Press Release

VIS Assigns Initial Ratings to Arshad Textile Mills Limited

Karachi, April 03, 2019: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘BB+/A-3’ (Double B Plus/A-Three) to Arshad Textile Mills Limited (ATML). The medium to long-term rating of ‘BB+’ denotes that obligations deemed likely to be met. Protection factors are capable of weakening if changes occur in the economy. Overall quality may move up or down frequently within this category. The short-term rating of ‘A-3’ denotes timely payment of obligations coupled with satisfactory company fundamental and liquidity factors. Outlook on the assigned ratings is ‘Stable’.

ATML is a small-scale spinning unit involved in the manufacturing and sale of cotton-blended yarn. ATML is a part of Arshad Group and shareholding is vested with sponsoring family who are actively involved in the day-to-day operations. The assigned ratings take into account relevant experience of the sponsors, established business relations with suppliers and customers, sustained top-line growth and some improvement in profit margins. The business risk profile draws some comfort from recent Balancing, Modernization, and Replacement (BMR) of existing spinning unit and diversification into finished fabric and service uniform business. Although ATML has been able to improve its competitiveness, the ratings are constrained by limited scale of spinning operations and susceptibility of margins to volatile cotton prices.

For further information on this rating announcement, please contact undersigned or Mr. Maimoon Rasheed at 021-35311861-70/042-35723411 or fax to 021-35311872-3.

Javed Callea

VIS Entity Rating Criteria Industrial Corporate (May 2016)

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 2019 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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