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JCR-VIS credit Ratins company Limited


Founder Shareholder - lslamic lnternational Rating Agency (llRA), Bahrain
Joint Venture Partner - Credit Rating & lnformation Services Ltd. (CRISL), Bangladesh
Member - Association of Credit Rating Agencies in Asia (ACRAA)


Date: December 7, 2018
Ref: IEL/BMR/0003

Confidential

Mr. Sardar Ali Wattoo Chief Executive Officer Integrated Equities Private Limited 202 Y Corrimercial, 1St Floor, DHA Phase III, Lahore

Broker Management Rating of Integrated Equities Private Limited

Dear Mr. Wattoo,

JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Broker Management Rating of Integrated Equities Limited(IEL) at BMR3++'. Outlook on the assigned rating is 'Stable'. The rating signifies sound continuity of internal control framework,client relationship management, risk management and HR & IT services along with adequate regulatory compliance levels and external controls. In line with lackluster stock market some weakening in financial management is observed.

The rating reaffirmation takes into account IRL's adequate board level governance. However, we opine that increase in Board size along with appointment of an independent director would enhance corporate governance standards. Chairing of Board Audit Committee (BAC) by an independent director and the constitution of board level Risk Management Committee would further improve the same. Moreover, we have positively noted that the company has a sound customer relationship management system in place.

The internal control environment is adequately supported by defined internal policy framework. However, compliance and risk management function may be segregated for clarity and control purposes. We have noted that the consultancy function has been the profitability driver of the institution; however, weakening of the same adversely impacted the top line in the outgoing year.Given the fixed nature of operating expenses, earning profile of the company has remained under pressure. However, we understand that support from one-off gain from sale of assets led to marginal profit for the year.

Please note that ratings continue to be under surveillance during the period of the contract. Moreover, please note that in terms of the regulatory requirements, ratings would require a mid-term review. In view of this, mid-term review of the assigned rating would fall due in June 2019. According, we would seek your cooperation for updating information available on the system. Furthermore, please notify JCR-VIS of any material development that may impact the risk profile of the institution.

We would also like to take this opportunity to thank the management of IEL for the cooperation and courtesy extended to us during the course of the rating assignment

With kind regards,

Jamal Abas Zaidi
Advisor


Head Office : VIS House, 1281C,25lh Lane Off. Khayaban-e-lttehad Phase VIl, D.H.A. Karachi. Ph: (92-21) 35311861-66 Fax: (92-21) 35311872-73
Lahore : VIS House, 431 - Block-Q, Commercial Area, Phase ll, DHA, Lahore. Ph: 042-35723411-13 Fax: 042-35708410 Website: www.jcrvis.com.pk

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