The Pakistan Credit Rating Agency Limited
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Muhammad Noor Ul Haq

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PACRA Maintains Entity Ratings of Usmani International Associates (Pvt.) Limited

Rating Type Entity
(28-Jun-19 )
(31-Dec-18 )
Action Maintain Maintain
Long Term BBB- BBB-
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

Usmani International Associates (UIA) has been operating in the construction industry for the last many decades. The second generation has also joined the business – with clarity of roles. The governance framework is expected to evolve, going forward. The reported profitability in terms of gross margin is good, though operational efficiency needs to be harnessed. The topline and profitability both are supplemented by JV business, lending support to the ratings. Construction business is dependent on award of public works and initiatives taken by the private sector. 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 trend is continuing in the reported management accounts of the company for 1HFY19.
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.

About the Entity
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 Mr. Ahmed Ghazal Usmani. The family governs the company on the basis of their rich experience in the construction industry.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.