Select Technologies Limited (hereafter 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, and was subsequently converted into a public limited company on January 6, 2026. The Company's registered office is situated at 152-1-M, Quaid-e-Azam Industrial Area, Kot Lakhpat, Lahore, Punjab, Pakistan. SELECT is currently a wholly owned subsidiary of Air Link Communication Limited (AIRLINK). However, the Company is in the process of listing on the Pakistan Stock Exchange (PSX) through an Initial Public Offering (IPO), following which AIRLINK's shareholding will be diluted. The IPO has received a strong market response, with the book-building phase concluding at an oversubscription of ~3.2x. The strike price was discovered at PKR 34 per share, exceeding the floor price of PKR 28 per share, reflecting robust institutional demand. Under the offering structure, 75% of the issue has been allocated to institutional investors and high-net-worth individuals through book building, while the remaining 25% is being offered to the general public during 2–3 July 2026. At the discovered strike price, the IPO is expected to raise ~PKR 3.02bln, compared to ~PKR 2.49bln at the floor price. The IPO proceeds will primarily be utilized to strengthen the Company’s manufacturing footprint and support future growth initiatives. The planned allocation includes the establishment of a state-of-the-art air conditioner manufacturing and assembly facility at the Sundar Green Special Economic Zone (SGSEZ), expansion of the television assembly line to include larger-screen models, upgradation of the smartphone manufacturing plant and machinery, and funding of working capital requirements. Based on the prospectus, ~25% of the proceeds are earmarked for the AC assembly line, 17% for the smartphone plant and machinery, 15% for TV assembly line expansion, and the remaining 43% for working capital. The new manufacturing facility will also benefit from the fiscal incentives available under the SGSEZ framework, including income tax exemption until FY35, which is expected to enhance the Company's long-term cost competitiveness and profitability. The Company was established to realize the sponsors’ vision of developing a state-of-the-art mobile phone assembly facility in Pakistan, promoting locally manufactured electronic products under the “Made in Pakistan” initiative while creating employment opportunities. Since the commencement of operations, SELECT has developed a strategic partnership with Xiaomi, under which it locally assembles a broad portfolio of Xiaomi smartphones. Over time, the Company has diversified its product portfolio to include Xiaomi Smart TVs, Hisense TVs, and Hisense air conditioners, broadening its presence in Pakistan's consumer electronics manufacturing sector. SELECT’s existing manufacturing facility comprises over 120,000 square feet of covered area, including ~60,000 square feet of clean-room space. The plant has an annual installed capacity of approximately 3.5 million smartphones under a single-shift operation, while AIRLINK’s facility has an additional capacity of ~1.2 mln smartphones. The Company also possesses an installed annual production capacity of ~180k Xiaomi Smart TVs. During 11MFY26, the Group assembled ~1.8 mln smartphones, compared to ~2.8 mln units in FY25, translating into a capacity utilization of ~41% (FY25: ~60%). To support its next phase of growth, the Group is nearing completion of a new integrated manufacturing complex at the SGSEZ, Lahore. The project spans eight acres, comprising three acres owned by AIRLINK and five acres owned by SELECT, and will feature ~1.4 million square feet of purpose-built manufacturing infrastructure. The facility will incorporate a 1 MW solar power system, which is expected to improve energy efficiency, reduce operating costs, and support the Group's sustainability objectives. Beyond serving domestic demand, the new complex has been designed to facilitate exports of smartphones, LED televisions, home appliances, and other high-tech electronic products for international brands, reinforcing the Group's long-term strategy of expanding Pakistan's electronics manufacturing and export capabilities.

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; however, the Company plans to be listed on the PSX, after which the shareholding structure is expected to change. 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 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 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 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’s cellular market has reached a high level of maturity, with tele-density surging to ~80% in FY25 and 95% of networks now 4G-enabled; however, there are only a few 5G-supported mobile sets in Pakistan. While macroeconomic headwinds, specifically elevated inflation, high interest rates, and PKR depreciation, initially constrained purchasing power and shifted demand toward affordable, locally assembled models, the market showed a mixed recovery during 9MFY26. On the supply side, improved foreign exchange liquidity and eased import restrictions facilitated a modest rebound in local manufacturing, supported by government-led localization initiatives. Per the Pakistan Telecommunication Authority’s (PTA) latest statistics, Pakistan’s mobile handset market remained largely assembly-led, although local production recorded a modest contraction during CY25. Local production declined by ~3.7% YoY to 30.21 million units (CY24: 31.38 million), comprising ~15 million 2G handsets and 16 million smartphones. In contrast, handset imports increased to ~2.37 million units, indicating relatively stronger demand for imported devices, particularly in higher-end and specialized smartphone segments not fully catered to by local assemblers.

During 5MCY26 (Jan–May’26), local production stood at 11.17 million units, reflecting a further ~11.26% YoY decline, including ~6.25 million 2G phones and ~4.92 million smartphones. Meanwhile, imports rose to 1.91 million units, reinforcing the trend of gradually increasing reliance on imported devices. The divergence between moderating local output and rising imports suggests evolving consumer preferences toward premium and technologically advanced handsets, while also highlighting competitive and demand-side pressures within the domestic assembly landscape.

The Company maintains a strategic partnership with Xiaomi, a globally recognized technology brand, for the local assembly and distribution of smartphones and Smart TVs in Pakistan. This longstanding association reinforces SELECT’s established market presence and operational credibility, while enabling access to internationally recognized products and established consumer demand. In line with its diversification strategy, the Company has recently partnered with Hisense for the assembly and sale of TVs and air conditioners at its new Sundar facility, expanding its footprint beyond consumer electronics into the broader home appliances segment and reducing product concentration risk over the medium term.

During FY25, the Company showed a decline of ~33.4% in its topline and recorded a net sale of ~PKR 48,893mln (FY24: ~PKR 73,460mln). Industry-wide demand has also softened, as reflected in PTA statistics for CY25, which indicate a reduction in overall production levels. However, 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 in margins during FY25 was primarily driven by a reduction in cost of goods sold (COGS), enhanced operational efficiency, and higher non-core income. 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.

Net sales for the nine months ended March 2026 stood at ~PKR 23,052mln, reflecting a contraction of ~37.1% on a period-over-period basis relative to FY25’s full-year net sales of ~PKR 48,893mln (FY24: ~PKR 73,460mln). The decline is partly structural, reflecting the winding down of high-volume low-margin 4G device production as Select repositions its product mix, and partly cyclical, driven by softer industry-wide smartphone demand. Despite the topline compression, margins improved materially across all levels: gross profit margin rose to 16.2% in 9MFY26 from 8.5% in FY25 and just 5.4% in FY24, driven by a shift toward higher-value Xiaomi models, reduced raw material costs, and enhanced operational efficiency at the existing facility. Operating margin followed suit at 13.4% (FY25: 8.1%), while net profit margin expanded to 5.8% (FY25: 2.7%), reflecting disciplined cost management and lower effective tax burden.

Select’s financial risk profile has shown a notable improvement in profitability metrics through 9MFY26 (period ending March 2026), even as top-line revenue contracted in line with industry trends. The Company’s margin recovery, improved debt service coverage, and significant reduction in related-party borrowings are positive developments that partially offset concerns around working capital elongation and the incremental leverage being assumed through the new long-term loan facility.

EBITDA for 9MFY26 stood at ~PKR 3,488 mln (FY25: ~PKR 4,191 mln; FY24: ~PKR 3,897 mln), while FCFO was recorded at ~PKR 3,169 mln (FY25: ~PKR 3,448 mln), indicating strong underlying operating cash generation on a nine-month basis. The EBITDA-to-Finance Cost coverage improved to 2.9x in 9MFY26 compared to 1.9x in FY25 and 2.6x in FY24, driven by both earnings’ improvement and a reduction in finance charges following the retirement of related-party borrowings. The interest coverage ratio similarly improved to 2.7x (FY25: 1.6x). The core debt service coverage ratio stood at 2.0x in 9MFY26, a substantial improvement from 1.2x in FY25, reflecting stronger cash generation and improved debt repayment capacity.

Working capital intensity increased meaningfully in 9MFY26, with gross working capital days rising to 138 days (FY25: 77 days; FY24: 27 days) and net working capital days extending to 91 days (FY25: 34 days). The primary driver was a strategic inventory buildup in raw materials (107 days) ahead of anticipated new Xiaomi model launches and HISENSE product onboarding, compounded by logistical delays. Trade receivable days remained controlled at 15 days (FY25: 13 days), indicating maintained collection discipline. Despite the WC elongation, the current ratio improved markedly to 4.6x as at 9MFY26 (FY25: 2.9x; FY24: 3.7x), supported by a PKR 7,931mln reduction in current assets partially offset by a PKR 10,939mln decrease in current liabilities, particularly the elimination of related-party payables.

Total borrowings remained broadly stable at ~PKR 12,952 mln in 9MFY26 (Jun-25: ~PKR 12,902 mln). A notable structural improvement was the full repayment of related-party borrowings, which stood at PKR 4,125 mln in Jun-25 but were reduced to zero by 9MFY26, deleveraging the intra-group funding dependency. The leveraging ratio improved to 51.6% from 61.2% in Jun-25, supported by equity accretion through retained earnings. Shareholders’ equity grew to PKR 12,156mln (Jun-25: PKR 10,818mln), driven by the net profit of ~PKR 1,338mln for the period. Short-term borrowings constitute 92% of total debt in 9MFY26 (Jun-25: 65.5%), reflecting the Company’s continued reliance on STBs for working capital, which is a structural characteristic of the mobile assembly business. Long-term project financing will be secured through the syndicated loan facility for the Sundar Green Special Economic Zone (SGSEZ) project, while the short-term funding needs are expected to continue being managed through Sukuk issuances.

To date, Air Link and its subsidiary, Select, have issued a total of sixteen (16) Sukuks/Instruments, of which currently five (5) 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:

Select Technologies Limited is set to issue its sixth Rated, Secured, Privately Placed, Short-term Sukuk-VI of PKR 3.0 billion, inclusive of a green shoe option of PKR 1,000 million, marking a strategic financial move for the Company. The Sukuk carries a markup at 6MK+1.10% with a tenor of six months. The purpose of the instrument is to finance the Company’s working capital requirements, primarily for importing CKDs used in mobile phones and new products’ assembly.

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 holders during the tenor of the Issue.

The Issuer shall maintain and efficiently manage Debt Payment Account (“DPA”) under the lien of the Investment Agent, whereby the payment equivalent to PKR 750 million shall be made starting from 47 days before the maturity date and every fortnight thereafter, such that an amount equivalent to the full issue amount is available in the DPA 05 days before the maturity date.