Press Release

JCR-VIS Reaffirms Ratings of LSE Financial Services Limited

Karachi, August 31, 2017: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed entity ratings of LSE Financial Services Limited (LSEFSL) at ‘A/A-2’ (Single A /A-Two). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on July 4, 2016.

Ratings incorporate overall low risk appetite of the company emanating from prudent policy on gearing, conservative investment policy, and policy of not engaging in underwriting business. Ratings also take into account stable revenue sources of the company. Core business includes management of lease and rental operation of LSEFSL Building. In addition to this, the company has made long term unquoted investments.

Rental income is the main source of income for the company; it has continued to increase on a timeline basis. In addition, income from Margin Trading System (MTS) has started contributing toward the bottom line, though its proportion in total income has remained modest. Management fee of funds managed by the company continues to support the bottom line. Share of profit of associated companies increased during 9MFY17 on the back of higher related profits. Going forward, income levels are expected to increase on account of rentals from the availability of south tower beginning Jan’18.

Liquid assets of the company have been declining on a timeline basis. However, overall liquidity profile is considered sound with liquid assets representing around 2.5x of total borrowings at end-9MFY17. Capitalization levels are considered strong in relation to risk carried on the balance sheet.

There has been a change at the helm of affairs. Mr. Farid Malik has been appointed as the CEO of the company in April 2017. Mr. Malik has a sound educational background with a career span over two decades. Sustainability in the senior management would play a pivotal role in effective implementation of business strategy.

For further information on this rating announcement, please contact the undersigned (Ext: 501) at 021-35311861-70 (10 lines) or Mr. Maimoon Rasheed at 042-35723411-13 or fax to 021-35311873.

Javed Callea

Applicable Rating Criteria: Non-Bank Financial Companies (March, 2005)

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 not an NRSRO and its credit ratings are not NRSRO credit ratings.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 2017 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited