Transmission of Annual Report for the Year Ended 31-12-2025

Annual Report 2025

Pak Elektron Limited

Corporate Information 01

Notice of Annual General Meeting 02

Vision and Mission 06

Chairperson's Review 07

Directors' Report 08

Pattern of Shareholding 29

Statement of Compliance with Listed Companies 35

(Code of Corporate Governance) Regulations, 2019

Key Finance Ratios 37

Independent Auditor's Review Report 38

Independent Auditor's Report 39

Statement of Financial Position 43

Statement of Profit or Loss 45

Statement of Comprehensive Income 46

Statement of Changes in Equity 47

Statement of Cash Flows 48

Notes to the Financial Statements 49

Form of Proxy 105

CORPORATE INFORMATION

BOARD OF DIRECTORS

Mr. M. Naseem Saigol Chairperson | Non-Executive

Mr. Muhammad Murad Saigol Chief Executive Officer - Executive/Certified (DTP) Mr. Muhammad Zeid Yousuf Saigol Director - Executive/Certified (DTP)

Syed Manzar Hassan Director - Executive/Certified (DTP) Mr. Muhammad Omer Farooq Director - Non Executive/Certified (DTP) Ms. Sadaf Kashif Director - Independent/Certified (DTP) Mr. Muhammad Kamran Saleem Director - Independent/Certified (DTP)

Mr. Javed Siddique Director - NBP Nominee U/S 164 of the Act / Non Executive

AUDIT COMMITTEE

Mr. Muhammad Kamran Saleem Chairperson Syed Manzar Hassan Member Mr. Muhammad Omer Farooq Member Mrs. Sadaf Kashif Member

HR AND REMUNERATION COMMITTEE

Mr. Muhammad Kamran Saleem Chairperson Syed Manzar Hassan Member Mr. Muhammad Omer Farooq Member

COMPANY SECRETARY

Khawaja Safee Sultan, CS

CHIEF FINANCIAL OFFICER

Syed Manzar Hassan - FCA

AUDITORS

Rahman Sarfaraz Rahim Iqbal Rafiq Chartered Accountants

A member of Russell Bedford International

LEGAL ADVISORS

Hassan & Hassan Advocates

SHARIAH ADVISOR

Mufti Altaf Ahmad

SHARES REGISTRAR

Corplink (Private) Limited Wings Arcade,

1-K, Commercial Model Town, Lahore T: +92 42 35916714, 35839182

F: +92 42 35869037

E: shares@corplink.com.pk

COMPANY INCORPORATION NO.

0000802

NATIONAL TAX NO. [NTN].

2011386-2

STATUS OF COMPANY

Public Interest Company (PIC)

STOCK EXCHANGE SYMBOL

PAEL

BANKERS

Albaraka Bank (Pakistan) Limited Askari Bank Limited

Bank Alfalah Limited Bank Makramah Limited Faysal Bank Limited First Habib Modaraba

Habib Bank Limited - Islamic Banking MCB Bank Limited

National Bank of Pakistan OLP Modaraba

Pak Brunei Investment Company Limited Pak China Investment Company Limited Pak Oman Investment Company Limited

Pakistan Kuwait Investment Company Limited Samba Bank Limited

Saudi Pak Industrial and Agriculture Investment Company Limited Sindh Bank Limited

The Bank of Khyber The Bank of Punjab United Bank Limited

REGISTERED OFFICE

10-G, Mushtaq Ahmed Gurmani Road, Gulberg-II, Lahore

T: +92 42 35920151-59

E: shares@saigols.com

ISLAMABAD OFFICE

Office no. 301, 3rd Floor,

Green Trust Tower, Blue Area, Islamabad T: +92 51 2824543, 2828941

KARACHI OFFICE

Ground Floor Baig Tower Near Balouch Colony Bridge, Shahrah-e-Faisal, Karachi T: +92 21 32200951-4

MANUFACTURING UNIT I

14 KM Ferozepur Road Lahore

T: +92 42 35920151-9

MANUFACTURING UNIT II

34 KM Ferozepur Road Keath Village, Lahore T: +92 42 35935151-2

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 70th Annual General Meeting of Shareholders of Pak Elektron Limited ("Company") will be held on Tuesday, 28 April 2026 at 11:00 A.M., at Factory Premises, 14-KM, Ferozepur Road, Lahore to transact the following business: -

1. To confirm the minutes of Extraordinary General Meeting held on 21 October 2025.

2. To receive and adopt the Annual Audited Accounts of the Company for the year ended 31 December 2025 together with Directors' and Auditors' Reports thereon.

3. To appoint Auditors to hold office till the conclusion of the next Annual General Meeting and to fix their remuneration.

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

By the order of the Board

Lahore: 06 April 2026

Khawaja Safee Sultan

Company Secretary

Notes:

1. Share Transfer Books of the Company will remain closed from 22 April 2026 to 28 April 2026 (both days inclusive). Physical transfers/CDS Transactions IDs received in order at Company registrar office M/s Corplink (Pvt.) Limited Wings Arcade, 1-K, Commercial Model Town, Lahore on or before 21 April 2026 will be treated in time.

2. A member entitled to attend and vote at this Meeting may appoint another Member as proxy. Proxies in order to be effective, must be received at 10-G, Mushtaq Ahmed Gurmani Road, Gulberg-II, Lahore the Registered Office of the Company not later than forty-eight hours before the time of the meeting and must be duly stamped, signed and witnessed.

3. Members whose shares are deposited with Central Depository System are requested to bring their original National Identity Cards or original Passports along with their Account Numbers in Central Depository System for attending the meeting.

4. Members are requested to notify the Company change in their addresses, if any.

5. Transmission Of Annual Report

   In terms of approval of the shareholders of the Company in their Annual General Meeting held on April 27, 2023 and pursuant to SECP's Notification No. SRO 389(1)/2023 dated 21st March, 2023. The Annual Report for the financial year ended on December 31, 2025 of the Company containing inter alia the audited financial statements, auditors' report, directors, and chairman's reports thereon may be viewed and downloaded by following QR code and weblink:

   Weblink	QR Code
   https://pel.com.pk/financial-reports/

   The Annual Report has been emailed to those shareholders who have provided their valid email address to the Company.

   The shareholders who wish to receive a hard copy of the Annual Report may send to the Company Secretary/Share Registrar, the Standard Request Form available on the website of the Company https://www.pel.com.pk The Company then will provide a free of Cost hard copy of Annual Report to the shareholders within one week of the request.

   NOTICE OF ANNUAL GENERAL MEETING

6. Replacement Of Physical Shares Into CDC Account

   Members, who hold physical shares, are advised to convert their shares into electronic form in terms of section 72 of the Companies Act, 2017.

7. Participation in the AGM through Video link Facility

   The SECP through its Circular No. 4 dated February 15, 2021 & Circular No. 6 dated March 03, 2021 has directed listed companies to arrange participation of shareholders in Annual General Meeting through Video Link Facility in addition to allowing physical attendance by the members. The members who are willing to attend and participate in the AGM can do so through video-link via smartphones, computers, tablets, etc. To attend the AGM through video-link, members are requested to get their following particulars registered by sending an email or WhatsApp at the number/address given below, at least 48 hours before the time of the AGM, and download video-link from https//zoom.us/download.

   Name	Folio/CDS Account No	CNIC No	Cell phone	E-mail

   Signature of Member

   WhatsApp	Email
   0345-8448666	safee.sultan@saigols.com

   Upon receipt of requests, the video-link login credentials will be shared with the interested shareholders on their email addresses or WhatsApp messages. The members can send their comments/suggestions related to the agenda items of the meeting through the above-mentioned means.

8. Prohibition of Distribution of Gifts

No gifts will be distributed at the Annual General Meeting as prohibited under Section 185 of the Companies Act, 2017.

0345-8448666

safee.sultan@saigols.com

2026 1 06: V

https://pel.com.pk/financial-reports/

To excel in providing engineering goods and services through continuous improvement.

To provide quality products and services to the complete satisfaction of our customers and maximize returns for all stakeholders through optimal use of resources.

To focus on personal development of our human resource to meet future challenges.

To promote good governance, corporate values and a safe working environment with a strong sense of social responsibility.

CHAIRPERSON'S REVIEW

Dear Shareholders,

The year under review reflects the Company's continued progress in strengthening its market position and building a foundation for sustainable long-term growth. Despite operating in a dynamic business environment, the Company remained focused on disciplined execution of its strategy, maintaining financial stability, and delivering value to shareholders. The Board remained committed to providing strategic direction and effective oversight to ensure that the Company continues to move forward with confidence and clarity of purpose.

Operational and Financial Performance

During the year, the Company delivered strong operational and financial performance, achieving revenue of Rs. 83,530 million, reflecting a growth of 20.00% compared to the previous year. Profitability improved significantly, with gross profit increasing to Rs. 17,139 million, profit before tax rising to Rs. 6,064 million, and profit after tax reaching Rs. 3,847 million, while earnings per share increased to Rs. 4.24. The performance was supported by improved export sales, disciplined cost management, enhanced supply chain efficiencies, and continued focus on product innovation. The Appliances Division recorded strong growth, while the Power Division maintained stable performance supported by gradual recovery in industrial demand and investment in transmission and distribution infrastructure.

Board Oversight and Effectiveness

The Board remained actively engaged in guiding the Company's strategic direction and overseeing management's execution of key priorities. Through regular meetings and constructive engagement with management, the Board monitored performance against objectives and ensured alignment with the Company's long-term vision. The Company's progress during the year reflects the effectiveness of governance practices and the continued focus on strengthening competitive positioning and expanding market opportunities, including growth in export markets.

Strategic Direction and Long-Term Value Creation

The Board continues to emphasize strategies that support sustainable growth, operational efficiency, and long-term competitiveness. Focus remained on strengthening core business segments, encouraging innovation, expanding market reach, and improving operational capabilities. The progress achieved during the year, particularly in expanding the Company's international footprint, reflects the effectiveness of these strategic priorities. The Board remains committed to ensuring that growth initiatives are supported by prudent financial management and a forward-looking approach.

Governance, Risk Management and Internal Controls

Strong corporate governance remains fundamental to the Company's long-term success. The Board, supported by its committees, continued to oversee strategy, financial stewardship, compliance, and risk management. The Board reviewed the Company's governance framework, internal control systems, and risk management processes and is satisfied that the system of internal control is sound in design and effectively implemented. The framework provides reasonable assurance regarding reliability of financial reporting, safeguarding of assets, compliance with applicable laws and regulations, and effective management of risks.

Sustainability and Responsible Business Practices

The Board recognizes the importance of sustainability and responsible business practices in supporting long-term value creation. The Company remains committed to conducting its operations in a manner that supports economic progress while being mindful of environmental and social considerations. Focus continues on energy efficiency, responsible resource utilization, ethical business conduct, and maintaining strong relationships with stakeholders. Corporate Social Responsibility remains an important element of the Company's philosophy as a responsible corporate citizen.

Chairperson's Significant Commitments

I continue to serve as the Chairperson of the Saigol Group of Companies including Pak Elektron Limited. I also serve as a non-executive director on the Boards of Kohinoor Energy Limited, Saritow Spinning Mills Limited, Kohinoor Industries Limited, and Kohinoor Power Company Limited, in addition to holding the office of Honorary Consulate of Belgium. Apart from the foregoing, I have no other significant commitments. There has been no change in these commitments compared to the previous year.

Acknowledgement and Outlook

The Board remains confident in the Company's strategic direction and future prospects. With continued focus on innovation, governance, and operational excellence, the Company is well-positioned to pursue growth opportunities while maintaining financial discipline. On behalf of the Board, I express appreciation to the management team, employees, customers, business partners, and shareholders for their continued trust and support.

M. Naseem Saigol Chairperson

Lahore

16 March 2026

DIRECTORS' REPORT

ECONOMIC OVERVIEW

Pakistan's economy has completed first half of FY2026 with continued macroeconomic stability, reflected in contained inflation, rebound LSM growth and strengthened foreign exchange reserves with stable exchange rate. The sustained growth momentum has been complemented with fiscal discipline resulting in fiscal and primary surpluses.

LSM has gained momentum, signaling improved growth prospects for the remaining period of the fiscal year. Remittances remained robust, supporting the external account. In parallel, the Pakistan Stock Market has maintained a strong rally, ranking among the world's top performing markets and reflecting improved investor sentiment. Building on these gains, the government has launched Economic Governance Reforms aimed at embedding stability into institutions and enabling sustainable private sector growth.

AGRICULTURE

The agriculture sector posted growth of 2.9 percent in Q1 of FY2026, showing a significant improvement from 1.0 percent during the same period last year. The important crops (excluding Wheat being a Rabi crop) recorded a contraction of 0.7 percent as compared to a contraction of 13.1 percent during Q1 last year, mainly due to reduced cotton production (-1.2%).

Other crops also witnessed a contraction of 6.4 percent as compared to 19.3 percent contraction in Q1 last year driven by lower green fodder production (-14.4%) and increase in input (fertilizer:13.0%). Livestock grew strongly by 6.3 percent (vs. 2.0% in Q1 last year) supported by decrease in value of inputs (green fodder: -14.4%). Forestry and Fishing recorded steady growth of 2.1 percent and 0.9 percent, respectively by retaining their normal growth tendency.

On the input side, agricultural credit disbursement increased by 11.4 percent to Rs. 1,411.6 billion during Jul-Dec FY2026 from Rs. 1,266.7 billion last year. Moreover, the imports of agricultural machinery and implements increased by 21.6 percent to $65.8 million during Jul-Dec FY2026 from $54.1 million last year. During Rabi 2025-26 (Oct-Dec), urea offtake was 2,526 thousand tonnes (26.1% higher than Rabi 2024-25), whereas DAP offtake was 543 thousand tonnes (22% less than Rabi 2024-25).

MANUFACTURING

LSM registered a growth of 6.0 percent with QIM index reaching its highest during Jul-Nov FY2026 since FY2016. During the period, 16 sectors recorded positive growth, including textile, wearing apparel, non-metallic mineral products, food, beverages, coke and petroleum products, electrical equipment, automobile and tobacco.

In November 2025, LSM grew by 10.4 percent on year-on-year (YoY) basis and by 0.2 percent on month-on-month (MoM) basis. Automobile, coke and petroleum products and wearing apparel remained the major contributing factors to overall growth with contribution of 1.8 percent, 1.3 percent, and 1.2 percent respectively. During Jul-Dec FY2026, the performance of automobile sector remained encouraging, supported by a substantial rise in production of cars by 56.1percent, trucks and buses by 89.4 percent and jeeps and pick-ups by 36.9 percent.

Similarly, cumulative cement dispatches reached 25.8 million tonnes, up 9.7 percent in Jul-Dec FY2026. Domestic dispatches totaled

21.1 million tonnes, 13.1 percent YoY increase, while exports declined by 3.7 percent to 4.6 million tonnes.

INFLATION

CPI inflation recorded at 5.6 percent on YoY basis in December 2025 as compared to 6.1 percent in the previous month and 4.1 percent in December 2024. On average, inflation during Jul-Dec FY2026 stood at 5.2 percent as against 7.2 percent during the same period last year. YoY major contributing factors of inflation include education (9.9%), health (7.7%), non-perishable food items (7.5%), housing, water, electricity, gas and fuels (6.9%), clothing & footwear (6.2%), restaurants and hotels (5.6%), transport (4.9%), alcoholic beverages and tobacco (3.9%), furnishing and household equipment maintenance (3.4%) and communication (0.6%). However, decline is observed in perishable food (20.1%) and recreation and culture (4.3%).

The Sensitive Price Indicator for the week ending 22 January 2026, declined by 0.48 percent. During the week, out of 51 items, prices of 12 items increased, 11 items decreased and 28 items remained stable.

FISCAL

The government has achieved a fiscal surplus during Jul-Nov FY2026 also owing to a growth in revenue and a considerable reduction in mark-up payments. Gross federal revenue receipts recorded a growth of 7.8 percent during the reference period, contributed by growth in both FBR's taxes and non-tax revenue by 10.2 percent and 4.8 percent, respectively.

Total expenditure declined by 6.2 percent due to 6.4 percent reduction in current expenditure as mark-up payments declined by 21.3 percent. Development expenditure, on the other hand, posted an increase of 1.5 percent.

The government achieved a consolidated fiscal surplus of 0.8 percent of GDP during the period under review as compared to a deficit of 0.04 percent during the same period of last year. Similarly, a primary surplus of 2.8 percent was recorded as compared to a surplus of 2.9 percent during the corresponding period last year.

During Jul-Dec FY2026, FBR's tax revenue grew by 9.5 percent, reaching Rs. 6,161 billion, contributed by a growth in the direct taxes (8.9%), sales tax (10%), federal excise duty (15.6%) and customs duty (7.4%).

MONETARY SECTOR

During Jul-Dec FY2026, money supply (M2) shows a growth of 3.7 percent as compared to a contraction of 0.7 percent during the corresponding period of last year. Within M2, net foreign assets of the banking system increased by Rs. 107.9 billion as compared to

DIRECTORS' REPORT

ECONOMIC OVERVIEW

an increase of Rs. 667.3 billion last year. Whereas net domestic assets of the banking sector increased by Rs. 1,406.5 billion as compared to a decrease of Rs. 934.7 billion last year.

Under the borrowing for budgetary support, the government retired Rs. 347.0 billion as compared to the retirement of Rs. 2,215.4 billion last year. Private Sector borrowed Rs. 992.3 billion as compared to a borrowing of Rs. 1,978.9 billion last year. During H1-FY2025, private sector credit was higher due to ADR criteria while during current fiscal year, demand for fixed investment loans by businesses increased to Rs. 257 billion, which bodes well for sustaining LSM growth in coming months.

EXTERNAL SECTOR

The current account posted a deficit of $1.2 billion during Jul-Dec FY2026, compared to a surplus of $0.96 billion recorded last year. Goods and services exports recorded at $20.3 billion compared to $20.4 billion last year in which goods export stood at $15.5 billion. Services exports were primarily driven by IT services that increased by 19.8 percent to $2.2 billion.

Goods and services imports recorded at $37.8 billion compared to $33.5 billion last year, including goods imports of $31.3 billion. Trade deficit of goods & services increased to $17.6 billion from $13.1 billion last year.

According to PBS data, gains in key exports were observed in knitwear (4.1%), garments (4.9%) and bedwear (1.9%). Increase in major import items was recorded in petroleum products (5.1%), petroleum crude (11.2%) and palm oil (28.8%).

FOREIGN INVESTMENT

Foreign Direct Investment (FDI) in Pakistan reached $2.46 billion in FY2025, showing a notable increase compared with the previous year. The main contributor to this inflow was China with about $1.22 billion (approximately 49.9%), followed by Hong Kong $470 million (around 19%), and the United Kingdom $201.8 million (about 8%).

Sector-wise, the power sector remained the largest recipient, attracting about $1.17 billion, largely driven by hydropower and energy projects under ongoing investment initiatives. Other significant sectors included financial services, oil and gas exploration, and electronics manufacturing, which also received considerable foreign investment.

Regarding portfolio investment, foreign portfolio investment showed mixed trends during 2025, with several periods of net outflows from private investors, while public sector investment inflows remained relatively positive due to government securities and external financing support.

WORKER'S REMITTANCES

Remittances continued their strong momentum and increased by around 7-8 percent to approximately $19.1 billion during H1 FY2026, compared with $17.8 billion during H1 FY2025. This growth was mainly supported by stable exchange rates, improved economic conditions in host countries, and sustained inflows from overseas Pakistani workers.

Saudi Arabia remained the largest source of remittances, contributing about 23-24 percent with nearly $4.5 billion, followed by the United Arab Emirates with around $3.9 billion, reflecting continued strong inflows from Pakistani expatriates working in the Gulf region. The United Kingdom and the United States also remained major contributors, sending approximately $2.7 billion and $1.9 billion respectively during the period.

The European Union collectively contributed over $2.3 billion, showing moderate growth compared to the previous year, with Italy, Spain, and Germany continuing to be the key sources of remittances from the region.

FOREIGN EXCHANGE RESERVES

Pakistan's foreign exchange reserves showed further improvement during FY2025, reaching around $16.5 billion by the end of the year. This included approximately $11.4 billion held by the State Bank of Pakistan (SBP) and about $5.1 billion maintained by commercial banks. The increase in reserves was mainly supported by higher workers' remittances, multilateral financing, and foreign investment inflows.

During H1-FY2026, the improvement in external inflows was largely supported by net foreign direct investment from China, Hong Kong, and the United Kingdom, which remained the key contributors. Sector-wise, the power sector continued to attract the largest share of inflows, followed by the financial business sector, reflecting continued investment in energy infrastructure and financial services development.

Overall, the strengthening of foreign exchange reserves during this period helped improve Pakistan's external sector stability and import coverage, supporting macroeconomic recovery and investor confidence.

PERFORMANCE OF KSE INDEX

In CY 2025, the Pakistan Stock Exchange (PSX) continued its strong upward trajectory, sustaining the bullish momentum observed in the previous year. The benchmark KSE-100 Index reached new historic highs during the year and briefly crossed the 175,000 point mark during intraday trading on the last trading session of the year. The index ultimately closed at 174,054.32 points on 31 December 2025, reflecting an exceptional annual gain of around 51 percent compared with the closing level of 115,127 points at the end of 2024. Strong investor participation and improving macroeconomic sentiment supported market activity throughout the year.

As of 31 December 2025, the market capitalization of the Pakistan Stock Exchange stood at approximately Rs. 19.7 trillion, indicating strengthened investor confidence and improved corporate earnings outlook across several key sectors of the economy.

DIRECTORS' REPORT

ECONOMIC OVERVIEW

SOCIAL SECTOR

In December 2025, the Bureau of Emigration and Overseas Employment registered 76,207 workers, 18.7 percent increase from 64,195 in December 2024. In CY2025, the Bureau of Emigration and Overseas Employment registered 762,499 workers, representing a 5.1 percent increase over 725,672 workers registered in 2024. The Pakistan Poverty Alleviation Fund, in partnership with 26 organizations, disbursed 21,050 interest-free loans worth Rs. 1,360 million during December 2025. Since 2019, a total of Rs. 122.8 billion has been provided to the borrowers. During Jul-Nov FY2026, Rs. 144.9 billion were spent under BISP, as compared to Rs.156.7 billion last year.

INDUSTRY OVERVIEW

Pakistan's industrial sector showed gradual recovery in FY2025, following the contraction recorded in the previous year. The sector posted modest growth of around 1.8%, supported by improved macroeconomic stability, easing inflationary pressures, and relative exchange rate stability. Large-Scale Manufacturing (LSM) also demonstrated improvement and recorded growth of about 2.5% during Fy2025, reflecting recovery in key manufacturing industries. During the early months of FY2026, industrial activity continued to stabilize as growth in manufacturing, electricity, gas and water supply offset weaknesses in mining and construction, which still faced challenges due to high financing costs and subdued investment.

The textile sector maintained its recovery momentum, recording approximately 3.5% growth during Jul-Nov FY2026, supported by improved export demand, better availability of imported raw cotton, and stable exchange rate conditions. The automobile industry also continued its upward trend, with production and sales increasing by around 22% and 21% respectively, driven by improved consumer demand and easing import restrictions on auto parts.

The cement industry experienced mixed performance during FY2025. Total cement dispatches recorded a moderate increase of around 2.0%, supported primarily by export demand. Domestic cement sales remained relatively subdued due to slower construction activity and fiscal consolidation measures, while cement exports increased by nearly 18%, reflecting strong demand from regional markets and competitive pricing of Pakistani cement.

According to the Pakistan Bureau of Statistics, production trends in CY 2025 showed moderate recovery in the Appliances Division. Refrigerator production increased by approximately 6.5%, air conditioners by 4.2%, LED TVs by 3.1%, and deep freezers by 5.4%, reflecting gradual improvement in consumer demand.

Similarly, Power Division products recorded slight recovery during CY 2025, with transformer production increasing by about 4.8%, energy meters by 3.6%, and switch gears by 2.9% compared to the previous year, indicating gradual improvement in industrial demand and infrastructure development.

OPERATING RESULTS

Summary of operating results is presented below:

2025 2024

Rupees in million

In 2025, PEL achieved a historic milestone in revenues, reaching Rs.83,530 million, reflecting a remarkable 20.00% growth from Rs.69,609 million in the previous year. This strong performance was driven by increase exports to USA, strategic pricing adjustments, improved operational efficiencies and stable economic conditions. Gross profit surged to Rs. 17,139 million, marking a 21.19% increase over Rs. 14,143 million in the prior year, showcasing the effectiveness of cost optimization and value-driven strategies.

Amidst a stabilizing economic landscape, the Company maintained profitability through disciplined cost control, supply chain efficiencies and enhanced product offerings. As a result, profit before tax climbed to Rs.6,064 million, a 47.01% increase from Rs. 4,125 million, while profit after tax rose significantly to Rs. 3,847 million, compared to Rs. 2,367 million in 2024. Earnings per share (EPS) grew to Rs. 4.24 up from Rs. 2.72, reflecting PEL's resilience, strong financial fundamentals and commitment to sustainable growth..

DIRECTORS' REPORT

OPERATING RESULTS

POWER DIVISION

In 2025, the Power Division recorded revenues of Rs. 29,681 million, reflecting a modest increase of 0.50% compared to Rs. 29,533 million in the previous year. This growth is primarily supported by political stability, economic recovery, and rising urbanization, with evolving lifestyles driving higher electricity consumption and sustaining strong demand for electrical equipment.

To meet this growing demand, the government is actively upgrading Transmission and Distribution (T&D) infrastructure, creating new opportunities within the sector. Furthermore, industrial growth and expansion in the housing sector are driving additional demand for Power Division products, aligning with the requirements of WAPDA DISCOs.

These developments underscore PEL's commitment to adapting to market dynamics, enhancing operational efficiency, and ensuring sustainable, long-term growth in a dynamic economic environment

APPLIANCES DIVISION

In 2025, the division achieved exceptional revenue growth of 34.37%, reaching Rs. 53,849 million compared to Rs. 40,075 million in 2024. This growth was driven by increased exports to USA, improved supply chain efficiency, stabilized raw material imports, and a resurgence in consumer demand. Favorable economic policies, exchange rate stability, and declining inflation in 2024 had already enhanced consumer purchasing power, which carried over into 2025, further boosting demand for home appliances.

Strategic initiatives, including product innovation, an expanded distribution network, and optimized pricing strategies, reinforced market performance and strengthened PEL's leadership in the home appliances sector.

PRODUCT WISE OPERATING PERFORMANCE

REFRIGERATOR

The refrigerator remains one of the Company's flagship products and continues to be a major contributor to overall revenue. During the year under review, refrigerators accounted for 49.01% of the Home Appliances Division's revenues and 31.59% of the Company's total revenues. Revenue from refrigerators increased by 30.82% compared to the previous year, primarily driven by ongoing research and development initiatives, the introduction of competitive models, and a continued focus on energy efficiency and advanced product features.

In 2025, PEL further expanded its refrigerator portfolio with the introduction of six new variants featuring eco-friendly R600a refrigerant, Smart LED lighting, a 360 Jet Cool Fan with blue light, and an enhanced freezer design. The Digitron series incorporates advanced Inverter Technology, a digital thermostat, and glass shelves, offering consumers a modern and energy-efficient refrigeration solution. In addition, new refrigerator models were introduced in collaboration with Electrolux to strengthen the Company's presence in the premium segment. The Glass Door Series (Direct Cool Refrigerators) was launched in four different capacities, featuring both flat and curved glass designs. Furthermore, the No Frost Series was introduced to address the growing demand for frost-free convenience and contemporary design, equipped with No Frost cooling technology, digital display control, and Auto Anion Technology (AAT).

Alongside product innovation, effective marketing strategies and dedicated sales efforts have been instrumental in sustaining the Company's leadership in a highly competitive market. While certain segments still exhibit product penetration gaps, significant opportunities remain for further market expansion. As a leading refrigerator manufacturer, the Company leverages its state-of-the-art manufacturing facilities, supported by an extensive nationwide sales and after-sales service network, to capitalize on future growth opportunities.

However, the Company continues to face challenges arising from rising product costs. It anticipates ongoing pressure due to increasing global commodity prices and fluctuations in the local currency. Despite these challenges, the Company's strong market positioning, proactive expansion strategy, and commitment to customer service provide a solid foundation for maintaining its competitive advantage and ensuring long-term sustainability.

AIR CONDITIONER

Air conditioners (ACs) represent the second-largest revenue-generating product category for the Company after refrigerators. During the year under review, revenues from the AC business increased by 36.28%, contributing 28.75% to the Home Appliances Division's revenue and 18.54% to the Company's total revenue.

PEL air conditioners are widely recognized for their modern designs, energy efficiency, and advanced technological features, which continue to support strong demand in the domestic market. Building on its continued success in the AC segment, the Company introduced several new models during 2025 to further strengthen its product portfolio. The Super Jumbo Series, featuring large indoor units, was launched in three capacity options to address demand for higher airflow and enhanced coverage for larger spaces. The Jumbo X Series introduced black indoor units in response to strong consumer preference for contemporary designs that complement modern interiors. In addition, the Fit Black Series expanded the range of dark-colored indoor units to meet the growing demand for stylish AC interiors.

To cater to price-sensitive consumers, the Company introduced the Majestic Glory model, an economical fixed-speed variant. Further portfolio expansion included the launch of the Fit Cool Series, Prismo Series, and Fit Graphite Series. Moreover, the Company strengthened its presence in the premium segment through collaboration with Electrolux, introducing high-end models designed to

meet evolving consumer expectations for advanced features and superior performance.

Furthermore, the Company enhanced its R32 Floor Standing category with the introduction of the "48K Ultimate" model. This model incorporates advanced Inverter Technology along with eco-friendly R32 refrigerant, offering improved energy efficiency while supporting environmental sustainability.

The AC segment presents significant growth potential, supported by improving lifestyle standards and rising demand for energy-efficient cooling solutions. However, the current economic slowdown has temporarily moderated growth momentum. Despite these short-term challenges, the Company's strong market fundamentals position it well to capitalize on future opportunities as economic conditions improve.

Looking ahead, the Company remains committed to introducing energy-efficient and technologically advanced products that align with evolving consumer preferences and sustainability objectives. In addition, PEL's extensive and responsive nationwide after-sales service network continues to play a vital role in strengthening consumer confidence and brand loyalty. This continued focus on innovation and customer satisfaction reinforces the Company's strong positioning for long-term growth in the air conditioner market.

DEEP FREEZER

During the year under review, the deep freezer business recorded a significant revenue growth of 72.71%, reflecting a strong recovery from the challenges posed by the previous economic slowdown. This substantial increase highlights improved sales performance and robust market demand for the Company's products.

The Company's consumer-specific and customized deep freezers, incorporating ozone-friendly refrigerants in compliance with the UN Montreal Protocol, have gained strong preference among multinational corporations (MNCs) as well as local enterprises. These carefully engineered products are designed to meet the stringent operational requirements of ice cream and beverage companies, underscoring PEL's commitment to quality, innovation, and environmental sustainability.

In addition, the Company's expertise in developing purpose-built refrigeration solutions has further strengthened its long-standing relationships with leading industry players, reinforcing its position as a trusted provider of customized refrigeration systems.

With ongoing advancements in food preservation technology, demand for deep freezers is expected to continue rising. Leveraging its high-quality product portfolio, extensive nationwide sales and after-sales service network, and continued investment in research and development, PEL remains well-positioned to capitalize on this growing market opportunity and further expand its market share.

MICROWAVE OVEN

The microwave oven business recorded a revenue decline of 10.37% during the fiscal year, reflecting the continued impact of the economic slowdown on consumer spending. Despite this contraction, PEL's microwave ovens continue to distinguish themselves through advanced features and dependable performance, offering consumers a convenient and innovative cooking experience.

In response to evolving customer preferences, the Company introduced two new digital models; PMO 26 Kitchen Pro and PMO 30 Kitchen Pro. These models incorporate inverter technology and are equipped with multiple cooking functions, including grill, convection, and air fry capabilities, along with a rotisserie function designed to enhance baking and cooking versatility.

PEL's microwave ovens cater to a broad customer base by offering both manual and digital interface options. Their cost-effective designs, compact structures, and customizable cooking features make them well-suited to the needs of consumers in the local market.

With increasing urbanization and evolving lifestyle patterns, demand for microwave ovens is expected to grow in the coming years. PEL is well-positioned to capitalize on this opportunity by leveraging its innovative product portfolio and strong understanding of changing consumer preferences to further expand its market presence.

WATER DISPENSER

The water dispenser business recorded strong revenue growth of 39.91% during the year under review, reflecting a significant recovery from the slowdown experienced in the previous period. This growth was primarily driven by improving consumer demand, supported by increasing urbanization and evolving lifestyle trends.

Recognizing the consistent demand in this segment, PEL initiated the local manufacturing of water dispensers in 2017. To further strengthen its product portfolio, the Company, in collaboration with Electrolux, introduced five new water dispenser variants during the year, aimed at expanding its presence in the premium and mid-premium segments. These additions include models featuring built-in ice-making functionality, enhancing convenience for both residential and commercial users. The Company also introduced models equipped with digital display controls, improving temperature monitoring and ease of use. Furthermore, the introduction of a three-tap configuration (Cold, Hot, and Warm) has increased product versatility, making the units suitable for both household and office environments.

PEL's water dispensers continue to receive a positive response in the local market, reflecting strong consumer confidence in the Company's product quality and reliability. With rising urbanization and lifestyle advancements supporting long-term demand, PEL remains committed to expanding its market presence by offering innovative, efficient, and high-quality hydration solutions.

DIRECTORS' REPORT

PRODUCT WISE OPERATING PERFORMANCE

LED TELEVISION

During the year under review, the LED TV business recorded an impressive revenue growth of 57.18%, reflecting a strong recovery from the previous decline caused by the economic slowdown. This growth underscores improving market conditions and rising consumer demand for advanced LED technology.

LED TVs have become a key segment in the consumer electronics market. With the increasing use of internet services and the demand for energy-efficient devices, Smart LED TVs have become an essential component of modern home appliances. In response to evolving market requirements and continuous technological advancements, PEL introduced a range of new LED TV products:

• Regular Non-Smart LED TVs: Available in 32-inch, 43-inch, and 49-inch sizes.

• Smart LED TVs: Equipped with social media and streaming applications such as YouTube, Facebook, and Netflix, available in 32-inch, 43-inch, 50-inch, 55-inch, and 65-inch sizes.

• Smart Mirroring Services: Allow seamless mirroring of iPhone and Android devices on LED TVs.

  These features received strong consumer interest, with many customers requesting the conversion of Non-Smart TVs to Smart models. To ensure smooth and error-free operation, PEL obtained Google Certification for Smart TVs, which enables automatic software updates for applications like YouTube and Netflix.

  In addition, PEL expanded its role as an OEM, supporting local manufacturing initiatives. As part of this, Panasonic established a TV assembly unit in Pakistan in collaboration with PEL, further strengthening PEL's presence in the local LED TV market and reinforcing its capabilities in advanced home entertainment solutions.

  WASHING MACHINE

  During the year under review, the washing machine business achieved a revenue growth of 5.19%, marking a successful recovery from the challenges posed by the economic slowdown and import constraints. This growth reflects improving market conditions, rising consumer demand, and PEL's strategic efforts to strengthen local manufacturing and optimize supply chain operations.

  Continuing its focus on innovation and customer satisfaction, PEL expanded its product portfolio by introducing the Top Load Series in both inverter and non-inverter models. Additionally, two premium inverter Front Load models were launched in collaboration with Electrolux, targeting high-end consumers. Through these initiatives, PEL is further strengthening its presence in the home appliances segment, offering high-quality, energy-efficient, and technologically advanced washing machines that cater to the evolving needs of modern consumers.

  DISTRIBUTION TRANSFORMER

  The Company has consistently maintained its leadership position among Distribution Transformer manufacturers in Pakistan, despite increasing market competition in recent years. This achievement is largely supported by its state-of-the-art Distribution Transformer manufacturing and testing facility, established in 2009 through a technology transfer partnership with Pauwels, Belgium. By strictly adhering to a "No Compromise" policy on quality standards, PEL has secured and maintained prestigious international certifications, including ISO 9001, ISO 17001, and ISO 17025. Notably, PEL remains the only company in Pakistan with CE marking for Distribution Transformers, reflecting its commitment to meeting the highest global safety and quality standards.

  During the year under review, revenue from Distribution Transformers increased by 67.47% compared to the previous year, reaching Rs. 11,994 million. This segment accounted for 40.41% of the Power Division's revenue and 14.36% of the Company's total revenue. The increase in revenue was primarily driven by increased export to USA in the year under review.

  In addition, rising raw material costs, local currency volatility, and broader economic uncertainties continued to exert pressure on the sector. Despite these challenges, the Company remains focused on maintaining operational efficiency, strengthening customer relationships, and enhancing product competitiveness to support the long-term stability and growth of the Distribution Transformer segment.

  POWER TRANSFORMER

  In the current year, revenue from Power Transformers declined significantly by 50.24% compared to the previous year. Revenue from this segment stood at Rs. 7,310 million, representing 24.63% of the Power Division's revenue and 8.75% of the Company's total revenue.

  Power Transformers remain a critical component of the electrical network, ensuring the reliable and stable transmission of electricity across a broad network of distribution companies. With a strong legacy of technological advancement, the Company pioneered the manufacturing of power transformers in 2004 and has since distinguished itself as the only manufacturer in Pakistan capable of producing 132kV equipment. In line with its long-term growth strategy and in anticipation of increasing demand for high-capacity transformers, the Company established a state-of-the-art manufacturing facility at 34 KM Ferozepur Road, Lahore. This facility was developed through a strategic technical collaboration with GANZ Hungary, leveraging their extensive expertise in the design and manufacturing of extra-high-voltage power transformers.

  PEL maintains stringent quality control standards throughout every stage of the manufacturing process and continues to upgrade its testing facilities with advanced equipment to ensure the production of reliable and high-performance transformers. Notably, PEL remains the only company in Pakistan with an installation base of over 800 units of 132kV power transformers deployed across the country.

  Pakistan has made considerable progress in expanding its power generation capacity to meet the growing energy needs of the economy. The next major priority is the strengthening of the transmission and distribution network, which is expected to drive substantial demand for power transformers-an essential component of grid stations. As a leading manufacturer in this sector, PEL is strategically positioned to capture a larger share of this market, particularly from WAPDA Distribution Companies (DISCOs).

  Looking ahead, the expansion of the industrial sector and the rapid growth of the housing sector-driven by urbanization and population growth-are expected to further increase demand for power transformers. To capitalize on these opportunities, PEL will continue to prioritize research and development (R&D), enabling the Company to effectively meet domestic demand while also exploring opportunities to expand into international markets.

  SWITCHGEARS

  The Company holds a distinguished position as one of the pioneers of Pakistan's Switchgear Industry, actively participating in the sector since its establishment in 1958. Over the decades, the Company has emerged as one of the leading manufacturers, consistently promoting innovation and operational excellence in power solutions.

  Through a strategic technical partnership with Schweitzer Engineering Laboratories (SEL), USA, PEL has remained at the forefront of delivering advanced technological solutions to the power sector and public utilities. These solutions include Substation Automation Systems (SAS), Industrial Power System Automation, and Satellite Synchronization of Power System Control, further reinforcing the Company's leadership and technological capabilities in the industry.

  During the year under review, Switchgear revenues reached Rs. 6,025 million, reflecting a 44.92% increase from Rs. 4,157 million recorded in the previous year. This segment contributed 20.30% to the Power Division's revenue and 7.21% to the Company's total revenue.

  PEL remains firmly committed to continuous technological advancement. Through its ongoing collaboration with SEL, USA, the Company continues to introduce modern power automation solutions, strengthening its position as a key technology-driven player in the industry.

  The Switchgear Division is also actively engaged in new product development, ensuring compliance with evolving customer requirements and international quality standards. A key achievement was the successful type testing of the LS-Electric Korea manufactured Vacuum Circuit Breaker (VCB) at KERI, Korea's leading testing laboratory. Following this accomplishment, the National Transmission & Dispatch Company Limited (NTDC) approved the VCB in accordance with NTDC specification P-44:2018, marking a significant milestone for PEL.

  With the steady rise in electricity consumption across the country, demand for switchgear equipment is expected to grow among WAPDA Distribution Companies (DISCOs) as well as the private sector. Supported by its state-of-the-art manufacturing and testing facilities, PEL is well positioned to capitalize on these opportunities and further strengthen its presence in the domestic power equipment market.

  ENERGY METERS

  During the year under review, the Energy Meter segment achieved revenues of Rs. 4,351 million, reflecting a robust growth of 23.50% over Rs. 3,523 million recorded in the previous year. This segment contributed 14.66% to the Power Division's total revenue and 5.21% to the Company's overall revenue.

  The Company's Three-Phase Direct Connected Electronic Energy Meter has obtained approval from NTDC, while the Single-Phase Electronic Energy Meter and the LT/HT Multifunction Dual Power Supply Energy Meter-designed for medium and high-voltage applications in LV and HV switchgear-are currently under the approval process.

  New product designs have been developed in line with updated standard specifications issued by NTDC's S&S Department, including:

  ·Integrated Smart Metering Control Device for Transformer Protection

  ·Single-Phase AMR-Based Energy Meter conforming to UDIL Standards by Power Information Technology Company, NTDC

  These designs incorporate advanced solid-state electronics, enhancing product quality, cost efficiency, and production capabilities.

  PEL is actively supporting PEPCO's implementation of AMR/AMI (Advanced Metering Infrastructure) across Pakistan to ensure accurate and efficient collection of metering revenue and to help minimize electricity theft. The Company has deployed several projects leveraging these technologies within utility networks.

  Additionally, PEL Energy Meter is a member of the DLMS (Device Language Message Specification) organization, an international forum that certifies meter manufacturers to ensure interoperability of Smart Metering and AMI systems. The Company has successfully achieved DLMS certification for its meters.

  With the increasing adoption of alternative energy sources by domestic and industrial consumers, PEL has designed and developed Net Metering AMR-Based meters-including Single-Phase, Three-Phase, and LT/HT models-which are now deployed and operational with NTDC to accurately record energy flows from both alternate sources and the main grid.

  DIRECTORS' REPORT

  DIVIDEND AND APPROPRIATIONS

  In view of the future strategic plans for 2026, requiring retention of profits, the Board of Directors did not propose any dividend for the year 2025.

  SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY

  At PEL we pride ourselves in aligning our business strategy to meet societal needs. We believe in giving something back to the society because we care. For us it's about more than just aligning our activities with our stakeholder's expectations whether it's our clients, suppliers, the community, our employees and society as a whole. Through a broad range of community initiatives, charitable giving, foundation grants and volunteerism, we seek to create more value for our society to continue to bring joy in people's lives.

  CORPORATE AND FINANCIAL REPORTING FRAMEWORK

  The Directors are pleased to state that:

• The financial statements, prepared by the management of the Company, present its state of affairs fairly, the result of its operations, cash flows and changes in equity.

• Proper books of accounts of the Company have been maintained.

• Appropriate accounting policies have been consistently applied in the preparation of financial statements and accounting estimates are based on reasonable and prudent judgment.

• International accounting standards, as applicable in Pakistan, have been followed in preparation of financial statements and any departure there from has been adequately disclosed.

• The system of internal control is sound in design and has been effectively implemented and monitored.

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

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

• Key operating and financial data for last six (6) years is attached.

• In view of the future strategic plans for 2026, requiring retention of profits, the Board of Directors did not propose any dividend for the year 2025.

• There is nothing outstanding against the Company on account of taxes, duties, levies and charges except for those which are being made in normal course of business.

• The Company maintains Provident Fund accounts for its employees. The value of the investments of the fund as on 31 December 2025 is Rs. 1,127 million.

BOARD OF DIRECTORS

The composition of the Board of Directors and attendance at meetings are given below: The total number of directors are Eight as per the following,

Male: Seven Female: One

The composition of the Board is as follows:

Attendance at meetings of the Board of Directors is as follows:

The Board has made following sub-committees Audit Committee

HR and Remuneration Committee

Sustainability Committee

IT Steering Committee

REVIEW OF RELATED PARTY TRANSACTIONS

All related party transactions are placed before the Audit Committee and upon recommendations of the Audit Committee, the same are placed before the Board for review and approval in accordance with requirements of the Code of Corporate Governance.

DIRECTORS' REPORT

DIRECTORS' REMUNERATION

Particulars of remuneration of Chief Executive and Directors are as follows:

Rs. (millions)

BOARD'S STATEMENT ON GENDER PAY GAP

Workplace equity lies at the core of PEL's organizational values. We are firmly committed to the principle of "Equal Pay for Work of Equal Value" and ensure that all HR-related decisions such as pay determination, promotions, salary increases, and career advancement are guided solely by merit, fairness, and equity, with zero tolerance for gender-based discrimination or bias.

In accordance with Circular 10 issued by the Securities and Exchange Commission of Pakistan (SECP) on 17 April 2024, we present below the gender pay gap data for the year 2025.

Mean Gender Pay Gap Median Gender Pay Gap

-14%

-46%

The primary reason for this pay gap is the demographic distribution of roles within the Company. A substantial proportion of our factory and labor workforce, roles that typically fall in the lower pay brackets, is comprised predominantly of male employees. Conversely, female employees are more concentrated in administrative, professional, and managerial roles, which tend to offer higher compensation.

This information will be available on Company's website.

ACCOUNTING POLICIES, JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

There were no changes in accounting policies, judgements, estimates and assumptions used in the preparation of financial statements. Further, there are certain amendments to approved accounting and reporting standards which are mandatory for the Company's annual accounting period beginning on 01 January 2025. However, there is no significant implications of such amendments on the annexed financial statements.

INTERNAL FINANCIAL CONTROLS

A system of sound internal control established and implemented at all levels of the Company of the Board of Directors. The system of internal control is sound in design for ensuring achievement of Company's objectives and operational effectiveness and efficiency, reliable financial reporting and compliance with laws, regulations and policies.

TRADING IN SHARES BY DIRECTORS AND EXECUTIVES

No trading was conducted during the year by directors, executives, their spouses and minor children in the shares of PEL.

APPOINTMENT OF AUDITORS

Rahman Sarfaraz Rahim Iqbal Rafiq, Chartered Accountants, have completed the annual audit of PEL for the year ended 31 December 2025 and have issued an unmodified report. They will retire at the conclusion of the forthcoming AGM, and being eligible, have offered themselves for reappointment for the year ending 31 December 2026. The Board of Directors on the suggestion of the Audit Committee has recommended their re-appointment as auditors of the PEL for the year ending 31 December 2026 at a fee to be mutually agreed.

SUBSEQUENT EVENTS

There are no material events after the reporting period.

FUTURE OUTLOOK

Global Economic Outlook

The global economy in 2026 is projected to grow at a moderate pace of around 3%, driven primarily by emerging markets such as China, India, and Southeast Asia, while advanced economies including the United States and Europe face slower growth due to high interest rates, tighter financial conditions, and cautious consumer spending. Inflation has eased compared to previous years, but energy, food, and housing costs remain elevated, amplified by geopolitical tensions in the Middle East, particularly involving Israel, Iran, and the U.S., which continue to create volatility in global oil and gas markets.

Global trade is gradually recovering, but the international landscape is shaped by trade restrictions, supply chain realignments, and ongoing geopolitical conflicts such as the Russia-Ukraine war and U.S.-China strategic rivalry. These factors, combined with high debt levels in emerging economies, continue to pose risks to financial stability, investment flows, and global commodity prices.

Despite these challenges, technological innovation, digitalization, and renewable energy investments are creating new growth opportunities. Regions such as Africa, Southeast Asia, and Latin America are expected to see faster growth due to urbanization, industrialization, and expanding digital economies. Countries and businesses that adopt sustainable practices, resilient policies, and innovation-driven strategies are likely to perform better in the evolving global economic environment.

Looking ahead, the global economy remains cautiously optimistic, but highly sensitive to geopolitical events, energy price fluctuations, and policy effectiveness. Nations that prioritize energy diversification, fiscal discipline, and structural reforms, while leveraging technology and green investments, are better positioned to capture long-term growth opportunities and strengthen economic resilience in the coming years.

Country Economic Outlook

Pakistan's economy in 2026 is showing signs of gradual stabilization, with GDP growth projected at around 3.8%-4.8%, supported by stronger domestic demand and modest easing in monetary policy. After several years of economic adjustment under IMF-backed reforms, the country is experiencing a cautiously positive recovery. Sectors such as agriculture, IT, services, and export-oriented industries are performing relatively well, providing resilience against weaknesses in manufacturing and construction caused by high borrowing costs and import restrictions.

Inflation is expected to remain in the range of 5%-7%, though global energy price volatility and ongoing geopolitical tensions in the Middle East, particularly involving Israel, Iran, and the United States, continue to create upward pressure on commodity and energy costs. The State Bank of Pakistan (SBP) is maintaining a cautious interest rate policy to balance inflation control with supporting growth, while ensuring liquidity in the market.

Fiscal consolidation remains a priority for the government. Measures including tax reforms, subsidy rationalization, and improved revenue collection are helping to narrow the fiscal deficit. At the same time, initiatives under CPEC, Special Economic Zones (SEZs), and renewable energy projects are expected to enhance industrial development, create employment opportunities, and boost exports, which are crucial for improving the balance of payments.

External vulnerabilities remain a concern. Pakistan continues to face pressures from rising debt obligations, global commodity price fluctuations, and energy import dependence. Additionally, heightened uncertainty in global markets due to geopolitical conflicts can affect investor confidence, foreign investment inflows, and overall economic stability. Managing these external risks effectively will be key to sustaining recovery.

Looking ahead, Pakistan's economic trajectory depends on political stability, effective implementation of structural reforms, and diversification of revenue sources. By strengthening governance, promoting investment-friendly policies, and focusing on digitalization and modernization across key sectors, the country has the potential to achieve sustainable growth, improve macroeconomic stability, and build a more resilient economy in the medium to long term.

DIRECTORS' REPORT

Company Future Outlook

The Company continues to operate in a challenging macroeconomic and geo-political environment marked by inflationary pressures, and expected volatility in the dollar-rupee exchange rate. While these factors have increased input costs and impacted pricing, ongoing IMF-supported reforms and gradual political stabilization are expected to foster a more conducive business environment in 2026. This recovery is likely to create opportunities for the Company to strengthen its market position as economic conditions improve.

Demand for electricity continues to rise, driven by rapid urbanization, industrial growth, and increasing adoption of electrical home appliances, highlighting the need for expanded transmission and distribution (T&D) infrastructure. Government initiatives to enhance the power sector, coupled with the ongoing development of Special Economic Zones (SEZs) under CPEC, are expected to generate sustained demand for the Company's Power Division products.

The Company is also focused on export-led growth, with efforts to diversify markets and enhance product competitiveness. Building on the successful entry into the U.S. power market, PEL is pursuing additional international opportunities, while maintaining high-quality standards and leveraging technological expertise.

Looking ahead, as global and domestic conditions gradually stabilize, the Company expects a rebound in consumer demand for home appliances, continued growth in power infrastructure, and expansion in international markets. By aligning operational strategies with emerging opportunities, the Company is well-positioned to achieve sustainable long-term growth and strengthen its global footprint in 2026 and beyond.

PRINCIPAL RISKS AND UNCERTAINTIES

The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including currency risk, interest rate risk and price risk). These risks affect revenues, expenses, assets and liabilities of the Company.

The Board of Directors has the overall responsibility for establishment and oversight of risk management framework. The Board of Directors has developed a risk policy that sets out fundamentals of risk management framework. The risk policy focuses on unpredictability of financial markets, the Company's exposure to risk of adverse effects thereof and objectives, policies and processes for measuring and managing such risks. The management team of the Company is responsible for administering and monitoring the financial and operational financial risk management throughout the Company in accordance with the risk management framework.

The Company's activities expose it to variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk.

ACKNOWLEDGMENT

We would like to thank our Board of Directors for continuous support and guidance. We are also thankful to our team for their dedicated efforts to make the company operationally sustainable through this challenging era.

We are confident with continued team efforts that we will meet expectation of all stake holders i.e., Shareholders, Creditors and Customers.

M. Murad Saigol Chief Executive Officer

Lahore

16 March 2026

M. Zeid Yousaf Saigol Director

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PATTERN OF SHAREHOLDING

FORM 20

THE COMPANIES ACT 2017

[Section 227(2)(f)] PATTERN OF SHAREHOLDING

PATTERN OF SHAREHOLDING

Classification of Ordinary Shares by Categories as at 31 December 2025

Categories of Shareholders

No. of Shareholders

Share held Percentage

Categories of Shareholding required under Listed Companies

(Code of Corporate Governance) Regulations, 2019 as on 31 December 2025

Sr. No. Name No. of Shares Held Percentage

PATTERN OF SHAREHOLDING

202 a31

1,044,468

44,646,957

257,387,916

-

-86,115,555

553,129,599

1,000 1

CORPORATE GOVERNANCE

STATEMENT OF COMPLIANCE WITH LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2019

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

1. The total number of directors are Eight as per the following,

   1. Male: Seven

   2. Female: One

2. The composition of the Board is as follows

   Category	Names
   Female/ Independent Director	Mrs. Sadaf Kashif
   Independent Director	Mr. Muhammad Kamran Saleem
   Non-Executive Directors	Mr. M. Naseem Saigol Mr. Muhammad Omer Farooq Mr. Javed Siddiue
   Executive Directors	Mr. Muhammad Murad Saigol Mr. M. Zeid Yousuf Saigol Syed Manzar Hassan

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 Act and the Regulations with respect to frequency, recording and circulating minutes of meeting of the Board;

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

9. In terms of the requirement of the clause 19 of the CCG Regulations, we confirm that seven directors have completed the Directors Training Program (DTP) and one director is exempt from the DTP;

10. The Board has approved appointment of chief financial officer, company secretary and head of internal audit, including their remuneration and terms and conditions of employment and complied with relevant requirements of the Regulations;

11. Chief financial officer and chief executive officer duly endorsed the financial statements before approval of the Board

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

    1. Audit Committee:

       1. Mr. Muhammad Kamran Saleem

       2. Mr. M. Naseem Saigol

       3. Syed Manzar Hassan

       4. Mr. Muhammad Omer Farooq

       5. Mrs. Sadaf Kashif

    2. HR and Remuneration Committee:

       1. Mr. Muhammad Kamran Saleem

       2. Syed Manzar Hassan

       3. Mr. Muhammad Omer Farooq

       4. Mrs. Sadaf Kashif

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

14. The frequency of meetings (quarterly/half yearly/ yearly) of the committee were as per following:

    1. Audit Committee:

       1. 25 March 2025

       2. 28 April 2025

       3. 28 August 2025

       4. 30 October 2025

    2. HR and Remuneration Committee:

       1. 25 March 2025

15. The Board has set up an effective internal audit function/ or has outsourced the internal audit function to who are considered suitably qualified and experienced for the purpose and are conversant with the policies and procedures of the company;

16. 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 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, chief financial officer, head of internal audit, company secretary or director of the company;

17. 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;

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

M. Murad Saigol Chief Executive Officer

M. Naseem Saigol Chairman

Lahore:

16 March 2026

KEY FINANCIAL RATIOS

MEAN MEDIAN

Dec-25 YTD Dec-25 YTD

GLAXO

-21%

-23%