Press Release

VIS Upgrades Entity Ratings of Al-Makkah Oil Refinery Limited

Karachi, March 27, 2019: VIS Credit Rating Company Limited (VIS) has upgraded the entity ratings of Al-Makkah Oil Refinery Limited (AOL) from ‘BBB-/A-2’ (Triple B Minus/A-Two) to ‘BBB/A-2’ (Triple B/A-Two). Outlook on the assigned ratings is ‘Stable’.

The assigned ratings draw comfort from the commitment that no long term debt would be undertaken by the company and short term borrowings & trade payables in relation to net sales would be maintained at prudent levels over the rating horizon. Given tax credit and low financial charges, cash flows are expected to remain a function of gross margins. Nevertheless, corporate governance framework and internal control systems have room for improvement.

Set up in 2014, AOL is engaged in manufacturing and selling of vegetable banaspati. Ratings continue to derive strength from established track record of sponsors in the edible oil business and favorable demand prospects for edible oil in the domestic market.

Going forward, ratings are dependent upon improving trend in gross margins and leverage indicators. Any deviation from communicated rating benchmarks would impact the ratings.

For further information on this rating announcement, please contact the undersigned (Ext: 201) or Mr. Jamal Abbas Zaidi (Ext: 208) at 021-35311861-71 or fax to 021-35311872-3.

Javed Callea

Applicable Rating Criteria: Industrial Corporates (May 2016)

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 2019 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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