Press Release
VIS Reaffirms Broker Fiduciary Rating to Darson Securities (Private) Limited
Karachi, April 22, 2025: VIS Credit Rating Company Ltd. (VIS) has reaffirmed Broker Fiduciary Rating of Darson Securities (Private) Limited (‘DSL’ or ‘the Company’) at BFR3+.Rating of BFR3+ denotes good fiduciary standards. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on December 28, 2023.
The rating signifies adequate business and financial sustainability as well as satisfactory ownership and governance framework. Internal controls and regulatory compliance are considered sound while management and client services are strong.
DSL is operating for over 20 years, providing brokerage services to both retail and foreign institutional clients. DSL’s operations are run through its corporate office in Karachi while the Company’s registered office is in Lahore. The Company has a network of 10 branches spread nationwide, DSL holds a Trading Right Entitlement Certificate (TREC) issued by the Pakistan Stock Exchange Limited (PSX) since 2000 for Trading and Self Clearing Services. External auditors of the Company are on ‘A’ category on the approved list of auditors published by the State Bank of Pakistan.
Assigned rating takes into account the Company’s ownership and governance framework, with a three-member board having no independent representation. Also, the Company has four board committees with same composition. Expanding the board and including independent, certified directors may enhance governance framework and bring diversification in the board committees. Management and Client Services of the Company are considered strong. However, improvement in investor grievance procedures may further enhance client services. Disaster Recovery measures of the Company may be further strengthened by outsourcing offsite backups to a third-party system. Internal control framework of the Company is considered sound, with key internal policies in place. However, enhancement in the scope of these policies may further improve the internal control framework.
Assessment of the financial profile reflects a strong rebound in the Company's profitability in FY24, driven by higher brokerage revenues, supported by a sizeable surge in industry volumes, with the momentum extending into 1HFY25. Consequently, the operational efficiency of the Company improved. Liquidity profile of the Company is adequate, while market risk remains low. The Company's capitalization profile is supported by nominal debt on its balance sheet, while its leverage indicator is at an adequate level. Going forward, diversification and enhancement in revenue base, along with improvement in operational efficiency, as well as maintenance of market risk, gearing and leverage ratios will remain important for 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