Rating Details	Rating Type	BFR
	Dissemination Date	Current (08-Mar-24 )	Previous (09-Mar-23)
	Action	Maintain	Maintain
	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. Syed Asim Zafar who owns the majority shareholding of ~80%. The remaining ownership vests with Mr. Kamran Ali Farooqi (10%), Ms
	Governance	The company has an adequate board structure comprising of three executive directors and two non-executive directors. Inclusion of independent representation may be considered to strengthen the governa
	Management and Client Services	The company has a lean organization structure with a qualified and experienced management team. Client services are considered good with online trading and mobile application availability. Research se
	Internal Controls and Regulatory Compilance	The rating takes into account an adequate internal control framework with the presence of the compliance and Internal audit department. However, there is a need to increase the depth and scope of both
	Business Sustainability	ZSPL has performed adequately during 1HFY24. The company reported a net profit of ~PKR 39mln in 1HFY24 (SPLY loss of ~PKR 3mln). The profits stem from realized and unrealized gains on proprietary inve
	Financial Sustainability	ZSPL engages in proprietary trading thus is exposed to market risk. A zero-leveraged capital structure is present; the company has an adequate equity base of ~PKR 251mln at end'Dec23 to resist market

Key Rating Drivers

Zafar securities (Pvt.) Limited ('ZSPL' or the 'company') has sustained its market position during 1HFY24. Effective management of its investment book resulted in healthy profit margins during the period. However, it is important for the company to diversify its revenue streams to better be able to face challenging economic conditions. Moreover, retention of key management personnel, improvement in client services, and profit sustainability remains vital.

About the Entity
	Legal Structure	Private Limited
	Year of Establishment	28-Jun-99
	Type of License	Trading and Self-clearing
	Majority Ownership	Mr. Syed Asim Zafar | ~80%

Regulatory Disclosures	Analyst	Applicable Criteria	Related Research
	Hassaan Ahmad Hassaan.Ahmad@pacra.com +92-42-35869504 www.pacra.com	Assessment Framework | Broker Fiduciary Rating | Jan-24	Sector Study | Brokerage & Securities | Jan-24

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