Press Release

JCR-VIS Assigns Initial Entity Ratings to Adam Securities Private Limited

Karachi, December 30, 2015: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has assigned initial entity ratings of ‘BB/A-3’ (Double B/A-Three) to Adam Securities Private Limited (ASPL). Outlook on the assigned ratings is ‘Stable’.

ASPL, incorporated in 2001, provides equity brokerage services to domestic retail and institutional clients. Shareholding structure of the company is split between two individuals which includes the CEO / Chairman. Major portion of clients of ASPL are retail in nature. Market penetration is primarily driven by the small paisa per share commission charged (on retail); market share has grown year on year to reach 11% for FY15 (FY14: 10%, FY13: 8%). The same however has not translated into high brokerage commission earnings, with the company reporting a meager positive bottom line in the last two years as opposed to losses from FY10-FY13. Equity base of the company was reported at Rs. 384m at end-FY15 (FY14: Rs. 397m) on account of sponsor support and accumulated profits.

There is room for improvement in the procedure and policy framework of the company, addressing weak organizational structure and segregation of duties. Though aging profile of trade debts remain satisfactory, concentration and growth in the same exposes the company to considerable market risk. The company has increased reliance on short term borrowings to meet running finance needs.

Going forward, management intends to improve presence in the market through business operation expansion via underwriting activities.

For further information on this rating announcement, please contact the undersigned (Ext: 516) or Mr. Jazib Ahmed, CFA (Ext: 510) at (021)35311861-70 or fax to (021)35311872-3.

Jamal Abbas Zaidi

Applicable Rating Criteria: Methodology - Securities Firms Rating (May 2015)

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 2015 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .