Press Release

VIS Reaffirms Broker Management Rating of Standard Capital Securities (Private) Limited

Karachi, May 22, 2024: VIS Credit Rating Company Ltd. (VIS) has reaffirmed Broker Management Rating of Standard Capital Securities (Private) Limited at ‘BMR2’. Outlook on the assigned rating is ‘Stable’. Last rating action was announced on May 12, 2023

The rating signifies strong client relationship whereas external control and supervision framework is considered sound. Compliance and risk management, financial management, HR and infrastructure, internal controls and regulatory requirements are considered adequate.

Standard Capital Securities (Private) Limited was incorporated in 1998, providing full scale equity brokerage services to institutional as well as individual clients. Shareholding of the company is vested with members of the Chamdia family including the Chief Executive Mr. Naushad Chamdia. The company has three offices in Karachi and one in Sialkot. SCS provides both online and assisted trading services to its clients. SCSPL is a private limited company holding Trading Rights Entitlement Certificate (TREC) granted by Pakistan Stock Exchange Limited (PSX), and is registered with SECP to provide Trading & Self-Clearing Services. External auditors of the company are Kreston Hyder Bhimji & Co Chartered Accountants. External auditors belong to category ‘A’ on the approved list of auditors published by the State Bank of Pakistan (SBP).

Reaffirmation of the rating takes note of SCS’s strong client relationship management, sound supervision and adequate regulatory framework. The board consists of three members representing four board committees, inclusion of independent and certified director may be considered to enhance governance framework and prevent repetition in board committees. Rating also takes note of sound external control framework while internal control framework is considered adequate. Improving disclosure levels by adding the director's report and CEO's statement to the financial statements may be considered while internal control framework can be further strengthened through enhancing the scope of all internal policies. The assigned rating also takes into account the SCS’s adequate HR & infrastructure, compliance & risk management. Independent reporting of internal audit to the Board may be considered for enhancing transparency and overall risk management framework.

The Company’s overall business and financial indicators are considered adequate, During FY23, the Company’s earning profile came under stress owing to subdued market activity and decline in core brokerage income. However, end-HFY24, capital gain and gain on re-measurement of investments supported profitability. The Company’s cost to income ratio also witnessed improvement during FY23. Liquidity profile continues to remain sound while capitalization indicators remain adequate, gearing remained low albeit leverage depicts increase. End- HFY24 leverage was reported to be 1.75x (FY23 0.88x, FY22 1.83x) owing to increase in total liabilities. Liquidity profile continues to remain sound while capitalization indicators remain adequate, gearing remained low albeit leverage depicts increase. End- HFY24 leverage was reported to be 1.75x (FY23 0.88x, FY22 1.83x) owing to increase in total liabilities. Going forward, revenue diversification, improvement in capitalization and low market risk will remain important for rating.

For further information on this rating, please contact 021-35311861-64 or email at info@vis.com.pk.



Applicable Rating Criteria: Broker Management Ratings:
https://docs.vis.com.pk/Methodologies%202024/Broker-Management.pdf
VIS Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .