Press Release
VIS Reaffirms Broker Fiduciary Rating of Adam Securities Limited
Karachi, June 25, 2025: VIS Credit Rating Company Ltd. (VIS) has reaffirmed Broker Fiduciary Rating of Adam Securities Limited (“ASL” or “the Company”) at ‘BFR2’. Rating of BFR2 denotes strong fiduciary standards. Outlook on the assigned rating is ‘Stable’. Last rating action was announced on June 20, 2024.
The rating signifies sound internal controls and management and client services while business financial sustainability along with ownership and governance are also considered sound.
ASL was incorporated in 2001 as a private limited company and subsequently became a public unlisted company in 2016. ASL is principally engaged in provision of equity brokerage services to domestic retail and institutional clients. Major shareholding of the company is vested with Mr. Noman Abdul Majeed who serves as a director of the Company. ASL is a Trading Right Entitlement Certificate (TREC) holder of Pakistan Stock Exchange. The company is also a Member of Pakistan Mercantile Exchange Limited (PMEX). External auditors are M/s Baker Tilly Mehmood Idrees Qamar Chartered Accountants. Auditors belong to category ‘A’ on the approved list of auditors published by the State Bank of Pakistan (SBP). ASL operates through its head office based in Karachi.
The assigned rating takes into account the Company’s sound ownership and governance framework, comprising a five-member board of directors, including two independent directors, with three board committees chaired by independent directors. However, repetition of members across these committees has been noted. The rating also factors in the Company’s management and client services, supported by the provision of multiple online trading platforms and prompt trade alerts upon execution. On the other hand, delegating the roles of Chief Financial Officer and Compliance Officer to separate individuals may further strengthen the Company’s organizational structure. Overall, internal control and regulatory compliance are considered sound, with documented policies in place and no non-compliances reported by PSX as per the latest system audit.
The assigned rating also incorporates the Company’s financial profile. During FY24 and 9MFY25, the Company’s brokerage revenue rebounded strongly, in line with positive industry trends, while profitability was largely supported by capital gains, primarily emanating from ready future transactions. Operational efficiency weakened in FY24 but improved in 9MFY25. The Company’s liquidity profile is considered sound, and market risk is viewed as manageable, given the investment in equity securities relative to its equity base. Capitalization profile is supported by a low leveraged balance sheet along with higher equity base which has grown in line with the Company’s profitability over the years. Going forward, continued enhancement in profitability along with managing market risk as well as maintenance of liquidity and capitalization profile will remain important for the rating.
For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria: Broker Fiduciary Ratings:
https://docs.vis.com.pk/Methodologies%202024/Broker-Fiduciary-Rating.pdf
VIS Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf