Press Release

VIS upgrades Broker Fiduciary Rating of Adam Securities Limited

Karachi, June 20, 2024: VIS Credit Rating Company Ltd. (VIS) has upgraded the Broker Fiduciary Rating of Adam Securities Limited (ASL) from ‘BFR3++’ to ‘BFR2’. Rating of BFR2 denotes strong fiduciary standards. Outlook on the assigned rating is ‘Stable’. Last rating action was announced on December 28, 2023.

The rating signifies sound internal controls and management, client services, business & financial sustainability and ownership and governance.

Adam Securities (ASL) was incorporated in 2001 as a private limited company and subsequently became a public unlisted company in 2016. ASL is principally engaged in provision of equity brokerage services to domestic retail and institutional clients. Major shareholding of the company is vested with Mr. Noman Abdul Majeed who serves as a director of the Company. ASL is a Trading Right Entitlement Certificate (TREC) holder of Pakistan Stock Exchange. The Company is also a Member of Pakistan Mercantile Exchange Limited (PMEX). External auditors are M/s Baker Tilly Mehmood Idrees Qamar Chartered Accountants. Auditors belong to category ‘A’ on the approved list of auditors published by the State Bank of Pakistan (SBP). ASL operates through its head office based in Karachi.

Rating takes note of the Company’s sound ownership, internal controls and governance levels. At present, the Company has 5 board members including two independent. Board performance remains satisfactory, however addition of certified directors may be considered. Rating also takes into account the Company’s management and client services. The Company has been undertaking research for clients, however, sharing the same on the Company’s website may enhance client experience. Establishment of a separate risk management function is noted positively. Overall regulatory compliance and control framework is considered sound, however, increasing the frequency of review of internal policies and order recording may further strengthen internal control framework.

Assessment of financial profile of the Company indicates improvement in the Company’s profitability due to high brokerage revenues and gains against debt securities. The cost-to-income ratio indicates a declining trend. Liquidity profile of the Company remains sound. Market risk is manageable given greater proportion of investments are held in government securities and mutual funds. Capitalization indicators are also within reasonable range. Going forward, diversifying revenue streams while maintaining low cost to income ratio and gearing and leverage will remain important.

For further information on this rating, 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

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 .