Press Release

VIS Assigns Initial Broker Fiduciary Rating to Foundation Securities (Pvt.) Limited

Karachi, February 22, 2022: VIS Credit Rating Company Ltd. (VIS) has assigned initial Broker Fiduciary Rating of ‘BFR3+’ to Foundation Securities (Private) Limited (FSL). The assigned rating denotes good fiduciary standards. In line with VIS methodology, the outlook on the rating has been assigned as ‘Rating Watch - Developing’ on account of amalgamation of Askari Securities Limited (ASL) with and into FSL. Rating will be reviewed once amalgamation is finalized.

The rating signifies strong management and client services as well as internal controls and regulatory compliance. Ownership and governance, and business and financial stability is adequate.

Assigned rating takes into account FSL’s strong internal control and regulatory compliance and management and client services. Appropriate policies, procedures, and infrastructure are in place along with enhanced client facilitation resource including research analysis. Geographical presence of the company in multiple cities is noted. Rating also takes into account adequate governance framework of FSL. Limited board size and lack of independent representation limits formation of additional independently represented board committees. Addition of certified directors on the board is also considered important.

Assessment of financial profile reflects improvement in profitability of FSL driven by higher brokerage revenue in line with increased market activity in FY21. Uptick in the topline is also reflected in a lower cost-to-income ratio. However, rating is impacted by high reliance on equity brokerage segment and low capitalization level. Liquidity profile is adequate with liquid assets providing adequate coverage to total liabilities. Gearing ratio is low and manageable, while leverage exhibits some room for improvement. Diversification of revenue streams along with increasing market share and improvement in capitalization indicators will be important for rating, going forward.

FSL is registered with Securities & Exchange Commission of Pakistan (SECP) and holds a Trading and Self-Clearing (TSC) license and Trading Rights Entitlement Certificate (TREC) granted by Pakistan Stock Exchange Limited (PSX). External auditors of the company are Grant Thorton Anjum Rahman Chartered Accountants. External auditors belong to Category ‘A’ of State Bank of Pakistan’s approved list of auditors.

For further information on this rating announcement, please contact Ms. Sara Ahmed (Ext: 207) or the undersigned (Ext: 201) at (021) 35311861-66 or email at

Javed Callea

Applicable Rating Criteria: Broker Fiduciary Ratings 2021:

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2022 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .