Select Technologies (Private) Limited (hereinafter referred to as ‘SELECT’) was incorporated in Pakistan on October 13th, 2021, as a private limited entity 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 incorporated as an outcome of the Sponsors' vision to set up a state-of-the-art mobile phone assembly plant in Pakistan. The idea is to promote ‘Made in Pakistan’ products and to create employment opportunities. SELECT has partnered with global smartphone giant 'Xiaomi' to manufacture different leading brands and models in Pakistan.

The principal line of business for the Company is to set up, establish, and operate plants for the assembly and production of mobile phones of various types and descriptions. The Company’s factory spans over 120,000 square feet of enclosed space, including a 60,000 square feet clean room. It has a current production capacity of 2.7 million units per annum in a single shift. This extensive and well-equipped facility ensures efficient production processes and high-quality output, positioning the Company as a significant player in the mobile phone manufacturing industry.

The Company is a wholly-owned subsidiary of Air Link Communication Limited, holding approximately a 99.99% stake. The remaining minor shareholding is held by individual investors. This ownership structure ensures strong financial backing and strategic alignment with the parent company's vision, fostering stability and growth opportunities for the subsidiary.

The Company's ownership structure is stable, with no major changes anticipated in the near future. The majority stake is held by the parent entity, Air Link Communication Limited, which provides strong financial backing and strategic direction. 

The sponsoring family is deeply involved in the related business at the group level and possesses a thorough understanding of the overall industry. Under their leadership, the parent company has demonstrated remarkable growth over the years. This strong business acumen and strategic vision are reflected in the impressive performance of Select Technologies (Pvt.) Limited, underscoring the family's ability to drive success and sustain growth across their ventures.

The sponsors of the Company do not hold any shareholding in other companies, allowing them to focus their attention and resources on the success of this venture. Their financial strength is deemed adequate, providing a solid foundation for the Company's stability and growth.

The board of Select Technologies (Pvt.) Limited comprises five distinguished members, each bringing a wealth of experience and expertise to the organization. The members include Mr. Muzzaffar Hayat Paracha (serving as the Group CEO and Director), Mr. Amir Mehmood (Group CFO and Director), Mr. Adnan Aftab (CEO of SELECT), Ms. Hina Sarwat (Director), and Mr. Syed Nafees Haider (Director). This diverse and skilled leadership team ensures robust governance and strategic direction for the Company.

The board members are seasoned professionals with extensive experience in managing business affairs. Mr. Muzzaffar Hayat, the Chairman of the Board, brings over two decades of leadership experience in the relevant field. Under his guidance, the board leverages their collective expertise to provide strategic direction and effective governance for the Company, ensuring its sustained growth and success.

The Company has established an Audit Committee and an HR & Remuneration Committee to enhance board effectiveness and ensure rigorous oversight of financial and human resource matters. Additionally, the inclusion of a female director on the board underscores the Company's commitment to diversity and effective governance.

An Internal Audit department is in place which closely monitors the policies governing the operational procedures and implementation thereof. The External Auditor of the Company is M/s EY Ford Rhodes, Chartered Accountants, one of the big four firms. They expressed an unqualified opinion on the company's financial statements for the year ended June 30, 2024.

The Company’s organizational structure is broadly divided into various functional departments, each headed by a department leader. These department heads report directly to the CEO, who in turn reports to the Group CEO. Within each department, a well-defined management hierarchy, consisting of different cadres, ensures smooth and efficient operations. This structured approach promotes effective communication, accountability, and streamlined workflows, contributing to the Company’s overall operational excellence. 

The Company’s management team consists of highly qualified and experienced professionals. Mr. Muzaffar Hayat, the Group CEO, brings over 30 years of industry experience to the organization. Mr. Adnan Aftab, the CEO of the Company, along with the top management, is supported by a team of skilled professionals working across various subdivisions. This structure ensures efficient reporting and smooth operations, fostering a well-coordinated and productive work environment. 

Each department head is responsible for overseeing and managing the affairs of their respective departments. Clearly defined roles and responsibilities within the organization enhance the overall effectiveness of the organizational structure.

The Company has implemented a comprehensive, all-in-one SAP system comprising various modules tailored to different business functions. This robust MIS framework enables the generation of detailed and frequent reports for senior management. 

The Company’s corporate structure is divided into various departments, each specializing in specific functions. As the organization experiences rapid growth, it is crucial to enhance management efficiency. This can be achieved by ensuring that each department is adequately staffed with skilled human resources. By addressing this need, the Company can maintain its momentum, streamline operations, and effectively manage its expanding activities. 

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. During CY23, local production of mobile phones reached 21.28 million units, including 13 million 2G devices and 8.28 million smartphones, while commercial imports stood at 1.58 million units. Furthermore, in the first half of CY24, the local industry produced ~17.34mln units, comprising 6.19mln 2G devices and 11.15mln smartphones, with imports recorded at ~0.84mln units. Currently, there are four top distributor chains in the country, with Airlink ranking number one and holding approximately 22% of the market share. 

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 FY24, the Company showed a significant growth in its topline and recorded total sales of PKR 73,460mln. In 6MFY25, the Company’s sales stood at PKR 27,744mln, recording a decline of ~24.5% YoY. 

During FY24, the Company recorded gross, operating, and net margins at 5.4% (FY23: ~8.1%), 5.2% (FY23: ~7%), and 2.1% (FY23: ~0.4%), respectively. In 6MFY25, the Company’s gross margin stood at ~7%, operating margin at ~6.2%, and net margin at ~2.2% on the back of increase in finance cost.

Xiaomi Corp, The Global Consumer Electronics & Smartphone Giant, has partnered with Select Technologies (Pvt.) Limited, as its manufacturing partner for Xiaomi smartphones in Pakistan. Xiaomi recently became the world’s second-largest vendor by handset shipments in the 2nd Quarter of 2021. Thus, boding well for the sustainable and quality technology accessible to everyone in Pakistan.

The Company’s working capital requirement emanates from financing inventory. Since the imposition of SBP's directive to maintain 100% margin for Line of Credit (LC), working capital needs shall remain high. The average gross working capital days of the Company stood at 27 days in FY24 (FY23: 90 days; FY22: 259 days). Average net working capital days of the Company have significantly reduced when compared with preceding years (FY24: 8 days, FY23: 45 days, FY22: 253 days). In 6MFY25, the gross and net working capital stood at 39 days and 19 days, respectively.

Free cash flow from operations (FCFO) ramped up to PKR ~3,845mln in FY24 (FY23: PKR ~ 1,359mln, FY22: PKR ~320mln) on account of improvements in profitability before tax. Core operating coverages of the Company have also improved during review period (FY24: 1.9x, FY23: 1.2x, FY22: 1.9x). In 6MFY25, the core coverage ratio incaresed to 2.7x. Debt payment capacity, currently remains comfortable.

Total debt of the Company increased in FY24 and recorded at PKR 9,351mln. The Company has a leveraged capital structure. In 6MFY25, the leveraging ratio stood at 60.4% due to incarese 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, cautious management approach is necessitated.