Press Release

JCR-VIS Reaffirms Entity Ratings of MIMA Leather (Pvt.) Ltd.

Karachi, April 8, 2013: JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of MIMA Leather (Pvt.) Limited (MLPL) at ‘BBB/A-3’ (Triple B/A-Three). Outlook on the medium to long term rating is ‘Stable’.

With leather being a relatively luxury product, leather industry is cyclical with sales exhibiting volatility in line with the global economic cycle. Over the last 5 years, Pakistan’s leather exports have hovered around $1b. In FY12, there was slight decline in exports due to continuing recession in Europe; however, rupee depreciation benefited export based units.

MLPL is an export oriented company largely focused on sale of leather sourced from goat skin which is primarily used in women’s shoes. Despite dip in volumes, MLPL’s sales improved in FY12 on account of increase in selling price while margins also improved slightly. Inventory levels were increased in anticipation of future sales orders. MLPL funded the increased working capital requirement through equity capital, which was enhanced by way of equity injection by associated companies in FY12.

MLPL is part of the Mima group of companies which also comprises two other companies operating in the leather sector; these are engaged in tanning operations & production of leather garments & accessories. Combined sales of the three entities remained at Rs. 2.5b in FY12. The group disposed a loss making unit during FY12 with liquidity thus generated having been reinvested in profitable group companies including MLPL.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 35311861-70 (10 lines) or fax to 35311873.

Abdur Rahim, ACII

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited 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.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.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.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 2013 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited