Transmission of Annual Report for the Year Ended for the year ended December 31, 2025

69thAnnualReport 2025 Crescent Star Insurance Ltd.

ESTD: 1957

FIRE MARINE

ENGG TRAVEL

NATION WIDE BRANCH NETWORK

MOTOR

HEALTH

LIVESTOCK

CROP

CONTENTS

Vision / Mission Statements Company Information

Notice of the 69thAnnual General Meeting Chairman's Review Report (English) Chairman's Review Report (Urdu)

Directors' Report to the Members on Unconsolidated Financial Statements Directors' Report to the Members on Unconsolidated Financial Statements (Urdu) Gender Pay Gap

Sustainability

Key Financial Highlights

Review Report to the Members on the Statement of Compliance with Best Practices of the Code of Corporate Governance

Statement of Compliance with the Code of Corporate Governance Auditors' Report to the Members on Unconsolidated Financial Statements Unconsolidated Financial Statements

Directors' Report to the Members on Consolidated Financial Statements Directors' Report to the Members on Consolidated Financial Statements (Urdu) Auditors' Report to the Members on Consolidated Financial Statements Consolidated Financial Statements

Pattern of Shareholding Investor's Awareness Branch Network

Proxy Form

Proxy Form (Urdu)

Company Vision

• To serve with excellence.

• Excellence achieved through our corporate mission.

• The brand name of CSI with a vision to expand with prudent approach and provide the Insurance Service to Pakistan Industry on sound footing.

  Company Mission

• First and foremost to secure the interest of our policy holders by adopting proper risk management techniques and prudent financial planning.

• To recognize human resources as the key element in progress and to provide our officers and field force due recompense for their efforts in building up the company.

• To generate operational profits and dividend return for our shareholders of the Company.

  Values

• Integrity

• Transparency

• Passion

• Team Work

• Corporate Social Responsibility

Company Information

Board of Directors Mr. Naim Anwar (Chief Executive Officer) Mr. Suhail Elahi

Mr. Shaikh Waqar Ahmed Mr. Rashid Malik

Ms. Naveeda Mahmud Ms. Huma Javaid

Ms. Rabia Omar Hassan Ms. Komal Sajid Lodhi

Chief Executive Officer Mr. Naim Anwar

Management Mr. Naim Anwar (Chief Executive Officer) Mr. Tanveer Ahmed (Resident Director) Mr. Suhail Elahi (Resident Director)

Mr. Malik Mehdi Muhammad (CFO & Company Secretary) Syed Danish Hasan Rizvi (Head of Internal Audit)

Board Audit Committee Mr. Shaikh Waqar Ahmed (Chairman) Ms. Naveeda Mahmud

Ms. Huma Javaid

Board Ethics, Nomination, H.R, Remuneration Ms. Huma Javaid (Chairman) & Sustainability Committee Mr. Naim Anwar

Mr. Shaikh Waqar Ahmed

Board Investment Committee Mr. Naim Anwar (Chairman) Mr. Shaikh Waqar Ahmed Ms. Huma Javaid

Mr. Malik Mehdi Muhammad Chief Financial Officer & Company Secretary Mr. Malik Mehdi Muhammad

Auditors Naveed Zafar Ashfaq Jaffery & Co.

Chartered Accountants

Legal Advisor Ms. Huma Naz, Soomro Law Associates

Bankers Habib Bank Limited

Faysal Bank Limited United Bank Limited

Share Registrar F. D. Registrar (SMC-Pvt.) Limited

Office No. 1705, 17th Floor, Saima Trade Tower - A

I. I. Chundrighar Road, Karachi

Tel #: 35478192-93 / 32271906 Fax #: 32621233

Registered & Head Office 2ndFloor, Nadir House

I. I. Chundrigar Road

P.O. BOX No. 4616, Karachi

Website https://cstarinsurance.com

Email info@cstarinsurance.com

CRESCENT STAR INSURANCE LIMITED NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 69thAnnual General Meeting of the shareholders of Crescent Star Insurance Limited will be held on April 30, 2026 at 9.00 a.m. at 2ndFloor, Nadir House I. I. Chundrigar Road, Karachi to transact the following business.

ORDINARY BUSINESS:

1. To confirm and approve the minutes of the 68thAnnual General Meeting held on April 29, 2025.

2. To receive, consider and adopt the audited financial statements of the Company for the year ended December 31, 2025 together with the Chairman's review, Directors' and Auditors' reports thereon.

   As required under Section 223(6) of the Companies Act, 2017 (the "Act"), Financial Statements of the Company have been uploaded on the website of the Company, which can be downloaded from the following link and/or QR enabled code:

   http://cstarinsurance.com/Investor-Information/Financial-Statements

3. To appoint Auditors for the year ending December 31, 2026 and fix their remuneration.

4. To elect eight (8) directors as fixed by the Board of Directors, in accordance with the provision of Section 159

   (1) of the Companies Act, 2017 for a term of three years in place of the following retiring directors, who are eligible for re-election:

   1. Mr. Naim Anwar 2. Mr. Suhail Elahi

      3. Mr. Shaikh Waqar Ahmed 4. Mr. Rashid Malik

      5. Ms. Naveeda Mahmud 6. Ms. Huma Javaid

      7. Ms. Rabia Omar Hassan 8. Ms. Komal Sajid Lodhi

5. Other Business

To transact any other business that may be placed before the meeting with the permission of the Chair.

By order of the Board Malik Mehdi Muhammad

Karachi: April 3, 2026 CFO / Company Secretary

NOTES:

1. Book Closure: The Register of Members and Share Transfer Books of the Company will remain closed from April 24, 2026 to April 30, 2026 (both days inclusive) and no transfer of shares will be accepted for registration during this period. Transfers received in order at the office of our Share Registrar M/s F. D. Registrar Services (SMC-Pvt.) Limited 17thFloor, Saima Trade Tower-A, I. I. Chundrigar Road Karachi at the close of business hours April 23, 2026 will be treated in time for the purpose of transfer of shares and voting rights at the AGM.

2. All members are entitled to attend and vote at the meeting. A member entitled to attend and vote at the meeting is also entitled to appoint another member of the Company as his / her proxy to attend, speak and vote for him / her. In case of corporate entity, the Board of Directors' resolution / power of attorney with specimen signature

   shall be submitted to the Company. A proxy must be a member of the Company. A member shall not be entitled to appoint more than one proxy to attend any one meeting. The instrument of proxy duly executed should be lodged at the Karachi Office of the Company not later than 48 hours before the time of the meeting. The form of proxy must be witnessed with the addresses and CNIC numbers of witnesses, certified copies of CNIC of member and the proxy member must be attached and the revenue stamp should be affixed and defaced on the form of proxy. Proxy Form in English and Urdu languages is available on company website https://www.cstarinsurance.com

3. The members are advised to bring their ORIGINAL Computerized National Identity Card (CNIC) and those members who have deposited their shares in Central Depository System should also be cognizant of their CDC Participant ID and Account Number at the meeting venue. In case of corporate entity, the Board of Directors' resolution / power of attorney with specimen signature of the nominee shall be produced at the time of the meeting.

4. Members who have not yet submitted photocopy of their Computerized National Identity Cards to the Registrar of the Company are requested to send the same at the earliest.

5. Shareholders are requested to notify to the Company's Share Registrar immediately of any change in their addresses.

6. The Company has arranged for participation of members in general meeting through electronic means (i.e., video-link, webinar, zooming etc.). In this regard, the interested shareholders can request by providing the relevant information (i.e. Name of the Shareholder, CNIC Number, Folio / CDC Account Number, Cell Number, Email Address etc.) to the Company Secretary at least 48 hours before the time of AGM at Email Address: info@cstarinsurance.com

7. Any person who seeks to contest the election to the office of a Director, whether he/she is a retiring director or otherwise, shall file required documents under section 159 of the Companies Act 2017, Section 12 of Insurance Ordinance 2000, Companies (General Provisions and Forms) Regulations 2018, Listed Companies (Code of Corporate Governance) Regulations, 2019 and the eligibility criteria, as set out in Section 153 of the Companies Act, 2017 to act as director or an independent director of a listed Company with the Company Secretary, at the Registered Office of the Company, situated at 2nd Floor, Nadir House, I. I. Chundrigar Road, Karachi, 14 days before the date of the Annual General Meeting:

   The final list of contesting Directors will be circulated not later than seven days before the date of said meeting, in terms of Section 159(4) of the Companies Act, 2017. Further, the website of the Company will also be updated with the required information.

8. It is hereby notified that pursuant to the Companies (Postal Ballot) Regulations, 2018 and its amendments notified vide SRO 2192(1)/2022 dated December 5, 2022, members will be allowed to exercise their right to vote for election of directors at the AGM, in accordance with the conditions mentioned in the aforesaid Regulations. The Company shall provide its members with the following options for voting:

   1. E-Voting Procedure

      1. Details of the e-voting facility will be shared through an email with those members of the Company who have their valid CNIC numbers, cell numbers, and email addresses available in the register of members of the Company within due course.

      2. The web address: login details, will be communicated to members via email.

      3. Identity of the members intending to cast vote through E-voting shall be authenticated through authenticated login.

      4. E-Voting lines will start from April 25, 2026 9:30 am and shall close on April 29, 2026 at 5 p.m. Members can cast their votes any time in the period.

   2. Postal Ballot

      For voting through Postal Ballot members may exercise their right to vote as per provisions of the Companies (Postal Ballot) Regulations, 2018 subject to the requirement of Section 143 to 145 of the Companies Act, 2017. Further details in this regard will be communicated to the shareholders within the legal time frame as stipulated under these said Regulations, if required.

      The members shall ensure that duly filed and signed ballot paper along with copy of CNIC should reach the Chairman of the meeting through post on the Company's registered office one day before the AGM i.e. April 29, 2026 during the working hours. The signature on the ballot paper shall match with the signature on CNIC or Company records.

9. In accordance with the applicable law mentioned above, M/S. DCCL (Private) Limited have been appointed as the e-voting service provider and M/s S.M Sohail & Co., Chartered Accountants, have been appointed as scrutinizer to monitor and validate voting for election of directors.

10. Members have the option to receive Annual Audited Financial Statements and Notice of General Meeting through email. Members can give their consent in this regard on prescribed format to the Shares Registrar. The Audited Accounts of the Company for the year ended December 31, 2025 are also available on the Company's website https://www.cstarinsurance.com.

11. In accordance with the directive issued by the SECP vide it is S.R.O. 452(I)/2025 dated March 17, 2025 the Company would like to inform all the shareholder that no gifts will be distributed at the meeting.

12. Form of Proxy is enclosed.

Chairman's Review Report

I am pleased to present Chairman's Review report as required under section 192 of the Companies Act, 2017.

A Board of Directors forms the highest level of authority in the governance of a Company whose main purpose is to align the overall Company strategy to protect the rights of all the stakeholders and ensures that the strategies implemented throughout the Company are effective in utilizing the resources in most efficient way in order to achieve its overall objective.

For the financial year ended December 31, 2025, the Board's overall performance and effectiveness has been assessed as satisfactory, it is based on an evaluation of integral components, including vision, mission and values; engagement in strategic planning; formulation of policies; monitoring the organization's business activities; effective fiscal oversight; equitable treatment of all employees and efficiency in carrying out the Board's business. Improvement is an ongoing process leading to action plans.

The Board during the year ended December 31, 2025 played effective role in managing the affairs of the Company in the following manner;

• The Board has ensured that sound system of internal controls are in place and appropriateness and effectiveness of same is considered by internal auditors on regular basis;

• All the significant issues throughout the year were presented before the Board or its committees to strengthen and formalize the corporate decision making process and particularly all the related party transactions executed by the Company were approved by the Board on the recommendation of the Audit Committee;

• The meetings of Board have held frequently enough to adequately discharge their responsibilities. The Non-Executive and independent directors are equally involved in important decisions.

Based on aforementioned it can reasonably be argued that Board of CSIL has played active role in ensuring that corporate objectives are achieved in line with the expectation of shareholders and other important stakeholders.

Naim Anwar

Chairman

Karachi: April 3, 2026

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UNCONSOLIDATED

Financial Statements for the Year Ended December 31, 2025

Directors' Report to the Members on Unconsolidated Financial Statements

The Directors of your Company are pleased to present the 69thAnnual Report and the Audited Unconsolidated Financial Statements for the year ended December 31, 2025.

Business Performance Highlights

The long outstanding issue of Bank Enlistment and limits still is a cause of concern for the penetration of Insurance in Pakistan. Over years this matter has been raised at every forum but it is disappointing that concerned regulators and departments have not supported the industry by addressing the issue. Mostly all Banks have their own Insurance Companies, and also issue a panel of insurers which is unlawful as described in Insurance Ordinance and a clear violation of Competition Act. Recently the Competition Commission of Pakistan took the initiative of issuing a report highlighting this concern, and the matter of rating was also raised. Banks and departments also require a rating for approving the companies on their panels. It is a well-known and settled principle of Insurance that the Insurance Capacity does not come from the Capital or Rating base but the capacity is raised through Re Insurance. Hence for any specific cover or the size of sum insured , any Company can raise the capacity through Re Insurance back up and its policy must be accept so that the Insurance Industry in Pakistan. It is high time that this matter is understood by the regulators and the concerned so that the smaller companies can compete and grow on fair competition.

Crescent Star Insurance Ltd (CSIL) has the strength of being one of the oldest Insurance Companies of Pakistan (1957) with the lowest Claim Ratio and no bank borrowings and listed on Pakistan Stock Exchange. With the Paid-up Capital of 1 billion net of discount it is already double than the required Minimum Paid-up Capital and the Company is fully complaint. With the highly professional team CSIL is well placed to address all risks and has the capability of underwriting prudent business.

Due to constraints mentioned above the Company has been underwriting business of Credit & Surety where the Company was lead market share in the Transit Business. However Transit Business was recently affected due to political reasons with border countries. The Company is hopeful of regaining the business, as the country moves towards political settlements which will support the business of the Company. Travel Insurance has been helpful in CSIL underwriting business and the Company continues to make efforts to expand this profitable business.

The Company continues its role in investments. The outcome of merger of its subsidiary Crescent Star Foods (Pvt) Ltd with and into PICIC Insurance Limited is expected soon which will give a major boost to the equity of CSIL (8 billion shares). Another subsidiary Crescent Star Luxury (Pvt) Ltd has already received the name availability for proposed change to Crescent Star Ventures (Pvt) Ltd, which plans to apply for license for advisory for structuring and restructuring in the Capital Markets.

Financial Highlights

The Company has reported a net profit, reflecting its continued commitment to maintaining financial stability while delivering value to its customers.

During the period under review, the Company's net premium decreased by 56% compared to the previous year, primarily due to the discontinuation of the Afghan transit business. However, the overall performance was significantly supported by strong investment income, which increased by 131% year-on-year. This growth is attributable to prudent investment decisions, which have contributed positively to the Company's profitability.

Operational details of last three years are tabulated below. Further, key financial data for the last ten years is annexed.

Financial Position at a Glance (Amount in Rs)

2025 2024 2023

The Company intends to expand the core business and has taken steps to enter the more developing individual client market. The management expects to make the Investment Portfolio active for earnings after the expected merger of its subsidiary Crescent Star Foods (Pvt) Ltd with and into PICIC Insurance Limited, which is still pending before the Honorable Sindh High Court for approval of the SCHEME OF ARRANGEMENT, which once approved will benefit your Company in the investment side.

Earnings per Share

The EPS of the Company stands at Rs. 0.19.

Dividend

The Board of Directors does not recommend any Dividend for the year ended December 31, 2025.

Auditors' Report

• The Company has charged interest amounting to Rs. 330.235 million on the advance amount and demanded the same from DSL. However, due to non-availability of any written agreement between DSL and CSIL for charging of mark-up, the auditors have expressed their reservation in the auditors' report.

• Due to non-availability of impairment testing for investment made in subsidiary companies Crescent Star Technologies (Pvt) Ltd and Crescent Star Luxury (Pvt) Ltd (being private limited) the auditors have expressed their reservations in the auditor's report.

• The Company has entered into agreements with Weavers Pakistan (Private) Limited and PICIC Insurance Limited during the year, to charge interest on loan at KIBOR plus 3% from the date of first disbursement. As the agreement was made in the current year the interest was charged in the current year, however, the auditors have expressed their reservations on this in the auditor's report.

Sustainability and Corporate Social Responsibility

CSIL is fully committed to play its role as a responsible corporate citizen and fulfills its responsibility through;

Occupational safety & health

There are adequate fire extinguishers installed at various points within the working premises. Further, the Company has a dedicate medical facility which is being supervised by a full time Chief Medical Officer posted at Head Office, to take care of employees and their families' health matters and also advise on preventive health care.

Business ethics & anti-corruption measures

The Board has adopted the Statement of Ethics, Anti Money Laundering and Business Practices. All employees are informed of this and are required to observe these rules of conduct in relation to business and regulations. Statement of Ethics and Business Practices are based on integrity, dignity, culture of excellence and ethical dealing with clients, peers and the public.

Energy Conservation

The Company is well aware with its responsibility towards the energy conservation. The Company has installed energy saving devices in the office premises. The Company also ensures minimum utilization of electricity during lunch breaks and after office hours besides making full use of natural day light.

Industrial Relations

The Company is fully aware with its responsibilities with respect to industrial relations. The Human Resource Department of the Company is responsible to adhere and implement all the applicable laws, regulations, and conventions in order to keep the work place at its higher professional standards.

Communities:

The Company continuously assesses stakeholder needs and refines engagement strategies to maintain long-term relationships, ethical business practices, and contributions to societal well-being and business sustainability.

Human Resource Initiatives

Your Company's management is of the firm belief that complete alignment of the human resource mission and vision with corporate goals is vital for the success of any organization. In today's competitive environment, we realize that it is important to place emphasis on retaining and developing existing staff and implementing effective performance reviews, your Company has been successful in hiring quality professionals in the area of marketing, finance and business development. Our continued focus on creating a meritocratic work environment with equal opportunity for all goes a long way in maintaining a pool of employees with knowledge, experience and skills in their respective fields and employees remain our most valuable asset.

Compliance with the Code of Corporate Governance

The statement of Compliance as at December 31, 2025 is annexed with the report.

Statement of Directors Responsibilities under the Code of Corporate Governance

The directors confirm compliance with the corporate and Financial Reporting Framework of the SECP Code of Governance for the followings:-

1. The financial statements, prepared by the Company, present fairly, its state of affair, the results of its operations, cash flows and changes in equity.

2. The Company has maintained proper books of accounts as required under the Companies Act, 2017 and the Insurance Ordinance, 2000.

3. The Company has followed consistently appropriate accounting policies in preparation of the financial statements, changes were made, have been adequately disclosed and accounting estimates area on the basis of prudent and reasonable judgment.

4. Financial statements have been prepared by the Company in accordance with the International Accounting Standards, as applicable in Pakistan, requirement of Companies Act, 2017, Insurance Ordinance, 2000, Insurance Rules, 2017 and Insurance Accounting Regulations, 2017.

5. The system of internal control is sound, effectively implemented and monitored. The process of review will continue to strengthen the system for its effective implementation.

6. There are no significant doubts upon the Company's ability to continue as a going concern.

7. There has been no material departure from the best practices of corporate governance, as detailed in the listing regulations.

8. Information about taxes and levies is given in the notes to and forming part of financial statements.

9. Report on gender pay gap data is annexed.

The Company has followed the best practices of corporate governance, as laid down by the Securities and Exchange Commission of Pakistan and there has been no material departure.

Board Meetings and Attendance

During the year five meetings of the Board of Directors were held and the number of meetings attended by each director is given hereunder:-

Name of Director

Mr. Naim Anwar

Ms. Komal Sajid Lodhi Mr. Suhail Elahi

Mr. Shaikh Waqar Ahmed Mr. Rashid Malik

Ms. Huma Javaid

Ms. Rabia Omar Hassan Ms. Naveeda Mahmud

Number of Board Meetings Attended

5

3

5

3

0

5

4

3

Auditors

The present auditors, M/s Naveed Zafar Ashfaq Jaffery & Co., Chartered Accountants, shall retire at the conclusion of the Annual General Meeting and, being eligible, have offered themselves for reappointment as external auditors of the Company for the year ending December 31, 2026.

Audit Committee

The Company has an Audit Committee, and had four meetings during the year 2025. The attendance of the meeting is as follows:

Ethics, Nomination, Human Resource, Remuneration & Sustainability Committee

The Company has an Ethics, Nomination, Human Resource, Remuneration & Sustainability Committee. The Committee is responsible for making recommendations to the Board on human resource matters and for overseeing and deliberating on the Company's sustainability-related initiatives and requirements. The Committee had one meeting during the year 2025; the attendance of the meeting is as follows:

Names of Members Meetings Attended

Ms. Huma Javaid Chairman 1

Mr. Shaikh Waqar Ahmed Mr. Naim Anwar

Member 1

Member 1

Investment Committee

The Company has an Investment Committee. The Committee had four meetings during the year 2025; the attendance of the meeting is as follows:

Names of Members Meetings Attended

Statement of Ethics and Best Business Practices

The Board has adopted "the Statement of Ethics and Business Practices" and circulated to all the directors and employees for their acknowledgement and acceptance.

Company Reporting

The Company reports to the shareholders 4 times a year with its 1st quarter, half-yearly, 3rd quarter and annual results, along with the director's reports on the operations and future outlook for the Company.

The value of investment in respect of provident fund maintained by the Company based on latest financial statements as at December 31, 2025 is Rs. 47,978,031.

Pattern of Shareholding

A statement showing pattern of shareholding of the Company and additional information as at December 31, 2025 is annexed with the report.

There have been no transactions carried out by Directors, Chief Executive Officer, Chief Financial Officer, Company Secretary and their spouses and minor children in the shares of the Company during the year.

Directors Training Program

Please refer note 11 of the Statement of Compliance with the Code of Corporate Governance.

Subsidiary Companies

The Company has annexed its consolidated financial statements along with its separate financial statements. Crescent Star Foods (Pvt) Ltd, Crescent Star Luxury (Pvt) Ltd and Crescent Star Technologies (Pvt) Ltd are the subsidiary of the Company.

Subsequent Events

The Board of Directors, in its meeting held on March 27, 2025, approved the issuance of right shares, which was subsequently ratified by the shareholders at the Extraordinary General Meeting held on April 29, 2025. Under this rights issue, the Company offered 40,924,116 ordinary shares of face value PKR 10 each at a discounted price of PKR 3 per share, aggregating to PKR 122.772 million. The rights shares represent 38% of the existing Paid-up Capital and were offered in the ratio of 38 shares for every 100 shares held.

The Board further approved January 20, 2026 as the book closure date. The subscription period for the rights issue commenced on January 22, 2026 and concluded on February 13, 2026, with allotment of shares completed on March 11, 2026 in accordance with applicable regulatory requirements.

Acknowledgment

The Directors of your Company would like to take this opportunity to thank Securities and Exchange Commission of Pakistan, Pakistan Stock Exchange, Insurance Association of Pakistan, State Bank of Pakistan, the Banks and Financial Institutions for their continued support and cooperation.

We also thank the shareholders, and customers / policy holders and all stake holders for their support and confidence in the Company and its management. The Company and its Directors extend special thanks and appreciation to officers and members of the staff and the entire CSIL team for their devotion, dedication and hard work and their contribution to the growth of their Company.

Komal Sajid Lodhi Naim Anwar

Director Managing Director & CEO

Karachi: April 3, 2026

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GENDER PAY GAP STATEMENT

Under SECP Circular 10 of 2024

Crescent Star Insurance Limited (CSIL) is committed to cultivating a fair and equitable workplace. Our commitment to Diversity, Equity, and Inclusion (DE&I) is central to our talent acquisition and employee engagement strategies, strengthen our diverse talent pipeline, and reinforce our foundational commitment to building an inclusive organization where every employee can thrive.

The gender pay gap on an overall basis for the year ended December 31, 2025, is as under:

• Mean Gender Pay Gap is 50%

• Median Gender Pay Gap is -16%

Naim Anwar

Chief Executive Officer

Karachi

April 3, 2026

SUSTAINABILITY

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) PRACTICES

1. Overview

   Crescent Star Insurance Limited (CSIL) recognizes that Environmental, Social and Governance (ESG) considerations are integral to sustainable business practices, effective risk management and long-term value creation. In line with the guidance issued by the Securities and Exchange Commission of Pakistan, the Company has commenced a structured approach to integrating ESG considerations into its governance framework, underwriting practices, investment decision-making and operational processes.

   These Practices outlines the Company's approach to ESG integration during the year and provides an overview of key initiatives, risk considerations and future plans.

2. ESG Governance and Oversight

   The Board of Directors retains overall responsibility for ESG oversight and ensures that ESG considerations are incorporated into the Company's strategic direction and governance framework.

   Key elements of governance include:

   • Review and approval of ESG policy and framework.

   • Oversight of ESG risks through the Risk Management Committee.

   • Review of ESG disclosures as part of the annual reporting process.

   Management is responsible for implementation of ESG initiatives, monitoring ESG performance indicators and ensuring compliance with applicable regulatory expectations.

3. Integration with Risk Management

   The Company has initiated integration of ESG risks into its Enterprise Risk Management (ERM) framework. ESG risks are considered alongside traditional insurance risks and are being incorporated into the Company's risk identification, assessment and monitoring processes.

   Key ESG-related risks identified include:

   • Climate and catastrophe risk affecting underwriting portfolios.

   • Environmental liability risk arising from insured industrial activities.

   • Social risks including customer protection and data privacy.

   • Governance risks including regulatory compliance and ethical conduct.

4. Environmental Considerations

   1. Operational Environmental Impact

      The Company has undertaken measures to reduce its environmental footprint, including:

      • Gradual reduction in paper usage through digitization of policy issuance and internal processes.

      • Monitoring of electricity consumption across offices.

      • Adoption of energy-efficient practices where feasible.

        While the Company's direct environmental footprint is relatively limited, ongoing efforts are being made to improve operational efficiency and reduce resource consumption.

   2. Climate and Catastrophe Risk

      As a general insurance company, the Company is exposed to climate-related risks, particularly in relation to increased frequency and severity of extreme weather events such as floods and storms.

      The Company manages such risks through:

      • Monitoring exposure to catastrophe-prone geographical areas.

      • Maintaining appropriate reinsurance arrangements to mitigate large losses.

      • Periodic review of underwriting exposure limits.

        Climate risk considerations are being progressively integrated into underwriting and risk management processes.

   3. Environmental Risk in Underwriting

      The Company has initiated incorporation of environmental considerations in underwriting decisions, particularly for large commercial and industrial risks.

      Key considerations include:

      • Compliance of insured entities with environmental regulations.

      • Exposure to pollution and environmental liability risks.

      • Nature of industrial activities and associated environmental impact.

        Where significant environmental risks are identified, additional underwriting conditions or risk mitigation measures may be applied.

5. Social Considerations

   1. Human Capital Management

      The Company recognizes its employees as a key asset and promotes:

      • Equal opportunity employment practices.

      • Diversity and inclusion within the workforce.

      • Employee training and professional development.

        Training programs are conducted to enhance employee skills, including technical, compliance and operational training.

   2. Workplace Health and Safety

      The Company is committed to providing a safe and healthy working environment and complies with applicable health and safety standards. Policies and procedures are in place to minimize workplace risks.

   3. Customer Protection and Fair Treatment

      The Company places significant emphasis on fair treatment of policyholders and customer satisfaction.

      Key practices include:

      • Transparent policy documentation and disclosures.

      • Timely and fair claims settlement processes.

      • Structured complaint handling and resolution mechanisms.

        Customer complaints are monitored and reported to management to ensure continuous improvement in service quality.

   4. Data Privacy and Confidentiality

      The Company maintains controls to safeguard policyholder data and ensure confidentiality. Systems and processes are in place to mitigate risks relating to unauthorized access or data breaches.

   5. Community Engagement

      The Company supports community initiatives, including participation in social welfare and disaster relief activities, reflecting its commitment to broader societal well-being.

6. Governance Practices

   1. Board Structure and Oversight

      The Company maintains a structured Board with defined roles and responsibilities. Board committees, including the Audit Committee and Risk Management Committee, provide oversight of financial reporting, internal controls, risk management and compliance.

   2. Ethical Conduct and Compliance

      The Company adheres to high standards of ethical conduct through:

      • A formal Code of Conduct applicable to all employees.

      • Anti-bribery and anti-corruption policies.

      • Conflict of interest management procedures.

      • Compliance with applicable laws and regulations is monitored through the compliance function.

   3. Internal Controls and Audit

      The Company maintains an internal control framework supported by an independent internal audit function. Internal audits are conducted periodically to assess the effectiveness of controls, governance processes and compliance.

   4. Whistleblowing Mechanism

      A whistleblowing mechanism is in place to enable employees and stakeholders to report unethical conduct or violations of policies. Reports are handled confidentially and investigated as appropriate.

7. ESG Integration in Investments

   The Company has initiated consideration of ESG factors in its investment decision-making processes. This includes:

   • Evaluation of governance practices of investee entities.

   • Consideration of environmental and social risks that may impact investment value.

   • Gradual alignment of investment portfolio with responsible investment principles.

   The Company will continue to enhance ESG integration in investment activities over time.

8. ESG Performance Indicators

   The Company has identified key ESG indicators to monitor its performance, including:

   • Energy consumption and operational efficiency.

   • Employee diversity and training metrics.

   • Customer complaint resolution and service quality.

   • Governance and compliance indicators.

   These indicators are under development and will be refined over time to enhance measurement and reporting.

9. ESG Reporting and Future Developments

The Company is in the process of strengthening its ESG reporting framework. Future initiatives include:

• Enhanced ESG disclosures in annual reports.

• Development of quantitative ESG metrics.

• Further integration of ESG considerations into underwriting and investment processes.

• Alignment with evolving regulatory expectations and international best practices.

The Company is committed to progressively strengthening its ESG framework and practices. While ESG integration is at an evolving stage, the Company believes that continued focus on environmental, social and governance factors will enhance risk management, operational efficiency and stakeholder confidence, thereby contributing to sustainable long-term growth.

KEY FINANCIAL HIGHLIGHTS

(RUPEES IN MILLION)

INDEPENDENT AUDITOR'S REVIEW REPORT

To the members of Crescent Star Insurance Limited

Review Report on the Statement of Compliance contained in Listed Companies (Code of Corporate

Governance) Regulations, 2019 and Code of Corporate Governance for Insurers, 2016

We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance) Regulations, 2019 and the Code of Corporate Governance for Insurers, 2016 (both herein referred to as 'the Regulations') prepared by the Board of Directors of Crescent Star Insurance Limited ('the Company') for the year ended December 31, 2025 in accordance with the requirements of regulation 36 of the Listed Companies (Code of Corporate Governance) Regulations, 2019 and provision lxxvi of the Code of Corporate Governance for Insurers, 2016.

The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our responsibility is to review whether the Statement of Compliance reflects the status of the Company's compliance with the provisions of the Regulations and report if it does not and to highlight any non-compliance with the requirements of the Regulations. A review is limited primarily to inquiries of the Company's personnel and review of various documents prepared by the Company to comply with the Regulations and Code.

As a part of our audit of the financial statements, we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider whether the Board of Directors' statement on internal control covers all risks and controls or to form an opinion on the effectiveness of such internal controls, the Company's corporate governance procedures and risks.

The Regulations require the Company to place before the Audit Committee, and upon recommendation of the Audit Committee, place before the Board of Directors for their review and approval, its related party transactions distinguishing between transactions carried out on terms equivalent to those that prevail in arm length transaction and transactions which are not executed at arm lengths price and recording proper justification for using such alternative pricing mechanism and also ensure compliance with the requirements of Section 208 of the Companies Act, 2017. We are only required and have ensured compliance of this requirement to the extent of the approval of the related party transactions by the Board of Directors upon recommendation of audit committee. We have not carried out procedures to assess and determine the Company's process for identification of related parties and that whether the related party transactions were undertaken at arm's length price or not.

Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Company's compliance, in all material respects, with the requirements contained in the Regulations and the Code as applicable to the Company for the year ended December 31, 2025.

Further we highlighted the instances of non-compliance with the requirement of regulations as reflected in the paragraph 33 where it is stated in the Statement of Compliance.

Naveed Zafar Ashfaq Jaffery & Co.

Chartered Accountants

Karachi

Date : 03 April, 2026

UDIN : CR2025102328GiMuOtde

STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE FOR INSURERS, 2016 & LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2019

CRESCENT STAR INSURANCE LIMITED ("the Company")

FOR THE YEAR ENDED DECEMBER 31, 2025

This statement is being presented in compliance with the Code of Corporate Governance for Insurers, 2016 (the Code) for the purpose of establishing a framework of good governance, whereby the Insurer is managed in compliance with the best practices of corporate governance and the Listed Companies (Code of Corporate Governance) Regulations, 2019 (the Regulations).

The Company has complied with the requirements of the Regulations in the following manner:

1. The total number of directors are eight (8), as per the following:

   1. Male: 4

   2. Female: 4

2. The Company encourages representation of independent non-executive directors and directors representing minority interests on its Board of Directors (the Board). At present the Board includes:

   Category	Names
   Independent Directors	Mr. Shaikh Waqar Ahmed Ms. Naveeda Mahmud Ms. Huma Javaid
   Executive Directors	Mr. Naim Anwar, CEO/Chairman Mr. Suhail Elahi Ms. Komal Sajid Lodhi
   Non-Executive Directors	Mr. Rashid Malik Ms. Rabia Omer Hassan

   The independent director meets the criteria of independence as laid down under the Code, Regulations and Companies Act, 2017.

3. The directors have confirmed that none of them is serving as a director in more than seven listed companies, including this Company;

4. All the resident directors of the Company are registered as taxpayers and none of them has defaulted in payment of any loan to a banking company, a DFI or an NBFI or being a member of a stock exchange has been declared as a defaulter by that stock exchange.

5. There was one casual vacancy in the Board which occurred in the year 2025 where Ms. Saba Azam was replaced with the appointment of Ms. Komal Sajid Lodhi as on March 26, 2025.

6. The Company has prepared a "Code of Conduct" which has been disseminated among all directors and employees of Company along with its supporting policies and procedures.

7. The Board has developed a vision / mission statement, overall corporate strategy and significant policies of the Company. A complete record of significant policies along with the dates on which they were approved or amended has been maintained by the Company.

8. All powers of the Board have been duly exercised and decisions on material transactions, including appointment and determination of remuneration and terms and conditions of employment of the Chief Executive Officer, other executive directors and the key officers, have been taken by the Board. Decisions on relevant matters have been taken by the Board / shareholders as empowered by the relevant provisions of the Act and these Regulations.

9. The meetings of the Board were presided over by the Chairman and, in absence, by a Director elected by the Board for this purpose and the Board met at least once in every quarter. Written notices of the Board meetings, along with agenda and working papers, were circulated at least seven (7) days before the meetings. The minutes of the meetings were appropriately recorded and circulated.

10. The Board have a formal policy and transparent procedure for remuneration of directors in accordance with the Act and Regulations.

11. While almost all the directors are professionals and senior executives who possess wide experience of duties of directors, the Company apprises its directors of new laws and regulations and amendments in the existing ones. The Board plans to arrange directors' training program.

12. There was no new appointment of Chief Financial Officer (CFO) or Company Secretary or Head of Internal Audit during the year.

13. The financial statements of the Company were duly endorsed by Chief Executive Officer and Chief Financial Officer before approval of the Board.

14. The Board has formed the following Management Committees:

    1. Underwriting, Reinsurance and Co-insurance Committee

       Names	Category
       Mr. Tanveer Ahmed	Chairman
       Mr. Naim Anwar	Member
       Mr. Anand Teja	Secretary

    2. Claims Settlement Committee

       Names	Category
       Mr. Naim Anwar	Chairman
       Mr. Muhammad Ayoub	Member
       Mr. Ashraf Dhedhi	Secretary

    3. Risk Management & Compliance Committee

       Names	Category
       Mr. Naim Anwar	Chairman
       Mr. Malik Mehdi Muhammad	Member
       Mr. Ashraf Dhedhi	Member

15. The Board has formed the following Board Committees comprising of members given below;

    1. Ethics, Nomination, Human Resource, Remuneration & Sustainability Committee

       Names	Category
       Ms. Huma Javaid	Independent Director / Chairman
       Mr. Shaikh Waqar Ahmed	Independent Director / Member
       Mr. Naim Anwar	Executive Director / Member

    2. Investment Committee

       Names	Category
       Mr. Naim Anwar	Chief Executive Officer / Chairman
       Mr. Shaikh Waqar Ahmed	Independent Director / Member
       Ms. Huma Javaid	Independent Director / Member
       Mr. Malik Mehdi Muhammad	Chief Financial Officer

16. The Board has formed an Audit Committee. It presently comprises of three members and all of them are independent director including the chairman of the committee. The Composition of the audit committee is as follows:

    Names	Category
    Mr. Shaikh Waqar Ahmed	Independent Director / Chairman
    Ms. Naveeda Mahmud	Independent Director / Member
    Ms. Huma Javaid	Independent Director / Member

17. The meetings of the committees except Ethics, Nomination, Human Resource, Remuneration & Sustainability Committee were held at least once every quarter prior to approval of interim and final results of the Company. The terms of references of the Committees have been formed and advised to the Committees for compliance.

18. The Board has established a system of sound internal control, which is effectively implemented at all levels within the Company. The Company includes all the necessary aspects of internal control given in the Code.

19. The statutory auditors of the Company have been appointed from the panel of auditor approved by the Commission in term of section 48 of the Insurance Ordinance, 2000 (Ordinance No. XXXIX of 2000). The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the Quality Control Review program of the Institute of Chartered Accountants of Pakistan and registered with Audit Oversight Board of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the Company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on Code of Ethics as adopted by the Institute of Chartered Accountants of Pakistan and that they and the partners of the firm involved in the audit are not a close relative (spouse, parent, dependent and non-dependent children) of the Chief Executive Officer, Chief Financial Officer, Head of Internal Audit, Company Secretary or director of the Company.

20. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the Act, the Regulation, or any other regulatory requirement and the auditors have confirmed that they have observed IFAC guidelines in this regard.

21. The Directors' report for this year has been prepared in compliance with the requirements of the Code and the Regulations and fully describes the salient matters required to be disclosed.

22. The Directors, Chief Executive Officer and other executives do not hold any interest in the shares of the Company other than that disclosed in the pattern of shareholding.

23. The Company has complied with all the corporate and financial reporting requirements of the Code.

24. The Board has set up an effective internal audit function and the head of internal audit is conversant with the policies and procedures of the Company.

25. The Chief Executive Officer, Chief Financial Officer, Compliance Officer and the Head of Internal Audit possess such qualification and experience as is required under this Code. Moreover, the persons heading the underwriting, claims, reinsurance, risk management and grievance functions possess qualification and experience of direct relevance to their functions, as required under section 12 of the Insurance Ordinance, 2000 (Ordinance No. XXXIX of 2000):

    Names	Designation
    Mr. Naim Anwar	Chief Executive Officer
    Mr. Tanveer Ahmed	Head of Underwriting, Reinsurance, Risk Management & Grievance Department
    Mr. Malik Mehdi Muhammad	Chief Financial Officer & Company Secretary
    Syed Danish Hasan Rizvi	Head of Internal Audit
    Mr. Ashraf Dhedhi	Head of Claims and Compliance Officer

26. The Board ensures that the investment policy of the Company has been drawn up in accordance with the provision of the Code.

27. The Board ensures that the risk management system of the Company is in place as per Code.

28. The Company has set up a risk management function, which carries out its tasks as covered under the Code.

29. The Board ensures that as part of the risk management system, the Company gets itself rated from approved rating agency which is being used by its management function/department and the respective committee as a risk monitoring tool. The last rating assigned by the rating agency on January 26, 2024 is A with Outlook Stable. Current rating is under review.

30. The Board has set up a grievance department/function, which fully complies with the requirements of the Code.

31. The Company has not obtained any exemption(s) from the Securities and Exchange Commission of Pakistan (SECP) in respect of the requirements of the Code.

32. We confirm that all requirements of regulations 3, 6, 7, 8, 27, 32, 33 and 36 of the Regulation and all material requirement of Code of Corporate Governance of 2019 have been complied.

33. Explanations for non-compliance with requirements, other than regulations 3, 6, 7, 8, 27, 32, 33 & 36 (non-mandatory requirements) are below:

For and on behalf of the Board of Directors

Crescent Star Insurance Limited

Naim Anwar

Managing Director & CEO Karachi: April 3, 2026

INDEPENDENT AUDITORS' REPORT

To the Members of Crescent Star Insurance Limited

Report on the Audit of the Unconsolidated Financial Statements

Qualified Opinion

We have audited the annexed unconsolidated financial statements of Crescent Star Insurance Limited (the 'Company'), which comprises the unconsolidated statement of financial position as at December 31, 2025, the unconsolidated statement of profit or loss account, the unconsolidated statement of comprehensive income, the unconsolidated statement of changes in equity and the unconsolidated statement of cash flows for the year then ended, and notes to the unconsolidated financial statements, including a summary material accounting policies and other explanatory information, and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of the audit.

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters discussed in the Basis for Qualified Opinion section of our report, the unconsolidated statement of financial position, the unconsolidated statement of profit or loss account, the unconsolidated statement of comprehensive income, the unconsolidated statement of changes in equity and the statement unconsolidated of cashflows together with the notes forming part thereof, conform with the accounting and reporting standards as applicable in Pakistan and give the information required by the Insurance Ordinance, 2000 and the Companies Act, 2017, in the manner so required and respectively give a true and fair view of the state of Company's affairs as at December 31, 2025 and of total comprehensive income, the changes in equity and its cash flows for the year then ended.

Basis for Qualified Opinion

1. As stated in note 8.1 to the unconsolidated financial statements, the Company has recorded accrued interest amounting to Rs. 330.235 million (2024: Rs. 330.235 million) at the rate of one-year KIBOR plus three percent on the advance against issuance of shares to Dost Steels Limited. We have not been provided any documentary evidence to substantiate the Company's claim therefore recoverability of the accrued interest income could not be ascertained. Accordingly, total assets/ solvency of the Company is overstated by Rs. 330.235 million (2024: Rs. 330.235 million) respectively.

2. As stated in note 8.2 to the unconsolidated financial statements, the Company's carrying value on account of investment in subsidiary and advance against issuance of shares amounts to total of Rs. 88.072 million (2024: Rs. 86.395 million). The management has not carried out impairment testing as required by IAS - 36 "Impairment of Assets". No provision for loss, if any, that may result, has been incorporated in the unconsolidated financial statements.

3. As disclosed in Note 8.5 to the unconsolidated financial statements, the Company entered into an agreement during the year, to charge interest on loan at KIBOR plus 3% from the date of first disbursement, i.e., from 2016 to 2025. By virtue of this agreement, the Company has recognized net interest income and receivable amounting to Rs. 17.048 million during the year. However, this treatment has resulted in an overstatement of interest income by Rs. 11.804 million, as disclosed in Note 23.1 to the unconsolidated financial statements. Had

   the Company accounted for the interest by restating comparative figures and adjusting opening retained earnings, the interest income for the year ended December 31, 2025 would have been lower by Rs. 11.804 million. Furthermore, the opening balance of loans and other receivables as at January 1, 2025 would have been higher by Rs. 11.804 million, with a corresponding increase in retained earnings by the same amount.

4. As disclosed in Note 15.1 to the unconsolidated financial statements, the Company entered into an agreement during the year, to charge interest on loan at KIBOR plus 3% from the date of first disbursement, i.e., from 2016 to 2025. By virtue of this agreement, the Company has recognized net interest income and receivable (net of payable) amounting to Rs. 3.186 million during the year. However, this treatment has resulted in an overstatement of interest income by Rs. 2.452 million, as disclosed in Note 23.1 to the unconsolidated financial statements. Had the Company accounted for the interest by restating comparative figures and adjusting opening retained earnings, the interest income for the year ended December 31, 2025 would have been lower by Rs. 2.452 million. Furthermore, the opening balance of loans and other receivables as at January 1, 2025 would have been higher by Rs.

2.452 million, with a corresponding increase in retained earnings by the same amount.

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Unconsolidated financial statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants of Pakistan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse opinion.

Key Audit Matters