Press Release

JCR-VIS Upgrades Ratings of Allied Rental Modaraba

Karachi, March 14, 2011: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has upgraded the medium to long term entity rating of Allied Rental Modaraba (ARM) to ‘A’ (Single A) with ‘Stable’ outlook from ‘A-’ (Single A Minus).The short term rating has been maintained at ‘A-2’ (A Two).

The upgrade takes into account the continued growth in operating assets and a commensurate increase in earnings and profits, since inception. The company’s low leverage has ensured strong coverage available to creditors with robust cash flows from operations. Excess cash has largely been kept in liquid avenues; while some portion is invested in musharika based short term placements. The strategic nature of ARM’s rental fleet has ensured its demand, despite a recessionary environment. Expansion and diversification in rental fleet of ARM has also been positively noted. While the modarba had experienced some infection in the past, risk is minimized as the rented assets are always deployed with operating staff, which ensures retention of control by the Modaraba over its assets.

Ratings incorporate the patronage of an associated company in terms of its technical assistance and support infrastructure as well as the brand value of Caterpillar (CAT). The Modaraba also gets the advantage of convenient disposal of its used assets. The governance framework can be further strengthened by enhancing the level of independence on the board and formally documenting checks and controls in the client selection process.

For further information on this rating announcement, please contact Mr. Safdar Kazi (Ext: 407) or Ms. Sabeen Saleem (Ext: 510) at (+92-21) 35311861-70 or fax to (+92-21) 35311872-3.

Faheem Ahmad
President & CEO

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 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 2011 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