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 clean room area, with an annual production capacity of approximately 2.7 million units based on a single-shift operation. In FY25, the Company assembled approximately 2 million mobile devices, reflecting a capacity utilization rate of around 75%.

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 parent company (AIRLINK) is in the phase of establishing a new state-of-the-art facility at Sundar Green Special Economic Zone (SGSEZ), Lahore. The project spans eight (8) acres with 1.4 million sq. ft. of purpose-built infrastructure, of which three (3) acres are owned by AIRLINK and five (5) acres by its wholly owned subsidiary, Select Technologies (Pvt.) Limited. The facility will integrate a 1 megawatt (MW) solar power generation system, which will reduce cost of production, lower the Company’s carbon footprint, and support long-term sustainable operations. The facility is expected to commence commercial operations by end of 2025. By operating within the SGSEZ framework, AIRLINK will benefit from ten (10) years of fiscal incentives, enhancing competitiveness and longterm growth. In line with its strategic vision, the new facility is designed to support future exports of mobile phones, laptops, LED TVs, electronics, home appliances, and other high-tech products by international brands from Pakistan, reinforcing AIRLINK’s role in strengthening the country’s industrial and export base.

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, 2025, 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 the irrespective 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 8MCY25, local mobile production reached ~19.76 million units (CY24: ~31.38 million units, CY23: ~21.28 million units), comprising around 10 million 2G devices and ~10 million smartphones as per the Pakistan Telecommunication Authority (PTA). Similarly, imports also decreased to ~1.29 million units in 8MCY25 (CY24: ~1.71 million units). 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 margins improved at all levels, with gross, operating, and net margins recorded at approximately 8.3%, 8.0%, and 3.3%, respectively. The improvement was primarily driven by a reduction in cost of goods sold (COGS) and better operational efficiency. 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 has also started 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 increased and stood at 77 days in FY25 (FY24: 27 days, FY23: 90 days), reflecting a temporary buildup in inventory and receivables following the launch of new models. Similarly, the average net working capital days of the Company stood at ~34 days in FY25 (FY24: 8 days, FY23: 45 days). Furthermore, Free cash flow from operations (FCFO) remained stable at ~PKR 3,448mln in FY25 (FY24: ~PKR 3,845mln, FY23: ~PKR 1,359mln), supported by consistent operating cash generation. Core operating coverages of the Company decreased during the review period (FY25: 1.2x, FY24: 1.9x, FY23: 1.2x). In FY25, the core coverage ratio also decreased to 1.6x (FY24: 2.6x, FY23: 1.7x). Debt payment capacity currently remains comfortable. Total debt of the Company further increased in FY25 and was recorded at ~PKR 12,902mln (FY24: ~PKR 9,351mln, FY23: ~PKR 4,528mln). The Company has a leveraged capital structure. In FY25, the leveraging ratio stood at 61.2% due to an increase in short-term borrowings (FY25: 65.5%, FY24: 56.5%, FY23: 39.0%). Most of the debt book is composed of short-term loans to manage working capital needs. Pertaining to the high-leveraged capital structure, PACRA will monitor the maintenance of full coverage of free cash flows from operations (FCFO) to gross sukuk obligations and preserving the desired level of leverage on a consolidated basis. To fulfill the immediate CAPEX requirment, the comapny is set to issue a new short-term sukuk of PKR 2.0bln, which will be bridged with the long-term syndicated facility of PKR 5,300 million, which is expected to be activated within a short span of time. This strategic arrangement reflects the Company’s proactive financial management, prudent liquidity planning, and commitment to maintaining an optimal funding structure through seamless alignment of short- and long-term financing needs. In addition to that, the Issuer has undertaken to cap identified financial institution's borrowing limits at a pre-agreed level, ensuring that the equivalent amount of PKR 2,100 million remains unutilized throughout the Sukuk’s tenor. This covenant will be served as a back-up source for instrument repayment if required. PACRA will monitor the un-utilized limits as agreed on a weekly basis.

Select Technologies (Pvt.) Ltd. is set to issue its third Rated, Secured, Privately Placed, Short-term Sukuk-III of PKR 2.0bln, marking a strategic financial move for the Company. The Sukuk carries a markup at 6MK+1.35% with a tenor of six months. The repayment of principal and markup will be done in a bullet upon maturity. The issue incorporates a built-in call option, enabling the Company, after 60 days from the date of first disbursement, to exercise the option either in full or in part (with a minimum amount of PKR 500 million and in integral multiples thereof) by providing fifteen (15) days’ prior written notice to the Lenders/Financiers. The redemption under the Call Option is intended to be funded through the proceeds of the syndicated financing facility of up to PKR 5,300 million. In the event of any delay in the disbursement of this facility, the Company shall redeem the Instrument in accordance with the terms stipulated in term sheet.

The underlying instrument is secured by a ranking charge over the Current Assets of the company. Additionally a Corporate Guarantee (“CG”) is also provided by Airlink Communication Limited (Parent) 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's holders during the tenor of the Issue.

The Issuer shall maintain and efficiently manage Debt Payment Account (“DPA”) under lien of the Investment Agent. For each redemption/repayment, the Issuer shall deposit into the DPA an amount equivalent to the upcoming principal installment as shown in the table below, no later than three (3) days prior to the corresponding Redemption Dates. 

The Issue shall be redeemed in three (3) equal installments of one-third (1/3) each of the Issue Amount. The first installment shall be payable at the end of the fourth (4th) month from the Issue Date, the second installment at the end of the fifth (5th) month from the Issue Date, and the final installment at the end of the sixth (6th) month from the Issue Date as presented in the following table. On each redemption date, the Issuer shall also pay the profit accrued for the relevant period.

Furthermore, the Issuer has also undertaken to cap the working capital financing facilities from the following institutions, with the respective un-utilized values presented in the table below: