The Pakistan Credit Rating Agency Limited
28-Feb-19
Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | Corporate Ratings | Jun-18
- Methodology | Criteria | Rating Modifier | Jun-18
- Methodology | Correlation Between Long-Term And Short-Term Rating Scale | Jun-18
Related Research
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PACRA Assigns Initial Entity Ratings to M.A. Aleem Khan and Sons (Pvt.) Limited
| Rating Type | Entity | |
|
Current (28-Feb-19 ) |
||
| 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 projects. MAAKSONS has a no limit contract license. Construction business is dependent on award of contract works. Given the slowdown in the economic activity, maintaining a continued healthy business pipeline would be a challenge. Alternatively, the company has a portfolio of properties. The envisaged strategy is to develop these properties to ensure revenue sustainability in the future. Properties are diverse and furnish different propositions to translate them into revenue streams. Although FY18 depicted robust results, the latest numbers reflect squeeze. The company has a mix of funded and non-funded banking lines to facilitate its business. The control environment may be strengthened by harnessing the audit quality and adopting quarterly accounts. The company has a defined strategy of building assets, required for its operations as well as investment purpose, through surplus cash. Occasionally, funded facilities are also utilized to finance acquisition.
The ratings are dependent on sustaining a steady revenue stream and financial risk profile. Any prolonged downturn in subdued business can negatively affect. 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 and in DHA Lahore, 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 and a housing society - Prism 9.
BOD comprises nine members, all of whom belong to the sponsoring family. They collectively have complete ownership of the company.