Rating Details	Rating Type	BFR
	Dissemination Date	Current (13-Jun-23 )	Previous (13-Jun-22)
	Action	Maintain	Initial
	Rating	BFR 3	BFR 3
	Outlook	Stable	Stable
	Rating Watch	-	-

Rating Rationale	Factor	Comment
	Ownership	The rating incorporates the long-standing experience of the sponsor Mr. Ahfaz Mustafa who owns the majority shareholding of ~65%. Remaining stakes are divided among family members.
	Governance	Assigned rating takes into account governance framework consisting of two directors and one Board level committee. Inclusion of more board members along with independent representation may be consider
	Management and Client Services	The rating factor in a lean organizational structure comprising of a seasoned management team. The clients have been provided with access to online trading and in-house research services. The Company
	Internal Controls and Regulatory Compliance	The rating takes into account an adequate internal control framework which could be improved with the presence of an internal audit function. Separation of compliance function from finance is importan
	Business Sustainability	The Company relies on equity brokerage as the primary source of revenue. In line with the market activity, the revenue has declined during the 1HFY23. Diversification of product slate may provide supp
	Financial Sustainability	The Company is engaged in proprietary trading which exposes the bottom line to market volatility as could be seen from a loss after tax of ~PKR 26mln. A low leveraged capital structure brings comfort

Key Rating Drivers

The assigned rating incorporates a sound business acumen of the sponsor, a seasoned management team, and a low-leveraged capital structure. However, the rating is constrained by the governance structure and internal control framework which may be improved further. The rating is dependent on maintaining the market share, low leverage metrics, retention of key management, and, improvement and sustainability in the financial profile.

About the Entity
	Legal Structure	Private Limited
	Year of Establishment	06-Aug-04
	Type of License	Trading and Self-clearing
	Majority Ownership	Mr. Ahfaz Mustafa (~65%)

Regulatory Disclosures	Analyst	Applicable Criteria	Related Research
	Afnan Iqbal afnan.iqbal@pacra.com +92-42-35869504 www.pacra.com	Methodology | Broker Fiduciary Rating | Jan-23	Sector Study | Brokerage & Securities | Jan-23

Disclaimer

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