Brainchild Communications Pakistan (Pvt.) Limited (herein referred to as "Brainchild" or "The Company") is a Private Limited Company incorporated, as a majority owned subsidiary of Bee Squared (Pte.) Limited, in 2010.

The Company was incorporated under the Companies Ordinance, 1984 (now “Companies Act, 2017”), operating in the space of media communication & planning. In the year of its inception, i.e., 2010, the Company entered into affiliation with Publicis Groupe, one of the largest media houses in the world. It is based in France. The Company uses the trademark of the divisions of the Publicis Group; Starcom and Mediavest.

Brainchild's principal activity is to carry out media buying, starategy, communications and planning for its clients. Moreover, it specializes in media consulting and other related activities including media research and creative services, with respect to digital marketing. The Company has three offices in the country i.e. in Karachi, Lahore and Islamabad.

Brainchild is predominantly owned by Bee Squared PTE, a Singapore-based Company holding a ~52% stake. The remaining shares are distributed between Mr. Raihan Merchant, the chairman of Brainchild, who holds a ~38% stake, and Merchant Holdings (Pvt.) Ltd, a fully owned Company of Mr. Raihan Merchant, which holds the remaining ~10% stake.

Since its inception, the ownership structure of the company has remained unchanged. To ensure the stability and continuity of leadership, a formal succession plan is also in place. This plan is designed to manage leadership transitions smoothly and maintain the Company's strategic direction and operational integrity over time. This demonstrates the Company's commitment to long-term growth and sustainability, ensuring that it continues to thrive under carefully planned and structured guidance.

Mr. Raihan Merchant, the founding chairman of Brainchild, is widely regarded as a trailblazer in the field of media and advertising. He pioneered the concept of media buying and planning in Pakistan, revolutionizing the industry. In 2011, his significant contributions were recognized by the Government of Pakistan, which honored him with the Tamgha-e-Imtiaz (Medal of Excellence). Leveraging its affiliation with a globally recognized marketing group, the Company has consistently showcased impressive performance indicators and sustained growth. This steady progress reflects the Company's robust business acumen and strategic prowess.

The financial strength of the sponsors is regarded as adequate. The group's financial performance reflects their capability and stability. In FY24, the total turnover of the group reached to PKR ~29bn. This substantial turnover indicates the group's ability to generate significant revenue and manage their operations effectively. Furthermore, IHF25, the group's turnover was recorded at PKR ~12bn. This demonstrates a continued strong financial performance, maintaining a healthy revenue stream. The consistent turnover figures highlight the sponsors' financial robustness and their potential to support and sustain future endeavors

The Board of Directors consists of five members, including Chairman Mr. Raihan Ali Merchant and Mr. Syed Taqui Abbas Rizvi. The board also has two independent directors who provide objective perspectives and one director representing Bee Squard PTE, Mr. Mike Readman.

The board members possess a strong professional background, with a cumulative experience of over ~31 years. This extensive experience equips them with a deep well of expertise and knowledge in their respective fields. Their long-standing careers and professional achievements enable them to bring valuable insights and strategic guidance to the organization. The diverse skill sets and vast experience of the board members are key assets that contribute to the Company's growth, innovation, and overall success.

The board, consisting of a blend of seasoned entrepreneurs and financial experts, provides invaluable strategic guidance to the management team. This diverse mix of experience and expertise ensures well-rounded decision-making and robust governance. In accordance with the guidelines of the Code of Corporate Governance, the board has established two essential sub-committees: the HR Committee and the Audit Committee. The HR Committee focuses on human resource-related matters, ensuring that the organization's talent management aligns with its strategic goals. The Audit Committee oversees financial reporting, internal controls, and compliance, safeguarding the company's financial integrity and transparency. These sub-committees play a crucial role in supporting the board's mission to drive the organization towards sustainable growth and success.

The Company's auditors, BDO Ebrahim & Co. Chartered Accountants, issued an unqualified opinion on the financial statements for FY23. However, the audit for FY24 is currently in progress. 

The organizational structure of the Company is composed of thirteen distinct functional departments, each led by skilled professionals. These department heads report directly to either the Chairman or the CEO, depending on their respective areas of responsibility. The management team is comprised of individuals with a long-standing association with Brainchild, demonstrating their deep understanding of the Company's operations and values. To foster diverse expertise among its workforce, the Company actively rotates employees across various departments. This strategic approach not only enhances their skill sets but also prepares them for future leadership roles, creating a robust succession pipeline for the senior management. By cultivating a dynamic and adaptable team, the Company ensures sustained growth and continuous improvement in its operations.

Mr. Farhan Khan, the CEO of the Company, brings with him over ~25 years of diversified professional experience, having worked in both the Middle East and Pakistan. Throughout his impressive career, he has successfully managed media accounts for several major global advertisers, including renowned Companies such as Samsung, Pfizer, General Motors, Emirates, Telenor, P&G, GSK, Unilever, and Reckitt Benckiser. His extensive experience in handling high-profile accounts for these leading brands showcases his expertise and strategic acumen in the media industry. Mr. Khan's leadership and vision continue to drive the  Company's success and growth, leveraging his vast knowledge and insights to achieve outstanding results.

In FY24, the Board established a Management Committee with aligned and approved Terms of Reference (TORs). This committee is mandated to meet and deliberate on specific agenda items once a month. Additionally, they are required to convene as needed, with members receiving a minimum of one week's notice prior to any meeting. The regular monthly meetings and the flexibility to address urgent matters ensure that the Management Committee remains proactive and responsive, providing timely strategic guidance and oversight.

The Company has both in-house as well as globally-sourced tools (both licensed and proprietary) which allow it to provide high level of insight, optimization and value to its clients. Brainchild uses "ODOO ERP V14 Enterprise."

The organizational structure includes various cadres of management, each clearly defining lines of responsibilities and authorization. This hierarchical arrangement ensures efficient decision-making and accountability throughout the Company. Complementing this structure is a robust technological infrastructure that supports both manufacturing and support functions, enhancing operational efficiency. Management meetings are held frequently, focusing on the Company’s financial position and future strategy. These regular discussions enable the leadership to make informed decisions, adapt to changing market conditions, and drive the company towards sustained growth and success.

The media industry in 2025 is experiencing transformative trends, such as AI-driven personalization and immersive experiences. Advertising is growing rapidly, with streaming services exploring ad-supported models, and the gaming sector continues to expand. Innovations in blockchain and cybersecurity ensure secure transactions, while real-time content sharing technologies enhance audience engagement. Social commerce is also reshaping customer interactions and revenue generation. The media industry earns majority of its revenue from advertisements. Other revenue streams include production revenue, subscription revenue and revenue earned by selling user data. The Media Market in Pakistan is witnessing moderate growth, influenced by the rise of digital platforms, changing consumer preferences, and the increasing availability of diverse content. This evolution reflects a shift towards more accessible and engaging media consumption. Ad spending in the Advertising market in Pakistan is forecasted to reach US$720m in 2025.

The Company holds a prominent position in the market. Total media players in industry is above 79 with major players; Group M and Brainchild. With respect to the advertising expenditure on TV, during FY24 Group M market share is ~36% while Bee Squared Group is on second with ~35% Market share. Brainchild has on boarded many new clientele which will improve performance of the Company in future.

The Company's revenue, which consists of both service income and discounts, benefited from effective cash management. As of FY24, the topline reached to PKR 1,380 mln, compared to PKR 1,076 mln in FY23, reflecting a YOY increase of ~28% driven by a more competitive pricing strategy and improved target market segmentation.

In FY24, the Company's gross profit margins increased slightly to ~26%, up from around ~24% in FY23, primarily due to higher sales. However, the net profit margin remained unchanged at about ~3% in FY24, consistent with FY23 due to the hefty taxes and increased finance cost. 

PEMRA has issued licenses for ~80 satellite television channels, covering a diverse range of genres including news, entertainment, sports, and more. Despite the challenging economic conditions, advertising spending is expected to persist, as it remains crucial for entities to reach their end consumers. Recently, several major esteemed clients, including government contracts, have been added to the portfolio of Brainchild, bringing a significant advertising budget.

Due to the nature of the business, the total billings (which are to be subsequently paid to the media suppliers) form part of the trade receivables and payables. The working capital cycle is calculated with reference to the total billings as opposed to the revenue of the Company. During FY24, the trade receivable days has been increased to ~123days from ~93 days in FY23 due to increased customer acquisition cost. On the other hand, the trade payable days as at FY24 stood at ~108 days from ~79 days in FY23. Hence, net working capital cycle is reached to ~15 days from ~13days in FY23.

As of FY24, the Company's free cash flows (FCFO) amounted to PKR ~308mln, down from PKR ~382mln in FY23. This decrease in FY24 is mainly due to increased finance costs and taxes, which led to a lower EBITDA. The FCFO coverage to debt obligations (including finance costs, current maturities of long-term debt [CMLTD], and uncovered short-term borrowings) was recorded at ~1.1x in FY24 (FY23: ~0.6x).

As of June 2024, the Company has total borrowings of PKR ~786mln, a decrease from PKR ~1,261mln in June 2023. This reduction in FY24 is primarily due to a decline in short-term borrowings of the Brainchild. The Company's leveraging mix is predominantly composed of short-term borrowings, amounting to PKR ~672mln in FY24 compared to PKR 1,146mln in FY23. These borrowings are secured against the Company's receivables. As a result, the leveraging ratio has also declined in FY24, remaining within the range of ~55% to ~73% over the past three years.