Press Release

JCR-VIS Reaffirms Entity Ratings of Indus Dyeing & Manufacturing Company Limited

Karachi, December 08, 2010: 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). Outlook on the medium to long-term rating is ‘Stable’.

During FY10, the country’s spinning sector benefited amidst shortage of cotton and yarn in international market, which led to an increase in international prices particularly in the second half of the year. With more than half of the company’s sales comprising exports, gross and cash margins reported by the company also widened during the outgoing year. Further rupee devaluation also contributed to the improvement in margins. Excess cash generated has been utilized to reduce debt levels.

Cotton prices have continued to increase in the on-going year. While margins in the industry may narrow in view of the notable increase in raw material prices, debt servicing capacity of IDMCL is expected to remain strong. The company has a sound capital structure, with leverage, adjusted for strategic investments, also within prudent limits.

For further information on this rating announcement, please contact the undersigned (Ext. 501) or Ms. Sobia Maqbool (Ext. 506) at 021-35311861-70 or fax to 021-35311872.


Javed Callea
Advisor

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 08, 2010 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.