Air Link Communication Limited ('Airlink' or 'the Company') is a public limited company, incorporated in January2014 under the repealed Companies Ordinance 1984, now the Companies Act, 2017. The Company has been listed on the Pakistan Stock Exchange (PSX) since September 2021. Its registered office is located at 152/1- M, Quaid-e-Azam Industrial Estate, Kot-Lakhpat, Lahore. Airlink began as a partnership firm in 2010, engaged in the import and distribution of IT products, particularly mobile phones and related products. In 2014, a new private company was incorporated to take over the partnership's business, and the entire business was transferred to the Company’s books in 2018. Subsequently, Airlink converted its status to a Public Unlisted Company in April 2019 and was eventually listed on the PSX in September 2021. Airlink’s core operations comprise the production of Tecno smartphones and the distribution of mobile phones and allied products for several leading global brands, including Xiaomi, Samsung, iPhone, Tecno, and Itel. The Company has further strengthened its market positioning through a partnership with Xiaomi, under which its wholly owned subsidiary, Select Technologies (Pvt.) Limited (STL), manufactures and distributes Xiaomi mobile phones and accessories in Pakistan. STL’s manufacturing facility spans 120,000 sq. ft. of closed area of which 60,000 sq. ft. is clean-room space and has an annual capacity of ~2.7million units on a single-shift basis. In FY25, the Company assembled around 2 million devices, reflecting a capacity utilization rate of ~75%. Airlink is currently developing a new state-of-the-art manufacturing complex within the Sundar Green Special Economic Zone (SGSEZ) in Lahore, which is nearing completion. The project covers eight acres, with three acres owned by Airlink and five acres by STL, and includes 1.4mln sq. ft. of purpose-built infrastructure. The facility will incorporate a 1 MW solar power system, expected to reduce production costs, improve energy efficiency, and support long-term sustainability objectives. Operating within the SGSEZ framework will provide the Company with ten years of fiscal incentives, enhancing cost competitiveness and supporting future growth. Aligned with its broader strategic vision, the new facility is designed to enable the export of mobile phones, laptops, LED TVs, electronics, home appliances, and other high-tech products for international brands. This expansion underscores Airlink’s growing role in strengthening Pakistan’s manufacturing and export base.

The majority stake rests with the members of the sponsoring family, holding ~73.43% of shares. Additionally, ~12.93% is owned by the general public, ~0.06% is held by foreign companies, ~8.38% is held cumulatively by banks, development finance institutions, non-banking finance institutions, insurance companies, modarabas and mutual funds, ~2.27% is held by directors, their spouses and minor children whereas the remaining ~2.93% is owned by others. The ownership structure of Airlink is considered stable, given the significant majority stake held by the sponsoring family. No major changes in the ownership structure are anticipated in the near future. Mr. Muzzaffar Hayat Piracha, the primary sponsor, has led the Company since its inception. With extensive industry experience and a deep understanding of the market, his strong leadership is evident through the successful strategic partnerships the Company has established. His business acumen is highly regarded. The owners of the Company do not hold any strategic stakes in other companies. However, Mr. Muzzaffar Hayat owns commercial and residential real estate, contributing to the overall financial strength, which is deemed adequate.

The Board of Directors comprises seven members: two non-executive directors (including the chairman and a female director), two executive directors (including the CEO), and three independent directors. The Board members are seasoned professionals with extensive, multifunctional experience across multiple sectors. Mr. Aslam HayatPiracha, the Chairman, possesses over five decades of business experience with a core specialty in imports and exports. He is actively involved in overseeing Airlink's systems and controls. The independent directors are highly regarded business experts, bringing exposure from diverse sectors. The Board meets at least quarterly to oversee management's performance and ensure alignment with the Company’s strategic goals. In FY25, four Board meetings were held with strong attendance from the directors. Meeting minutes are appropriately documented, and action points are communicated to the relevant stakeholders. The Board has established two committees: the Audit Committee and the HR and Remuneration Committee, which enhance the Board's effectiveness by enabling focused oversight and efficient decision-making. M/S BDO Ebrahim & Co. Chartered Accountants, listed in the category 'A' on SBP's panel of auditors, serve as the Company's external auditors. They have expressed an unqualified opinion on the Company’s financial statements for the year ended June 30, 2025.

Airlink has a well-defined organizational structure, divided into eight functional departments: Human Resources, Production, Retail, Operations, Internal Audit, Marketing, Distribution, and Accounts & Finance. Each department is led by a professional Head who reports directly to the CEO. Currently, all key positions are filled. Mr. Muzaffar Hayat Piracha, the CEO, holds a Master's Degree in Business Administration and has over two decades of multifaceted leadership experience across various sectors. He is supported by a seasoned management team with extensive expertise. Notably, Mr. Adnan Aftab, the CEO of Select Technologies (Pvt.) Ltd., holds a Master's Degree in Manufacturing Engineering and has over three decades of experience in manufacturing. Additionally, Mr. Nusrat Mahmood, the CFO, is a distinguished Management Accountant and Chemical Engineer with over two decades of experience across multiple industries, including textiles, fertilizers, and telecommunications. Each functional department has a multi-layered hierarchy with well-defined and documented roles and responsibilities, strengthening management effectiveness. Furthermore, six management committees have been established: the Credit Committee, Risk Management Committee, Sales Control Committee, Cash Management Committee, Operational Control Committee, and Business Plan Committee. These committees enhance overall operational efficacy by enabling focused decision-making and bridging inter-departmental gaps. The Company has implemented SAP, an ERP solution, to maintain a robust reporting system. The internal audit department, which reports directly to the Board’s audit committee, ensures oversight. Detailed MIS reports for senior management are frequently generated for each business unit, including region-wise business partner reports with adjustments, daily stock reports for all warehouses, and product-wise reports of region and corporate limits.

Pakistan’s cellular market has experienced rapid growth, with tele-density rising from ~6% in FY04 to ~80% in FY25. Approximately 95% of cellular networks are now 4G-enabled, with 4G users making up the vast majority of the data-active population. During FY25, Pakistan’s mobile phone market exhibited mixed performance amid macroeconomic headwinds and a gradual recovery in consumer demand. Elevated inflation, high interest rates, and PKR depreciation constrained purchasing power, particularly in the mid-to-premium segment, driving a shift toward locally assembled, affordable models. On the supply side, improved foreign exchange availability and eased import restrictions supported a modest rebound in local manufacturing, aided by government-led localization initiatives. Due to which, local mobile phone production stood at around 30.21 million units in CY25 (CY24: 31.38 million units; CY23: 21.28 million units), comprising roughly equal volumes of 2G devices (~15 million units) and smartphones (~16 million units), as reported by the Pakistan Telecommunication Authority (PTA). Meanwhile, mobile imports increased to ~2.37 million units in CY25 (CY24: 1.71million units), indicating a slight shift towards imported handsets for the year. Airlink is among the top 10 mobile phone distributors in the country and the Company is the sole manufacturer of Xiaomi smartphones in Pakistan and also manufactures Tecno smartphones and itel phones, signifying the prominent position of the Company within the mobile phone manufacturing and distribution industry. Airlink has significantly diversified its portfolio beyond mobile distribution, solidifying its position as a consumer electronics powerhouse. Following the successful rollout of Xiaomi and IMIKI products, the Company recently signed a manufacturing deal with Acer Inc. for laptops and tablets. Strategic expansion continues in 2025 with the incorporation of its new wholly-owned subsidiary, ZEXO Technologies (Pvt.) Limited and a landmark partnership with HISENSE (via Airlink’s subsidiary, SELECT). As notified to the PSX, this latest venture brings HISENSE’s world-class Smart TVs and air conditioners to the Pakistani market. The macroeconomic environment has shown signs of improvement since the second half of FY25, contributing to a recovery in demand and supporting higher sales volumes. Concurrently, Airlink has partially completed its new manufacturing facility within the Sundar Green Special Economic Zone (SGSEZ), which is expected to enhance production capacity, expand operational scale, and provide notable tax advantages. During FY25, Airlink’s consolidated revenue was recorded at ~PKR 104.379bln (FY24: PKR 129.742bln), reflecting a decline primarily driven by the imposition of higher taxes, elevated device prices, and reduced mobile phone assembly volumes amid subdued market demand and pending new launches. The slowdown in consumer purchasing power, coupled with a shift toward lower-priced models, further constrained topline growth. In 1HFY26, sales modestly declined by ~6.6% year-over-year. Industry-wide demand has also softened, as reflected in PTA statistics for CY25, which indicate a slight reduction in overall production levels. The Company’s profitability improved notably in FY25, supported by effective cost management and operational efficiencies. Gross profit margin increased to ~10.6% (FY24: ~7.5%), while operating margin strengthened to ~9.1% (FY24: ~6.5%). Consequently, the net profit margin also rose to ~4.5% (FY24: ~3.6%). The positive trajectory continued in 1HFY26, with gross, operating, and net margins recorded at ~14.9%, ~12.5%, and ~6.3%, respectively, reflecting sustained cost discipline and improved production efficiency despite a softer revenue base.

Airlink’s working capital requirements are largely driven by inventory needs across its assembly and distribution operations. During FY25, the Company’s average gross working capital days increased to ~67 days (FY24: ~30 days), while net working capital days rose to ~46 days (FY24: ~18 days). The increase primarily reflected inventory buildup to meet demand from the principles for new launches. Although the free cash flow from operations (FCFO) improved to ~PKR 8,839mln in FY25 from PKR 8,578mln in FY24, supported by improved profitability, the interest coverage ratio moderated to 2.7x (FY24: 3.3x) due to higher finance costs amid an elevated interest rate environment. The Company’s debt repayment capacity remained sound, as reflected by a debt payback ratio of 0.4x in both FY25 and FY24. In 1HFY26, working capital intensity deteriorated, with gross and net working capital days lengthened to 107 and 86 days, respectively, primarily driven by a strategic inventory build-up ahead of anticipated new model launches, further compounded by logistical bottlenecks and transit lead-time extensions associated with specific modes of transportation. In 1HFY26, FCFO stood at ~PKR 5,750mln, while interest coverage improved to 3.3x, indicating strengthened cash flow generation and improved capacity to service financial obligations. In 1HFY26, total debt slightly reduced to ~PKR 30.9bln, with the leverage ratio easing to ~63.6% by December 2025 (FY25: ~64.7%), supported by partial debt repayments and improved internal cash generation. To support current demand and expansionary activities, the Company’s working capital requirements are expected to be met through the existing sukuks and the new issuance. In parallel, the Company has successfully secured a syndicated long-term facility of PKR 4,764mln for its new project at Sundar Green Special Economic Zone (SGSEZ), which has been partially completed, with mobile phones line now ready-for-service (RFS). This new facility has been partially financed through a previously issued PKR 2.0bln sukuk under Select Technologies Pvt. Limited. The long-term facility will be structured into two term finance certificates (TFCs), PKR 1,464mln under Airlink and PKR 3,300mln under Select, to optimize fund allocation and align with project financing requirements. The final terms and modalities of the facility remain under evaluation and could influence the Company’s financial risk profile, including leverage, liquidity, and debt-servicing capacity.

To date, Air Link and its subsidiary, Select, have issued a total of thirteen (13) Sukuks/Instruments, from which currently five sukuks are available in the market and the rest have been matured/redeemed. The following table outlines the current status of all matured and active issuances of the Group:

Air Link is set to issue its tenth rated, secured, privately-placed, short-term Sukuk-X, marking a strategic financial move for the Company. The Sukuk will carry a markup of 6MK+1.20%, with a tenor of six months. The repayment of principal and markup will be done in a bullet upon maturity. The purpose of the instrument is to finance the Company’s growing working capital requirements. The issue incorporates a call option enabling the Company, after sixty (60) days from the first disbursement, to redeem the Instrument in whole or in part (minimum PKR 500 million and in integral multiples thereof) by giving fifteen (15) days’ prior written notice to the Lenders/Financiers. Redemption under the Call Option is intended to be funded from the proceeds of the syndicated financing facility of ~PKR 4,764 million. In the event of any delay in the disbursement of such facility, the Company shall redeem the Instrument in accordance with the terms stipulated in the Term Sheet.

The underlying instrument is secured by a ranking charge over the Company’s current assets.

The Issuer shall maintain and efficiently manage Debt Payment Account (“DPA”) under lien of the Investment Agent whereby the payment equivalent to PKR 667 million shall be made on or before 50 days before the maturity date, and subsequently 1/3rd of the remaining amount to be deposited every 15 days thereafter, such that amount equivalent to full issue amount is available in the DPA 05 days before the maturity date.