Multinet Pakistan Pvt. Limited (‘Multinet’ or ‘the Company’) was incorporated in 1996, as a private limited company. The Company was founded by Mr. Adnan Asdar Ali and Mr. Nasser Khan Ghazi in 1996, and began as the branded reseller of internet and data connectivity services. Later in 2006, the 89% majority shareholding was acquired by TM International Limited (now called Axiata) of Telekom Malaysia. In Nov-18, Axiata fully exited from Multinet, transferring all of the shareholding to Mr. Adnan Asdar Ali. Multinet is currently engaged in providing connectivity infrastructure and solutions to Telecos, corporates, SMEs, and financial institutions. Primary business activity of the Company are to provide telecommunication, electronic media, and connectivity infrastructure and solutions, including internet services, design, development, and implementation of networks. Moreover, value-added services include voice services, data center, audio and video conferencing, hosting applications and servers.

The ownership of the company is predominantly concentrated, with Mr. Adnan Asdar Ali holding an 99.9% stake. The remaining shares are modestly distributed among the company’s directors, CEO, and VP of Energy. Ownership of the Company seems stable. The Sponsor has a respectable standing in the technology segment. Mr. Adnan Asdar Ali, the Chairman and co-founder of the Company, has more than 37 years of experience in connectivity-based solutions and network infrastructure. He co-founded the Company in 1996 and is responsible for building partnerships and synergies with renowned technology manufacturers. Financial strength of the Sponsor is considered adequate. Moreover, the Sponsor is engaged in software houses, telemedicine, water filtration, and mobile application development through multiple associated companies.

The Board of Directors comprises of 4 members. Mr. Adnan Asdar Ali serves as an Executive Director, while Mr. Sohail P. Ahmad, Joozer JiwaKhan, and Anwar Ali Khan serve as an Independent Directors. Mr. Adnan Asdar Ali, the co-founder, has more than 37 years of experience in connectivity-based solutions and network infrastructure. Last year, the Board established an audit committee to ensure the seamless execution of the audit process. Mr. Sohail P. Ahmad has been appointed as the chair of the committee. The Company’s external auditors, Baker Tilly Mehmood Idrees Qamar, have expressed an unqualified opinion on the financial statements of the Company for the year ended Dec-25. The firm is QCR rated and is in SBP’s category ‘A’ panel of auditors.

The Company’s organizational structure reflects clear reporting lines and is split between Operations, Administrative, Legal, Human Resources, and Business Development. Each function is monitored by the head of department, who reports to the CEO. The management comprises experienced and qualified individuals. Mr. Adnan Hayat Zaidi, the Chief Executive Officer, is an IT graduate. He has more than 22 years of experience in the technology industry and has been a part of the Company since 2002. Mr. Umer Zahoor, the CFO, is a Chartered Accountant and has an overall experience of 15+ years. He is associated with the Company since 2014. The Company has one management committee in place named the Steering Committee. It includes all the departmental heads, along with the CEO (Mr. Adnan Hayat Zaidi). Policies, procedures, budgets and key performance parameters are discussed in the committee meetings regularly to review activity. Weekly and monthly reports are shared with the CEO regarding the projects’ status. The Company has developed oracle as its Enterprise Resource Planning (ERP) System. EY is the company's internal auditor, conducting quarterly reviews of internal controls and submitting reports to the Board of Directors to maintain strong operational control.

With a growing youth population, increasing internet penetration and thriving startup ecosystem, Pakistan is poised to become a significant player in digital economy and achieve the goal of national growth and prosperity. From July 2023 to June 2024, Pakistan’s IT exports reached $3.223 billion, compared to $2.596 billion in the same period of the previous financial year. The IT industry is striving to increase IT exports with the full support of SIFC (Special Investment Facilitation Council), IT ministry, Pakistan Software Export Board. The present coalition government is paying special attention towards information technology (IT) and had earmarked over Rs79 billion for it in the budget 2024-25, the highest allocation in country’s history. 25% of cellular traffic and 50% of financial market traffic runs through Multinet Pakistan Pvt. Limited. The Company has segregated revenue streams according to the nature of its clientele. There are four different business units of the Company:    Enterprise Business Units (EBU): Information Communication and Technology (ICT) services are provided to corporates and SMEs. Corporations include financial institutions and multinational companies. EBUs contributed PKR 3,684mln (CY24: PKR 3,368mln) to the total revenue during CY25.   Carrier Business Unit Domestic (CBUD): In this segment, local telecom operators, Internet Service Providers, and Cable Operators are provided infrastructure for connectivity. These include long-term contracts with Telenor Pakistan, China Mobile, Transworld and Mobilink. This contributed PKR 873mln during CY25 (CY24: PKR 787mln).   Carrier Business Unit International (CBUI): The Company caters to international data and voice businesses with global operators. These include Tata Communications, Telebiz International, Verizon Business, and BICs among others. The segment contributed PKR 635mln (CY24: 638mln) in the Company’s topline.   Long Distance International (LDI): The Company offers global coverage for long-distance international voice calls with routing and billing options. Revenue contribution stood at PKR 96mln during CY25 (CY24: PKR 96mln).   International Business:  The Company offers a small portion of its services to international business as well. Revenue contribution stood at PKR 734mln during CY25 (CY24: PKR 717mln).   The company reported strong top-line growth in CY25, with gross revenue increasing to Rs. 6.16 billion from Rs. 5.68 billion in CY24, representing a year-on-year growth of approximately 8.5%. This indicates continued business expansion and improved market demand during the year. Sales tax expenses also increased in line with higher revenue levels, rising from Rs. 806.9 million in CY24 to Rs. 871.2 million in the period. Despite the increase in taxation, the company achieved a healthy improvement in net revenue performance.   As a result, net revenue grew to Rs. 5.29 billion in CY25 compared to Rs. 4.87 billion in CY24, reflecting an increase of approximately 8.6% year-on-year. The consistent growth in net revenue suggests stable operational momentum and effective revenue generation capabilities. The ratio analysis for CY25 reflects a notable improvement in operational efficiency and overall profitability. Gross Profit Margin increased significantly to 41.3% from 35.0% in CY24, indicating improved cost optimization, stronger pricing discipline, and better utilization of network and infrastructure assets. This improvement is particularly important in the ICT sector, where fixed infrastructure investments are substantial and margin enhancement reflects stronger scalability of services.   Operating Profit Margin also improved to 15.1% compared to 11.0% in the previous year, demonstrating enhanced control over administrative and operating expenses. The increase suggests that Multinet Pakistan has been able to leverage its existing fiber, cloud, and managed services infrastructure more efficiently while benefiting from higher enterprise demand for digital transformation and cybersecurity services.   Net Profit Margin improved to 6.7% from 5.2%, indicating stronger bottom-line performance despite industry-wide pressures such as inflation, technology upgrade costs, and competitive pricing within the telecom and IT-enabled services sector. The improvement reflects better financial management, operational resilience, and the company’s growing ability to convert revenues into shareholder value.  The Company has started to fiberize towers in Pakistan, which will be imperative for 5G technology and to cater the increasing user base. Currently, 1000 towers have been fiberized. For this purpose, the management has availed an Infrazamin credit guarantee-backed long-term loan of PKR 2.1bln from HBL currently loan amount restricted to 1,038mln

The Company demonstrated enhanced efficiency in its working capital management during CY25. Inventory days improved to 15 days from 19 days in the previous year, indicating a quicker turnover of stock and potentially reduced holding costs. Similarly, the Company achieved a reduction in trade receivable days, which stood at 52 days in CY25 compared to 68 days in CY23, suggesting more effective collection processes. Consequently, the gross working capital cycle shortened to 67 days in CY25 from 87 days in CY24, reflecting an overall improvement in the time taken to convert inventory and receivables into cash. Furthermore, payable days also decreased to 115 days in CY25 from 128 days in CY24, indicating a potentially faster payment cycle to suppliers. The net working capital days remained negative but moved from -49 days in CY25 to -41 days in CY24. While a negative net working capital cycle can be a sign of efficient cash management, the slight increase warrants monitoring to ensure it is not indicative of undue pressure on supplier payments. Overall, the improvements in inventory days and trade receivable days contributed positively to a more efficient working capital cycle for the Company. The Company exhibited a notable improvement in its funds from continuing operations (FCFO), which increased to PKR 1,122 million in CY25 from PKR 828 million in the prior year. This strengthening in FCFO provides a larger pool of internally generated funds available to service debt obligations and fund operational needs. The decrease in finance costs to PKR 270 million in CY25 (CY24: PKR 414 million), the Company's FCFO to finance cost coverage improved to 4.7x in CY25 from 2.2x in CY24.   This indicates an enhanced ability to meet its interest expenses from its core operating cash flows. The total coverage ratio also showed positive momentum, rising to 0.5x in CY25 from 0.4x in CY24, suggesting a slightly improved capacity to cover total debt obligations with its FCFO. The increase in FCFO more than offset the rise in finance costs, resulting in stronger debt service coverage metrics for the Company. The Company maintains a conservative capital structure, evidenced by a leverage ratio of 24.1%. This prudent approach to financing is further highlighted by a reduction in overall borrowings, which stood at PKR 2.2 billion in CY25 compared to PKR 1.6 billion in the prior year. Notably, the composition of the Company's debt portfolio indicates a low reliance on short-term financing, with only 4.3% of total borrowings categorized as short-term. This emphasis on longer-term funding sources mitigates potential refinancing risks and supports a stable financial foundation. The combination of a low leverage ratio and a predominantly long-term debt profile suggests a measured and sustainable approach to capital management.

Multinet Pakistan (Pvt.) Limited has issued a privately placed secured instrument of PKR 2,100 million (as per management representation initially the contract was designed to be 2,100 million but was later restricted to 1,038mln due to surge in policy rate) with InfraZamin Pakistan as its guarantor. The proceeds of the facility will be utilized by the Company for funding its expansion plans including addition of 225 Data Centre Racks, Long Haul Capacity Expansion from 12.5 Gbps to 200 Gbps, Fiber Footprint, and Tower Fiberization. The tenor of the instrument is 7 years with 24 quarterly payments. The profit is being paid quarterly in arrears at the rate of 3M Kibor+0.75% p.a calculated on a 365 days basis on the outstanding principal amount. The principal is also being paid in twenty-four equal quarterly installments commenced from Feb-24 after the expiry of the Grace Period.

The claim of the Instrument holder will rank superior to the claim of ordinary shareholders.

The Facility is secured by the way of i) Pari Passu hypothecation charge over the present and future movable fixed assets of the Company with a minimum 25% margin ii) specific contracts and receivables of the Borrower are assigned and routed through a designated Escrow Account at Habib Bank Limited, with a Lien over and set-off rights on the Escrow Account iii) 100% of the Borrower's shares are pledged iv) Personal Guarantee of the Sponsor and Sponsor Support Agreement v) Debt Payment Account opened for monthly routing of next installment amount for the specific receivables and vi) Debt Service Reserve covering 1.5x of peak quarterly installment.