Press Release February 03, 2025 SARLA PERFORMANCE FIBERS LIMITED Rating Downgraded and Issuer not co-operating

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	10.00	ACUITE BB+ | Downgraded | Issuer not co-operating*	-
Bank Loan Ratings	215.00	-	ACUITE A4+ | Downgraded | Issuer not co-operating*
Total Outstanding	225.00	-	-
Total Withdrawn	0.00	-	-
* The issuer did not co-operate; based on best available information.

Rating Rationale

­Acuité has downgraded its long-term rating to 'ACUITE BB+' (read as ACUITE double B plus) from ‘ACUITE A-’ (read as ACUITE A minus) and the short-term rating to 'ACUITE A4+' (read as ACUITE A four plus) from ’ACUITE A2+’ (read as ACUITE A two plus) on the Rs.225.00 crore bank facilities of Sarla Performance Fibers Limited (SPFL). This rating is now flagged as issuer not cooperating on account of information risk and is based on best available information. The rating has been downgraded on account of information risk.

About the Company

­Mumbai- based, SPFL, incorporated in 1993 is engaged in the manufacturing of specialized high tenacity yarns. The overall operations of the company is managed by Mr. Krishnakumar Jhunjhunwala. The yarn manufactured by the company is used in the manufacturing of automotive seat belts and trims, airbags, upholstery, dress, casual & athletic footwear, leather goods, soft luggage, lingerie, swimwear and sportswear. The company has two yarn manufacturing unit located in Silvassa, one dyeing unit at Vapi and one HT twisting unit at Dadra. The company also has Partially Oriented Yarn (POY) manufacturing unit in USA through its subsidiary; however same has been shut since December 2017.

About the Group

­The company has two wholly owned subsidiaries under the name of Sarla Overseas Holdings Limited (SOHL) in the British Virgin Islands and Sarla Flex Incorporated, in the United States of America and one step down subsidiary Sarla Europe LDA at Portugal. The company caters to the North and Central American market through its US based subsidiary, SOHL and caters to Europe and South American markets through Portugal based step-down subsidiaries.

Unsupported Rating

­Not applicable

Non-cooperation by the issuer/borrower

­­Acuité has been requesting for data, information and undertakings from the rated entity for conducting surveillance & review of the rating. However, the issuer / borrower failed to submit such information before the due date. Acuité believes that information risk is a critical component in such ratings, and noncooperation by the issuer along with an unwillingness to provide information could be a sign of potential deterioration in its overall credit quality. This rating is therefore being flagged as “Issuer not-cooperating”, in line with prevailing SEBI regulations and Acuité’s policies.

Limitation regarding information availability

This rating is based on information available from sources other than the issuer / borrower (in the absence of information provided by the issuer / borrower) . Acuite endeavoured to gather information about the entity/industry from the public domain. Any rating with the suffix 'Issuer not cooperating' is assigned without any management interaction with the issuer entity or any data / information from the entity. Sometimes this non co-operation by a rated entity may be due to a result of deterioration in the credit risk profile of the entity. Therefore, Acuité cautions lenders and investors regarding the use of such information, on which the indicative credit rating is based.

Rating Sensitivities

­­­"No information provided by the issuer / available for Acuite to comment upon."

Liquidity Position

­­­"No information provided by the issuer / available for Acuite to comment upon."

Outlook

­Not applicable

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	383.95	389.20
PAT	Rs. Cr.	32.72	21.38
PAT Margin	(%)	8.52	5.49
Total Debt/Tangible Net Worth	Times	0.32	0.28
PBDIT/Interest	Times	13.56	13.80

Status of non-cooperation with previous CRA

­­Not Applicable

Any other information

­None

Applicable Criteria

• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm

Note on complexity levels of the rated instrument

­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 13 Nov 2023 PC/PCFC Long Term 10.00 ACUITE A- | Stable (Downgraded from ACUITE A | Stable) PC/PCFC Short Term 31.00 ACUITE A2+ (Downgraded from ACUITE A1) PC/PCFC Short Term 35.00 ACUITE A2+ (Downgraded from ACUITE A1) Letter of Credit Short Term 20.00 ACUITE A2+ (Downgraded from ACUITE A1) Letter of Credit Short Term 30.00 ACUITE A2+ (Downgraded from ACUITE A1) Letter of Credit Short Term 20.00 ACUITE A2+ (Downgraded from ACUITE A1) Letter of Credit Short Term 39.00 ACUITE A2+ (Downgraded from ACUITE A1) PC/PCFC Short Term 40.00 ACUITE A2+ (Downgraded from ACUITE A1) 17 Mar 2023 PC/PCFC Long Term 10.00 ACUITE A | Stable (Reaffirmed) PC/PCFC Short Term 31.00 ACUITE A1 (Reaffirmed) PC/PCFC Short Term 35.00 ACUITE A1 (Reaffirmed) Letter of Credit Short Term 20.00 ACUITE A1 (Reaffirmed) Letter of Credit Short Term 30.00 ACUITE A1 (Reaffirmed) Letter of Credit Short Term 20.00 ACUITE A1 (Reaffirmed) Letter of Credit Short Term 39.00 ACUITE A1 (Reaffirmed) PC/PCFC Short Term 40.00 ACUITE A1 (Reaffirmed)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Bank of Bahrain and Kuwait Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 20.00 Simple ACUITE A4+ | Downgraded | Issuer not co-operating* ( from ACUITE A2+ ) Indusind Bank Ltd Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 30.00 Simple ACUITE A4+ | Downgraded | Issuer not co-operating* ( from ACUITE A2+ ) P T Bank Maybank Indonesia (Formerly, Bank International Indonesia) Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 20.00 Simple ACUITE A4+ | Downgraded | Issuer not co-operating* ( from ACUITE A2+ ) Standard Chartered Bank Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 39.00 Simple ACUITE A4+ | Downgraded | Issuer not co-operating* ( from ACUITE A2+ ) HDFC Bank Ltd Not avl. / Not appl. PC/PCFC Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 40.00 Simple ACUITE A4+ | Downgraded | Issuer not co-operating* ( from ACUITE A2+ ) CITI Bank Not avl. / Not appl. PC/PCFC Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 31.00 Simple ACUITE A4+ | Downgraded | Issuer not co-operating* ( from ACUITE A2+ ) Bank of Bahrain and Kuwait Not avl. / Not appl. PC/PCFC Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 10.00 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* ( from ACUITE A- ) DBS Bank Ltd Not avl. / Not appl. PC/PCFC Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 35.00 Simple ACUITE A4+ | Downgraded | Issuer not co-operating* ( from ACUITE A2+ )

* The issuer did not co-operate; based on best available information.

*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)

­ Sr No Name of the entity 1 Sarla Performance Fibers Limited 2 Sarla Overseas Holdings Limited 3 Sarlaflex Inc 4 Sarla Europe LDA

Contacts

Mohit Jain Senior Vice President - Rating Operations Divya Bagmar Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.