ARY Communications Limited ("ARY" or "the Company") was established in Pakistan in October 2001 as a private limited company under the Companies Ordinance, 1984 (now governed by the Companies Act, 2017). In September 2008, the company transitioned its status to a public unlisted company.

ARY initially started its business by trading Pakistani products such as textiles, rice, pickles, and other goods in the Middle East, while also facilitating the trade of gold for third parties in Pakistan and abroad. In 1974, the ARY Group was formally established, and a decade later, it began producing gold bars branded as “ARY Gold 999, Dubai.” In late 1999, ARY Group acquired a UK-based Pakistani channel, which it rebranded as ‘ARY Digital’ in mid2000. The Company launched its operations in Pakistan in September 2001, making it the second Pakistani satellite television channel after PTV, the state broadcaster.

ARY is one of Pakistan’s largest satellite television networks, broadcasting nationwide and offering a diverse range of content to viewers. The Company holds an encrypted satellite TV channel license from the Pakistan Electronic Media Regulatory Authority (PEMRA). Its portfolio includes six local channels: i) ARY Digital HD, ii) A Sports, iii) ARY Zindagi, iv) ARY Musik, v) ARY News, and vi) ARY Qtv. In addition, ARY operates several international channels, such as i) ARY Digital UK, and ii) ARY Arabia — a YouTube channel featuring Arabic-dubbed Pakistani dramas and original soundtracks. The Company also has a presence in the Over-the-Top (OTT) segment through its platform, ARY ZAP replaced by ARY Plus. To support its media operations, ARY has two subsidiaries: i) ARY Films & TV Productions (Pvt.) Limited and ii) ARY Films (Pvt.) Limited.

The Company is a family-owned venture. The largest stake, about 46%, is held by ARY Digital FZ-LLC, a UAE-registered parent company primarily owned by Mr. Salman Iqbal, bringing his total direct and indirect ownership to around 65%. In total, the family holds roughly 99% of the shares, while less than 1% of the ownership lies outside the family.

The sponsor family has maintained a long-term association with the Company, and its ownership structure remains stable, particularly with the successful integration of the second generation into the family business. However, formal succession planning has not been documented.

The sponsoring family has successfully expanded into various business sectors, including gold, real estate, media, and consultancy, over the course of more than seven decades. The current sponsors have been actively involved in the media industry for over two decades, playing a key role in establishing and enhancing the prominence of the Company.

The owners of the Company possess significant financial strength, having successfully diversified their investments across multiple sectors, including gold, real estate, media, and consultancy, over the past several decades. Their extensive experience and accumulated wealth provide a solid financial foundation for the Company, enabling them to support its growth and expansion initiatives. The family's strong financial position is further bolstered by its strategic investments and ability to leverage assets effectively, ensuring the continued stability and long-term sustainability of both the Company and its business ventures.

The Board of Directors is largely comprised of the Company’s shareholders, ensuring strong alignment between ownership and governance. It is made up of two Executive Directors and five Non-Executive Directors, each contributing diverse expertise to the company’s oversight and decision-making processes. Mr. Salman Iqbal serves as both the Chairman of the Board and the Chief Executive Officer (CEO), where he plays a pivotal role in leading the Company’s strategic vision and operational execution. His dual leadership position reacts his central role in driving the company’s growth and long-term objectives.

Mr. Salman Iqbal, the Chairman of the Board of Directors, is a prominent figure from the sponsoring family and the nephew of Abdul Razzak Yaqoob. He holds a degree in Finance from the University of Houston, which complements his strong academic foundation and leadership role. Mr. Salman has earned widespread recognition for his significant contributions to both business and society. In early 2022, he was awarded the prestigious Sitara-e Imtiaz, one of Pakistan's highest civilian honors. Furthermore, he was named a Young Global Leader by the World Economic Forum in 2007, acknowledging his exceptional leadership potential and influence on the global stage. Mr. Jarjees Seja, commonly known as JJ, serves as the Executive Director and has played a pivotal role in shaping Pakistan's entertainment industry. His passion for creativity and innovation has led to the creation of high-quality content across diverse genres, including sports, entertainment, reality shows, and live gaming. Mr. Seja’s vision and dedication have made him a leading force in the industry, consistently driving the development of new and engaging ideas. The Board of Directors also includes five Non-Executive Directors (NEDs): Mr. Muhammad Yaqoob, Mr. Muhammad Shoaib Gandhi, Mr. Haji Mohammad Iqbal, Mr. Haji Jan Mohammad and Mr. Anwar Maqsood. Together, this team of distinguished individuals provides strong leadership and direction to the Company.

The Board of Directors is supported by three key sub-committees, each dedicated to essential areas of governance and oversight: i) the Audit Committee, which meets quarterly and as required to review financial reporting and internal controls; ii) the Human Resources (HR) Committee, which convenes semi-annually and as needed to oversee talent management and organizational development; and iii) the Risk Committee, which meets quarterly and when necessary to evaluate and address potential risks to the Company. Minutes of all Board and committee meetings are meticulously recorded, ensuring transparency and accountability in the decision-making process.

The Company's external auditors, RSM Avais Hyder Liaquat Nauman Chartered Accountants, have issued an unqualified opinion on the financial statements for the year ended June 2025. RSM Avais Hyder Liaquat Nauman Chartered Accountants holds a Quality Control Review (QCR) rating in category ‘A’ on the State Bank of Pakistan’s panel of auditors.

The Company maintains a clearly defined organizational structure with a well-established segregation of duties to ensure effective governance and operational efficiency. Each departmental head is accountable to the Head of Media Business, who oversees the integration and performance of the various divisions. The Head of Media Business, along with the Chief Financial Officer (CFO), directly reports to the CEO. The CEO, in turn, provides comprehensive updates and briefings to the Board of Directors on the Company's progress, strategies, and key developments. In terms of internal controls and compliance, the Head of Internal Audit operates independently and reports directly to the Audit Committee. This ensures an unbiased and transparent review of the Company’s f inancial and operational processes. This organizational framework facilitates clear communication, accountability, and effective decision-making at all levels.

Mr. Salman Iqbal serves as the CEO of the Company, providing strategic leadership and overseeing its overall operations. Mr. Jarjees Seja, a distinguished figure in the media industry, holds the position of Head of Media Business, with extensive experience and expertise. Mr. Seja drives the Company’s media operations, shaping its vision and content strategy. Mr. Minhas Muhammad Hassan Molwani fulfills the dual roles of Chief Financial Officer (CFO) and Company Secretary. In these capacities, he is responsible for managing the Company’s financial strategy, reporting, and compliance, as well as handling corporate governance matters. Mr. Ammad Yousaf serves as the President of ARY News, leading the channel's operations, ensuring editorial excellence, and guiding its strategic direction in the competitive news media landscape. Together, this leadership team plays a crucial role in steering the Company towards continued growth and success in the media industry.

The Company does not have established formal management committees. Instead, senior management convenes as needed, with meetings occurring regularly.

The Company introduced its custom-developed ERP system in 2007, and since then, it has been continuously upgraded and enhanced to align with the evolving needs of the business. The primary modules within the ERP system include: i) Financial Solutions, which manages financial transactions and reporting; ii) Media Management System, designed to streamline the planning, execution, and tracking of media-related activities; and iii) Inflow, a module dedicated to managing the inflow of goods, services, or information within the organization. In addition to the ERP system, the Company has implemented Time Trax, a specialized Human Resources (HR) module that supports the payroll process, ensuring accurate and efficient management of employee compensation.

The Company has established an in-house internal audit department, which reports directly to the Board committee. The department conducts audits on a quarterly basis, ensuring that all activities are thoroughly examined. Each audit is accompanied by a detailed and well-documented report, which is reviewed by the Board committee to provide transparency and ensure effective oversight of internal controls and operations.

The advertising industry continues to evolve amid heightened pressure on advertisers to optimize returns, particularly in the current environment of economic stress. Multinational companies have increasingly streamlined advertising budgets, intensifying competition among media platforms. The entertainment sector remains highly competitive, with both domestic and international players vying for audience attention amid rapidly shifting consumption patterns. The expansion of affordable internet access and rising penetration of smartphones and laptops have accelerated the shift toward digital media, prompting a gradual migration of advertising spend from television to digital platforms. Advertising revenues remain closely linked to macroeconomic conditions; persistent economic challenges and Pakistan’s recurring Current Account Deficit (CAD) continue to pressure the PKR–USD exchange rate, increasing volatility in corporate advertising expenditures. Despite a structural shift toward digital and OTT platforms, television retains relevance, with approximately 59% of Pakistanis watching TV at least once a week. However, the share of non-viewers has risen to around 22%, reflecting growing reliance on digital media. In FY24, total media sector advertising revenues reached PKR 114.6 billion (+14.4% YoY). Television remained the largest segment with PKR 50.1 billion (43.7% share), while digital advertising expanded rapidly to PKR 35.8 billion (31.2% share), supported by a large and growing online user base on platforms such as YouTube. This ongoing shift poses structural challenges for traditional broadcasters, while digital media faces emerging regulatory and data-privacy risks.

In FY25, ARY Communications maintained a strong market position within Pakistan’s broadcast media industry. ARY Digital reported revenues of approximately PKR 11.868 billion, significantly outperforming key peers. Notably, ARY Digital’s revenues were derived almost entirely from a single stream, advertising, underscoring its dominant share in traditional broadcast advertising. In contrast, several industry peers operate with a more diversified revenue mix, incorporating digital platforms, subscription-based models, and ancillary income streams alongside advertising. While ARY Digital’s concentration highlights its strong brand recall and advertising demand, it also reflects comparatively higher exposure to advertising market cyclicality relative to more diversified competitors.

ARY, a leading broadcaster with a strong presence in news and general entertainment programming, has been a key contributor to revenue growth in recent years. The Company’s primary revenue stream, advertising income, exhibited strong and consistent growth up to FY24, with net revenues increasing by 37% year-on-year to PKR 15.2 billion in FY24, compared to PKR 11.1 billion in FY23 and PKR 9.9 billion in FY22. However, this positive trajectory reversed in FY25, with revenues declining by approximately 22% to PKR 11.868 billion. The contraction is largely attributable to the Company’s reliance on a single revenue stream, in contrast to peers with more diversified income profiles. Additionally, evolving marketing spending patterns and increased budgetary rationalization by advertisers are expected to continue exerting pressure on advertising revenues in the near term.

The Company has exhibited margin volatility over the review period, reflecting fluctuations in cost structure and revenue performance. In FY25, gross margin declined sharply to approximately 10.2% (FY24: 18.8%, FY23: 24.5%, FY22: 11.1%), primarily due to elevated transmission and broadcast-related costs. Correspondingly, operating margin compressed to around 3.8% in FY25, compared to 14.0% in FY24, 17.7% in FY23, and 5.4% in FY22. At the net level, profitability weakened materially in FY25, with net income declining to PKR 199 million, compared to PKR 1,344 million in FY24 (FY23: PKR 1,335 million; FY22: PKR 473 million). While FY24 earnings were supported by higher sales volumes, the sharp decline in FY25 revenues, coupled with cost pressures, resulted in a significant contraction in net margin to 1.7%, down from 8.8% in FY24, 12.0% in FY23, and 4.7% in FY22. Overall, profitability in FY25 reflects the combined impact of rising operating costs and subdued revenue generation.

The sustainability of a media channel relies heavily on its ability to maintain a competitive edge and protect its market share. This challenge is particularly significant for local TV channels, which must compete not only with other domestic broadcasters but also with international and digital platforms. To achieve this, it is crucial for a TV channel to build a strong brand image and deliver high-quality programming, with the ultimate goal of consistently winning audience preference. ARY has demonstrated its strength in this area by successfully increasing viewer engagement over time. Supported by experienced promoters with a long-standing presence in the broadcasting industry, a solid market position, advanced technology adoption, strong customer profiles and satisfaction, as well as superior content quality, ARY has been able to foster sustainable viewer loyalty.

The Company manages its working capital requirements through a balanced combination of internal cash generation and short-term borrowing facilities from various financial institutions. During 1QFY26, the Company’s gross working capital cycle increased to 333 days (FY25: 276 days), primarily due to an increase in receivable days. A similar trend was observed on a full-year basis, with the gross working capital cycle rising to 276 days in FY25, compared to 201 days in FY24. This elongation was largely mitigated by a notable improvement in trade payable days, which increased to 80 days as of September 2025, compared to 46 days in FY25 and 16 days in FY24. Net working capital days stood at 252 days as of end-September 2025, broadly stable relative to June 2025 (230 days), though elevated compared to June 2024 (185 days) and June 2023 (204 days). The Company continues to maintain adequate working capital lines to support its short-term liquidity requirements. As of September 2025, total short-term borrowings, including the current maturity of long-term borrowings, amounted to PKR 586 million, reflecting sufficient liquidity coverage.

The Company’s cash flows and coverage ratios have shown mixed performance over the years, with improvements driven by higher FCFO (free cashflows from operations) in FY23. However, as of June 2024, FCFO decreased to PKR 1,806 million, down from PKR 2,010 million in the previous period (FY22: PKR 226 million), primarily due to a decline in profits and these further decreased to merely PKR 250 million in FY25. Finance costs also rose, increasing to PKR 157 million in FY25, compared to PKR 154 million in FY24, reflecting an uptick in short-term borrowings. Consequently, interest coverage declined to 1.6x from 11.7x in FY24. Therefore, the decrease in interest coverage is notable.

The Company maintains a low reliance on borrowings. As of June 2025, total borrowings stood at PKR 629 million, down from PKR 811 million in SPLY. Of this, short-term borrowings (STB) accounted for PKR 495 million (FY24: PKR 738 million) . The Company has consistently strengthened its equity base, which currently stands at PKR 9,598 million as at FY25 compared to PKR 9,404 million as at FY24. As a result, the Company's leverage ratio decreased to approximately 6.1%% at the end of FY25, down from 7.9% in FY24.