Select Technologies (Private) Limited (referred to as "SELECT" or "the Company") was incorporated in Pakistan on October 13, 2021, as a private limited company under the Companies Act, 2017. The Company's registered head office is located at 152- 1-M, Quaid-e-Azam Industrial Area, Kot Lakhpat, Lahore, Punjab, Pakistan. SELECT is a wholly owned subsidiary of Air Link Communication Limited. The Company was established to realize the sponsors' vision of setting up a state-of-the-art mobile phone assembly plant in Pakistan, to promote 'Made in Pakistan' products, and to create employment opportunities. SELECT has forged a strategic partnership with global smartphone leader Xiaomi to assemble a range of popular smartphone brands and models locally in Pakistan. The Company’s primary business is establishing, operating, and managing facilities for the assembly and production of mobile phones of various types and specifications. The Company's factory spans over 120,000 sq. ft. of closed space, including 60,000 sq. ft. of cleanroom area, with an annual production capacity of approximately 2.7 million units based on a single-shift operation. During FY25, the Company assembled ~2 million mobile devices, with a capacity utilization of ~75% (FY24: ~94%). 

The Company is a wholly owned subsidiary of Air Link Communication Limited, holding approximately 99.99% of the shares, with the remaining minor stake owned by individual investors. The ownership structure of the Company is deemed stable, with the majority stake held by the parent company, and no significant changes are anticipated in the near future. The sponsoring family plays an active role in the group’s related businesses and possesses a deep understanding of the industry. Under their leadership, the parent company has experienced substantial growth over the years, a success that is also reflected in the performance of Select Technologies (Pvt.) Limited. The sponsors of the Company do not hold any shareholding in other companies, which contributes to a focused financial position. As a result, the financial strength of the sponsors is considered to be adequate.

The board of Select Technologies (Pvt.) Limited comprises five members: Mr. Muzzaffar Hayat Paracha (Group CEO / Director), Mr. Amir Mehmood (Group CFO / Director), Mr. Adnan Aftab (CEO of SELECT), Ms. Hina Sarwat (Director), and Mr. Syed Nafees Haider (Director). The board members are seasoned professionals with extensive experience in managing business operations. Mr. Muzzaffar Hayat serves as the Chairman of the Board, bringing over two decades of leadership experience. The Company has established both an Audit Committee and an HR & Remuneration Committee to enhance board effectiveness. Additionally, the inclusion of a female director on the board strengthens the Company's commitment to a diverse and effective governance structure. The Company's external auditors, M/s BDO Ebrahim & Co. Chartered Accountants, are listed in Category 'A' on the SBP’s panel of auditors. They issued an unqualified opinion on the Company’s financial statements for the year ended June 30, 2024, affirming the Company’s compliance with applicable policies and accounting standards.

The organizational structure of the Company is organized into various functional departments, with each department head reporting directly to the CEO, who in turn reports to the Group CEO. Within each department, a clear management hierarchy is in place, allowing for streamlined operations and efficient execution of tasks. The management of the Company consists of qualified and experienced professionals. Mr. Adnan Aftab, the CEO, holds a Master’s degree in Manufacturing Engineering and brings over three decades of experience with leading companies. He is supported by a team of skilled professionals across various divisions, ensuring efficient operations and smooth reporting. Each department head is responsible for managing the operations of their respective department. Clearly defined roles and responsibilities within the organization contribute to the overall effectiveness of the organizational structure. The Company has implemented an integrated SAP system, comprising various modules. Management Information System (MIS) reports are generated frequently for senior management, providing detailed insights for informed decision-making. The Company has established an in-house internal audit function to assess and report on risks arising from its operations.

Pakistan has emerged as one of the fastest-growing cellular markets. The devaluation of the currency against the USD in the preceding year, coupled with a rise in duty structure, has significantly amplified the prices of imported phones, exerting pressure on the demand for high-end mobile phones. In CY24, local mobile production reached ~31.38 million units (CY23: ~21.28 million units), comprising around 13 million 2G devices and ~19 million smartphones as per the Pakistan Telecommunication Authority (PTA). Similarly, imports also increased to ~1.71 million units from ~1.58 million units in CY24. Currently, there are four top distributor chains in the country, with Airlink ranking number one. SELECT is one of the foremost mobile phone assemblers in the country. The Company collaborates with the globally renowned brand Xiaomi to assemble and distribute its smartphones in the local markets of Pakistan. This partnership with Xiaomi underscores SELECT's leading position in the industry and its commitment to providing high-quality products to consumers. In FY25, the Company showed a decline of ~33.4% in its topline and recorded a total sales of ~PKR 48,893mln (FY24: ~PKR 73,460mln). During FY25, the Company’s gross margin stood at ~8.3%, operating margin at ~8.0%, and net margin at ~3.3%, on the back of reduced COGS. The sustainability of the Company is affirmed by SELECT's association with Xiaomi Corp., the Global Consumer Electronics & Smartphone Giant, as its manufacturing partner for Xiaomi smartphones in Pakistan. Xiaomi is the world’s second-largest vendor by handset shipments. Thus, boding well for the sustainable and quality technology accessible to everyone in Pakistan. Furthermore, the Company is also starting the assembly of Xiaomi Smart TVs, which will diversify the product portfolio and augment the revenue streams of SELECT.

The Company’s working capital requirement emanates from financing inventory. Since the imposition of SBP's directive to maintain a 100% margin for Line of Credit (LC), working capital needs shall remain high. The average gross working capital days of the Company stood at 78 days in FY25 (FY24: 27 days, FY23: 90 days; FY22: 259 days). Average net working capital days of the Company also increased to 34 days in FY25 (FY24: 8 days, FY23: 45 days, FY22: 253 days). Furthermore, Free cash flow from operations (FCFO) marginally increased to ~PKR 4,096mln in FY25 (FY24: ~PKR 3,845mln, FY23: ~PKR 1,359mln, FY22: ~PKR 320mln). Core operating coverages of the Company remained unchanged during the review period (FY25: 2.0x, FY24: 1.9x, FY23: 1.2x, FY22: 1.9x). Debt payment capacity currently remains adequate. Total debt of the Company further increased in FY25 and was recorded at ~PKR 12,888mln (FY24: ~PKR 9,351mln). The Company has a leveraged capital structure. In FY25, the leveraging ratio stood at 59.9% due to an increase in short-term borrowings (FY24: 58.0%, FY23: 54.2%, FY22: 40.9%). Most of the debt book is composed of short-term loans to manage working capital needs. However, a cautious management approach is necessary.

Select Technologies (Pvt.) Ltd. has issued its second Rated, Secured, Privately Placed, Short-term Sukuk of PKR 3.5bln on June 16, 2025, marking a strategic financial move for the Company. The Sukuk carries a markup at 6MK+1.75% with a tenor of six months. The repayment of principal and markup will be done in a bullet upon maturity. The underlying instrument will be secured by a ranking charge over the Current Assets of the company and any other security required by the credit rating agency. Corporate Guarantee (“CG”) by Airlink Communication Limited to be equivalent to the outstanding issue size plus any accrued markup in favor of the Investment Agent for the benefit of Privately Placed Short Term Sukuk holders during the tenor of the Issue in case of any negligence or misconduct on the part of STL.

The claims of the Sukuk holders will rank superior to the claims of ordinary shareholders.

The Issuer shall maintain and efficiently manage Debt Payment Account (“DPA”) under lien of the Investment Agent whereby the payment equivalent to PKR 875 million shall be made starting from 47 days before the maturity date, and every fortnight thereafter, such that amount equivalent to full issue amount is available in the DPA 05 days before the maturity date.