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 mid-2000. 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 across the country and offering a wide range of content to television viewers. The Company holds an encrypted satellite TV channel license from the Pakistan Electronic Media Regulatory Authority (PEMRA). ARY operates seven channels: i) ARY News, ii) ARY Digital, iii) ARY QTV, iv) ARY Zindagi, v) A Sports, vi) Nickelodeon, and vii) ARY Musik. To support its operations, the Company has established two subsidiaries: i) ARY Films & TV Productions (Pvt.) Limited, and ii) ARY Films (Pvt.) Limited.

The Company is a family-owned business, with approximately 99% of its shareholding controlled by family members. The majority of these shares, around 46%, are held by ARY Digital FZ-LLC, a parent company based in the UAE. ARY Digital FZ-LLC is predominantly owned by Mr. Salman Iqbal, who, through both this entity and his personal holding, owns around 65% of the total shareholding. The remaining shares are distributed among other family members, with approximately 1% of the ownership held by external investors.

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 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 reflects 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 focused on critical areas of governance and oversight. These include: i) the Audit Committee, which meets quarterly and as needed to review financial reporting and internal controls, ii) the Human Resources (HR) Committee, which convenes semi-annually and as required to oversee talent management and organizational development, and iii) the Risk Committee, which meets quarterly and as necessary to assess and manage potential risks facing the Company. Minutes from both the Board of Directors and committee meetings are thoroughly documented, ensuring transparency and accountability in decision-making processes.

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 2024. The firm 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 financial 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 in the field, Mr. Seja drives the Company’s media operations, shaping its vision and content strategy. Mr. Minhas Muhammad Hassan 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 media industry in Pakistan has seen remarkable growth, with an increasing number of platforms providing businesses with new opportunities to advertise and broaden their consumer reach. TV channels and other platforms rely on producing high-quality content to attract viewership, which, in turn, helps them secure and retain advertising revenue. In FY24, total advertising expenditure reached PKR 114.6 billion, an increase from PKR 100.1 billion in FY23, reflecting a consistent upward trend in the sector. Television advertising continues to dominate, with TV channels accounting for a significant portion of the total spend—PKR 50.14 billion, which represents 43.74% of the total advertising expenditure (compared to PKR 43.41 billion or 43.34% in FY23). As of the end of FY24, there are over 140 active TV channels in Pakistan. However, only a few have managed to establish themselves as prominent players in the industry, attracting substantial viewership and securing high-value advertising contracts. The top channels in Pakistan, based on viewership and advertising revenue, are i) ARY Digital, ii) Geo Entertainment, iii) Hum TV, iv) Geo News, and v) ARY News.

ARY Communications is a leading player in the industry, holding approximately 30% of the market share in terms of revenue in FY24, up from around 23% in FY23. This growth highlights the Company's strengthened position and increasing influence within the media sector.

ARY, known for its news and general entertainment programming, has played a key role in driving the revenue growth. The Company’s primary revenue source is advertisement income, which has shown steady growth over the years. In FY24, the Company achieved a significant 37% increase in net revenue, totaling PKR 15.2 billion, compared to PKR 11.1 billion in FY23 and PKR 9.9 billion in FY22.

The Company has experienced fluctuating margins over the years. In FY24, the gross margin declined to approximately 18.8% (FY23: 24.5%, FY22: 11.1%), primarily due to increased transmission and broadcast costs. Similarly, operating margins also saw a downward trend, falling to around 14% (FY23: 17.7%, FY22: 5.4%). At the net level, the Company’s net income showed a slight increase in PKR terms, reaching PKR 1,344 million (FY23: PKR 1,335 million, FY22: PKR 473 million), driven by higher sales. However, net margins decreased to 8.8% (FY23: 12.0%, FY22: 4.7%), reflecting the impact of rising costs on overall profitability.

Media Channel sustainability depends to gain a competitive advantage over their competitors to save their market shares and sustain themselves in the sector. This especially applies to local TV channels, which not only compete with other local TV channels, but also compete with international and online platforms at the same time. For this it is important for the TV channel to create a good brand image in the minds of the audience, as well as good program quality, their end goal being to sustainably gain the preference of the audience. ARY’s proven ability to increase their viewing times over a period along with experienced promoters with the long track record in broadcasting industry with the established market position, the use of technology, the profile and satisfaction of customers, the quality of the product or service produced leading to the sustainable behavior of the viewers.

The Company manages its working capital primarily through its own cash flows, with minimal reliance on borrowings. However, as of June 2024, short-term borrowings (STB) increased to PKR 738 million, up from PKR 297 million in June 2023 (FY22: Nil). Given the nature of the business, which does not require inventories, working capital days are predominantly driven by receivable days and payable days. As of June 2024, receivable days slightly decreased to 201 days (FY23: 211 days, FY22: 198 days), while payable days increased to 16 days from 7 days in FY23 (FY22: 4 days). As a result, net working capital days declined to 185 days (FY22: 195 days), reflecting an increase in revenue and an increase in payables compared to the previous year.

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. Finance costs also rose, increasing to PKR 154 million in FY24, compared to PKR 66 million in FY23, reflecting an uptick in short-term borrowings. Consequently, interest coverage declined to 11.7x from 30.7x in FY23 (FY22: 2.9x). While the decrease in interest coverage is notable, it remains at a comfortable level.

The Company maintains a low reliance on borrowings. As of June 2024, total borrowings increased to PKR 811 million, up from PKR 412 million in FY23 (FY22: PKR 89 million). Of this, short-term borrowings (STB) accounted for PKR 738 million (FY23: PKR 297 million, FY22: Nil), representing 91% of total borrowings (FY23: 72%, FY22: Nil). The Company has consistently strengthened its equity base, which stood at PKR 9,404 million as of FY24 (FY23: PKR 7,922 million, FY22: PKR 6,442 million). As a result, the Company's leverage ratio increased to approximately 7.9% at the end of FY24, up from 4.9% in FY23 (FY22: 1.4%), reflecting a modest increase in borrowing relative to equity.