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

CONTENTS

01 04

Organizational Overview

04 Vision, Mission & Corporate Strategy

Financial Statements

32 Independent Auditor's Review Report to the

06 Code of Conduct, Culture, Values & Ethical Principles

08 Company Profile

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10 Company Information

Directors' Report

14 Chairman's Review Report

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16 Directors' Report to the Shئ ش areholders

26 ٹروپر یک ز/رئاڈ ےئل ےک زرڈلوہ /ی

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27 ٹروپر ہزئاج یک من ی 5ئ ی چ

Financial Highlights

30 Key Financial Data For Last Six Years

Members

33 Statement of Compliance with Listed Companies (Code of Corporate Governance) Regulations, 2019

35 Independent Auditor's Report to the Members

1. Statement of Financial Position

2. Statement of Profit or Loss

3. Statement of Comprehensive Income

4. Statement Of Changes In Equity

5. Statement of Cash Flows

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6. Notes to the Financial Statements

Other Information

72 Pattern Of Shareholding

73 Notice of Annual General Meeting

75 Statement of Material Facts as Required Under Section 134(3) of the Companies Act, 2017

77 Form of Proxy

79 مراف یسکارپ

01

Organizational Overview

• Vision, Mission & Corporate Strategy

• Code of Conduct, Culture, Values & Ethical Principles

• Company Profile

• Company Information

VISION, MISSION & CORPORATE STRATEGY

VISION STATEMENT

We envision to drive innovation and excellence in the energy sector while contributing to a cleaner environment and a prosperous community.

MISSION STATEMENT

Through innovation, efficiency, and a commitment to reducing emissions, we strive to make a positive impact on the environment and the communities we serve, fostering growth and development while ensuring energy security for the future.

CORPORATE STRATEGY

Develop and maintain a balanced energy portfolio that includes highly efficient, low-emission power plants to ensure a stable and sustainable supply of electricity by implementing best practices and advanced technologies to optimize the efficiency and reliability of our power generation processes, minimizing downtime and maximizing output.

Pursue strategic opportunities for expansion and diversification within the energy sector, focusing on scalable and sustainable projects that align with our long-term vision and mission.

Attract, retain, and develop top talent within the industry by providing a supportive and dynamic work environment that encourages innovation, professional growth, and a commitment to excellence.

Uphold the highest standards of corporate governance, ethics, and integrity in all our dealings, ensuring accountability and transparency across the organization.

Actively contribute to the well-being and development of the communities we operate in through social responsibility initiatives, educational programs, and sustainable practices.

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MUGHAL ENERGY LIMITED

Annual Report 2025 5

CODE OF CONDUCT, CULTURE, VALUES & ETHICAL PRINCIPLES

Our Code of Conduct consists of the following principles which all Directors and employees are required to apply

in their daily work and observe in the conduct of Company's business.

Every Director and employee must comply with all applicable laws, rules and regulations, including those related to insider trading, financial reporting, money laundering, fraud, bribery and corruption.

Every Director and employee is prohibited from indulging in actions or relationships that create personal conflicts of interest unless approved by the Company.

Every Director and employee must deal fairly with customers, suppliers, competitors and each other.

Every Director and employee must maintain the confidentiality of the information with which they are entrusted, including complying with information

barrier procedures applicable to our business. The only exception is when disclosure is authorized or legally mandated.

We do not tolerate any type of discrimination prohibited by law, including harassment.

Directors and employees are prohibited from making or soliciting political contributions or engaging in political activities.

Everyone should protect the Company's assets and ensure their efficient use. All Company's assets should be used for legitimate business purposes only.

All employees share a responsibility for the Company's good public relations particularly at the community level.

The Company has strong commitment to the health and safety of its employees and preservation of environment.

The Company strictly prohibits retaliation against anyone who reports in good faith a possible violation of the Code, no matter whom the report involves.

We pledge to comply and enforce the basic principles of Code of Conduct and prevent its violation. Any employee observing any violation or abuse of this Code of Conduct may bring the same to the notice of the Management in writing.

CULTURE

Our culture demonstrates the manifestation of shared values and beliefs, which we practice every day to move towards a better and more successful organization. Our values provide the foundation of our

culture and bind us into a successful team yearning to outperform the competition.

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VALUES

We tend to conduct our business in a socially responsible and ethical manner.

We are dedicated to maintaining the highest ethical standards and ensuring openness and honesty in all our dealings by maintaining utmost integrity at all times.

We are devoted to implement such policies and procedures, which translate into fair

and equitable treatment of all stakeholders, including

selection, hiring, rewarding and compensating all employees.

We trust, respect and support each other, and we strive to earn the trust of our customers and shareholders.

We provide equal opportunities to all our employees without any bias against gender, race, ethnicity and religion.

We seek new opportunities and out-of-the-ordinary solutions.

We make sure that we always do what we say we will and strive for excellence and quality in everything that we do.

We are endeavored to foster a culture where people come first and we hire, develop, train

and retain our people to work as synergized teams in line with our mission and vision.

We are committed to fostering a culture where employees work as a team, listen to and respect each other, provide support to

one another, work co-operatively and highly regard one another's views, making our work environment fun and enjoyable.

Our experience shows that if we satisfy our customers well, our own success will follow.

We are dedicated to complying fully with the letter and spirit

of the laws, rules and ethical principles that govern us. Our continued success depends upon unswerving adherence to this standard.

While recognizing that the old way may still be the best way, we constantly strive to find a better way of doing things.

MUGHAL ENERGY LIMITED

Annual Report 2025 7

COMPANY PROFILE

Mughal Energy Limited was incorporated in Pakistan as a public limited company on

August 19, 2012 under the repealed Companies Ordinance, 1984 (now the Companies Act, 2017).

The Company's registered office is located at 31-A, Shadman I, Lahore. It is listed on the Growth Enterprise Market (GEM) Board of the

Pakistan Stock Exchange Limited and operates as a subsidiary of Mughal Iron & Steel Industries Limited.

The principal business of the Company is the generation, purchase, import, transformation, conversion, distribution, supply, export, and trading of electricity and all other forms of energy, along with related products and services.

At present, the Company is primarily engaged in the installation of a 36.50 MW captive hybrid power plant, which will enhance its capacity to provide reliable and sustainable energy solutions.

36.50

MW

Hybrid Captive Power Plant

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MUGHAL ENERGY LIMITED

Annual Report 2025 9

COMPANY INFORMATION

Board of directors

Mr. Mirza Javed Iqbal Mr. Jamshed Iqbal Mr. Khurram Javaid Mr. Fahad Javaid

Mr. Muhammad Mateen Jamshed Mrs. Jahanara Sajjad Ahmad

Mr. Muhammad Aslam Bhatti

Audit committee

Mr. Muhammad Aslam Bhatti Mr. Mirza Javed Iqbal

Mr. Muhammad Mateen Jamshed

Human resource and remuneration committee

Mr. Muhammad Aslam Bhatti Mr. Mirza Javed Iqbal

Mr. Jamshed Iqbal

Chief operating officer

Mr. Shakeel Ahmad Mughal Tel: +92-42-35960841 Ext: 154

E-mail: shakeel.ahmad@mughalsteel.com

Chief financial officer

Mr. Muhammad Zafar Iqbal Tel: +92-42-35960841 Ext: 138

E-mail: zafariqbal@mughalsteel.com

Company secretary

Mr. Muhammad Fahad Hafeez Tel: +92-42-35960841 Ext: 155

E-mail: fahadhafeez@mughalsteel.com

Share registrar & Transfer agent

Digital Custodian Company Limited Pardesi House 4th Floor, Old Queen Road Karachi, Pakistan

Tel: +92-21-32419770

Email: info@digitalcustodian.com

Statutory Auditors

Muniff Ziauddin & Company Chartered Accountants

(A member of BKR International)

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Legal advisor

Muhammad Atif Butt

Shareholder complaint handling cell

In case of shareholder complaint/queries, Please Contact:

Mr. Zeeshan Ejaz

Tel: +92-42-35960841 Ext:136

Email: fahadhafeez@mughalsteel.com

Bankers / Institutions

The Bank of Punjab (Taqwa Islamic Banking) MCB Islamic Bank Limited

PAIR Investment Company Limited Parwaaz Financial Services Limited

Entity Credit Rating

Long-term: A Short-term: A2 Outlook: stable Agency: PACRA

Geographical presence

31 -A Shadman I Lahore, Pakistan

Tel: +92-42-35960841-3

Fax: +92-42-35960846

17-Km Sheikhupura Road Lahore, Pakistan

Company website:

The Company is operating website https://www.mughalenergy.com.pk containing updated information regarding the Company.

MUGHAL ENERGY LIMITED

Annual Report 2025 11

02

Directors' Report

• Chairman's Review Report

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• Directors' Report to the Shئ ش areholders

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• ٹروپر یک ز/رئاڈ ےئلئ ےک زرڈلوہ /ی • ٹروپر ہزئاج یک م5

CHAIRMAN'S REVIEW REPORT

The Company has a diverse and competent Board of Directors which holds to the Company's vision and mission with the ultimate goal of serving

the interests of stakeholders. The objective of the Board has been to ensure that the organization is being managed effectively, in a way that helps it to achieve its objectives whilst also safeguarding the integrity of the organization and the interests of its stakeholders.

The Board demonstrated satisfactory performance throughout the year. The Board committees as well continued to work efficiently as designated by the Board. The position of the Chairman of the Board of Directors and the office of the Chief Executive Officer are held separately, with clear division of roles and responsibilities. The Chairman is entrusted with the leadership of the Board's proceedings, whereas, the CEO is an Executive Director who also acts as the head of the Company's Management. Management is primarily responsible for implementing the strategies as approved by the Board of Directors.

It is the responsibility of management to conduct the routine business operations of the Company in accordance with the strategies and goals as approved by the Board.

The Board's role in diversifying the energy generation mix and remaining eco-friendly has been effective.

The Board regularly reviewed the principal risks and mitigating factors against them. The Board

reviews the quality and appropriateness of financial statements of the Company, reporting and transparency of disclosures, Company's accounting policies, corporate objective plans, and other reports. The Board has also framed the Code of Conduct which defines requisite behavior and has been disseminated throughout the Company. Adequate controls and robust systems are in place to ensure effective control environment so compliance of best policies of Corporate Governance are achieved.

Lastly, I would also like to recognize the efforts of our executive management team for their dedication and commitment. I would also like to express my gratitude for the efforts of all our employees for their dedication and stakeholders for their trust in us.

Mirza Javed Iqbal

Chairman of the Board

Lahore: September 04, 2025

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DIRECTORS' REPORT TO THE SHAREHOLDERS

PRINCIPAL ACTIVITY AND STRUCTURE

The principal activity of the Company is to carry on the business of generating, purchasing, importing, transforming, converting, distributing, supplying, exporting and dealing

in electricity and all other forms of energy and products or services associated therewith.

The Company is a subsidiary of Mughal Iron & Steel Industries Limited (the holding company).

PAKISTAN ECONOMY

During FY-2025, Pakistan's economy exhibited signs of cautious optimism. Agriculture continued to lead the recovery. The industrial sector showed gradual revival, while services remained stable amid evolving demand dynamics.

The current account recorded a surplus during the first nine months, aided by controlled imports and improved remittances. Foreign exchange reserves strengthened further, supported by inflows under the IMF Extended Fund Facility. Fiscal indicators showed relative improvement, with continued focus on revenue mobilization and expenditure control, resulting in a sustained primary surplus. The exchange rate remained broadly stable, and inflationary pressures slightly eased. However, despite this progress, structural challenges persisted, including elevated energy costs, high interest rates, subdued private investment, and administrative controls on key sectors, which continued to weigh on the pace of broad-based recovery.

BUSINESS, FINANCIAL & OPERATIONAL REVIEW

The financial highlights of the Company for the year ended June 30, 2025 are as follows:

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The Company is yet to commence its commercial operations and therefore posted loss for the year ended June 30, 2025, which was mainly on account of salaries, fee & subscription and various routine expenses. However, the Company expects profitable results post achieving commercial operations.

On the operational front, key milestone in the development of its 36.50 MW Hybrid Captive Power Plant was successfully achieved with the completion of the hydro testing phase which is a critical step in such projects, serving to verify the mechanical integrity and pressure endurance of pipelines, boilers, and related systems before commencing electrical works. The project is now in its final stages.

In addition, the Company completed installation of its 1.8 MW solar power project. However, since, the CoD of hybrid power plant is currently pending, therefore, the said solar plant has been leased out to the holding company on short-term basis.

During the year, the holding company issued unsecured long-term loan of Rs. 2.500 billion to the Company for the purpose of financing the captive hybrid plant project. The Company has an effective cash management system.

The Company constantly monitors cash flows to ensure overall liquidity. All contingencies and commitments have been disclosed in detail in relevant notes to the financial statements.

The Company's net worth as at June 30, 2025 stood at Rs. 3,435.206 million as compared to Rs. 3,456.486 million as at June 30, 2025 with a breakup value of Rs. 15.85 per share as at June 30, 2025 as compared to Rs. 15.95 as at June 30, 2024.

SEGMENTAL REVIEW OF BUSINESS PERFORMANCE

The results are reported as a single reportable segment. Information about segmental review has been given the relevant notes to the financial statements.

SUBSEQUENT EVENTS / MATERIAL CHANGES

Except as otherwise disclosed, there were no other material changes or commitments which have occurred between the end of financial year of the Company to which the financial statements relate and the date of this report.

DIVIDENDS AND APPROPRIATIONS

Since, the Company is in pre-commencement stage,

therefore no dividend has been declared nor any other appropriations were made.

PRINCIPAL ACTIVITIES OF THE COMPANY AND DEVELOPMENT AND PERFORMANCE OF THE COMPANY'S BUSINESS DURING THE YEAR

The details related to development and performance of the Company's business has been provided in relevant areas of the Directors' report.

CHANGES IN NATURE OF BUSINESS

There has been no change in nature of the business of the Company during the year, nor were there any companies in which the Company had any interest therein, except as disclosed elsewhere.

FUTURE OUTLOOK AND THE MAIN TRENDS AND

FACTORS LIKELY TO AFFECT THE FUTURE DEVELOPMENT, PERFORMANCE AND POSITION OF THE COMPANY'S BUSINESS

Going forward, the Company remains committed to successful and timely achievement of commencement of operations of its captive hybrid power plant.

COMPOSITION OF THE BOARD

The Board comprises of seven members. The composition as at the close of the financial year was as follows:

*In respect of independent directors, the Company has not rounded up the fraction as one, as the Board has determined the current composition adequate.

NAMES OF PERSONS WHO AT ANY TIME DURING

THE FINANCIAL YEAR WERE DIRECTORS OF THE COMPANY

During the financial year, six meetings of the Board were conducted. No meetings were held outside Pakistan during the year. Leave of absence (if any) was duly taken. Following are the names of the persons who, at any time during the financial year, were Directors of the Company:

During the year after election of directors, Mr. Muhammad Aslam Bhatti and Mrs. Jahanara Sajjad Ahmad were elected as Independent, Non-Executive Directors, whereas, Mr.

Waleed Bin Tariq Mughal and Mr. Muhammad Sayyam ceased to be the Directors w.e.f January 01, 2025.

MUGHAL ENERGY LIMITED

Annual Report 2025 17

NAMES OF MEMBERS OF THE BOARD COMMITTEES

S.

No.

Name of Members

Designation

During the financial year, four meetings of the Committee were conducted. Following are the names of the members of the Committee:

During the year after election of directors, the Committee was reconstituted, whereby, Mr. Muhammad Aslam Bhatti and Mr. Muhammad Mateen Jamshed were appointed as members in place of Mr. Jamshed Iqbal and Mr.

Muhammad Sayyam w.e.f January 07, 2025.

S.

No.

Name of Members

Designation

During the financial year, one meeting of the Committee was conducted. Following are the names of the members of the Committee:

During the year after election of directors, the Committee was reconstituted, whereby, Mr. Muhammad Aslam Bhatti was appointed as members in place of Mr. Muhammad Sayyam w.e.f January 07, 2025.

DIRECTORS' REMUNERATION

The remuneration of Board Members is approved by the Board. However, it is ensured that no Director takes part in deciding his own remuneration. Non-Executive Directors and Independent Directors are only paid meeting fee.

For information on remuneration packages of Directors and CEO aggregate amount charged in these financial

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statements, please refer relevant notes to the financial statements.

DIRECTORS' EVALUATION

Effective mechanism has been put in place to review the Board's performance on self-assessment basis. Board of Directors continued to provide valuable guidance to ensure effective governance.

DIRECTORS' ORIENTATION AND TRAINING PROGRAM

Six of the Directors have completed the Director's Training Program certification from authorized institutions, whereas, remaining will also obtain in future.

Furthermore, appropriate arrangements are made for detailed orientation of new Directors to familiarize them with their duties and responsibilities. A formal familiarization program primarily includes amongst other things giving briefings relating to the Company's visions and strategies, the Company's core competencies, organizational structure, role and responsibility of the director as per

the Companies' Act, including the Code of Corporate Governance and any other regulatory laws applicable in Pakistan.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Boards has established efficient and effective systems on internal financial controls. Implementation of these controls is regularly monitored by an Independent Internal Audit Function which reports directly to the Audit Committee. The Audit Committee reviews on a periodic basis the effectiveness and adequacy of internal controls frameworks and financial statements of the Company.

PATTERN OF SHAREHOLDING

Information about the pattern of holding of the shares is annexed.

TRANSACTION / TRADE IN COMPANY'S SHARES

All the trades in shares of the Company carried out by the Directors, Executives and their spouses and minor children (if any) during the financial year 2025 are disclosed in pattern of shareholding annexed to the Annual Report.

Executives include Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Head of Internal Audit