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They aim to be an organization that is founded on…

• Growth through creation of sustainable relationships with DSL customers.


• Prudence to guide DSL business conduct.
• A national presence with a history of contribution to DSL communities.

They shall work to…

• Meet expectations through Market-based solutions and products.


• Reward entrepreneurial efforts.
• Create value for all stakeholders.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 1
They aim to be peopling who…

• Care about relationships.


• Lead through the strength of DSL commitment and willingness to excel.
• Practice integrity, honesty and hard work.
• They believe that these are measures of true success.

They have confidence that tomorrow we will be…

• Leaders in DSL industry.


• An organization maintaining the trust of stakeholders.
• An innovative, creative and dynamic institution responding to the changing needs of
the internal and external environment

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 2
It gives me great pleasure to announce that Darson Securities Pvt Limited Pakistan is
gearing up to the challenges faced by the domestic brokerage industry due to innovations
and advances in the international brokerage world, which is the consequence of
globalization.

Now DSL core objective is to create an interest for equities market and with other
investment avenues. So let start from Reasons to invest in equities markets.
When we talk about a market there should be a buyer and a seller, the same concept applied
here in equities market. This market can also divided into two parts. One is primary market
of equities in which you just fill the company's subscription form at an offering price of
defined quantity of shares usually 500 share lots. The second is secondary market where you
can directly active for buying and selling of a particular shares known as stocks/equities
market known as Stock exchange where buyers and sellers execute their orders according to
their views and opinion on the particular shares or on overall stock market synchronized by
index methodologies.

You have heard about the phrase 'Higher the risk and higher the returns' but this does not
mean you work in irrational manners. Investment in equities market is a risky task as
compare to other markets. Grabbing maximum returns varies according to individual-to-
individual skills and personality for bearing risk for a particular time period depends on the
objective wanted to accomplish. Few individuals take this business as a part time job some
consider as full time job in both cases end point is to maximize the wealth or savings for
future better perspectives in life. But when we talk about to manage these funds in efficient
manners and overcome on hiccups of inherent total risk is not a game. We need to establish
an appropriate investment plan for getting higher returns with minimum owing risk or cost
of transaction.

In other words there is a rational way and irrational way to manage required returns but
making sense for defining rational and irrational way of individuals for any tradable
instrument is very difficult. Because in stock market at the time of trading execution order
there are reasonable sellers available at a particular price in time to sell and on other side
reasonable buyers are willing to buy at the same price the seller want to sell both at the time
of inference assuming right on the way but only one get capital gains and other get capital
losses. In DSL view it depends on your trading or investing style in stock market. Few of
trading or investing style are as follows.
follows.

Chairman& President

Zeeshan Dar

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 3
“The company is committed to provide excellent and personalized
professional service to all its clients. We believe that quality research is vital
for the success of any brokerage house and we aim to provide objective and
unbiased market research to DSL valued client.”

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 4
“Darson Securities mission is to become Pakistan's leading Brokerage
house, focusing on equity and debt organization and distribution, through
value-added products targeted at various institutions, and high net worth
individuals. By combining the activities of equity brokerage and investment
advisory, the company will be able to conduct diverse activities including
equity organization, debt distribution, fund management, etc. It is also in the
process of obtaining an Investment Advisory License from the SECP. This
license will entitle the Company to undertake all from of advisory service
including ones related to fund management.”

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 5
“Darson As a firm we obsessed with service quality as we recognize that
technical superiority alone is never enough to excel in a service industry. We
are committed to innovation and market leadership but we recognize that only
a serious commitment to customer service will allow Darson Securities to truly
distinguish itself.

Success in DSL industry is a function of customer satisfaction. Therefore, each


one of us believes that we must build the kind of relationships that last over
time; relationships that are based on mutual trust, confidence and professional
respect. We realize that the integrity of DSL people is crucial to building such
relationships. That is why extra care has been taken to recruit professionals
who are not only technically competent but have also exhibited the highest
possible moral and ethical standards.”

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 6
“Now Our core objective is to create an interest for equities market and
with other investment avenues.”

“In other words there is a rational way and irrational way to manage
required returns but making sense for defining rational and irrational way
of individuals for any tradable instrument is very difficult.”

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 7
Darson Securities (Pvt.) Ltd. is a corporate member of the Karachi Stock
Exchange and the Lahore Stock Exchange. Darson Securities (Pvt.) Ltd. was incorporated
in January 1998,
1998, at Lahore, Pakistan. It is a limited liability company formed under the
Company’s Ordinance 1984. Its services include equity brokerage, corporate finance,
portfolio management, online foreign exchange trading, and commodity trading. The
company offers brokerage services to fund managers, unit trusts mutual funds, brokerage
companies, high net worth individuals, and retail investors. Darson Securities (Pvt.) Ltd.
was formerly known as Darson (Pvt.) Ltd. and changed its name in April 2000. The
company was earlier incorporated as Darson (Pvt.) Ltd.Ltd. in March 2000 and the name
was subsequently changed in April 2000.
2000. Darson Securities (Pvt) Ltd. was incorporated in
the year 2000 having Company Registration number L-10156 of 1999-2000

The Darson Securities (Pvt) Ltd is the member company of Dollar East Group Of
Companies; the Group has a lot of projects in its list. Some major and prestigious projects
are as follows:

1- Gift University (The First Ever High Education Institute Based in Gujranwala)

2- Chain Designer (The Biggest Supplier of Gold Chains in Pakistan)

3- Dollar East Exchange Company (The top rated Foreign Exchange House)

4- Bio Vet (Pvt) Ltd (specialized in distribution of vet nary food and vaccination)

5- AWAS International (deals in Computer imports and distribution)

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 8
The paid up capital of the company was Rs. 20 million with corporate membership at
the Lahore stock Exchange. Darson also acquired a corporate membership at the Karachi
stock Exchange and has been operational since September 23, 2002. The paid up capital of
the company now stand at Rs. 120 million, with the authorized capital at Rs. 200 million.
The sponsors realize the need to enhance the capital base further and have decided in
principle to increase it to Rs. 700 million through IPO by next year.

Number of Share held by Shareholder:

Name Amount of Share Capital

Sabahat Dar 6,000,000


Imrana Farooq 5,990,000
Malik Nadeem Asghar 5,500,000
Malik Waheed Asghar 5,500,000
Shameem Akhtar 5,000,000

Hence this is the total division of paid up capital of the Company.

- Now of the Company is Rs-200 Million;

- The Capital of the Company was Rs-48 Million at the Time of


Incorporation.

- Later it was increased to Rs-70 Million.

- Now a day the Company has paid up capital of Rs-120 Million.

The division of Paid up Capital and shareholding patron among


Chief Executive, directors and shareholders
(Shares of Rs 100 each)

Name Designation Amount of Share Capital


(Figures in Rs)
Zeeshan Dar Chief Executive 27,500,000
M. Anwar Dar Director 9,000,000
M. Farooq Dar Director 15,500,000
Madam Robina Mehmood Director 5,010,000

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 9
The company has eight branches in Pakistan, with head office at Lahore, Corporate
office at Karachi and regional office at Gujranwala and Multan, others sales office include
one in Lahore and three in Karachi. Darson Securities is own subsidiary of Credence Group,
a well diversified business family with active interest in money exchange, equity broking,
software development, educational institution, imports/ distribution and gold chain
manufacturing. Mission Darson Securities mission is to become Pakistan's leading
Brokerage house, focusing on equity and debt organization and distribution, through value-
added products targeted at various institutions, and high net worth individuals. By
combining the activities of equity brokerage and investment advisory, the company will be
able to conduct diverse activities including equity organization, debt distribution, fund
management, etc. It is also in the process of obtaining an Investment Advisory License from
the SECP. This license will entitle the Company to undertake all from of advisory service
including ones related to fund management. The company is committed to provide excellent
and personalized professional service to all its clients. We believe that quality research is
vital for the success of any brokerage house and we aim to provide objective and unbiased
market research to DSL valued client.

Head Office Corporate Office

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 10
Contact Person:
Zulfiqar Ali Contact Person:
Room No. 102, 1st Floor, M. Saqib Islam
Lahore Stock Exchange Building, Room No. 808, 8th Floor,
Lahore, Pakistan. Business & Finance Centre,
UAN: 111-900-400 I.I. Chundrigar Road,
Ph: +92-42-6317111, 6366655 Karachi-Pakistan.
+92-42-6316777
Ph: +92-21-2470755-57

Karachi Office
Lahore DHA Office Gujranwala Office
Room # 808, Business & Contact Person Contact Person:
Finance Centre,
Mohammad Asif Mr. Waheed Asghar Malik
I. I. Chundrigar Road, T-23, Phase II, Office No. 3, 1st Floor,
GDA, Trust Plaza,
Commercial Area DHA,
Karachi, Pakistan
Near General Bus Stand,
Lahore Pakistan.
Phone: 92 11 190 0400 Gujranwala Pakistan.
Ph: +92-42-5743181-84
Ph: +92-553-732961-64
Fax: 92 41 247 1088 Fax: +92-42-5743185
Fax: +92-553-732965

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 11
CHAIN DESIGNER

Manufacturing of quality gold chains Chain Designer is Pakistan’s largest manufacturer of


quality gold chains. The company has captured a big share of the Domestic Jewelry market
and its products are exported as well. The company was established in 1999, with a paid-up
capital of Rs. 20 million.

BIO VET LTD.

Importers of Poultry Biologics and Pharmaceuticals. Bio- Vet is the single largest distributor
of poultry vaccines and other medicines in Pakistan as well as several countries in the
Middle East; Established in 1984, the company has successfully expanded its operation
having 12 offices throughout Pakistan.

LINK MAZE (PVT.) LIMITED www.linkmaze.com.pk

Link Maze (Pvt.) Limited was incorporated in year 2004. The company deals in imports of
heavy construction machinery, scrap and many other industrial new and used items. Link
Maze has rich, varied and diversified experience in the field of Imports, Real Estate,
Construction and Power sector.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 12
Darson is sponsored by a well established group of Pakistan; commonly know as Dollar East
Group, with very successful business ventures in various fields including software
development, educational institution, import/distribution and gold chain manufacturing etc.
Mr. Anwar Dar is the chairman & Mr. Zeshan Dar is the CEO of the group . Presently
sponsor directors own majority of the Company’s equity equally, while the remaining
portion is held by Mr. Ghayas Uddin.

DOLLAR EAST EXCHANGE COMPANY (PVT.) LTD.

Dollar East Exchange Company (Pvt.) Limited is a leading exchange company providing
money exchange and remittance services in Pakistan. The company is one of the pioneers to
start currency exchange business in the country. It was amongst the first companies to
receive the license of money changer from State Brokerage house when this business was
regularized in 1992. The company currently operates a network of 15 branches which are
strategically located in all high potential areas of Pakistan and representative offices in all
over the world. The network of these foreign correspondents is being rapidly expanded to
provide remittance service in other countries of the world.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 13
ROSHNI HOMES
A Home for Orphans

At Roshni homes, we hope to support the international and national efforts to promote and
protect the Rights of Children. The main aim of the Trust is to ensure better socialization and
ensuring physical growth of the children who are without parental care. This is to be carried
out irrespective of their color, caste, creed, race, religious belief, ethnic background or any
other social status. We aim to provide services of the family, higher education, health,
shelter, recreation and food all under a friendly environment. We also hope to improve the
quality of current efforts to detect, treat and improve the quality of services rendered to these
destitute children. In addition to all this , the trust also aims to design and arrange
comprehensive training programs for professionals and concerned parties engaged in efforts
to deal with these children.

www.roshnihomes.org

GIFT UNIVERSITY: www.gift.edu.pk

Gujranwala Institute of Future Technologies.

GIFT is the group largest undertaking in provisioning quality education in Pakistan. The
state of the art campus at Gujranwala has started its operations offering courses in modern
disciplines such as computer Engineering, E- Commerce and Business Administration etc.
Punjab Education Department has also granted GIFT a university status.

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INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 15
MANAGEMENT STRUCTURE & HIERARCHY:

CHIEF EXECUTIVE

CHIEF OPERATING CHIEF OPERATING


OFFICER LHR OFFICER KHI

CHIEF MANAGERS CHIEF MANAGERS


Finance: Accounts: Finance: Accounts:
Sales: Human Sales: Human
Resource: Admin: Resource: Admin:
Online Trading: Online Trading:
Business Development: Business Development:
IT: IT:
Online Trading Online Trading

MANAGERS MANAGERS
Finance: Accounts: Finance: Accounts:
Sales: Human Sales: Human
Resource: Admin: Resource: Admin:
Online Trading: Online Trading:
Business Development: Business Development:
IT: IT:
Online Trading Online Trading

Non- Managerial Staff

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 16
The Chief Executive
Zeeshan Dar

Trading & Finance CDC &


Marketing Department Settlements
Department Department

1- Zulifqar Ali Zubair Ahmed Farhan Mir


(Senior Agent) (Finance & tax manager) (Manager CDC)
Corporate

2- Mehram Ali Muhammad Saeed Faraz Haider


(Senior Agent) (Deputy Finance manager) (Settlements Manager)
Individuals

3- Ghayas-Ud-Din Haseeb Iqbal Izhar-ul-Haq


(Senior Agent) (Accounts Officer) (Deputy manager CDC)
Corporate-Karachi

Nasir Hussain Toqeer Butt


(Assistant to finance manager) (Assistant to CDC manger)

The Darson since its incorporation has been showing excellent performance in share
brokerage business, the management of the company which include

1- ZEESHAN DAR (Chief Executive)

2- GHAYAS-UD-Din (Chief operating officer) at Karachi Office

3- ZULIFQAR ALI (Chief operating officer) at Lahore office

Zeeshan Dar (Chief Executive Officer)


The Chief Executive Officer of DSL, Mr. Zeeshan Dar is currently heads the Board. He has
more than 8 years of finance and marketing experience with his own family business “Dollar
East”. Mr. Dar completed his MBA with major in finance from an Australian University. Mr.
Dar has been actively involved in Karachi stock Exchange since 1996. He is also responsible
for the management of the group portfolio.

M. Ghayas Uddin (hief Operating Officer)


Mr. Muhammad Ghayas Uddin, has had 12 years of experience in stock broking business
with Citibrokerage house and various brokerage houses. He was involved in product sales
and managing the unit’s client base and settlements desk for foreign equity investments in

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 17
both primary and secondary market transactions and was instrumental in re-engineering
control and management systems. His experience includes exposure to all the local, foreign
and operational aspects and is fully conversant with all financial matters related to equity
trading operation. He holds a M.Com degree from the University of Karachi.

Saqib Islam (CFO)


Mr. Saqib Islam is one of the pioneer team members and integral part of DSL. Right from
the start of Darson’s borkerage activities at Karachi Stock Exchange, he provided strategic
management of accounting, finance functions and risk management controls. His financial
management abilities in the fields of due-diligence, compliance and MIS, helped DSL to
develop a competitive product offering.

Tariq Hussain Khan, Head - Portfolio Management


Services
Mr. Tariq Hussain Khan has over 15 years of experience in capital markets. His last
assignment was at Elixir Securities (Pvt) Ltd as Head of Portfolio Management Services.
During his career Mr. Hussain has worked at some of the leading brokerage houses and asset
management companies in the country. His core expertise is research analysis and portfolio
management and during his career he has completed in-depth analysis on economy and
various sectors such as brokerage houses, cement, textile, fertilizer, automobiles, etc. Tariq
brings with him strong fundamental & technical qualifications, allowing him to implement
long-term and short-term investment strategies. By qualification, he is an MBA in
Brokerage & Finance (PIMSAT).

Aftab Merchant, Head - Corporate Sales


Mr. Aftab has been associated with Pakistani capital markets since 1998, working for both
local and multinational firms. His expertise includes forex, private equity, corporate finance
and equity sales. Prior to joining Darson Securities (DSL) he served as Head of Brokerage,
Escorts Investment Brokerage house. Over the years Aftab has been an essential part of
every institution he has been associated with. He holds an MBA in Marketing from King's
College, UK.

Saad Mehmood, Head - Business Development & Strategy


An ex-commercial brokerage houseer by profession, Saad joined DSL in 2008 and has been
a vital part of the firm. Holding a Bachelors degree in General Business from Oklahoma
(USA), Saad has experience in sales, services and management. During his brokerage tenure
he served as a Branch Manager for prominent institutions such as Union Brokerage house,
Standard Chartered Brokerage house and NIB Brokerage house.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 18
Muhammad Akhtar, Head - Online Trading
Mr. Akhtar has more than 5 years of experience in online brokerage automation, operations,
sales & marketing. Prior to joining DSL he was working with ApplicationXS (Pvt) Ltd., a
pioneer of online trading systems in Pakistan, as manager sales & marketing. There he
gained invaluable knowledge of retail brokerage through online trading services and helped
implement them at leading brokerage houses.

Dil Awayz Ahmed, Manager - Finance & Admin


Mr. Dil Awayz is a pivotal team member of DSL as well as one of the pioneers. He is well
versed in corporate issues related to the brokerage industry. His core responsibilities include
managing all accounting functions of DSL and to liaison with brokerage houses &
regulatory authorities. Throughout his career Dil Awayz has dealt with all responsibilities
with utmost competence and professionalism. He holds an M.Com degree from Hailey
College of Commerce, University of Punjab and has recently undertaken CA certification.

Shiraz Ali, Head - Information Technology


Shiraz has vast experience in IT networking which has been crucial to DSL’s success. His
technical skills have played a vital role in the development of the firms IT infrastructure. He
holds a MSC in Information Technology from University of Karachi.

These all are the dedicated members of this team and all these persons have excellent
experience of stock market trading and making their best for better results of company’s
portfolio.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 19
The company has a flat structure and modern horizontal style of management exits in the
company, the Chief Executive of the Company is sitting at Lahore in head office and
the Saqib Islam (Chief Finance Officer) of Karachi branch mainly handles the Karachi
office.
There are two main shares trading agents in Lahore office acting on company’s behave
having many corporate clients for shares portfolio.

The names of these two agents are:

1- Zulifqar Ali Anjum

2- Mehram Ali

Mr. Zulifqar Ali Anjum is a very senior agent and having many prestigious investment
Companies in clients list including

1- Al-Khair Five Star Foam,


2- Crescent Investment Brokerage house,
3- Switch Securities,
4- First Pakistan Securities Ltd,
5- Wasiullah Khan Securities
6- Arif Habib Securities. And many other Corporate Clients

Mr. Mehram Ali is mainly dealing with individual clients of the company.

Mr. Ghayas-UD-Din is the main trading agent at Karachi Office

Mr. Farhan Mir is CDC manager and deals with the shares incoming and out going
deliveries, which has to give or take from the National clearing Company.

The company has to take and give the deliveries of the shares which take place due to the
trading of shares and whose settlement take place due to T+3, Spot And T+1 trading of the
clients, all these settlement is responsibility of CDC department.

The company has a strong internal control relating to the reconciliation of the Stock of
shares available in- individual CDC A/C and the holding of the clients; the reconciliation
takes place on weekly basis.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 20
Mr. Faraz Haider is the Settlement manager,
manager, his duties include the receiving and payment
of the share price from the clients for the delivery of shares, and also the commission slab
rates with the new clients.
The statement services of the company provide the facilities of giving the confirmation of
the transactions and ledger balances to the clients. The corporate clients have certain limit of
the balance retaining say Rs-100, 000/-. They pay the remaining amount through cross
cheque.

The company has huge amount available for maintenance of its portfolio, at this time
company has a portfolio of Rs-50 Million,
Million, the company earned a capital gain of Rs 4 Million
this year and 2.5 Million last years.

Primary market is very rewarding and need intensive capital investment in Pakistan and
all over the world; usually the prices of securities are less in primary market and best time
for investment in some special securities in this time, the always tries to avail such
investment opportunities.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 21
“An organization without product is like an individual without
his/her aim of life”

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 22
The company is committed to provide excellent and personalized professional service to
all its clients. It believes that quality research is vital for the success of any brokerage
house and it aims to provide objective and unbiased market research to its valued clients.
Its product range has been structured such that a sustained growth in revenues can be
maintained.

Product offering will include the following:

• Equity Brokerage
• Equity Research
• Portfolio Management
• Investment Advisory
• Debt Advisory
• Asset Management
• Corporate Finance
• Online Forex Trading
• Personalized Services

The growth and structural change in Pakistan’s financial and capital markets have created
significant opportunity for properly focused “financial house”. Darson Securities objective is
to become a highly specialized equity corporate finance house, and public sector of Pakistan.
Darson has primarily focused on equities sales and trading and has been successfully
offering brokerage facilities to hundreds of satisfied retail clients and some of the
institutions namely.

Equity Brokerage

DSL has maintained an untarnished reputation for excellence as a full-service broker. DSL
commitment to providing DSL clients with superior investment advice, attentive customer
service, and excellent trade executions continues to provide the foundation for DSL success
in the brokerage services industry. DSL customers are fund managers, unit trusts mutual
funds, brokerage firms, high net worth individuals and retail investors.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 23
Equity Research

Fundamental Research:

We realize that credible research is vital for the success of a securities house. We view
research as an essential pillar supporting DSL full-service platform and believe that the
quality of DSL research will distinguish us from DSL competition. Consequently, we place a
lot of emphasis on providing reliable, accurate and up-to-date research.

To achieve this we have staffed DSL research department with high quality professionals
and provided them with some of the best technology available around.

So understanding that every investor’s needs and goals are different, we provide a
comprehensive set of research reports, so that you can make the right investment decisions
regardless of your investing preferences!

Morning Glimpse

Morning Talks is a daily publication which covers daily news, current issues, political and
economic events, payouts and expected announcements of particular stocks.

Evening Glimpse

This document discusses precisely overall intra-day trading activity with DSL comments on
important events on that day and reasons behind the price fluctuation of various stocks.

CFS & Market Information

This document discusses released and unreleased amount acquired by the investors for
financing themselves.

Technical Analysis

Milestone (Tech Paper)

Overall general trend, weekly and daily stocks trading inferences.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 24
Parameters for trading

Yesterday's price parameters, support and resistance levels. These all numbers work
interchangeably, as support and resistance mechanism helpful in trading.

Performance sheet

Different important numbers that gives you an idea on a period basis of specific stock is
basically performing and its momentum. Also provides you a clue for accumulation or
distribution hints.

Financial Portal

Financial Portal with features that include do-it-yourself technical analysis and historical
data of listed companies for in-depth analysis.

Portfolio Management

DSL portfolio management and investment advisory services are structured to provide high
returns while maintaining a strict control over capital preservation and liquidity. These
products will be targeted towards individual and institutional investors on a discretionary
and non-discretionary basis and will include both money and capital markets instruments.
Given the experience of Darson Securities’ personnel in this area we expect to introduce
innovative, low risk financial products that will allow us to meet the individual investment
needs of DSL customers

Corporate Finance

DSL top management has unmatched network of relationships with leading corporations of
Pakistan. These relationships have been honed to a point where we virtually act as
permanent advisors to such corporations. Such unlimited access gives us a tremendous
competitive advantage when originating corporate finance transactions.

DSL corporate finance activity is aimed at assisting private and public sector companies to
formulate and execute plans for raising equity and debt capital. We also provide advisory
services with regard to their existing financial and capital structures. Specific capital markets
products include advisory and private placements of new and existing shares, underwriting
of public issues and arranging short and long term commercial debt and trade finance.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 25
Commodity Trading

www.ncel.com.pk

Darson is also member of National Commodity exchange of Pakistan, and offers its clients
commodity trading facility in NCEL, a world-class commodity futures trading platform to
trade in a wide spectrum of commodity derivatives.

Online Forex Trading

DSL sponsor, Dollar East, one of the largest exchange companies of Pakistan, on line
foreign exchange web site to help the importers, exporters, and general public to buy sell
remit or send money overseas online. We are in touch with State Brokerage house of
Pakistan on this issue and once granted permission will launch a secure web site.

Personalized Services

Experience ease and convenience - from opening your account to accessing top research. To
all investors, we offer investment guidance and portfolio planning.

DSL goal is simple: to give you everything you need to do better.

Whether you want to manage your portfolio yourself or have us professionally manage it,
you’ll receive one-on-one investment guidance and portfolio planning from an experienced
investment professional.

At Darson, we believe that no matter how you choose to work with us, you deserve a
personal relationship based on respect and listening. It’s the foundation from which we’ll
support your financial needs and goals.

Enjoy the benefits of a full-service broker—without high prices or fees. At Darson, it’s DSL
belief that you should always enjoy low, easy-to-understand prices and superior service with
no compromises. Simply put, you get more for your money here.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 26
“Control can be kept through the feedback of activities performed”

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 27
Equity Brokerage

DSL has maintained an untarnished reputation for excellence as a full-service broker. DSL
commitment to providing DSL clients with superior investment advice, attentive customer
service, and excellent trade executions continues to provide the foundation for DSL success
in the brokerage services industry. DSL customers are fund managers, unit trusts mutual
funds, brokerage firms, high net worth individuals and retail investors.

Functions of Finance Department of Brokerage House and


Information flow at the end of trading day

Broker’s own
database software

Take the Back up of the entire trading transactions of that particular brokerage house, from
the central system of stock exchange which have been take place during the trading day. The
system of the brokerage house is updated accordingly.

The reconciliation between the Lahore stock exchange and brokerage house information
system for the settlement figure of the trading day and confirmation of the deliveries of the
final settlement .

LSE central data base software has record


of the entire transaction take place between
all brokers

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 28
Investment Advisory

Investment Advisory

Investing is a part of finance in which you manage savings or excess savings amount to
provide a safeguard against strategic economic down falls impact on the particular country
currency in future. Therefore some portion of the investment management consider as an art
and some portion as science. We believe you don't need much convincing about the wisdom
of investing. However knowledge about the subject is your power more learning more
perfect in managing investment amount in different investment avenues.

In this the key of success is to achieve your objective in consistent manners through
assimilating strategies successfully that made earlier before entering into investing
obligations, which is not a game. But your right decisions on a right time will make you a
winner to get higher returns from different investment avenues in comparison to your annual
required rate of return. In Pakistan required rate of return for developing portfolio is range
from 25% to 30%. If you are novice at investing terms such as Stocks, Bonds, Mutual funds,
Money market instrument, Commodities, Financing mode for carry over open transaction
over a period of time, Graph patterns, P.E ratios, Capital gain/loss, Risk, Yields may sound
Greek and Latin. Relax you will become familiar with these terms in this course ahead.
Being enthusiastic about getting started is the first step, though some hitch or anxiety at the
first instance will hold your head. But as soon as you aware how to invest in efficient
manners will make you aweless. That's why DSL investing course begins with a dose to
encouragement with reasonable time and focus on discipline. There is no guarantee or
warranty to find out the right moves in tradable instrument markets. But you can mange
your trades wisely to find the right move or direction of the tradable instruments in the
market. Patience and motivation to icon your savings across a portfolio of securities depends
on your own bespoke nature that suits your age and risk profile. This will boost your
revenues at the same time cushion you against any major losses. Investing is not a gambling;
neither a speculation; nor you need to put the money into the 'Next Info system,' without
measuring monetary benefits or having intention to make killing and creating problems for
others. It's all about taking reasonable risk to mature steady rewards / investment returns.

Trading or investing in capital, financial and commodities markets is one way to achieve
these goals. Irrespective of whether, you work as a full-time trader/investor or a part time
trader. If you do not have discipline in properly timed work you always do mistakes, same
like you need discipline in this risky business where money flows directly from few seconds
to years. You must have mission of rules in your mind for making inferences in these
markets and should avoid following mistakes.
“Poor understanding and knowledge about tradable instruments in these markets will dry
your capital amount. Means you should have knowledge about Fundamentals and Technical
of the instruments.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 29
Because every economic activity starts from country economy. In both analyses we need
Growth rates of particular sector, Government policies towards particular sector and Federal
Brokerage house activity for determining values and expected trading volume.
Therefore the definition of Fundamentals analysis would be "Predicating future price
movements from analysis of the fundamentals about the company or commodity in
question" is necessary for determining intrinsic values and assessing history of the
instruments for issued returns.
And the definition of Technical analysis is "The study of stocks and the overall market bases
on supply and demand. Technical analysis use charts of historical price and volume activity
to predict future price movements" is essential for evaluating real values and assessing
history of the instruments for capital gain returns.
Both studies have much significance if use in efficient manners. The Mechanics of these
studies is the way, to implement sequential approach for analysis of any instrument. In
Fundamentals we make sure consistency in earnings track record of the instruments and its
expected fair value of the instruments. While in Technical's we make sure the phase of
instrument price present on time scale? How much the risk involve in it? What will be the
real value expected and the position size? When to execute trading order? Where to exit?

Under capitalization avoid to trade when you have not sufficient amount of capital to
locate margins or differences.

Unrealistic expectations i.e. do not involve in gambling or avoid to live in your own ego's,
always adopt realistic approach through taking advises from experts.

Lack of patience: This is necessary because its significance varies with your trading styles.

Lack of discipline:
discipline: You can manage this obstacle through developing your strategies for
different timeframe i.e. for either day. Near, short medium and long term purposes.

High-risk aversion: Although this is based on your capital amount and mental temperament
means varies individual to individuals. To handle the risk you should have to deep focus on
these instruments where you can get higher returns with minimum cost and low bearing risk.

The best time to invest is depending upon your personality and your risk bearing profile i.e.
how much you can take risk at the time of investing in any tradable instrument. But however
few researchers, market participants and history indicate some golden rules that applicable
for all types of investors or traders.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 30
“Once you studied the specific investment case as viable don't wait invest early.
" Invest regularly for short-term basis if offering better returns in future.
" Invest long-term basis always based on opportunity cost.

Continue reinventing your capital amount with return or income is known as compounding
concept of investments. This needs to develop discipline strategy to robust your income or
returns consistently in tradable instruments. By doing this you allow your investments more
time to grow especially in stock market where your country's economy momentum is on the
upward move. Under these conditions long-term investment consider reasoning your
country's economy mitigates the stock market volatility and the risk of losses.

Portfolio Management

DSL’s portfolio management and investment advisory services are structured to provide high
returns while maintaining a strict control over capital preservation and liquidity. These
products will be targeted towards individual and institutional investors on a discretionary
and non-discretionary basis and will include both money and capital markets instruments.
Given the experience of Darson Securities’ personnel in this area we expect to introduce
innovative, low risk financial products that will allow us to meet the individual investment
needs of DSL customers

Online Forex Trading

DSL’s sponsor, Dollar East, one of the largest exchange companies of Pakistan, on line
foreign exchange web site to help the importers, exporters, and general public to buy sell
remit or send money overseas online. We are in touch with State Brokerage house of
Pakistan on this issue and once granted permission will launch a secure web site.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 31
“Dealing with the field matters is just like as producing the resources for
new business.”

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 32
I did my internship in Darson Securities Private Limited DHA branch Lahore. Field
of activities in main branch is following:

• Equity Brokerage
• Investment Advisory
• Commodity Trading
• Portfolio Management

DSL with its sponsor, Dollar East, one of the largest exchange companies of
Pakistan, online foreign exchange web site to help the importers, exporters, and general
public to buy sell remit or send money overseas online.

The company is providing all types of brokerage functions relating to the ordinary
Shares, debentures and all type of fixed income and equity securities of the companies listed
on Karachi and Lahore Stock Exchange.

The company also providing the advisory services to the investors relating to
management of their portfolio of investments and has a large number of corporate and
individual clients, who prefer to liquidate their investment portfolio through the company.

Darson is also member of National Commodity exchange of Pakistan, and offers its
clients commodity trading facility in NCEL, a world-class commodity futures trading
platform to trade in a wide spectrum of commodity derivatives.

DSL’s portfolio management is structured to provide high returns while maintaining


a strict control over capital preservation and liquidity. Given the experience of Darson
Securities’ personnel in this area we expect to introduce innovative, low risk financial
products that will allow us to meet the individual investment needs of DSL customers

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 33
DSL is a brokerage house and it provides brokerage in different way it can be as an
intermediary while trading the commodities or while managing portfolio or advising
investments.

DSL is providing investment advisory to its clients and charging very low charges
for these services. Experienced and well educated advisory staff advises the client while
making any investment. The following are the things which I learnt during the internship.

Practical Experience and tips for investing wisely

Tips for Investing Wisely


When trading in the Stock Market, one should avoid,

1. Greed; being greedy can be a problem as it corrupts wisdom,


2. Making the same mistake twice,
3. Following the crowd, as the loss at the end is of the individual and not the crowd
itself,

“Putting all your ‘eggs in one basket” You should diversify and spread your investment,

4. Using rumors as tips, as this can result in losses. A tip can end up as a ‘pit’,
5. Emotions; being emotional can effect reasoning. Traders should use research backed
by fundamental reasoning.
6. Impatience; patience pays, perseverance gains,

Over borrowing; loan repayment is not an investment.

Intra-day trading style

Trading position open and square in 1 hours to end of trading session in stocks market.

Day trading style

Trading or Investment position open and square within the period of 1 day to 3 days or if
memento continue then 1 day to 5 days of the trading sessions in stock market.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 34
Swing based trading styles

Trading or Investment position open and square within the period of


1. Near-term basis 1 day to 15 days;
2. Short-term basis 1 day to 3 month;
3. Intermediate term basis 1 day to 6 month in stock market.

Pure investing style:

pPsition open with a view of longer term goals that consist of period from 12 month to
more than 5 years

Standard assumptions for pronouncing irrational way of investing or


trading in stock market.

However we can also define standard assumptions for pronouncing irrational way of
investing or trading in stock market as well given as follows.

Following tips of news or rumors in a hot stocks; overall stock market or relevant news to
the economy or government policies without considering the current state of price i.e. how
length of price appreciated or depreciated on the scale where the particular stock is present
at the moment are key questions need to solve.

Without studying particular stock or without considering investment consultant advises just
blindly or impulsively executing trading orders are the valid points will make your
investment capital shrink or the cause of abnormal losses.

Another most important point is the self-ego problem and betting with each other really hurt
in all types of businesses especially in stock market where the risk is higher in respect; will
some times brokerage houserupt you.

So avoid all above recklessness before executing trading orders in stock market.
Before discussing approaches to invest in equities we would like to clear your mind about
the size of the saving you allocate your money wisely that really lead to your financial goals.
As earlier we mentioned about savings basket in Pakistan is between 12% to 18%, which is
under valued this should be at least from 30% to 35% of your total monthly or yearly
income. Most of people do not know how to save there money for better future they
consume only on food maybe the reason can be just defined as inflation in prices in an
economy or due to under employment. But what about the rest of people found wasting their
money on unnecessary activities like Speculation activity without member ship card of any
tradable market, Involve in gambling, betting etc. These all activities have no productive
out-put in an economy ultimately idle money flows into limited hands and rest of the whole

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 35
population faces the consequences. In DSL opinion the person who wants to save for his
better life in future should divide into four saving baskets out of first three baskets you
should divide equally your primary income savings and the fourth basket you will reinvest
from second and third basket usually known as passive income.

Security Basket

This basket should be the first priority of any individual who wanted to grow his saving just
enough to keep pace with inflation in an economy. The type usually covers fixed income
instruments, which provide you a safe guard against any emergency matter. You are mentally
satisfied that you have access funds any time to handle hurdle. In all over the world the
benchmark of this basket is range between 1.5% to 4.5% annually but in Pakistan this should
be 5% to 18% or depends on the fixed income instrument % of return.

Growth Basket for short to intermediate term basis:

This basket is little risky then security basket but manageable for building your net worth
and positive cash flow assets that will lead your financial freedom. In this you put some
portion of your savings money into different tradable exchanges of the country, mutual funds
etc. The standard return from kind of basket in all over the world is range between 8.5% to
20% annually. In Pakistan this offers you high volatile returns range between 7.5% to 40%
that really highest as compare to other countries.

Growth Basket for Long term basis:

The concept of investment compounding apply to this basket accelerate the building of your
net worth & positive cash flow assets that will lead to financial autonomy. This covers the
developing wining portfolio of more than 10-stocks that offers you consistent annual
earnings records and payouts with managing stock prices appreciation and depreciation for
capital gains with perspective of more than 12 month to 10 years objective.

Luxury Basket

This basket should not come from your primary source of income but from the passive
income generated from aforementioned growth baskets. In this you save to indulge your
cumulative passive income into your dream assets. Like: Status maintenance, dream house
up gradation, luxury cars, jewelry, boats, paintings, antiques and precious metals etc.
Investing is a method of buying or selling assets in order to get capital gains or profits in the
form of reasonable income no matter in the shape of dividend, interest, rentals and gains due
to appreciation in prices over a certain period of time.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 36
Actually the company acts as an intermediary party between the purchaser and the
seller of the securities (shares or debentures) or any fixed or equity securities of a listed
company.

Nature of Investment Accounts of Investors

There are generally two forms of an account of an investor are maintained by the brokerage
house, one is called “Cash Position” of the customer and second is called the “Holding
Position” of the customer.

The “Cash position” shows the exposure limit of the client and shows how much the cash
and exposure deposit is needed by the client to trade his portfolio.

On the other side the “Holding position” of the client shows the worth of the shares and
investment of the clients in different companies.

One point that always should be kept in mind is that the Receivable limit of any client
should not be more than the holding position of the client.

While trading in shares during the trading hours company provide the facility of
“LEVERAGE” to the clients up to the 10 to 15 time of the cash balances deposited by the
client but at the end of the trading session the holding position should not be more than the
cash balance of the client.

The leverage not only increase the capacity of the client to trade in the shares but also
increase the brokerage revenue of the house, finally the client has to settle the delivery
position of the share according to the deliveries of the shares available to him in his
portfolio.

The company usually gives the margin equal to the four time of the deposit of the investors
for trading in shares. The higher the value of the share the more exposure a person will use,
so there is greater risks involved in high priced less stable shares.

The shares having good background of paying handsome dividend and strong financial
structure are considered “most favorite” in the eyes of the investors and portfolio managers
of the investment companies. The serious Mutual Fund mangers always take the bold step of
“delivery of the shares” on their realistic values and sell these deliveries on very high
unrealistic values of shares.

The difference earned due to the change in value of shares in “capital gain” which is total
exempt from the tax.
The Darson Securities (Pvt) Ltd provide the facility of investment advisory service to the
active traders of the shares. For increasing profitability of the portfolio of the investors the
company maintains a balanced leverage and high liquid financing, so that investors can
easily take the deliveries of the shares.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 37
Costs

Costs that are associated with stock dealing usually fall under the following heads:
Daily trade charges cost incurred by the investor for intra day transactions.
Badla charges are the charges incurred by the clients for carry over transactions commonly
known as COT.
Delivery charges cost incurred by the investor for delivery transactions. It is highly
recommended that the investors should have a proper understanding of the commission
structure of the brokerage service. The structure varies from broker to broker in most cases.
It is advisable that the investor should ask his broker about all the cost associated with stock
dealings to arrive at his net profit position Badla is a mechanism to carry forward a
speculative trade. It is also known as the Carry over Transaction (COT).

Investment Avenues

Investors can invest in their money in stock in following ways:

Shares: It is the direct mode of investment in which investor directly sell and purchase
stocks of various companies through the brokers or dealers.

BONDS AND LONG-TERM NEGOTIABLE INSTRUMENTS

In Pakistan Bonds structure has been divided into two parts. One is non-interest bearing
bond and the second is interest-bearing bonds.
Bond market in Pakistan is not being well established by the government of Pakistan but
regulates through Federal Reserve Brokerage house (State brokerage house of Pakistan).

Interest bearing Bonds

The Government issue savings bond named as PIB's that offers a fixed rate of interest over a
fixed period of time for the purpose of raising capital. Many people find these bonds
attractive because of fixed interest rates nature. On maturity date of bonds individual get his
principal amount that invested in along with fixed rate of interest amount. Cannot be
negotiable.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 38
Non-interest bearing bonds-Islamic bond (trust certificates):

Recently Government of Pakistan (GoP) has issued Islamic bond ever issued internationally
named as Sukuk bonds. Sukuk are Islamic shariat law compliant instruments. Islamic shariat
disallows payment of interest on any financial transactions. Because of this, Sukuk investors
will receive profit yielded by approved investments of the GoP.
The Sukuk bonds offered to state and government-backed entities and businesses turned out
to be the biggest investors like Asset managers, Islamic brokerage houses, trustees and other
brokerage houses with foreign currency price per purchase. In order to comply with Islamic
shariat, Sukuk bonds will be backed by state owned assets, including the 400-kilometer
Islamabad-Lahore motorway called M-2. The government's National Highway Authority
(NHA) administers the motorway, the best in Pakistan's motorway-highway networks. GoP
has formed Pakistan International Sukuk company Ltd. (PISCL) that will issue trust
certificates, through lease agreement. The periodicity of payments on certificates will be
described as 'rental on assets', or 'Ijara rather than interest, so that Sukuk remain Islamic
shariat compliant. Pakistan undertakes irrevocably to purchase the land at the agreed
exercise prices, on dissolution. When this trust is dissolved in 2010, and upon receipt of the
exercise price payable by Pakistan, along with rentals payable under the 'Ijara' agreement, up
to the date of Dissolution Distribution Amount, will be applied to redeem the Sukuk
certificates.

Other long-term negotiable instruments include Brokerage house fixed deposits,


Preference shares and Term fiancé certificates.
Brokerage house fixed deposits: every brokerage houses has its own fixed deposits structure
for this purpose.

Preference share

is another kind of fixed instruments. This is a class of ownership in a corporation that has a
higher claim on the assets and earnings than common stock. Preferred stock generally has a
dividend that must be paid out before dividends to common stockholders and the shares
usually do not have voting rights
The precise details as to the structure of preferred stock is specific to each corporation.
However, the best way to think of preferred stock is as a financial instrument that has
characteristics of both debt (fixed dividends) and equity (potential appreciation). Also
known as "preferred shares". Can easily convertible if option driven by the corporation.

In Pakistan few corporations has issued preference shares to their shareholders like DGKC,
PPL, PICT and etc.

Average rate of return on bonds and securities in Pakistan between range 10% to 18%.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 39
Term Finance Certificates TFC's

An issue of term finance certificate that all have the same maturity date. Their time to
maturity can be from long term. Upon maturity, the issuer pays all outstanding holders the
amount owing. Term finance certificate can also be repaid prior to maturity if they are called
or converted.

Certificate of deposits

These certificates are usually develop for short to medium terms fixed deposits interest rate
instruments offered at brokerage sector to promote savings in the country. These types of
instruments are low-risk and low return instruments but having charged penalty if withdrawn
before the maturing date of the instruments. However few categories of these are saving
deposits, fixed deposits, recurring deposits etc.

In Pakistan average rate of return on these certificates are below 10% and above 4%.

MUTUAL FUND

Mutual funds manage by the investment company or asset management companies raises
money from public and invests in a group of assets in accordance with a stated set of
objectives. Basically this is an option for those investors who are risk-averters and having
not sufficient knowledge that how to invest there savings in an efficient manners. Or due to
some other reasons like unable to invest directly in equities or debt markets because of
resources, time or some other constraints amount. For the sake of this purpose now you can
invest through a professional team working in a mutual fund industry.

Mutual fund industries do business by issuing its units against a reasonable set of amount,
which can be redeemable on demand based on the funds Net Assets Value that is determined
at the end of each trading session. Average rate of return of each individual funds vary
accordingly from funds to funds performance is based on its professional team. That is why
their average rate of returns to put together is not fixed but in generally more than what earn
in fixed deposits.
There are two types of mutual funds one is open-end mutual fund can constantly changes
capitalization as new shares are sold and out-standing shares redeem like money market
mutual fund are the good example. While the second type is close-end mutual fund cannot
change its capitalization, remain fixed as shares trade on Exchanges and Over the counter
market (OTC). In Pakistan most of the mutual funds are providing return between 20%
to 40% depends on overall performance of the mutual funds.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 40
MONEY MARKET INSTRUMENT:

These types of instruments come into cash equivalents; are highly liquid and safe
instruments, which can easily converted into cash having some times risk free or less risky
nature as compare to stock markets. Like: treasury bills below than a year and money market
funds.

COMMODITIES AND VICE VERSA:

Recently in Pakistan year 2007, National Commodity Exchange has started its trading as
investment vehicles in Gold and having plan to develop further is Rice other stuff etc.

While for vice versa there are art and crafts, antiques and foreign currencies etc are available
for investment purposes. Where about foreign currencies usually considered as hedging tool
of risk management rather than an investment purposes.
See currencies at, http://www.dollareast.com/. This is the main group that handling
currencies business as well. DARSON Securities (Pvt) limited is active in stock market for
investment basically a subsidiary of this group.
The investing avenues are many but few are as follows:
Stocks or Equities
Bonds
Mutual funds
Fixed deposits
Money market instruments
Commodities vice versa
It depends on the individual to select different options of the investment for his saving and
that based on the risk profile to get the returns. The reason is risk and returns are directly
proportional to each other. Higher the risk, higher the returns. Following are the brief review
of different investment avenues.

STOCKS OR EQUITIES

Investing in share companies listed on stock exchange is known as stocks or equities


investment. Stocks can be buy and sell through stock exchange known as secondary market.
Where reasonable buyers and sellers are available to execute transactions at particular price.
Existing economic news relevant to the particular sector discount in the stocks. News
discounting is an art, which can be measurable through different discounting scales on
various investment/trading technical indicator models and fundamentals financial models.
The basic two streams of revenue generation from this form of investment are as below:

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 41
Dividend / Payouts:

Distribution of a portion of a company's earnings, decided by the board of directors, to a


class of its shareholders. The dividend is most often quoted in terms of the country's
currency amount each share receives (i.e. dividends per share or DPS). It can also be quoted
in terms of a percent of the current market price, referred to as dividend yield. I.e.

Dividend yield= dividend / current price.

Dividends may be in the form of cash, stock or property. Most secure and stable companies
offer dividends to their stockholders. Their share prices might not move much, but the
dividend attempts to make up for this.

Capital Gain/Loss:

The prices of the stocks well appreciated or depreciated in the market due to appropriate
growth posted by the company or on the hope of the company's change in fundamental
aspects in future or government policies relevant to the particular sectors impact the stocks
fluctuations resulting in capital gains or losses.

Total sum of these two components i.e. Dividend and Capital gains shows the total return on
investment in units. To convert into % Dividend + Capital gains / Actual investment amount
is known as investment on returns.

In Pakistan the % of total return on an average basis is 15% to 30% and above from these
percentages in a precise time reflects good output of portfolio management. The key point is
to identify the right stocks on the right time for enter and exit with finding risk levels from
the trading transactions made for it.

DSL suggestions and comments on various stocks issued on daily basis to DSL clients
through DSL e-mail services. And we also provide specific stock analysis for DSL client for
short to long-term perspectives.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 42
Key considerations for investment in equities

Understanding why you are investing is the first step in structuring a portfolio. There are few
questions investors need to ask them and review with their broker before starting to invest.

Specifically, What are my investment objectives? What is this money for? What kind of risk
am I willing to take? What is my time horizon? It is important that you work closely with
your advisor so you both have a clear understanding of your specific needs and goals.

Risks

Understanding risk is an integral factor that is required to be evaluated before making any
investment. You can view risk as portfolio volatility, as the risk of not achieving your goals,
or as the risk of permanent capital loss. When you are assessing risk, questions to ask
yourself include: Risk and returns are generally related. Over the long term, increasing your
risk typically leads to higher expected returns, while lowering your risk leads to lower
expected returns. However, this is not always so. These guidelines will enable you to
structure your portfolio and provide you with a framework that allows you to review and
understand your investment performance.

Investment Climate

Whenever you hire a broker to invest in the stocks it’s not necessary that your results would
be same as the market movements. In some cases brokers advise to invest in stocks that are
not highly correlated with stock index due to the small capitalization of that particular scrip
in the market.

Maximization of Return

The goal of the investor, in most cases, is to maximize return. Higher returns are often
related with higher degree of risk. Investor should not take unnecessary risk to earn higher
profits because it posts a great deal of threat to its basic equity and investments. Investors
could avoid risk by diversifying its portfolio in different sectors, which usually pays off in
terms of better returns.

Company Profile

Information regarding companies invested in and their economic profile should be exposed
to the investor.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 43
How much Money can you afford to Invest

Investors should be aware of the fact that investments in the stock usually do not result in
immediate profits. A sound investment strategy avoids speculative moves. An investor
should have excess reserves with its broker to protect himself against frequent fluctuations
in stock.

Own investment Strategy vs. professional Advise:

Sound strategy for investment in stock market requires either professional’s advice or own
stock dealing decisions, which are often, time consuming. Despite the time consideration it
is advisable to pursue own investment strategy because it is more rewarding than seeking
broker’s opinion.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 44
Trading means buying and selling the products. In brokerage houses like Darson
Securities Pvt Limited, it refers to the online buying and selling of different commodities.
When the securities are traded in secondary market price show very volatile results and the
factors of “speculation”, “arbitration” and other market situation like general
economic conditions and inflationary gaps in country can affect the prices of the
securities.
Having a best research department under the supervision of the chief executive of the
company Darson has maintained a portfolio of best-rated companies of stock market.
The investment in shares is a risky job and need personal attention and quick observation of
portfolio manager who can better judge the future change in price of the shares.
The chief operating officers in Karachi and Lahore stock exchange paying personal
Attention to the portfolio of the company and so preventing it from the hazards of quick and
wrong decision-making.

The audited accounts of the company shows that it has very strong financial grounds for the
development of brokerage business Organizational Structure

Risk, reward & value of the information available

Buying shares can offer advantages over saving in deposit accounts: your investment may
increase in value besides paying you dividends. You share the rewards when the company
does well and the price of the shares goes up. But if the company performs badly, the share
price may go down and the value of your investment will be reduced. Other factors, such as
the performance of the stock market as a whole and the general economic climate, may also
affect the price of your shares. Investment in shares is therefore investment in ‘risk capital’.
The shareholders can be rewarded for taking this risk and the potential return on your money
can be higher than that on other investments. You can reduce your risks with careful
planning.

(Trading Cycle & Accounting System)

(Selling of shares)

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 45
Customer or Investor Brokerage house

Stock Exchange (Trading Facilities)

(Buyer of shares)
(Customer or investors) Brokerage House

Settlement Cycle & Financial System of Organization (after 3 days)

Seller of securities Brokerage House


(Customer or investor)

Settlement Brokerage Pays Cash National Clearing


house of Buyer’s & Company
Seller
Deposit the cash with the brokerage house

Buyer of Securities
(Customer or Investor) Brokerage House

The brokerage house also stands as intermediary between the buyer and seller of shares,
which are passed out of the stock exchange and the information system of the broker it self
handle all these transactions.

Brokerage Brokerage Brokerage


House # 1 House # 2 House # 3
Central Depository
INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem
Company 46
All the brokerage houses have their a/c in CDC

(Takes the delivery of shares from sellers)

NCCPL (The
Settlement Company)

And credit these shares to the buyer of the shares.

Mobilization of Funds of Brokerage House & Settlement Brokerage house

share in
Brokerage have shares in
CDC A/c
House
Brokerage
sellingbuying
house
INTERNSHIP the
REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 47
shares
the shares
Give delivery of shares to NCCPL
Takes cash
Brokerag
e house
Give cash to selling broker
NCCPL
Give delivery to buying broker
Takes shares
CDC A/c
Give cash to NCCPL
Have cash in Brokerage
house A/c

Generation of Funds and Role of Finance Department

The Finance department plays the key role in the management and supervision of the trading
environment of the stock exchange, it not only confirms the trading information flow but
also protect it from unauthorized use and its proper Settlement between participants.

Sources of Funds & its Allocation Role of Finance Department

1- Confirmations of the trading contacts and their settlement.


2- Improvement and maintenance of the Information relating to the trading exposures of
the
3- Safety and the data of the trading for further reference and legal proof of the trading
done in the open market.
4- Settlement facilities to all the participants and confidence of the investor.
5- Proper control on the efficiency of trading and minimizing the chances of “insider
trading” with in stock exchange and its linkage
6- Protection and integrity of the Finance data and making it possible to of database &
transmitting of daily trade transaction to the NCCPL Company for the settlement.

What is “Badla”?

Badla Finance in simple terms means putting money on interest. The mechanism is very
easy for the stock broking society but complex for the ordinary investor. History says Badla

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 48
was born in the nineteenth century. Then, till today, the purpose has remained the same, the
mechanism has hardly changed but the process has. These changes have made Badla
Finance safer, more secure and transparent to clients besides a fair business practice for the
stockbrokers

Mechanism of “Badla”

A person buys shares with the intention to make profits but without blocking money. The
purchase at the end of the settlement is carried forward to the next settlement. Here is where
the client / Badla financiers steps in. The financier's block the money for taking delivery of
shares purchased by the speculators. He gives the money to the exchange for shares bought.
For this facility the speculator pays interest to the financiers. This interest is known as
Badla.

Badla Financing is done through Stock Broker:

The financier gives money to his broker who in turn, hands over the same to the Exchange.
The Exchange under custody, on behalf of the broker’s client, retains the shares. Since the
shares and the money lie with the Exchange, broker's risk is also eliminated.

Example: If "A" has purchased 1000 shares of MCB @ Rs. 50 per share in Settlement 1, he
has to take delivery from "B" who has sold the same. "A" would like to carry forward his
position to the next settlement by letting "C" (Badla Financier) take delivery at the
prevailing interest rate.

In settlement 2 "A" will have to purchase the shares at a higher Badla rate as determined by
the Exchange. If the Badla was Rs. 0.20 in settlement no.1, "A" will have to buy MCB @
Rs. 50.20 per share from "C".

The difference in purchase price in settlement no.1, and sale price in settlement no.2, is the
earning for the Badla Financier.

Futures Contract

A Future contract involves purchase and sale of a financial or tangible asset at some future
date, at a price fixed today

Complete Structure of the Finance Department of Darson


Security Pvt Limited, and its linkage Finance Department of
Stock Market (The trading supervisor), CDC and NCCPL
Companies (The settlement Supervisors).
Brokerage House Brokerage House
(on behalf of (on behalf of seller)
Buyer)
INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 49
Lahore Stock
Exchange (Main
Terminal)

(Matches the rate and quantity of the buy and sell orders coming from the entire trading
terminals placed in the houses of all active members)

The Lahore Stock Exchange keeps all the records the entire transactions take place
between the members. Where on one side there will be a brokerage house standing on behalf
of seller and other on the behalf of buyer.
Settlement information flow in stock market (for settlement of sale or purchase of shares)

Brokerage
House Pays the required amount in settlement a/c

Shift the shares to main a/c


Brokerage House’s settlement Brokerage
CDC house
Takes the service charges Amount is credited to brokers A/c
LSE
NCCPL

Takes the delivery from CDC

Key Information required before You Buy a Stock

1- What Does the Company Do?

2- Is the Company Profitable?

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 50
3- What Is the Company's Earnings History and Outlook?

4- How Richly Is the Company's Stock Valued?

5- Who Are the Company's Competitors?

6- Who Runs the Company?

Portfolio management relates to investing money in different sectors so that it can be


used to the maximum and most profitably. The purpose of Portfolio management is to

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 51
minimize the risk and to maximize the return by allocating the money in different sectors of
the economy.

Remember there is always first time for everything so also there is first for you build
investment profile. It is obvious you need free amount of capital to locate your amount in
investment obligations. In DSL opinion your saving strategy should be like if you are
salaried person or if you come into small to medium business category then you have to save
at least 30% to 35% of your monthly income. Stick to this practice and try to increase you
saving levels.

In Pakistan on an average basis this % is range between 12% to 18% of GDP which is lower
then the world bench mark the cause for diminished % saving rate is currency value that is
continue in down ward pressure since more than decade or on sideways as compare to other
currencies.

The reason in DSL opinion are few economical factors that really influencing DSL
currency for example real investment in shape of industrial projects needed for local and
foreign investors for decreasing unemployment rate in the country, Properties values are
unnecessarily rising in worth need to control by government and In budget the benefits
announced by the government for various industrial sectors not pass onto to nation
ultimately inflationary pressure observe during the assessment year.

Now there are few measures that are necessary to protect your saving for abnormal losses.
Do not invest savings made for emergency purpose hold them in a liquid state. Do not utilize
100% amount of saving into risky business like stock markets. Avoid unnecessary or lavish
expenses better is to save amount to groom your self and your family. It is foolish to pay off
debt by trying to first make money for the cause out of gambling or investing in stocks with
whatever little money you hold.

Opportunity cost needs to define for making decisions for investment options in tradable
instruments. Opportunity cost means the cost of an alternative that must be forgone in order
to pursue a certain action. Put another way, the benefits you could have received by taking
an alternative action. Example: The difference in return between a chosen investment and
one that is necessarily passed up. Lets say you invest in a stock and it investment returns a
worthless 5% over the year.

In placing your money in the stock, you gave up the opportunity of another investment - say,
a risk-free government bond like-t-bills yielding 8%. In this situation, your opportunity costs
are 3% (8%-5%). However there are certain trading or investment styles and holding risk
that really need to choose before entering into tradable instrument markets varies according
to period wise. Like:

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 52
 1hours to 1day
 1day to 3days.
 1day to 5days.
 5days to 15days.
 15days to 3month.
 3month to 6month.
 6month to 1year
 1year to 3years.
 3years to 5years.

Means how long you wanted to open your investment position under different time frame
period; its return and inherent risk is important need to diversify accordingly. Once you
evaluated you have to develop a portfolio strategy for maximizing returns and reducing risk
in the market and accordingly reduce or add number of tradable instrument in the portfolio.

Why do Investors Buy Shares?

Studies have shown that over a twenty-year span, investment in shares has provided greater
returns than most other forms of savings. Shares can provide you with a regular stream of
income through dividends as well as the potential for your investments to grow in value. If
the prices of shares go up, you can sell them for more than you paid. This is called capital
gain.

What are Dividends?

Dividends are returns paid to shareholders out of the profits of the company. Returns can be
in the form of cash or additional shares of the company called bonus shares. Dividends are
usually paid once or twice a year depending upon the company’s profit distribution policy.

What is Capital Growth & Role of Finance Department in it?

This is one of the ways in which shares differ from deposit accounts. The principal amount
of money you put in a brokerage house or any fixed income savings scheme always stays the
same e.g. if you start with Rs.100, 000 you will always have Rs.100, 000 (other than any
interest earned).Changes in value according to the performance of the company. With good

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 53
management information system, the value of your investment in shares of a company can
grow over time so that your shares are worth more than you paid for them. This is capital
growth.

Equity Stocks are Vital for Superior Growth

Equities are mainly growth investments, and can include things like real estate, art, and gold.
However the most popular equity investments that people rely on for growth are stocks. But
stocks can also serve purposes other than growth.

In addition to potential capital gains, stocks also have the potential to pay dividends. If you
have equity in a business you are an owner, and if your company makes money, you are
rewarded with dividend

How do you decide when a Stock is Attractive to Purchase?

There are two general ways of determining a stock's potential as an investment. You can
look at the “fundamentals” or you can look at “technical analysis” and of course you can
look at both.

Fundamental analysis looks at factors such as earnings, cash flow, debt, strength in its
industry, outlook for the industry, general economic factors, interest rates, and so on. If these
factors are good, then even if there are short-term setbacks, over the long run, the stock
should do well.

Technical analysis looks at factors like volume of trading, cyclical behavior, trends, moving
averages and many others.

Some investors use both approaches. They use fundamentals to determine the long-term
potential of a company and technical analysis to decide when to buy. For example, you may
believe that a certain company has great potential over the long-term and will be worth
much more in years to come.

However, it could be that the current market for this company’s product is temporarily weak
and that as a result, the stock price could fall. Technical analysis could be helpful in
determining how far the price might fall and could provide help in indicating a good time to
buy.

How to become Shareholder

Shares of a particular company are offered by the following methods.

Initial Public Offering

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 54
An initial public offering (IPO) is the sale of equity in a company, generally in the form of
shares of common stock. These shares trade on a recognized stock market. A company goes
public; to raise capital for project funding, business planning and implementation; for
marketing purposes.

Right Issues

A rights issue gives the existing shareholders the right to subscribe for new ordinary shares
at an issue price lower than the prevailing market price and at a ratio equivalent to their
existing shareholding. Companies carry out a rights issue when they want to raise additional
funds to finance their capital requirements.

Things you should know about Equities trading

Stocks and shares are the most volatile asset class in terms of price movements and thus, the
most risky. Hence, do not invest directly in the stock market unless you can bear a fall in
price without it having any impact on your day-to-day living standard. Remember the
saying: “the greater the reward, the higher the risk”.

The aim of investing in stocks and shares is to buy at a low and sell at a high, but knowing
when, is the problem. Many investors attempt to time the market: they try to figure out when
the market is going up and buy into it before it does, and then figure out when it is going to
crash and sell everything just before it does. Unfortunately such spot on accuracy is usually
impossible to achieve, so what you can do is try to catch a portion of each big swing. You
buy when the upswing has begun, and sell as the downswing starts. But for this to work, you
must be able to control your greed, as you do not know exactly when the top or bottom is
reached.

The stock market can be said to be driven by two emotions: greed and fear. People get
caught up in the boom fever and pay silly prices for unworthy shares - this is greed driving
bull markets.
markets. In bear markets,
markets, people get carried away with the ruling negativity and are
overeager to believe the worst rumors - this is fear dominating bear markets. You must step
away from the crowd and not let them take over your rational reasoning and action.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 55
Central Depository Company of Pakistan Limited (CDC) started in 1993 to manage and
operate the Central Depository System. CDS is an Electronic book entry system to record
and transfer securities.
securities. Electronic book entry means that the securities do not physically
change hands and the transfer from one client account to another takes place electronically.
CDC is to operate as a central securities depository on behalf of the financial services
industry to support an effective capital market system that will attract institutional and retail
level investors from Pakistan and abroad. Its basic purpose is to operate and maintain an
electronic book entry settlement system for equity, debt and other financial instrument.

Capital Market prior to CDS Information System

The capital markets of Pakistan have witnessed a rapid growth resulting in increased trading
volume. This in turn has led to difficulty in handling the share certificates. The custody and
safe keeping of physical certificates required maintenance of huge vaults by the individuals
and institutions and the physical settlement of certificates were no longer feasible.
Moreover, the manual system was also plagued by long delays, risks of damage and
considerable time delays. Following are some highlighted problems faced before CDS was
in place,

1- Increased volume of bookkeeping and paper work.

2- Problems in settlement due to increased volume.

3- Maintenance of huge vaults for safe keeping of certificates.


Long share transfer procedure taking up to 45 days.

4- Payment of stamp duty on share transfers which ranged from 0.1% to 1.5% of the face
value.

5- In case of new issues the issuers would take more than 2 months for the dispatch of
certificates.

6- Risks of damaged, lost, forged and duplicate certificates.

7- Capital and time investment required for issue and dispatch of share certificates, cash
dividend, and bonus and right issues.

Benefits after CDS information system was Incorporated

Following are some of the benefits of electronic settlement of securities through CDS:

1- Reduced workload due to paperless settlement environment.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 56
2- Reduced manpower requirements.

3- Instantaneous transfers of ownership.

4- No stamp duty on transfers in CDS.

5- No risk of damaged, lost, forged or duplicate certificates.

6- No impact in case of sudden increase of settlement volumes.

7- Instant credit of bonus, rights and new issues.

8- Substantial reduction of paperwork during book closure.

9- Convenient pledging of securities.

10- Substantial reduction in time & capital investments.

Tracking stocks

To track how your stocks are doing, you have to look at stock listings. Stock listings are
published in most of the newspaper (e.g. Dawn). The listings look confusing at first, since
they look like a mixture of numbers, but can be a very useful tool when tracking your
stock’s progress. The listings are organized into many columns, including the following
information:

Company name

This field is usually abbreviated in the listings, and listed alphabetically.

Symbol

This field is a one to five character symbol used as a sort of nickname for the company.

Volume

The volume is the amount of stocks that were traded the day before.

High, Low and Close

These are the highest and lowest price of the stock the day before, and the closing price for
the day before. This is an indicator of how much the price of the stock fluctuated throughout
the previous day.

Net change

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 57
This is the change of the price of the stock from the previous day. This gives you an idea
whether the price is dropping or rising.

In addition to the stock listings, other useful information about companies is available in the
Annual Reports that reflects the balance sheet, income statement and cash flows and states
the reasons for changes in these financial statements during the year.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 58
The strength of any organization can be better judged by analyzing its
balance sheet and its other statements of accounts. The financial statement
of any organization shows the results of its operation and its position in
business.

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The data of balance sheet and income statement give idea about firm position but it is better
judged by analysis. By comparing of degree of changes in different items .the comparison
shows the fluctuation in assets and liabilities of business.
The financial statements of organization usually includes following:

1. Balance Sheet
2. Profit & Loss Account
3. Cash Flow Statement
4. Statement of Changes in Equity

These statements can be suitable to make an idea about business performance. These
statements have been analyze in two ways

1. Horizontal Analysis
2. Vertical Analysis

Horizontal Analysis:

Through this analysis we can check that what are changes with in years in the items of
balance sheet and profit and loss account. Last year become base for next year. And change
can be easily analyzed.

Vertical Analysis:

In this analysis the percentage of each item of statement is calculated to total and then the
change in the percentages is checked with in years.

Note:

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 68
Due to incomplete data of financial year 2009 I decided to do financial analysis of year
2008.

Balance Sheet
As on 30th June, 2008 (Rs)

2008 2007 Evaluation


Assets 2006-2007
Non Current Assets
Security deposits 52.09% 61.93% Worse
Accounts Receivable 26.93% 26.98% Worse
Advances 15.25% 14.16% Good
Investments 92.72% 136.55% Worse
Other receivables 209.43% 233.84% Worse
Cash & Brokerage house Balances 17.96% 20.82% Worse
Advance Income taxes 6.41% 8.22% Worse
Total Assets 420.79%
420.79% 502.50%
502.50% Worse
Liabilities
Bills payable 7.03% 1.51% Worse
Borrowings from financial institutions 7.76% 7.62% Worse
Deposits and other accounts 332.50% 403.09% Worse
Sub-ordinated loans
Liabilities against assets subject to 0.0088% 0.014% Good
finance lease
Other liabilities 17.62% 20.44% Good
Deferred tax liabilities 1.58% 3.88% Good
Net Assets 54.30%
54.30% 65.95%
65.95% Worse
Represented By
Share capital 4.70% 5.14% Worse
Unappropriated profit 21.25% 16.85% Good
Reserves 9.20% 10.75% Worse

Surplus on revaluation of assets 19.15% 33.21% Worse

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 69
Profit And Loss Account
For the year ended 30th June, 2008 (Rs)

2008 2007 Evaluation


2006-2007
Mark-up/return/interest earned 100% 100% same
Mark-up/return/interest expensed 31.14% 30.63% Good
Net mark-up/interest income 68.86% 69.36% Better
Provision against non-performing 7.02%
7.02% 7.27%
7.27% Worse
advances
Provision for diminution in the value of (1.62%) (0.73%) Worse
investment
Bad debts written off directly 0.012%
0.012% 0.068%
0.068% Good
Net mark-up/interest income after 63.45% 62..70% Good
provision
Non Mark-Up/Interest Income
Fee, commission and brokerage income 14.03%
14.03% 14.65%
14.65% Better
Dividend income 6.61% 5.1% Good
Income from dealing in foreign 3.05% 3.58% Worse
currency
Other income 1.43% .53% Good
Total non mark-up/interest income 27.78% 28.02% Better
Non Mark-Up/Interest Expenses
Administrative expenses 30.70% 33.28% Good
Other provision/write offs 0.039% 0.59% Good
Other charges 0.48% 0.19% worse
Total non mark-up/interest expenses 31.14% 34.06% Good

Extra ordinary items


Profit before tax 60.09% 56.66% Good
Taxation –current 19.86% 21.27% Good
-prior year(s) 1.21% 3.27% Good
-Deferred (0.14%) (0.87%) Good

Profit after tax 38.87%


38.87% 37.72%
37.72% Good
Unappropriated profit brought forward 44.24% 32.31% Good

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 70
Profit available for appropriation 83.11%
83.11% 70.03%
70.03% Good
Earning per share 24.01 17.92 Good

Formula for Calculation Of Values

Every value = Value *100


Capital Employed

Here Capital Employed = Long term Liabilities + owners equity

2007: 89687210+25281450 = 114968660

2008: 111771790+ 39165389 = 150937179

Where,
Long Liability= Borrowing from financial institutions
+ Term deposit
+ Liability against asset subject to finance lease.

2008: 11704079+100054476+13235 = 111771790

2007: 8756847+80913734+16629 = 89687210

And
Owner’s Equity=share capital + Un-appropriated profits

2008: 7090712+32074677=
7090712+32074677= 39165389

2007: 5908927+19372523 = 25281450

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 71
Balance Sheet
As on 30th June, 2008 (Rs)

2007 2008 Evaluation


2006-2007
Assets
Cash and balance with treasury brokerage 100% 110.43% Increase by 10.43%
houses
Balances with other brokerage houses 100% 131.02% Increase by 31.02%
Lending to financial institutions 100% 141.33% Increase by 41.33%
Investments 100% 89.15% Increase by 10.85%
Advances 100% 117.58% Increase by 17.58%
Other assets 100% 113.25% Increase by 13.25%
Operating fixed assets 100% 102.41% Increase by 2.41%
Total Assets 100% 109.94% Increase by 9.94%
Liabilities
Bills payable 100% 609.12% Increase by 509.12%
Borrowings from financial institutions 100% 133.66% Increase by 33.66%
Deposits and other accounts 100% 108.30% Decrease by 8.30%
Liabilities against assets subject to 100% 79.59% Decrease by 20.41%
finance lease23068314
Other liabilities 100% 113.19% Increase by 13.19%
Deferred tax liabilities 100% 53.49% Decrease by 46.51%
Total Liabilities 100% 110.22% Increase by 10.22%
Net Assets 100% 108.09% Increase by 8.09%
Represented By
Share capital 100% 120% Increase by 20%
Unappropriated profit 100% 165.57% Increase by 65.57%
Reserves 100% 112.34% Increase by 12.34%
Surplus on revaluation of assets 100% 75.71% Increase by 24.29%
Total 100% 108.09% Increase by 8.09%

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 72
Profit And Loss Account
For the year ended June 30th, 2008

2007 2008 Evaluation


2006-2007
Mark-up/return/interest earned 100% 129.96% Increase by 29.96%
Mark-up/return/interest expensed 100% 132.1% Increase by 32.1%
Net mark-up/interest income 100% 129.02%
129.02% Increase by 29.02%
Provision against non-performing 100% 125.71% Increase by 25.71%
advances
Provision for diminution in the value of 100% (288.54%) Negative
investment
Provision against off balance sheet - - -
obligations
Bad debts written off directly 100% 22.91% Decrease by 77.09%
Net mark-up/interest income after 100% 131.38%
131.38% Increase by 31.38%
provision
Non Mark-Up/Interest Income
Fee, commission and brokerage income 100% 124.72% Increase by 24.72%
Dividend income 100% 168.27% Increase by 68.27%
Income from dealing in foreign currency 100% 110.63% Increase by 10.63%
Other income 100% 352.91% Increase by 252.91%
Total non mark-up/interest income 100% 129.50% Increase by 29.50%
Non Mark-Up/Interest Expenses
Administrative expenses 100% 119.80% Increase by 19.80%
Other provision/write offs 100% (8.72%) Increase in writing
off
Other charges 100% 329.60% Increase by 229.60%
Total non mark-up/interest expenses 100% 118.73% Increase by 18.73%
Extra ordinary items 100% -
Profit before tax 100% 138.07% Increase by 38.07%
Taxation –current 100% 121.55% Increase by 21.55%
-prior year(s) 100% 148.30% Increase by 48.30%
-Deferred 100% 21.23% Decrease by 78.77%
Profit after tax 100% 133.93% Increase by 33.93%
Unappropriated profit brought forward 100% 177.97% Increase by 77.97%

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 73
Profit available for appropriation 100% 154.25% Increase by 54.25%
Earning per share 17.92 24.01 Increase by 133.98%

Ratio analysis includes method of interpreting financial ratios to access the performance of
any organization. The basic input to ratio analysis is profit and loss account and balance
sheet. Ration analysis of any organization is in interest of its creditors, employees,
shareholders and of its management as well.

Both existing and prospective customer are interested in the ratio analysis of organization

Ratio analysis is a valuable aid to management in the discharge of its basic functions such as
planning, forecasting, control etc. these ratios describe the relationship with the functioning
of the business and helpful for controlling cost of goods manufactured. The great advantage
of ratio analysis is that it reduces raw data of widely varying magnitude to a common
comparative basis. Thus, ratio analysis is the most meaningful to compare financial
information regarding a giving company.

1. Net Interest Income to Gross Income:

It is the comparison of Net Interest income earned & the gross income by the brokerage
house.
Net mark-up/ interest income /Gross Income * 100

Year 2007 Year 2008

Net mark-up/ interest income 23370897 30153716

Gross income 87,256,8 98720954


74

Net interest income to gross income 71.33% 71.25%

Gross Income = Net interest income + Non- mark-up income

2005=
2005= 23370897+ 9392351= 32763248

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 74
2006=
2006= 30153716+ 12162892= 42316608

Comments:

The Net interest income to gross income is good due to increase in Net Income.

2. Risk Asset Turnover Ratio:

It is a comparison of Net Mark-up/ Interest after provisions & Risk assets (Advances) of the
brokerage house.
Net mark-up/ interest after provisions / Risk assets (Advances)

Year 2007 Year 2008

Net mark-up / interest after 21146970 27782170


provisions

Risk assets 305000 580474

Risk asset turnover ratio 0.079times 0.088 times

Comments:

The Risk Asset Turnover Ratio of 2008 is good as compared to that of 2007. This may be
due to increase in net markup. Percentage of increase in net markup is more than risk assets.

3. Interest Coverage Ratio:

It is a comparison of Earning before Tax & Financial Charges of the Brokerage house.
Earning before Tax / Financial Charges

Year 2007 Year 2008

Earning Before Tax 57015048 72661728

Financial Charges 10321768 13634912

Interest Coverage Ratio 5.52 times 5.33 times

Earning before Tax = Mark-up / Interest Earned

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 75
+ Total Non- Markup Income
+ Provision against non performing advances
+ Total non markup interest expenses

2008=43788628
2008=43788628 + 12162892+ 3075723 + 13634485=
13634485= Rs. 72661728

2007= 33692665 + 9392351+ 2446739 + 11483293=Rs.


11483293=Rs. 57015048

Comments

The Interest Coverage Ratio of 2008 is bad as compared to that of 2007. This may be due to
increase in financial charges.

4. Operating Profit Ratio

This ratio is a comparison of Operating Profit to markup/ Interest of the Brokerage house.

Operating Profit / Markup Earned * 100

Year 2007 Year 2008

Operating Profit 19056028 26310577

Markup/ interest Earned 33692665 43788628

Operating Profit Ratio 56.56% 60.09%

Comments:
The operating Profit Ratio of 2008 is good as compared to that of 2007. This may be due to
increase in operating profit.

5. Net Profit Ratio before Tax:


Net profit before tax/Interest Earned*1
Year 2007 Year 2008

Net profit before tax 19056028 26310577


Interest Earned 33692665 43788628
Net Profit Ratio before Tax 56.56% 60.08%

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 76
Comments:

In years 2008 it has increased up to 60.08% from 56.56% in Year 2007. This increase in
profit shows the unsatisfied performance of the brokerage house.

6. Net Profit Ratio after Tax


Net profit after tax/Interest Earned X 100

Year 2007 Year 2008


Net profit after tax 12709444 17022346

Interest Earned 33692665 43788628

Return on assts 37.72% 38.87%

Comments:

This ratio shows that an organization is earning on its assets after meeting all the expenses
and obligations. This ratio also increased up to a great extent.

7. Return on Total Assets


Net Profit after Tax/total assets X 100

Year 2007 Year 2008

Net Profit after Tax 12709444 17022346

Total assets 577718806 635132711

Return on Total Assets 2.20% 2.68%

Comments:
Comments:

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 77
This ratio also increased up to a great extent so it shows that an organization is earning on its
assets after meeting all the expenses and obligations.

8. Return on Share Capital:


Net profit after tax/Share Capital X 100

Year 2007 Year 2008

Net profit after tax 12709444 17022346

Share Capital 5908927 7090712

Return on Share Capital 2.15% 2.40%

Comments:

The ratio has increased in Year 2008 which shows that that DSL has positive trend of
earning on share capital

9. Return on Deposit:

=Net profit after tax/Deposits X 100

Year 2007 Year 2008

Net profit after tax 12709444 17022346

Deposits 463426602 501872243

Return on Deposits 2.74% 3.39%

Comments:

By analyzing, I analyze that the ratio has increased in Year 2008 which shows that brokerage
house is in good position.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 78
10. Solvency ratio:

=Total Assets/Total Liabilities-Issued Capital

Year 2007 Year 2008

Total assets 577718806 635132711

Total Liabilities-Issued 501900862-5908927 553178593-7090712


Capital
Solvency ratio 1.16 times 1.16 times

Comments:

This ratio shows that the asset of brokerage house has increased as well as liabilities has also
increased with the same ratio. This shows the sound position of business.

11. Advances to Deposits ratio:


Total advances/total Deposits X 100
Year 2007 Year 2008

Total advances 268838779 316110406

Total Deposits 463426602 501872243

Total advances/total Deposits X 100 58.01% 62.99%

Comments:

The DSL has ratio of 62.99% in Year 2008as compare to 58.01% in Year 2007. The increase
in ratio is due to increase in promotion of services, like online forex trading.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 79
12. Deposits to Capital:
Total Deposits/Share Capital
Year 2007 Year 2008

Total Deposits 463426602 501872243

Share Capital 5908927 7090712

Total Deposits/Share Capital 78.43 times 70.78 times

Comments:
I analyze that DSL has negative trend of Deposits to Capital ratio from Year 2007 to Year
2008.

13. Total debts to Total Assets ratio:


Total debts/Total assets X 100
Year 2007 Year 2008

Total debts 501900862 553178593

Total assets 577718806 635132711

Total debts/Total assets X 100 86.88% 87.10%

Comments:
The higher the ratio, the greater the amount of other people’s money to generate profits.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 80
1. Net Interest Income to Gross Income:

Remarks: The Net interest income to gross income is good due to increase in Net Income.

2. Risk Asset Turnover Ratio:

Remarks: The Risk Asset Turnover Ratio of 2008 is good as compared to that of 2007. This
may be due to increase in net markup. Percentage of increase in net markup is more than
risk assets.

3. Interest Coverage Ratio:

Remarks: The Interest Coverage Ratio of 2008 is bad as compared to that of 2007. This
may be due to increase in financial charges.

4. Operating Profit Ratio

Remarks: The operating Profit Ratio of 2008 is good as compared to that of 2007. This may
be due to increase in operating profit.

5. Net Profit Ratio before Tax:

Remarks: In years 2008 it has increased up to 60.08% from 56.56% in Year 2007. This
increase in profit shows the unsatisfied performance of the brokerage house.

6. Net Profit Ratio after Tax

Remarks: This ratio shows that an organization is earning on its assets after meeting all the
expenses and obligations. This ratio also increased up to a great extent.

7. Return on Total Assets

Remarks: This ratio also increased up to a great extent so it shows that an organization is
earning on its assets after meeting all the expenses and obligations

8. Return on Share Capital:

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 81
Remarks: The ratio has increased in Year 2008 which shows that that DSL has positive
trend of earning on share capital

9. Return on Deposit:

Remarks: By analyzing, I analyze that the ratio has increased in Year 2008 which shows
that brokerage house is in good position.

10. Solvency ratio:

Remarks: This ratio shows that the asset of brokerage house has increased as well as
liabilities has also increased with the same ratio. This shows the sound position of business.

11. Advances to Deposits ratio:

Remarks: The DSL has ratio of 62.99% in Year 2008as compare to 58.01% in Year 2007.
The increase in ratio is due to increase in promotion of services, like online forex trading.

12. Deposits to Capital:

Remarks: I analyze that DSL has negative trend of Deposits to Capital ratio from Year 2007
to Year 2008.

13. Total debts to Total Assets ratio:

Remarks: The higher the ratio, the greater the amount of other people’s money to generate
profits.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 82
Every organization especially Brokerage organizations has some dilemmas while operating
its business. The dilemmas of DSL are following:

1. DSL works like one of the inefficient Brokerage organizations. Its working
machinery has since been become unworkable. The staff as well as its managing
force does not care to acquire the commercial gains but it cares only for its own
financial benefits, payments, allowances and bonuses etc. This is why the DSL
could not achieve the due standards in brokerage market.

2. The DSL no doubt extends brokerage services to the public but the top
management including its micro managerial infrastructure does not take due care
while appointing staff for The marketing & trading agents are less active in
performance; the department has very poor performance during last one year, as
they cannot add even one corporate client in the clients’ list of the company,
although a corporate member, the Darson Securities (Pvt) Ltd. is mostly
dependant on the individual clients of the market.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 83
1- Although the company has a flat architecture and the chief Executive has a strong
interaction and check in each operation and department of the company, but it has
made the decision-making too centralized for the company.

2- The managers feel them selves as less authoritative in taking bold decision relating to
the financial and marketing related decision-making, the lower capital has decreased
the exposure limit of the trading of the shares on the behalf of customer.

3- The marketing & trading agents are less active in performance; the department has
very poor performance during last one year, as they cannot add even one corporate
client in the clients’ list of the company, although a corporate member, the Darson
Securities (Pvt) Ltd. is mostly dependant on the individual clients of the market.

4- The capital budgeting suggestions approved and recommended by the finance


department are usually treated as less important, and due to this ignorance and less
control on capital expenditures the company.

5- The common problem which I observed with transactions making with any
brokerage house is that they use two different soft wares for maintaining records of
transactions, which may cause fraud or misconduct of business.

6- Some time the company has to face serious problems in managing these projects

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 84
Overall performance of the company is fine although not “excellent” and it has a very good
reputation in the brokerage marking relating to its portfolio management.

1. The decentralization of the decision-making about the financial and legal matters can
improve the condition of the company.

2. Secondly and also more importantly the marketing department at Lahore Stock
Exchange should accelerate its functions to increase its customer base, because the
bigger working capital is beneficial for the brokerage house.

3. The leverage of the company should be increased to take the advantage of market
fluctuation.

4. Last but not the least, the company has a very sound and good start in brokerage
business and it can improve its efficiency as well as profitability in future if it could
its weaknesses in management style and financing techniques.

5. The debt sources of finance and increase in corporate client base can give the
company a very high boost in the market.

6. Currently company is using the facility of credit limit from the ABL, which is
charging 9% mark up on its credit line, but some other brokerage houses like KASB
Brokerage house is offering the same facility on 6%, the finance department has
completed all the documentations and formalities for taking this credit facility.

7. This will not only decrease the financial costs of the company but also increase the
profitability of the company.

8. It is hoped that by the end of this year the National Commodity Exchange may start
its functioning and having the corporate membership of the exchange the company
will be the pioneers of that market in Pakistan.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 85
9. It is hoped that National Commodity Exchange would be the biggest brokerage point
for exchange of deliveries of all commodities in Pakistan with in next few years.

10. We can see a very bright and fruit full future of the company with next few years, as
it has all the qualities of a best rated brokerage house to excel and & progress in the
finance world.

11. The most Important point that should be kept very clear in mind is that debtor turn
over ratio of the company is decreasing day by day, basically the main reason for this
is that the volume of the revenue has not increased in the same pattern as the debtors
and the second one is that that most of the brokerage house provide the facility of
“Leverage” to its corporate client which are the biggest part of company Clients.

12. For increase in the revenue and decrease in the capital Blockage in the Company
should inject new capital in the finance side and should try to negotiate with the
corporate Clients of the Company for increase in the speed of recovery of the
delivery payments.

13. Fresh debt finance has been injected to increase the efficiency, which will be
beneficial in coming years.

14. Overall position of the Company is Satisfactory and it has a very bright future in the
future.

15. Two different soft wares should not be used; only soft ware provided by CDC should
be used to make transactions fair and to avoid misconduct of business.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 86
I had wonderful experience of doing internship in Darson Securities Pvt Limited
Pakistan.
Pakistan. I got much information regarding practical work of brokerage house. DSL is one
of the leading brokerage houses of Pakistan. It has a big network of branches in the country.
It is earning very well just because of its good services and low charges. It is Pakistan’s
brokerage house or we can say nations brokerage house as it itself state.
state. It is not just profit
seeking institution but also working for the welfare of the nation of Pakistan.

Darson Securities Pvt Limited Pakistan maintains its position as Pakistan's premier
brokerage house determined to set higher standards of achievements. It is the major business
partner for Dollar East with special emphasis on fostering brokerage business growth
through aggressive and balanced policies, technologically oriented services offered through
its large network of branches locally.

Its most of branches are online so they have to do work online which some time
cause of interruption and in case of any discontinuity they lose much because they have to
make quick decisions and have to keep an eye on the market every time.

Its services are very authentic and people trust on them. Customer can obtain
different services either investment advisory or foreign exchange trading. Brokerage
services are one of the major functions of every brokerage house. So Darson Securities Pvt
Limited Pakistan is providing brokerage for different natures to different kinds to people at a
reasonable brokerage fee, they provide Equity Brokerage facility for individuals and
businesses. They are also providing the portfolio management services to the clients.

They provide facilities to rapid transfer of equity from one place to another through
online trade, commodity trade, Equity Brokerage and through Corporate Finance.

They also provide Personalized Services for their customers; they provide
customized services to their clients according to the needs of their customers.

It is representative of Dollar East. It is involved in Equity Research.


Research. Which is also a
very good service for its customers? This makes their investment safer and tells the client
different new ideas and ways to deal with equities.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 87
Darson Securities Pvt Limited Pakistan is at the forefront of international brokerage
in Pakistan which is proven by the fact that DSL has its branches in all of the major financial
capitals of Pakistan; they have recently set up the Online Forex Trade wing under the Dollar
East Group.

They also provide Assets management services to their customers’ which is helpful
in managing the assests more efficiently and making the most of them.

It is providing services of investment advisory to its customer which is very helpful


for the individuals willing to invest their money in different sectors. The professional skills
of the brokerage house representatives prove to be very helpful.

One more very attractive service of Darson securities Pvt Limited is “Debt
Advisory”. The customer is advised whether to take a debt or not; or how to plan to pay a
debt back in an efficient way.

If we talk about the financial position of the brokerage house it is outstanding its
earning is very well and its earning is increasing year by year. Ratio analysis is a yard stick
to see the financial position of the brokerage house and by using this technique I get it that
its financial position is much better.

It should provide more services to people because it is era of competition and private
brokerage houses are struggling more to provide good services to people.

I have provided the problems faced by the organization through my observation in


brokerage house. I have also provided some recommendations to improve the deficiencies.

I have a very well experience to work here learn a lot of things regarding brokerage
operations. Staff is very diligent, honest and devoted towards their work. They all guide me
for better work.

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 88
www.darson.com.pk

www.darsononline.com.pk

DARSSON SECURITIES PVT LIMITED


DHA BRANCH, LAHORE
Contact Person
Mohammad Asif
T-23, Phase II,
Commercial Area DHA,
Lahore, Pakistan.
Ph: +92-42-5743181-84
Fax: +92-42-5743185

Zubair Bajwa (Manager Accounts)


(Visiting Card)

INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 89
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INTERNSHIP REPORT ON DARSON SECURITIES PVT LIMITED. Prepared By Muhammad Faisal Saleem 90