Press Release

JCR-VIS reaffirms Entity Ratings of Indus Dyeing & Manufacturing Co. Ltd. at A/A-2

Karachi, December 30, 2005: JCR-VIS Credit Rating Co. Ltd. (JCR-VIS) has reaffirmed the medium to long-term entity rating of A (Single A) and short-term rating of A-2 (A Two) assigned to Indus Dyeing & Manufacturing Company Ltd. (IDMCL). The outlook on the medium to long-term rating is ‘Stable’.

Our ratings recognize the strong cash flows generation exhibited by IDMCL in the past few years arising from healthy margins on operations and sales growth from consistent investment in plant facilities while pursuing a capital structure policy targeted to contain the financial risk of the company.

We have noted the recent increase in leverage following the merger with an associated company, Yusuf Textile Mills Ltd., operating at a significant high gearing as it acquired sizeable debt in FY2005 for setting up a towel unit targeting value-addition. However, in view of the management’s intention to consolidate operations in the current year, we expect the situation to rectify shortly due to the quantum of incremental cash flows anticipated to arise from the towel project and the expansion in spinning capacity conducted during FY2005. The management is also taking steps to reduce the currently high customer concentration in the towel unit.

For further information on this rating announcement, please contact Mr. Safdar Kazi (safdar@jcrvis.com.pk / Ext: 221) or Mr. Saad Ahmed Madani (saad@jcrvis.com.pk / Ext: 219) at 5671822/5671833/5680996 or fax to 5681105/5671600.


Faheem Ahmad
CEO & President

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 December 30, 2005 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.