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 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 1QFY26, the Company assembled ~650,250 units including mobile devices and LEDs, reflecting a capacity utilization rate of around 72.25% on a YoY basis. Recently, the Company has entered into a strategic partnership with HISENSE, a leading global consumer electronics brand, for the manufacturing and distribution of home appliances in Pakistan, including Smart TVs and Air Conditioners. The collaboration brings together HISENSE’s global technology leadership and Airlink Group’s strong local manufacturing and nationwide distribution capabilities. This alliance is expected to strengthen local manufacturing, enhance product availability, and offer high-quality home appliances tailored to local consumer needs.

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, 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 facility 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 the half of 2026. By operating within the SGSEZ framework, AIRLINK will benefit from ten (10) years of fiscal incentives, enhancing competitiveness and long-term 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 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.

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 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. As of September 2025 (Q3), Xiaomi maintained its global smartphone market share of ~13.6% for one quarter. In CY25, local mobile production reached 30.21 million units, reflecting a marginal ~3.7% decrease compared to the previous year (CY24: 31.38 million units). According to the Pakistan Telecommunication Authority (PTA), the current year's production comprised ~14.57 million 2G devices and ~15.64 million smartphones. Conversely, mobile imports saw a substantial growth, increasing by ~38.6% to total ~2.37 million units in CY25, up from ~1.71 million units in CY24.

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 one of the leading positions in the industry over the years and its commitment to providing high-quality products to consumers. By end-CY25, Infinix leads the domestic handset market with an estimated share of ~12.1%, followed by VGO TEL (~11.8%) and Vivo (~9.3%). In comparison, Xiaomi’s share has declined to ~4.6% in CY25 from ~7.5% in CY24, reflecting sustained competitive pressure, particularly the aggressive pricing by larger peers. Looking ahead, the Company has signed a strategic agreement with another leading global brand, which will further improve the relative position of the Company in the market and enhance the revenue stream.

During FY25, the Company recorded a decline of ~33.4% in its topline and reported net sales of ~PKR 48,893mln (FY24: ~PKR 73,460mln). Similarly, in 1QFY26, sales reached a modest year-over-year decline of ~7.3%, amounting to ~PKR 11,332 million. The dip was primarily due to the timing of further new model launches in September, with the related revenue expected to materialize in the following quarter. Industry-wide demand has also softened, as reflected in PTA statistics for CY25, which indicate reduction in overall production levels.

The Company’s margins significantly improved at all levels in 1QFY26, with gross, operating, and net margins recorded at approximately 16.0%, 15.6%, and 8.7%, respectively (FY25: ~8.5%, ~8.1%, and ~2.7%; FY24: ~5.4%, ~5.2%, and ~2.1%). The improvement in margins during 1QFY26 and FY25 was primarily driven by a reduction in cost of goods sold (COGS), enhanced operational efficiency, and higher non-core income. 

The Company’s business sustainability is supported by its long-standing association with Xiaomi Corporation as a local manufacturing partner for Xiaomi smartphones in Pakistan. Xiaomi ranks among the largest global vendors by handset shipments, reinforcing product credibility, technology transfer, and brand strength in the domestic market. This relationship underpins the Company’s ability to deliver reliable, quality technology to a broad consumer base. In addition, SELECT has entered into a strategic arrangement with another leading global consumer electronics brand, for the manufacturing and distribution of selected consumer appliances in Pakistan, including smart TVs and air conditioners. The initiative is expected to broaden the Company’s product slate, enhance cross-segment penetration, and support revenue diversification, thereby reducing reliance on a single product category while strengthening medium-term growth visibility.

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 ~100 in 1QFY26 (FY25: 77, FY24: 27, FY23: 90), 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 ~61 in 1QFY26 (FY25: 34, FY24: 8, FY23: 45). 

Free cash flow from operations (FCFO) improved and was recorded at ~PKR 1,853mln in 1QFY26 (FY25: ~PKR 3,448mln, FY24: ~PKR 3,845mln, FY23: ~PKR 1,356mln), supported by consistent operating cash generation. Core operating coverages of the Company improved during the review period (1QFY25: 2.8x, FY25: 1.2x, FY24: 1.9x, FY23: 1.2x). In 1QFY26, the core coverage ratio also increased to 3.6x (FY25: 1.6, FY24: 2.6x, FY23: 1.7x). Debt repayment capacity currently remains comfortable.

Total borrowings of the Company remained stable in 1QFY26 and was recorded at ~PKR 12,242mln (FY25: ~PKR 12,834mln, FY24: ~PKR 9,296mln, FY23: ~PKR 4,528mln). The Company’s capital structure is leveraged. In 1QFY26, the leveraging ratio decreased and stood at 57.8% due to a decrease in long-term borrowings (FY25: 61.1%, FY24: 57.9%, FY23: 54.2%). Most of the debt book is composed of short-term loans to manage working capital needs. Pertaining to the 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. The Company has issued four short-term sukuk to date to fund working-capital requirements associated with CKD imports, of which two remain outstanding in the market. 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.