Rating Details	Rating Type	BFR
	Dissemination Date	Current (25-Jun-21 )
	Action	Initial
	Rating	BFR 3
	Outlook	Stable
	Rating Watch	-

Rating Rationale	Factor	Comment
	Ownership	CCPL is a family owned business and the stakes are being divided into two family members wherein the majority of shareholding lies with Mr. Umair Amanullah.
	Governance	BoD comprises two professional members having experience in the financial services, however, room for improvement exists in board size.
	Management and Client Services	CCPL's management team is well experienced. integration of technology into systems results in high efficiency and customer satisfaction.
	Internal Controls and Regulatory Compilance	The Company has established adequate risk management framework and has in house internal audit department to look after the internal controls.
	Business Sustainability	Ratings are constrained by the Company's significant dependence on equity brokerage operations, limited diversification of income streams.
	Financial Sustainability	The Company has a reasonable capitalization level with regulatory Net Capital Balance (NCB) standing at PKR 146mln at end-Dec'20. CCPL may have asset under custody of up to 25x of net worth.

Key Rating Drivers

The assigned rating of Cedar Capital (Pvt.) Limited (CCPL) is reflective of adequate ownership structure, conservative governance framework, good regulatory compliance level and prudent client servicing. CCPL’s services mainly comprise equity brokerage where it has competitive institutional clientele. The ratings incorporate the CCPL's low leveraged capital structure supported by sponsor’s loan. CCPL has closed its proprietary book to reduce the volatility in profits, hence less exposed to market risk. The ratings would remain dependent on the management’s ability to strengthen revenue base by augmenting consultancy and advisory services. Retaining market share and sustaining profitability from core operations remain critical. Meanwhile, upholding strong internal controls and diligent monitoring of risks is important.

About the Entity
	Legal Structure	Private Limited
	Year of Establishment	07-Feb-08
	Type of License	Trading and Self-clearing
	Majority Ownership	Mr. Umair Amanullah | ~74%

Regulatory Disclosures	Analyst	Applicable Criteria	Related Research
	Afnan Iqbal afnan.iqbal@pacra.com +92-42-35869504 www.pacra.com	Methodology | Broker Fiduciary Rating | Jan-21	Sector Study | Brokerage & Securities | Jan-21

Disclaimer

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