The Pakistan Credit Rating Agency Limited
26-Dec-17
Analyst
Muhammad Jhangeer Hanif
jhangeer@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | Corporate Rating Methodology | Jul-17
- Methodology | Correlation between long-term and short-term rating scale | Jun-17
- Methodology | Criteria Modifiers | Jun-17
Related Research
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PACRA assigns Entity Ratings to MAAKSONS
| Rating Type | Entity | |
|
Current (10-Jan-18 ) |
||
| Action | Initial | |
| Long Term | BBB+ | |
| Short Term | A2 | |
| Outlook | Stable | |
| Rating Watch | - | |
M. A. Aleem Khan & Sons (Pvt) Limited (MAAKSONS) has been in the construction industry for many decades. The company has three generations of the sponsoring family in the business and has two main offices – Lahore and Islamabad. The sponsors have a very good understanding of the business. The reporting and functional responsibilities are clearly demarcated. The company has delivered multiple, Army and DHA, projects. MAAKSONS has a no limit contract license. The company’s profitability and leveraging is adequate, and has a mix of funded and non-funded banking lines to facilitate its business. Construction business is dependent on award of public works (Federal & Provincial PSDP + CPEC). The control environment may be strengthened by harnessing the audit quality and adopting quarterly accounts.
The ratings are dependent on sustaining a steady revenue stream and financial risk profile. Any prolonged downturn in subdued business volume can negatively affect the rating. Good corporate governance practice is considered essential.
About
the Entity
MAAKSONS officially registered as a Company in 1984 but has been in business since 1951. MAAKSONS scope of work comprises construction of roads and highways, bridges and structures, residential and commercial buildings, canals and tunnels, etc. Significant projects to its credit are Signal Free Corridor Islamabad Highway, Metro Lahore, 29 storey Telecom Tower Islamabad, Gulberg Green, 3x210 Thermal Power Station Muzaffargarh, Chashma Canal, etc. to name a few. It is currently focused on a few major projects in Lahore including, a multipurpose complex - Panta Square, a housing society - Prism 9, and a Signal Free Corridor in DHA.
BOD comprises nine members, all of whom belong to the sponsoring family. They collectively have complete ownership of the company.