Press Release

JCR-VIS Reaffirms Ratings of Al-Noor Sugar Mills Ltd at A-/A-2

Karachi, April 27, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Al Noor Sugar Mills Limited (ASML) at ‘A-/A-2’ (Single A Minus/ A-Two). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 31, 2014.

The ratings assigned to ASML take into account diversified revenue sources of the company. Business mix of the company comprises two-thirds of sugar while remaining proceeds are received from its board unit. In order to overcome electricity shortages, the company is also involved in power generation primarily for its internal use. Despite higher average selling prices of sugar, proceeds of sugar division stood lower than last year while revenue base of board unit depicted an improvement in FY15. With both better sucrose recovery in sugar segment and higher margins in the board division, bottom line of ASML improved considerably.

The ratings also factor in cyclicality and vulnerability of the sugar industry. Local sugarcane prices are primarily regulated by the provincial governments and as such, have no relation with the sugar prices. Moreover, until recently, sugar prices have remained depressed for an extended period of time on account of surplus availability of the commodity. Going forward, level of sucrose recovery and direction of sugar prices will largely determine the revenue and profitability of ASML.

Debt levels of the company also stood marginally lower than prior year; debt profile of ASML largely comprises short term facilities utilized for working capital requirements. As a result, debt leverage and gearing were reported lower by end-FY15. No major CAPEX is planned over the foreseeable horizon, in view of which capital structure is expected to be largely maintained. Meanwhile, level of borrowings may continue to vary with seasonal requirements.

For further information on this rating announcement, please contact the undersigned (Ext: 516) at 021-35311861-71 or Mr. Maimoon Rasheed at 042-35723411 or fax to 021-35311872-3.

Mohammed Khalid Ali

Applicable Rating Criteria: Industrial Corporates (October 2003)

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 2016 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