Press Release

JCR-VIS reaffirms Rating of the Rs. 1.385b Sukuk issued by Quetta Textile Mills Ltd.

Karachi, September 8, 2011: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the rating assigned to the Rs 1.385 billion Sukuk of Quetta Textile Mills Limited (QTML) at ‘BBB+’ (Triple B Plus). Outlook on the rating is ‘Stable’.

Rating takes into account the improved results posted by QTML in FY11 despite high cotton prices which were off-set by commensurate increase in yarn and fabric prices as demand-supply deficit widened. While leverage has improved considerably over the last two years on account of improved financial results, it is still considered high. Following two years of healthy margins enjoyed by the sector, margins may be expected to normalize to historical levels, given the current trend in prices.

Cash flow coverages may come under pressure if margins are not maintained at current levels. In line with the stepped up principal repayment schedule of the sukuk issue, major installments will be due from 2013 onwards. JCR-VIS will continue to monitor the developing risk profile of the company in the backdrop of price trends in the industry.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 506) at 021-35311861 or fax to 021-35311873.

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 .