leverage employed as well as presence of liquid investments. JCR-VIS foresees no short term pressure on the ratings; however, the ratings may come under stress if the current economic trends persist over a longer period.

For further information on this rating announcement, please contact Mr. Safdar Kazi ( or Ms. Sobia Maqbool ( at 021-5311861 or fax to 021-5311873.

Safdar Kazi

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2009 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited