Press Release

VIS Assigns Initial Broker Fiduciary Rating to Floret Commodities (Private) Limited

Karachi, Aug 5, 2024: VIS Credit Rating Company Ltd. (VIS) has assigned Initial Broker Fiduciary Rating to Floret Commodities (Private) Limited at ‘BFR3’. Rating of BFR3 denotes good fiduciary standards. Outlook on the assigned rating is ‘Stable’.

The rating signifies adequate ownership and governance structure as well as adequate business and financial sustainability. Also the management and client services and internal controls are considered adequate.

Floret Commodities Private Limited was incorporated in 2015, under the Companies Act 2017. The Company is involved in the brokerage of commodities through Pakistan Mercantile Exchange Limited (PMEX) and plans to expand its scope of services to equity market. The Company is currently in the process of acquiring a Trading & Self Clearing license from the Securities & Exchange Commission of Pakistan (SECP). External auditors of the Company are M/s. Nasir Javaid Maqsood Imran Chartered Accountants; a category ‘B’ auditors on the State Bank of Pakistan (SBP) approved list of auditors.

Assigned rating incorporates Company’s adequate ownership and governance structure. Presently, the Company’s board comprised of two directors, while inclusion of an independent director is under consideration. Also formulation of board level committees is in process to strengthen the governance framework. Disclosure levels are also considered adequate. Overall management and client services procedures are considered satisfactory. Internal controls are also considered adequate given that core internal policies are in place and other policies are being developed to further strengthen the control framework. While a commodity trading platform is in use, the Company is in the process of developing a trading platform for equity trading. Development of a full scope equity trading platform encompassing all client facilitation tools along with an operational research platform will remain important for the assigned rating.

Overall business and financial sustainability indicators of the Company are considered adequate. Assessment of the Company’s financials, including the upcoming equity brokerage business indicates that the cost to income ratio will remain on higher side due to higher expenses relative to recurring income. Liquidity profile and capitalization indicators are considered sound; however small equity base is a constraint to the rating. Going forward, improvement in Company’s earning profile along with diversifying business, improvement in market share and maintenance of liquidity and capitalization indicators will remain important for the rating.

For further information on this rating, please 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

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 .