Press Release

VIS Reaffirms Broker Fiduciary Rating of Topline Securities Limited

Karachi, April 29, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed Broker Fiduciary Rating of Topline Securities Limited (TSL) at ‘BFR2’. Rating of BFR2 denotes strong fiduciary standards. Outlook on the assigned rating is ‘Stable’. Last rating action was announced on November 24, 2022.

The rating signifies sound governance framework, business and financial sustainability, management and client services and internal controls and regulatory compliance.

Topline Securities Limited (TSL), holding a trading and self-clearing licence, is engaged in the business of stock brokerage, commodity brokerage, underwriting, consultancy, book bidding, and advisory services. Shareholding of the Company is primarily vested with Mr. Mohammad Sohail, who also serves as the CEO of the Company. The Company provides both online and assisted trading services to local and foreign clients. TSL is a public unlisted company holding Trading Rights Entitlement Certificate (TREC) granted by Pakistan Stock Exchange Limited (PSX) as well as membership in Pakistan Mercantile Exchange Limited (PMEX). External auditors of the company are M/s Naveed Zafar Ashfaq Jaffery & Co. – Chartered Accountants, which are “A” rated on the SBP’s panel of auditors.

Assigned rating incorporates improvement in the board composition wherein number of independent directors have increased from one to two, reflecting positively on the Company’s governance framework. In addition, functioning of board committees also provide support to the same. Disclosure levels of the Company are considered sound. Management and client services are also sound, with various client facilitation tools and resources employed by the Company to support clients in executing transactions. Availability of research reports on various social media platforms bode well for the Company’s client services. Disaster recovery mechanisms are supported through the availability of offsite backups at third party warehouse. Internal control framework of the Company is considered sound. Enhancement in the scope of Employee Trading Policy (ETP) has been noted positively. Similarly, the Company’s internal audit and compliance department operate independently, boding well for the Company’s regulatory compliance.

Assessment of the Company’s financial profile reflects a rebound in the earning profile during 6MFY24 on the back of a resurgence in trading activity during that period. The Company’s operational efficiency is considered manageable while market risk remains muted as investments are largely in money market funds. Liquidity profile of the Company draws support from its liquid assets, providing sufficient coverage against its current liabilities. Capitalization indicators of the Company are characterized by low gearing ratio while leverage is increased at moderate levels. Going forward, growth in revenue as well as improvement in efficiency levels along with maintenance of capitalization and liquidity profile will remain important for the rating.

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


Applicable Rating Criteria: Broker Fiduciary Ratings:
https://docs.vis.com.pk/docs/BrokerFiduciary012021.pdf

VIS Issue/Issuer 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 .