Lahore, December 21, 2021 (PPI-OT):The assigned rating of Spectrum Securities Limited (“SSL” or the “Company”) incorporates adequate ownership structure and governance framework. Increasing the board size and inclusion of independent director in board level committees may result in improved governance framework. SSL’s services mainly comprise of equity brokerage where it has a good mix of corporate/institutional and HNWI’s. SSL has adequately defined organizational hierarchy where the responsibilities and reporting lines are structured. SSL provides prudent services to its clients with access to technical and fundamental reports and a dynamic reporting mechanism.

Client services may be further enhanced through complaint tracking system. SSL has a sound IT infrastructure supported by established IT policy. Contingency measures are in place with off-site data backup. The internal control and regulatory compliance is considered sound whereby the Company has established Trading Policy and Procedures to deal with any potential conflict with clients trades.

Segregation of Head of Finance and Compliance may strengthen the compliance function. The rating incorporates low leveraged capital structure of the Company. Timely materialization of outstanding receivables is important. At end-Jun’21, the brokerage revenue clocked in at ~PKR 118mln (SPLY: ~PKR 55mln) and the equity improved to ~PKR 187mln at end-Jun’21 (SPLY: ~PKR 135mln). Improvement in equity through further capital injection and reduction in outstanding receivables will be important, going forward.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com