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The Pakistan Credit Rating Agency Limited
Press Release

Date
24-Dec-20

Analyst
Anam Waqas Ghayour
anam.waqas@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

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

Rating Type Entity
Current
(24-Dec-20)
Previous
(28-Dec-19)
Action Maintain Downgrade
Long Term BB+ BB+
Short Term A3 A3
Outlook Stable Stable
Rating Watch - -

Usmani International Associates (UIA) has been operating in the construction industry for many decades. Construction business is dependent on award of public works and initiatives taken by the public & private sector, muted activity is witnessed therein; furthermore, the countrywide lockdown to combat Covid-19 pandemic put a halt in constructional activities. The topline has continued to show a declining trend from the previous year after three years of consecutive growth, reflected from the assigned ratings. The reported profitability in terms of gross margin is adequate, though operational efficiency needs to be harnessed. The audited accounts of the company for FY20 reflect the sustained business and financial risk profile of the entity. The governance framework is expected to evolve, going forward. The control environment may be strengthened by harnessing the audit quality and adopting semi-annual accounts. The ratings are dependent upon the sustained positioning of the company in the industry.
The rating dependent on continued business activity and sustained operational capability. Adherence to sound financial discipline while capturing the market through competitive and efficient bids is pivotal for survival. Strengthening of the project pipeline is also essential 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 the 1960s. Significant projects to its credit are the Green Line BRTS from KESC Power House Chowrangi, Surjani to Municipal Park, Saddar Karachi, Construction of North Access Road (Package-II) from Baradam to Ashriat – 7.330 Km of Lowari Tunnel Project, Construction of G+14 Central Park Apartments at Bahria Town, Construction of BRTS Green Line, BRT Common Corridor, an Underground facility at M.A. Jinnah Road, Karachi, to name a few. The company has a two-member board. The management control is held 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.

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.