Transmission of Annual Report for the Year Ended June 30, 2025

ANNUAL REPORT 2025

BE A MARKET LEADER IN STEEL INDUSTRY THROUGH DIVERSIFICATION, PROFESSIONALISM OPTIMUM USE OF RESOURCES & ENSURING STAKE HOLDERS INTEREST

METROPOLITAN STEEL CORPORATION LIMITED IS COMMITTED TO: BE ETHICAL IN ITS PRACTICES

PRODUCE TO THE HIGHEST QUALITY STANDARDS

FULFILL AND EXCEED THE QUALITY EXPECTATIONS OF OUR CUSTOMERS OPERATE THROUGH TEAM WORK

EXCEL THROUGH CONTINUOUS IMPROVEMENT RETAIN OUR POSITION AS MARKET LEADER

CONFORM WITH ENVOIRONMENTAL PROTECTION STANDARS ENSURE A FAIR RETURN TO SHAREHOLDERS

FULFILL SOCIAL RESPONSIBILITES

COMPANY PROFILE

Board of Directors

Chairman

Mr. Mehmood Ali Mehkri Non-Executive Chief Executive

Mr. Muhammad Umar Mehkari Executive Director

Mr. Irshad Ali Pitafi* Independent Director/Non Executive Director

Mr. Abdul Rahim Suriya Independent Director/Non Executive Director

Mr. Tahir Mahmood** Independent Director/Non Executive Director

Mrs Uzma Mehmood Mehkri Non-Executive Director

Mrs. Sara Mehkri Non-Executive Director

Mrs. Saba Mehkri Executive Director

*Resignation accepted on september 19, 2025

**appointed on September 19, 2025.

Audit Committee

Nomination Committee

Risk Management Committee

Company Secretary

Mr. Abul Mojahid

Auditors

Reanda Haroon Zakaria Aamir Salman Rizwan & Company Chartered Accountants.

Registere/ Head Office

Plot No: H.E 1/2, Landhi Industrial area Karachi.

METROPOLITAN STEEL CORPORATION LIMITED NOTICE OF ANNUAL GENERAL MEETING

NOTICE is hereby given that the 70thAnnual General Meetings of the Company will be held on Saturday October 25, 2025 at 10:00 a.m. at the Registered Head office factory premises on plot No. HE-1/2, adjacent Nagaria Textile Mill, Landhi Industrial Area, Karachi to transact the following business:

1. ORDINARY BUSINESS:

   1. To confirm the minutes of the 69thAnnual General Meeting held on October 25, 2024.

   2. To receive and adopt the audited accounts of the Company for the year ended June 30, 2025 with the Audit report, Directors' Report and review report by the chairman thereon;

   3. To appoint auditor for the year ending June 30, 2026 and fix their remuneration.

   4. Any other business with the permission of the chair.

      Karachi: 04-10-2025 By Order of the Board

      Abul Mojahid Company Secretary

      NOTES

      1. The share transfer books of the Company will remain closed from 19-10-2025 to 25-10-2025 (both days inclusive)

      2. A member entitled to attend and vote may appoint any other member as his /her proxy.

      3. The instrument appointing proxy must be received at the Registered Office of the company duly stamped and signed not later than 48 hours before the meeting.

      4. CDC Account Holders will further have to follow the under mentioned guidelines as laid down in Circular 1 of January 26, 2000 issued by the Securities Exchange Commission of Pakistan.

         1. For Attending the Meeting:

            1. In case of individuals, the account holder or sub-account holder and/or the person whose securities are in group account and their registration details are uploaded as per the Regulations, shall authenticate his /her identity by showing his /her original National Identity Card NIC or original passport at the time of attending the meeting.

            2. In case of corporate entity the Board of Directors resolution/power of attorney with specimen signatures of the nominee shall be produced (unless it has been provided earlier) at the time of the meeting.

            3. Participation through video conferencing facility:

               The shareholders, can participate in the AGM proceedings via video link also, those members who are willing to attend and participate in the AGM via video link are requested to register themselves by sending an email along with following particulars and valid copy of both sides of CNIC at email address corporate@msclwire.com.pk with subject of 'Registration for AGM' not less than 48 hours before the time of the meeting:

               Name of Shareholder	CNIC No.	Folio/CDC Acc. #	Cell No.	Email Address

               Members who will be registered, after necessary verification as per the above requirement, will be provided a password protected video link by the company via email. The said link will remain open 10:00 a.m. on the date of AGM till the end of the meeting.

         2. For Appointing Proxy:

            1. In case of individuals the account holder or sub account holder and or the person whose securities are in group account and their registration details are upload as per the Regulations, shall submit the proxy form as per the above requirement

            2. The proxy form shall be witnessed by two persons whose names, addresses and NIC numbers shall be mentioned on the form

            3. Attested copies of NIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy form.

            4. The proxy shall produce his original NIC passport at the time of the meeting

            5. In case of corporate entity, the Board of Directors' resolution/power of attorney with the specimen signatures shall be submitted (unless it has been provided earlier) along with proxy form to the Company.

      5. Transmission of Annual Audited Financial Statements and Notice of AGM for the year

         ended June 30, 2025, have been placed on the Company's website, which can be accessed

         / downloaded from the link https://msclwire.com.pk/investor-information/

      6. Distribution of Gifts As required by SRO 452 dated March 17, 2025, no gifts shall be distributed at the General Meetings.

DIRECTORS' REPORT

FOR THE YEAR ENDED JUNE 30, 2025

To the Members,

the honour to present this Annual Report, together with the audited financial statements of the Company for the year ended June 30, 2025.

1. OPERATIONAL AND FINANCIAL REVIEW

   
   
   

   steel wire products. The current fiscal year 2024-2025 was marked by a challenging economic landscape characterized by slow and stagnant economic

   
   
   

   The steel wire industry faced significant headwinds, including a sharp increase

   
   
   
   
   
   
   cularly from China-our primary source of raw materials-led to a 15%-20% decrease in the average price of our products,
   
   
   
   
   

   Head Office: Plot# HE-1/2, Landhi Industrial Area, Karachi Pakistan,

   Tel: 02135130403-4, Email: mscl@cyber.net.pk Website: https://www.msclwire.com.pk

   04

   
   
   
   
   
   

   Alhamdulillah, despite these macroeconomic hardships, the market remained pressures due to sluggish demand for steel products.

   Key Performance Indicators:

   Particulars	2025	2024
   Net Revenue Loss Before Taxation Net Loss After Taxation	Rs. 100.748 million	Rs. 122.475 million
   	Rs. 13.010 million	Rs. 23.754 million
   	Rs. 12.423 million	Rs. 23.341 million

   The decrease in capacity utilization by approximately 2.52% is a direct result of the subdued market demand. While the Company reported a net loss of Rs.

   12.423 million, it is noteworthy that this represents a reduction in losses compared to the previous year, reflecting management's continued efforts in cost control and operational efficiency.

   2. MATERIAL EVENTS AND COMMITMENTS

   During the year, no material event occurred that has a significant impact on the Company's operations or financial position, other than the industry-wide challenges of price erosion, smuggling, and increased energy costs as detailed above.

   05

2. MATERIAL EVENTS AND COMMITMENTS

   During the year, no material event occurred that has a significant impact on

   -wide challenges of price erosion, smuggling, and increased energy costs as detailed above.

   
   
   

3. CORPORATE SOCIAL RESPONSIBILITY POLICY

   
   
   

   city, is a

   
   
   
   
   
   
   
   
   

   people and its neighbours.

   
   
   
   -One
   
   
   
   
   

   food insecurity in the vicinity of our city.

   
   
   
   
   
   

   1. Baitussalam Welfare Trust (BWT)

      BWT in Karachi, Pakistan is a non-

      
      
      
      
      
      

      in their efforts to become more self-sufficient.

   2. Shaukat Khanum Memorial Cancer Hospital and Research Centres (SKMCH&RC)

      SKMCH&RC are state-of-the-art cancer centres located in Lahore and Peshawar, Pakistan.

4. . FUTURE OUTLOOK

   
   
   
   
   
   
   
   
   
   
   
   

   more stable pricing in the upcoming fiscal year 2025-2026. The Board remains capitalizing on the expected market recovery.

5. . AUDITORS

   The auditors, Reanda Haroon Zakaria Associates have expressed their willingness to continue in office. A resolution for their re-appointment and the determination of their remuneration will be proposed at the forthcoming Annual General MeeGng.

   For and on behalf of the Board of Directors

   Muhammad Umar Mehkari

   Chief ExecuGve Officer

   
   
   

   October 03, 2025

   CHAIRMAN'S REVIEW

   Dear Shareholders,

   It is my pleasure to present the annual audited financial statements and my review on the performance of your Company for the outgoing financial year June 30, 2025.

   The Company after facing economic challenges is progressing towards stability, with better pricing and steady increase in sales, we express our gratitude to shareholders, employees, customers for their continued support

   and belief in the Company.

   We also congratulate the management for integrating into the latest digital invoicing platform creating more transparency and efficiency within the company. The start of new fiscal year has been positive with an increase in capacity utilization and better pricing, and the company looks forwards to achieve profitability in the coming. year by further improving the range and quality of our products, IN SHAA ALLAH.

   The overall performance of the Board, its members and sub-committees has been assessed as 'Satisfactory'. As the Chairman of the Board, I would like to extend my gratitude to all Board members for their valuable participation, support and guidance. I would also like to thank all the shareholders for their unwavering support and confidence in our vision.

   October 03, 2025

   Head Office: Plot# HE-1/2, Landhi Industrial Area, Karachi Pakistan,

   Tel: 02135130403-4, Email: mscl@cyber.net.pk Website: https://www.msclwire.com.pk

   08

   
   
   
   
   
   

   Mahmood Ali Mehkri Chairman

   STATEMENT OF COMPLIANCE WITH LISTED COMPANIES

   (CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2019 (THE REGULATIONS)

   Name of Company: Metropolitan Steel Corporation Limited Year ended: June 30, 2025

   Metropolitan Steel Corporation Limited (the Company) has complied with the requirements of the Regulations in the following manner:

   1. The total number of Directors are seven as per the following:

      1. Male: 4

      2. Female: 3

   2. The composition of the Board of Directors (the Board) is as follows:

      Category	Names
      Non-Executive Directors	Mr. Mehmood Ali Mehkri
      	Mrs. Uzma Mehmood Ali Mehkri
      	Mrs. Sara Mehmood Mehkri
      Independent Director	Mr.Irshad Ali Pitafi*
      	Mr. Abdur Raheem Sooryia
      	Mr. Tahir Mehmood**
      Executive Directors	Mr. Muhammad Umar Mehkari
      	Mrs. Saba Mehkari Farooqui
      Female Directors	Mrs. Sara Mehmood Mehkri
      	Mrs. Saba Mehkari Farooqui
      	Mrs. Uzma Mehmood Ali Mehkri

      *Resignation accepted on September 19, 2025

      **Appointed on September 19, 2025

   3. The Directors have confirmed that none of them is serving as a Director on more than seven listed companies, including this Company;

   4. The Company has prepared a "Code of Conduct" and has ensured that appropriate steps have been taken to disseminate it throughout the Company along with its supporting policies and procedures;

   5. The Board has developed a vision / mission statement, overall corporate strategy and significant policies of the Company. The Board has ensured that complete record of particulars of the significant policies along with their date of approval or updating is maintained by the company;

   6. All the powers of the Board have been duly exercised and decisions on relevant matters have been taken by the Board / shareholders as empowered by the relevant provisions of the Act and these Regulations;

   7. The meetings of the Board were presided over by the Chairman and, in his absence, by a director elected by the Board for this purpose. The Board has complied with the requirements of the Act and the Regulations with respect to frequency, recording and circulating minutes of meeting of Board;

   8. The Board have a formal policy and transparent procedures for remuneration of Directors in accordance with the Act and these Regulations;

   9. The Board has not arranged any Directors' Training program for its directors. The Directors will be trained in the upcoming period. All the Directors on the Board are fully conversant with their duties and responsibilities.

   10. The CFO has resigned in the financial year June 30, 2016 and his successor has not been appointed till the issuance of these financial statements.

   11. The financial statements were duly endorsed by the Chief Executive Officer (CEO) before approval of the Board;

   12. The Board had formed committees comprising of members given below:

       1. Audit Committee

          Sr. # Name Designation

          1. Mr. Irshad Ali Pitafi*

          2. Mr. Tahir Mahmood**

             Chairman Chairman

          3. Mrs. Sara Mehkari Member

          4. Mrs. Uzma Mehmood

             *Resignation accepted on September 19, 2025

             **Appointed on September 19, 2025

       2. HR and Remuneration Committee

          Member

          Sr. # Name Designation

          I Mr.Irshad Ali Pitafi*

          1. Mr. Abdul Rahim Suriya

             Chairman Chairman

          2. Mr. Mehmood Ali Mehkri Member

          3. Mrs. Uzma Mehmood

          * Resignation accepted on September 19, 2025

       3. Nomination Committee

          Member

          Sr. #	Name	Designation
          i	Mrs. Sara Mehmood Mehkri	Chairman
          ii	Mr. Mehmood Ali Mehkri	Member
          iii	Mrs. Uzma Mehmood	Member

       4. Risk Management Committee

          Sr. # Name Designation

          1. Mrs. Saba Mehkari Farooqui Chairman

          2. Mr. Mehmood Ali Mehkri Member

          3. Mrs. Uzma Mehmood Member

   13. The terms of reference of the aforesaid committees have been formed, documented, and advised to the committees for compliance;

       The frequency of meetings of the committees were as per following:

       Committee Frequency of Meetings

       1. Audit Committee

       2. HR and Remuneration Committee

       3. Nomination Committee

       4. Risk management Committee

       Quarterly Annually Annually Annually

   14. The Board is in the process of establishing an internal audit function, for which a head of internal audit has been appointed subsequently;

   15. 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 (ICAP) and registered with Audit Oversight Board of Pakistan, that they and all their 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, company secretary or director of the company;

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

   17. We confirm that all requirements of regulations 3, 6, 7, 8, 27,32, 33 and 36 of the Regulations have been complied with; and

   18. Explanation for non-compliance with requirements, other than regulations 3, 6, 7, 8,

27,32, 33 and 36 are below:

On Behalf of the Board,

MEHMOOD ALI MEHKARI

CHAIRMAN

Dated: October 03, 2025

13

P. Key Financial & Operating Data

MSC METROPOLITAN STEEL CORPORATION LIMITED.

This has been summarised for the following seven years for the assesment of operting and finacial results.

REPRESENTED BY

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF

METROPOLITAN STEEL CORPORATION LIMITED REPORT ON THE AUDIT OF FINANCIAL STATEMENTS

Qualified Opinion

We have audited the annexed financial statements of Metropolitan Steel Corporation Limited (the Company), which comprise the statement of financial position as at 30 June 2025, and the statement of profit or loss and other comprehensive income, the statement of changes in equity, the statement of cash flows for the year then ended, and notes to the financial statements, including a material accounting policy information 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 except for the matters stated in the Basis for Qualified Opinion section of our report.

In our opinion, except for the possible effects of the matters described in the Basis for Qualified Opinion section of our report, and to the best of our information and according to the explanations given to us, the statement of financial position, statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows 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 Companies Act, 2017 (XIX of 2017), in the manner so required and respectively give a true and fair view of the state of the Company's affairs as at 30 June 2025 and of the loss and other comprehensive loss, the changes in equity and its cash flows for the year then ended.

Basis for Qualified Opinion

We were unable to obtain sufficient appropriate audit evidence to satisfy ourself about recoverability of doubtful trade debts (note 9) and liabilities written back (note 30.1) amounting to Rs. 24.07 million and Rs. 15.38 million respectively, due to non-availability of any assessment by management. The balances could not be verified from other alternative procedures. Further, we were unable to substantiate unclaimed dividends, lease liabilities and markup accrued there upon amounting to Rs. 1.27 million, Rs. 21.22 million and Rs. 3.74 million respectively, due to non-availability of records and being old in nature. Consequently, we were unable to determine whether any adjustments were necessary in respect of above balances and related disclosures in the financial statements.

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 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 opinion.

Material Uncertainty relating to Going Concern

We draw attention to Note 1.3 to the accompanying financial statements, which indicates that the Company has incurred a gross loss of Rs. 11.68 (2024: Rs. 17.21) million and a loss after-tax of Rs. 12.42 (2024: Rs. 23.34) million and its accumulated losses stood at Rs. 113.42 (2024: Rs. 105.51) million along with the management's reasons for preparing these financial statements on going concern basis. These conditions, along with other matters mentioned in note 1.3, indicate the existence of material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Emphasis of Matter

We draw attention to the fact that the accompanying financial statements are not authenticated by the Chief Financial Officer as required by the Companies Act, 2017 because the same was not appointed till the date of authorization of the accompanying financial statements.

Our opinion is not modified in respect of the above matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

In addition to the matters described in the Basis for Qualified Opinion section and Material Uncertainty relating to Going Concern section we have determined the matter described below to be the key audit matter to be communicated in our report

Following is the Key audit matter:

Key audit matter How the matter was addressed in our audit Valuation of stock in trade

As disclosed in note 8 to the financial

statements, stock-in-trade amounts to Rs. 14.45 million. The stock is measured at lower of weighted average cost and net realizable value. There is an element of judgement involved in determining an appropriate costing basis and assessing its valuation.

Our audit procedures to assess the valuation of stock-

in-trade amongst others include the following:

• Obtained an understanding of controls over purchases and valuation of stock-in-trade and tested, on a sample basis, their design, implementation and operating effectiveness;

• Performed observation of inventory counts and physical inspection of the stock held at the premises of the Company;

  Key audit matter How the matter was addressed in our audit

  Given the significance of stock-in-trade to the financial performance of the Company and the level of judgements and estimate involved, we have identified valuation of stock-in-trade as a key audit matter.

• Assessed net realizable value (NRV) by comparing management's estimation with the selling prices achieved subsequent to the reporting period; and

• Assessed the adequacy and appropriateness of the disclosures for compliances with the requirements of applicable financial reporting framework.

  Valuation of Property plant and equipment

  As disclosed in Note 4 and 16 to the financial statements, the Company carried out a revaluation of its property, plant and equipment during the year of Rs. 54.88 million, resulting in an increase in their carrying amounts and recognition of a revaluation surplus

  The valuation involved significant judgement, use of key assumptions, and reliance on independent professional valuers. Accordingly, we have identified the revaluation of property, plant and equipment as a key audit matter.

  Valuation of Stores, spare parts and loose tools.

  As disclosed in Note 7 to the financial statements stores, spare parts and loose tools amounted to Rs. 11.95 million, the Company carried out a valuation of its stores, spare parts and loose tools during the year.

  The valuation involved significant judgement, use of key assumptions, and reliance on independent professional valuer. Accordingly, we have identified the revaluation of stores, spare parts and loose tools as a key audit matter.

  Our audit procedures included the following:

• Obtained valuation report of external valuation expert.

• Evaluated the qualification, independence, experience, and competency of external valuation expert engaged by the company as valuation expert.

• Obtained understanding of valuation processes and techniques adopted by valuation expert to assess whether they are in line with company's norms.;

• Assessed the adequacy of related disclosures in the annexed financial statements;

  Our audit procedures included the following:

• Observed the physical inspection of the stock held by the company.

• Evaluated the qualification, independence, experience, and competency of external valuation expert engaged by the company as valuation expert.

• Obtained and assessed the valuation reports prepared by independent external management valuer.

• Obtained an understanding of controls over valuation of stores, spare parts and loose tools, and tested on sample basis, their design, implementation and operating effectiveness.

• Assessed the adequacy of related disclosures in the annexed financial statements.

Information Other than the Financial Statements and Auditor's Report Thereon

Management is responsible for the other information. The Other Information comprises the information included in the Annual Report but does not include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the Other Information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the Other Information and, in doing so, consider whether the Other Information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this Other Information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Board of Directors for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting and reporting standards as applicable in Pakistan and the requirements of Companies Act, 2017(XIX of 2017) and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Board of directors are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs as applicable in Pakistan will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the board of directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the board of directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the board of directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

Based on our audit, we further report that in our opinion:

1. except for the possible effects of matters described in the Basis for Qualified Opinion section of our report, proper books of accounts have been kept by the Company as required by the Companies Act, 2017 (XIX of 2017);

2. except for the possible effects of matters described in the Basis for Qualified Opinion section of our report, the statement of financial position, the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows together with the notes thereon have been drawn up in conformity with the Companies Act, 2017 (XIX of 2017) and are in agreement with the books of account;

3. investments made, expenditures incurred and guarantees extended during the year were for the purpose of the Company's business; and

4. no zakat was deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980).

The engagement partner on the audit resulting in this independent auditor's report is

Muhammad Farooq.

Reanda Haroon Zakaria Aamir Salman Rizwan & Company Place: Karachi

Chartered Accountants Dated:

UDIN: AR202510127jSpH26o9V

INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF

METROPOLITAN STEEL CORPORATION LIMITED

Review Report on Statement of Compliance Contained in Listed Companies (Code of Corporate Governance) Regulations, 2019

We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance) Regulations, 2019 (the Regulations) prepared by the Board of Directors of Metropolitan Steel Corporation Limited, ("the Company") for the year ended June 30, 2025 in accordance with the requirements of Regulation 36 of the Regulations.

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.

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. We are only required to ensure compliance of this requirement to the extent of the approval of the related party transactions by the Board of Directors upon recommendation of the Audit Committee.

Instance of non-compliance with respect to regulations was observed which have not been stated in the Statement of Compliance:

• Qualification of Company secretary is not in compliance with the criteria specified under section 24 of the Regulations.

Based on our review, except for the above instances of non-compliances, 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 best practices contained in the Regulations as applicable to the Company for the year ended June 30, 2025.

Further, we highlight below instances of non-compliance with the requirements of the Regulations as reflected in the Statement of Compliance:

Reanda Haroon Zakaria Aamir Salman Rizwan & Company Place: Karachi

Chartered Accountants Dated:

UDIN: CR202510127og4aj1CG3

METROPOLITAN STEEL CORPORATION LIMITED STATEMENT OF FINANCIAL POSITION

AS AT JUNE 30, 2025

ASSETS Note

Non-Current Assets

2025 2024

- - - - Rupees in '000' - - - -

EQUITY AND LIABILITIES

Share Capital and Reserves Authorized Capital

_____________________ _____________________

Chief Executive Officer Director

The annexed notes from 1 to 47 form an integral part of these financial statements.

Chief Executive Officer

Director

METROPOLITAN STEEL CORPORATION LIMITED STATEMENT OF PROFIT OR LOSS AND OTHER COMPERHENSIVE INCOME

FOR THE YEAR ENDED JUNE 30, 2025

Note

2025 2024

- - - - - Rupees in '000' - - - - -

_____________________ _____________________

Chief Executive Officer Director

The annexed notes from 1 to 47 form an integral part of these financial statements.

Chief Executive Officer

Director

METROPOLITAN STEEL CORPORATION LIMITED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED JUNE 30, 2025

Share capital

Capital

Reserves

Revaluation surplus on property, plant and equipment

Revenue Reserves

General Unappropriated reserve loss

Total

- - - - - - - - - - - - - - - - - - Rupees in '000' - - - - - - - - - - - - - - - - - -

Balance as at June 30, 2025 309,776 568,022 80,500 (113,416) 844,882

_____________________ _____________________

Chief Executive Officer Director

The annexed notes from 1 to 47 form an integral part of these financial statements.

Chief Executive Officer

Director

METROPOLITAN STEEL CORPORATION LIMITED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED JUNE 30, 2025

Note

2025 2024

- - - - Rupees in '000' - - - -

A. CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations after

_____________________ _____________________

Chief Executive Officer Director

The annexed notes from 1 to 47 form an integral part of these financial statements.

Chief Executive Officer

Director

METROPOLITAN STEEL CORPORATION LIMITED NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2025

1. LEGAL STATUS AND OPERATIONS

   1. Metropolitan Steel Corporation Limited (the Company) was incorporated on August 24, 1955 as a Public Limited Company. The shares of the Company are quoted on Pakistan Stock Exchange Limited. The Company is a manufacturer of steel products such as mild and high carbon steel wires.

   2. The geographical location and addresses of business units are as under: Location Address

      Registered office and Manufacturing facility Landhi Industrial Area, Plot # HE:1/2

   3. During the year, the Company has incurred gross loss of Rs. 11.68 million (2024: Rs. 17.21 million) and has incurred loss after tax amounting to Rs. 12.42 million (2024: Rs. 23.34 million) and its accumulated losses stood at Rs. 113.42 million (2024: Rs. 105.51 million). The sales of the company has been reduced by Rs

      21.73 million.

      These conditions indicate the existence of material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.

      However, the management of the Company has prepared these financial statements on going concern basis due to the following reasons:

      1. Though the company's sales have been reduced, the other financial indicators such as gross profit margin, current ratio and cash generated from operations have improved or been maintained. This indicates company's continuous efforts to control and minimise the costs and generate cash flow. The macroeconomic factors are also improving, which will enhance the company's efforts to introduce innovative products, increase it's customer base and improve distribution channel. The current ratio is stable and there is no long term liability. The management is of the view that it's innovative products, increased customer base and improved distribution channel will generate sufficient revenues and profits in the future to offset its accumulated losses and provide reasonable return to its shareholders.

      2. The Company has no bank liability and sponsors directors are committed to support the company, in shape of interest free loan, in case working capital requirement arises.

2. BASIS OF PREPARATION

   1. Statement of compliance

      These financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:

      • International Financial Reporting Standards (IFRS Standards) issued by the international Accounting Standard Boards (IASB) as notified under the Companies Act, 2017.

      • Provision of and directives issued under the Companies Act, 2017.

      Where provisions and directives issued under the Companies Act, 2017 differ from the IFRS standards, the provisions of and directives issued under the Companies Act, 2017 have been followed.

   2. Basis of measurement

      These financial statements have been prepared under the historical cost convention except for:

      • short term investments are stated at the fair values; and

      • leasehold land, buildings on leasehold land, and plant & machinery which have been classified under property, plant & equipment and are stated at revalued amounts.

   3. Functional and presentation currency

      These financial statements are presented in Pakistani Rupees which is the Company's functional and presentation currency. All financial information presented in Pakistan Rupees has been rounded to the Rupee.

   4. Use of estimates and judgments

      The preparation of financial statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies. Estimates and judgments are continually evaluated and are based on historic experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future period affected.

      In the process of applying the accounting polices, management has made the following estimates and

      judgments which are significant to the financial statements:

      1. Determining the residual values and useful lives of property, plant and equipments (Note 3.1),

      2. Impairment / adjustments of inventories and stores to their net realizable value (Note 3.6 & 3.5),

      3. Recognition of taxation and deferred tax ( Note 3.13), and;

      4. Impairment of assets (Note 3.3 & 3.4.5).

   5. Standards, interpretations and amendments to approved accounting standards

      1. Amendments to approved accounting standards and interpretations which became effective during the year ended June 30, 2025:

         There were certain amendments to accounting and reporting standards which became effective for the Company for the current year. However, these are considered not to be relevant or to have any significant impact on the Company's financial reporting and, therefore, have not been disclosed in these financial statements.

      2. Standards, interpretations and amendments to the existing standards that are not yet effective and have not been early adopted by the company

         IAS 21

         IFRS 7

         The Effects of changes in Foreign Exchange Rates (Amendments)

         Financial Instruments (Amendments regarding disclosures)

         Effective date (annual reporting periods beginning on or after)

         January 1, 2025

         January 1, 2026

         IFRS 17 Insurance Contracts January 1, 2026

         IFRS 9

         Financial Instruments (Amendments regarding the classification and measurement of financial instruments)

         January 1, 2026

3. MATERIAL ACCOUNTING POLICY INFORMATION

   The principal accounting policies applied in the presentation of these financial statements are set out below. These policies have been consistently applied to all the years presented.

   1. Property, plant and equipment and depreciation

      1. Owned assets

         Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses except for leasehold land which is stated at revalued amount less impairement lossess and buildings on leasehold land, and plant & machinery which are stated at revalued amount less accumulated depreciation and accumulated impairment losses. Cost of property, plant and equipment comprises the acquisition cost and directly attributable cost of bringing the assets to its working condition.

         Depreciation is charged to income applying the reducing balance method, using the rates stated in note 4.1.

         Depreciation is charged when the asset is put to use till the asset is disposed.

         The assets' residual values, and useful lives are reviewed and adjusted, if appropriate, at each reporting date.

         Maintenance and normal repairs are charged to income as and when incurred. Major renewals and improvements are capitalized and the assets so replaced, if any, are retired.

         Valuations are performed frequently enough to ensure that the fair value of a revalued asset does not differ materially from its carrying amount at the reporting date.

         An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Gains or losses on disposal or retirement of an asset represented by the difference between the sale proceeds and the carrying amount of the asset is charged to statement of profit or loss.

   2. Revaluation surplus on property, plant and equipment

      Revaluation surplus is recorded in other comprehensive income and accumulated to the Revaluation surplus on property, plant and equipment in equity. However, to the extent that it reverses a revaluation deficit of the same asset previously recognized in profit or loss, the increase is recognized in statement of profit or loss. A revaluation deficit is recognized in the statement of profit or loss, except to the extent that it offsets an existing surplus on the same asset recognized in the revaluation surplus on property, plant and equipment.

      An annual transfer from the revaluation surplus on property, plant and equipment to unappropriated profit is made for the difference between depreciation based on the revalued carrying amount of the asset and depreciation on the asset's original cost. Upon disposal, any surplus relating to the particular asset being sold is transferred to unappropriated profit.

   3. Impairment of non - financial assets

      The carrying amounts of the Company's non financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the asset's recoverable amount, being higher of value of use and fair value less costs to sell, is estimated. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognized in the statement of profit or loss.

   4. Financial instruments

      1. Initial Recognition

         All financial assets and liabilities are initially measured at cost which is the fair value of the consideration given or received. These are subsequently measured at fair value, amortized cost as the case may be.

      2. Classification of financial assets

         The Company classifies its financial instruments in the following categories:

         • at amortized cost.

         • at fair value through other comprehensive income ("FVTOCI"), or

         • at fair value through profit and loss ("FVTPL"),

           The Company determines the classification of financial assets at initial recognition. The classification of instruments (other than equity instruments) is driven by the Company's business model for managing the financial assets and their contractual cash flow characteristics.

           Financial assets at amortized cost

           Financial assets that meet the following conditions are subsequently measured at amortized cost:

           1. the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

           2. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

           Financial assets at fair value through OCI

           Financial assets that meet the following conditions are subsequently measured at FVTOCI:

           1. the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and

           2. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

           However, Company may make an irrevocable election at initial recognition for particular investments in equity instruments that would otherwise be measured at fair value through profit or loss to present subsequent changes in fair value in other comprehensive income.

           Financial assets at fair value through P&L

           A financial asset is measured at fair value through P&L unless it is measured at amortized or at fair value through OCI.

      3. Financial liabilities

         The Company classifies its financial liabilities in the following categories:

         • at fair value through profit or loss ("FVTPL"), or

         • at amortized cost.

           Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or the Company has opted to measure them at FVTPL.

      4. Subsequent measurement Financial assets at FVTOCI

Elected investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently, they are measured at fair value, with gains or losses arising from changes in fair value recognized in OCI.

Investments in un-quoted equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently, they are measured at fair value. However, in limited circumstances, where there is insufficient recent information is available or where there is wide range of possible fair value measurements, the cost may be an appropriate estimate of fair value.

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, and subsequently carried at amortized cost, and in the case of financial assets, less any impairment.

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the statement of profit or loss and other comprehensive income. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the statement of profit or loss and other comprehensive income in the period in which they arise. Where management has opted to recognize a financial liability at FVTPL, any changes associated with the Company's own credit risk will be recognized in other comprehensive income/(loss). Currently, there are no financial liabilities designated at FVTPL.