PACRA Revises Entity Ratings of Usmani International Associates (Pvt.) Limited
Usmani International Associates (UIA) has been operating in the construction industry for the last many decades. The governance framework is expected to evolve, going forward. The reported profitability in terms of gross margin is adequate, though operational efficiency needs to be harnessed. The topline has shown decline after three years of continuous growth, having impact on the ratings. Construction business is dependent on award of public works and initiatives taken by the private sector, muted activity is witnessed therein. The control environment may be strengthened by harnessing the audit quality and adopting quarterly accounts. The audited accounts of the company for FY18 reflect sustained business and financial risk profile of the entity. The audit for FY19 is yet to be concluded. The time being taken is a concern.
The ratings are dependent upon the sustained positioning of the company in the industry. Adherence to sound financial discipline while strengthening debt servicing capacity is pivotal for the ratings. Improving governance and control environment is also important.
Usmani International Associates was established in 1988 by Engr. Ahmed Ghazal Usmani with an ambitious plan after having worked in his family’s construction business, INDUS ENGINEERS, which was established in 1960s. Significant projects to its credit are the 150 MW Fauji Kabirwala Power Project, Pakland Cement extension project, reconstruction of berths for Karachi Port Trust, 3 tier flyover KPT Interchange Karachi, and civil works on five major military bases, to name a few. The company has two member board. The overall governance matters are overseen by the MD / Chief Executive Ms. Amna Usmani after the demise of her father Mr. Ahmed Ghazal Usmani. The family governs the company on the basis of their rich experience in the construction industry.