Financial Results for the Year Ended December 31, 2025

PRC Towers, 32-A, Lalazar Drive, M.T. Khan Road, Karachi, Pakistan Ph: 021-99202908- 14 Fax: (92-21) 99202920-21 & 22

E-mail: prcl@pakre.org.pk,Website: https://www.pakre.org.pk

PRC/BS/BOD/199/2026/4/1 FORM - 7 Karachi, April 7, 2026

The General Manager,

Pakistan Stock Exchange Limited, Stock Exchange Building,

Stock Exchange Road, Karachi.

SUBJECT: FINANCIAL RESULTS FOR THE YEAR ENDED DECEMBER 31, 2025.

Dear Sir/Madam,

We are pleased to inform you that the Board of Directors of Pakistan Reinsurance Company Limited ("the Company"), in its 199thmeeting held on Tuesday, April 7, 2026, at 11:00 a.m. at the Company's registered head office, has recommended the following:

1. CASH DIVIDEND: 10% I.E. PKR 1/- PER SHARE OF RUPEES TEN (RS.10.00)

2. BONUS SHARES: NIL

3. RIGHT SHARES: NIL

4. ANY OTHER ENTITLEMENT / CORPORATE ACTION: NIL

5. ANY OTHER PRICE SENSITIVE INFORMATION: EXTERNAL AUDITORS HAVE ISSUED QUALIFIED REPORTS FOR BOTH CONVENTIONAL AND WINDOW RETAKAFUL ACCOUNTS. BOTH REPORTS ARE ENCLOSED.

The financial results of the Company for the captioned period are enclosed as Annexure 'A' (Conventional) and Annexure 'B' (WRTO).

The Annual Report of the Company for the period ended December 31, 2025 will be transmitted through PUCARS separately, within the specified time and shall also be made available on Company's website https://www.pakre.org.pk.

Yours sincerely,

For PAKISTAN REINSURANCE COMPANY LIMITED

Sumeet Kumar

Company Secretary

Emerging Pakistan is an initiative put in motion by the Ministry of Commerce, Government of Pakistan. For more details please contact: MINISTRY OF COMMERCE TEL: +92-51-9202621

ROOM NO.502, 5THFLOOR, BLOCK-A, FAX: +92-51-9205241

PAK SECRETARIAT, ISLAMABAD, PAKISTAN https://www.commerce.gov.pk

https://www.emergingpakistan.gov.pk

PAKISTAN MINStJRANCE COMPANY LIMITE

The annexed notes 1 to 61 form an integral part of these financial statements.

Chairman Director Director ChiefExecutive Officer ChiefFinancial Olficer

P.4KISTAN REINSURANCE COMPANY LI RIITED PROFIT AND LOSS ACCOUNT

FOR "£HE YEAR ENDED DECEMBER 31, 2025

Notes

December 31,

2025

- -- (Rupees)

December- 31,

2024

ct insurance |aremiuni

et insurance claims

ct coiwrission and other acquistion costs Premiums deficiency reserve expense lnsurance claims and acquisition expenses

klaiaagement expenses

I1°rovision) / reversal of provision for doubtful c4ebts L nderwriting results

36 9,069,1.90,843

37 (5,399,434,599)

39 (941,407,9G0)

(24,549,000)

(6,3C5,391,799)

40 (l,6fi6,476,057) (97,426,J4S) 919,896,539

10,554,927,767

(5,436,15G,7 19)

(l,073,7b2,93 7)

(6,509,933,656)

(2,01"9,C07,343) 113,945,262

2,439,332,030

Inv'estnient income Rental income - net Other income

Other expetases

ltesults ol' operating activities Finance cost

Conventional Profit before tax

Profit front Window Retakaful Operations - O}aerator's Fund Protit bef'orc levies and income tax

Le 'res

Profit before income tax

Protit for the year

Earnings (after tax) per share - Pvupees

The annexed notes 1 to 61 form an integral part of these financial statements.

41

42

43

44

45

46

47

45.1

48

3,317,234,855

170,153,601

329,113,085

(42,202,702)

3,774,298, 539

4,694,4 95,378 (6,73B,283)

4,687,457,095

49,839,613

4,737,296,708 (23,7C0,000)

4,713,53 6,708 (1,584,44G,444) 3,129,G96,264

3.48

3,443,381,1 14

149,96 1,507

652,b6 1,079

(30,762,419)

4,215,441,251

6,654,773,31 I

(9,222,676)

6,645,552,635

174,787,448

6,520,33 S,0b3

(26,929,1 87)

6,7°43,408,896

(3,015,094,041) 3,77S,3l4,S55

4.20

Chairman Director Director ChiefExecutive Officer ChiefFinancial Officer

PAKISTAN REINSURANCE COMPANY LIMITS'. STATEMENT OF COMI•REHENSIVE INCOME ' FOR THE YEAR ENDED DECEMBER 31, 2025

Profit for the year

Other comprehensive income for the year

Items that may be reclassified subsequently to profit and loss account

Unrealized gain on available for sale investments

Deferred tax on unrealised gain on available for sale investments Impact of change in tax rate

Unrealized gain on available for sale investments -Window Retakaful Operations- net of tax

Deferred tax on gain on revaluation Unrealized gain on available for sale investments - Window Retakaful Operations

Impact of change in tax rate

Items that wik not be reclassified subsequently to Profit and Loss Account

Actuarial (loss)/gain on defined benefit obligations

Surplus on revaluation of property and equipment Surplus on revaluation of right ofuse asset Deferred tax on revaluation surplus

Deferred tax on revaluation surplus - effect of change in tax rate

Total comprehensive income for the year

The annexed notes 1 to 61 four an integral part of these financial statcments.

Notes

28.3

7.1

24

2d

December 31,

2025

------------ (Rupees) ----------3,129,096,264

2,242,302,645

(874,498,032)

1,367,804,613

7,082,038

(2,762,001)

4,320,037

1,372,124,650

(46,292,000)

51,030,697

455,708,851

(197,628,424)

309,111,124

1,634,943,774

4,764,040,039

December 31,

2024

3,778,314,855

2,388,909,209

(931,674,592)

(122,167,489)

1,335,067,128

6,713,880

(2,618,404)

(88,360)

4,007,1 16

1,339,074,244

297,660,663

194,396,213

437,706,392

(246,520,016)

(142,388,063)

243,194,526

1,579,929,433

5,658,244,288

Chairman Director Director ChiefExecutive Officer ChiefFinancial Officei

I•AKIS"£AN REINSURANCE COMPANY LIMITED STATEMENT OF CASH 1*LOWS

roR Fl IE YEAR ENDED DECPMBKR 3J , 202.$

OPERATING CAsH mows:

Underwriting activities:-l°rerniulii receiverl Reinsurance premiium pairl Claims Jaaid

Reinsurance and other recoveries received

Commitsion paid

Commission received

Other underwriting payments (management expenses)

Deceit her 31, December 3.1 ,

2025 202't

- (Rupees) -------------

Net cash inflows from undcrwl-itin g activities

Other operating activities:

Levies & Income tax paint Other operating payments Other operating receipts AtJvances to employees

Net cash (outflows) from other operating activities

"Lotal cash (otttflovs) / inflows frnm VIII nyerating :tctivities

In vestment acfivities

Atlditions to pt oper ty awal ec}uiprneials Sale proceeds of fixed asscts

Adfiititins in intangil ie assets

Payiiienf s for investmenI

Rental income received - net of e•i°enses Dividend income received

Interest income on bank cteposits

Invcstlrcnt incoiaac rcccivcd - net of cxpcliscs Proceec4s irons invest lrents

1.11,1.05,697

(2,0 14,876,021)

(1,597,770,324)

3,0 14,63.3, 1.59

(2,773,560,875)

24.1,072,2S I

December 31, December 31,

2025 2024

- -- (llupees) -------------

lteconcili0tion to profit and loss account

Chairman Director Director ChiefExecutive Officer Chief Financial Officer

STAIKMtNTOFCt*NGLS;flyQUiY

£URIHEYEAE ENDEDDECEVBER3Ki02S

Deferred lax orl nvai|ablc fer investments

R 1assf<1iozzBunmxndled‹o",v,ilrb}ufo,s,k" invm»n,nm

g,000,OOO.OOO 2R1.OOOG00

2,3b8,909,209

4.ti07, 1.16

(I 5,495,740)

I . t35.296.? I G 'J,7N6,8 00,000 3,778,3 I 4,855

4D7597l518

2.3bb,9U9,20O

( I 22,1 6y,489i

S.415,049.762

Final c‹ish dividend for lhc year 2023: fts, I .00 @ j 0'x» l3a)once o* el DcceT»ber 3 I, 2024

Unroaiz°a (lOss)o»zv ilzblz for salt invzs moms

Oet rt'cd tax o» a *i1ablc lot- iJjvalzncnts • efficct uF cJJgngc in tgz rule UiJreolizcfl loss oil available lâr sale in"es{mcnfs -

Winclou' Reti kntjJl Oper+itionS- net a{ lax RcrtJcastrcment of ttofi»od benefit obligor cns - net uf tax Su lus o» revaTuatio T oF rn crt ood e ui mett

Sur]›llTs en revitlutirion oFrig|jt ct use asset DcForrud lax oJj reyalualion sMrglus

Rcclsssitlcatioii sdj tistn cut related to "svallaibie for sflie" Investments

(900.0OW,oOO}

9.000%00.000 281,000,000 2,708,215,564

3,529,096,36

t4s,zoz,Oooj tas,z»z,»ooi

-

174,036.1B9

Fisat cast dividend tâT the y«or 202S: Its. 2.OU @! 2f›%

Balenec ne ai December 3T, 2025

Chairman Director

4,075,34£,43* 9,539,279,616

Director ClñefExecutive OEicer ChiefFinancial Officer

P.4KISTAN RE1NSUiC4NC E COMP.4NY LIMITED - WINDOW RET.AKAFUL OPERATION ST.AT EMENT OF FINANCIAL POSITION

AS AT DECE MBER 31, 2025

Operator's Retakaful Fund

Statutory flind

t4 600,000,000

600,000,000

Reserves tS 319,714,817 284,992,6 16

Total Operator's Fmuds Participant's Retakaful F-und

Seed money

919,714,817

16

88°,99 °,6 16

1,000,000

1,000,000

Reserves

Balance o1 Participant's Retal‹afiil Fund

2,187,168,886

1,651,306,271

Qard-c-Hasna

LIABIL ITIES

Underwriting provisions

Outstandiiig claime includin3 I BNR Uneaiaieri conti ibrltion reserves Contributi on deflciency reserve

9 3.0.0,000,000 300,000,000

2,487,168,886

t7

is

Unearned wakala fee Takaful/retakaful payables

Payable to Operator's Retakaful Fund - net Taxation - provision less payment Deterred taxation

Other creditors and accruals

Payable to Pakistan Reinsurance Company Limited TOTAL LI.XBIL IT I ES

TOT.ML EQUITY .AND LI-ABILITIES

CONTINGENCI ES AND COi'vIMI TiVlENTS

10

19

8

20

21

22

23

2-|

1,562,187,409

1,474,363,376

288,840,23S 2,090,079,333 i ,886,260,933

1,208, >3,0S2 4,577,248,218 3,567,567,204

The annexed notes 1 to 4.1 four an integral part ot these tn ancial statements.

Chairman Director Director ChiefExecutive O8icei ChiefFinancial Officer

PAKISTAN REINSURANCE COMPANY LIGHTED - WINDOW RETAK.AFUL OPERATION

Participant's Retakaful Fund

December 31, 2025 December 3 1, 2024 Note ---------------------------Rupees---------------------------

Contributions earned

1,569,906,379

1,427,408,942

Less: contributions ceded to Retakaful (220,881,169) (194,260,861)

Net contribution revenue

-

Net claims - reported/ settled - IBNR

25 1,349,025,210

16 (998,289,444)

1,233,148,08 I

(912,215,685)

(Charge) of contribution deficiency reserve (13,947,000)

Surplus before investment and other income Investment income

Other income

Less: modarib's fees

(Provision) / reversal of"provision for doubtful

336,788,766

27 126,911,521

28 73,433,899

29 (50,091,355)

320,93 2,396

88,863,572

264,861,482

(88,43 1,264)

contributions receivable

7.2

(10,407,961) 35,657,889

Surplus before taxation

476,654,869

621,884,076

Taxation

Surplus transferred to accumulated surplus

30 (44,019,721) (59,702,430)

432,635,148 562,181,646

Operator's Retakaful Fund Wakala fee income Commission expense

25.1

31

392,476,595

(415,272,605)

356,852,235

(338,3 12,950)

General, administrative and management expenses 32 (19,410,404) ( I 6,733,308)

Investment income Other income Modarib's fee

Protit before taxation

*7 28

29

92,046,028

49,839,613

1,805,977

172,981,471

174,787,445

Taxation 30 (19,437,449) (76,>16,567)

Profit after taxation attributable to shareholders

The annexed notes l to 4 I form an integral part of these financial statements.

30,402,164

98,070,88 I

ChaFmâll DltCCt0l DFeCt0f ChiC1 XCCUtVe Oflcei ChiefFklancial 08icer

PAKISTAN REINSURANCE CO4IPAN4" LIMITED - WINDOW RETAKAFUL OPERATION ST.ATEiHENT OF CONIPREHENSIVE INCOIYIE

FOR THE YEAR ENDED DECENIBER 31, 2025

Note December 31, December 31, 2024

----- -----Rupees----------------------

Surplus for the year

432,635,148

562, 181,646

Other comprehensive income

Item that may be subsequently reclassified to profit and loss account Unrealised gain on 'available for sale' investments - net

35

Total comprehensive income for the year Operator's Retakaful Fund

73,227,467 24,647,793

505,862,615 586,829,439

Total comprehensive income for the year

The annexed notes 1 to 4I form an integral part of these financial statements.

34,722,201 102,077,997

Chairman Director Director ChiefExecutive O8icer ChiefFinancial O8icer

PAKISTAN REINSURANCE COMPANY LIMIT B'-' WINDOW RETAKAFUL OPERATION STATEMENT OF CASHFLOWS ^ ' _

FOR THE YEAR ENDED DECEMBER 31, 202.5 ¿

Chairman Director

Director ChiefExecutive Officer ChiefFinancial Officer

PAKISTIN REINSURANCE COMPANY LIMITED - DOjW RETAHAFUL OPERATION ST-4TEMENT OF CHANGES IN FUNDS '>'

FOR THE YEAR ENDED DECEMBER 31, 2025 *:

Balance as at December 31, 2025

The annexed notes 1 to 41 form an integral paid of these financial statements.

73,227,4G7 432,635,148 505,862,615 505,562,615

t,000,000 89 2 78 7 9 2 88 2 8'7 8 886

Chairman Directs Director ChiefE.xecutive O)ficer ChiefFinancial Officer

INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF PAKISTAN REINSURANCE COMPANY LIMITED REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Qualified Opinion

We have audited the annexed financial statements of Pakistan Reinsurance Company Limited, which comprise the statement of financial position as at December 31, 2025, the profit and loss account, the statement of comprehensive income, the statement of cash flows, the statement of changes in equity for the year then ended, and notes to the financial statements, including 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.

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

Basis for Qualified Opinion

1. Receivable from Sindh Revenue Board (SRB) and the Related Litigation

   
   
   
   
   
   
   

   As disclosed in note 15 and 35.2 to the financial statements, an amount of Rs. 2,573.889 million which has been carried from the year 2017 as receivable from Sindh Revenue Board (SRB) which was recovered by SRB in respect of sales tax on reinsurance services. The Company has recorded this amount as an asset; however, the Company could not substantiate any control over the underlying asset and the flow of economic benefits is remote due to ongoing Court case. Had the Company not recorded this asset, total assets, accumulated profit and shareholders' equity would have been reduced by the same amount accordingly.

2. Unreconciled Balances

The Company's amount due from other insurance/reinsurance companies on account of treaty and facultative business as appearing in note 16 in the annexed financial statements includes unreconciled gross amount of Rs 4,280.32 million and net amount of Rs. 3,578.87 million and that gross amount includes balance of related party Mls National Insurance Corporation Limited amounting to Rs. 4,224.15 million. Similarly, the Company's amount due to other insurance/reinsurance companies on account of treaty and facultative business as appearing in note 31 in the annexed financial statements includes unreconciled balance of Rs 6,774.07 million. Management asserted that the reason for time lag in reconciliation is intimations and communications of the transactions which normally takes place after three to four months of the transaction. The Company is in the process of reconciling these balances. Due to pending reconciliations relating to the above balances, resultant adjustment and consequential impact thereon, if any, on these financial statements remain unascertained.

We conducted our audit in accordance with International Standards on Auditing (ISAs). 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 abasis for our qualified opinion.

Emphasis of Matters

We draw attention to the notes 16, 17, 18, 19, 25, 26, 27, 31, 36, 37, 39 and 53 to the financial statements, which reflect the transactions and balances relating to the Company's treaty proportional reinsurance business. Previously, no supporting documentation of the premium and claims of the ceding insurance companies were made available to the auditors. However, effective preceding year the management has developed some control mechanism over treaty proportional business premium and claims which includes obtaining relevant information from ceding companies in support of periodic returns on random basis and performing ceding company wise analysis of treaty proportional business as well as checking compliance of the treaty terms. However, this needs consistency and continuity of the internal control system over the years.

1. We draw attention to notes 35.1 to 35.9 of the financial statements, which provide details regarding contingencies in respect of which decisions are pending.

   Our opinion is not further modified in respect of the matters.

   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 period. 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 Emphasis of Matters section of our report, we have determined the matters described below to be the key audit matters to be communicated in our report.

   Following are the Key Audit Matters:

   S. No.	Key Audit Matters	How the matter was addressed in our audit
   1.	Revenue Recognition -Facultative premium earned
   	Refer notes 5.25.1 and 36 to the financial statements for accounting policies and details in respect of revenue recognition. The Company recognizes facultative premium earned from facultative reinsurance policies representing 78% of gross premium written.	Our audit procedures to address this matter included the following:

   • Obtained an understanding, including the design and implementation of internal controls over process of capturing, processing in and recording of facultative premium income.

   S.No.	Key Audit Matters	How the matter was addressed in our audit
   	We identified revenue recognition as a key audit matter as it is one of the key performance indicators of the Company and because of the potential risk that revenue transactions may not be accurately recorded, recognized in the appropriate period and not properly disclosed in the financial statements.	« Assessing the appropriateness of disclosures made in financial statements to ascertain whether these are in compliance with applicable financial reporting framework.
   2.	Valuation of outstanding claims including claims incurred but not reported
   	Refer to notes 6.6 and 25 to the financial statements for accounting policy and details in respect to facultative claim liabilities. The Company's facultative claim liabilities represent approximately 33% of the Company's total liabilities, both Conventional and Re-takafu1. Valuation of these liabilities involves significant judgment because it requires a number of assumptions to be made with high estimation uncertainty such as loss ratios, trend of historical claims and estimates of the frequency and severity of claims. Facultative claim liabilities are recognized on inUmation of the insured event based on management judgment and estimate.	Our audit procedures to address this matter included the following:

   • Assessed the appropriateness of the Company's accounting policies for recording of facultative premiums in line with the requirements of applicable laws, accounting and reporting standards.

   • Tested the policies on sample basis where policies were written close to the year-end and subsequent to the year- end, and evaluated that these were recorded in the appropriate accounting period.

   • Tested the facultative premium recorded on sample basis to test the accuracy from the underlying policies issued to insurance contract holders.

   • Recalculated the unearned portion of facultative premium and ensured that appropriate amount has been recorded as provision for unearned premium in liabilities.

   • Assessed the appropriateness of the accounting policies for recording of facultative claims in line with the requirements of applicable laws and accounting and reporting standards.

   • Obtained an understanding of the Company's policy, including the design and implementation of internal controls over the capturing, processing and recording of information related to claims.

   
   
   
   
   
   
   

   S. No.	Key Audit Matters	How the matter was addressed in our audit
   	The Company maintains provision for Incurred But Not Reported (IBNR) claims based on the advice of an independent actuary. The actuarial valuation process involves significant judgment and the use of actuarial assumptions. Based on the above factors, we have considered it as a key audit matter.
   		actuary to:
   		Understand the basis and methodology used for such valuation.
   		Evaluate the completeness and accuracy of source data used for the purpose of valuation.
   3.	Investments and related income
   	The Company's total investments, amounting to Rs. 30,405 million, form a substantial portion (40%) of Company's total assets, both Conventional and Re-takafu1. Moreover, the Company's investment income (both taken in profit and loss account and other comprehensive income) amounting to Rs. 5,798 million, form 77% of Company's total comprehensive income, gross of tax. The Company's investment portfolio comprises of government debt securities, equity securities and mutual funds. Because of significant impact of investments on the Company's financial position, results and solvency requirement as well as estimates and judgments are involved in valuation of investments, it is considered as an area of significant audit risk as part of our audit procedures, we include it in key audit matter section of our report.	Our audit procedures to address this matter included the following: management's processes and evaluated the design and implementation of key controls for valuation and classification of investments and recognition of investment and its related income. custodians to verify existence and completeness of the investment portfolio and compared and reconciled the contents of the responses with the books and records of the Company. In cases where confirmations were not received, statements of custodians were used to assess whether number of scripts have been accurately recorded by the Company.

   • Performed test of details and test of controls on a sample basis to evaluate whether the facultative claims settled during the year-end and outstanding at the year-end are appropriately recorded in accordance with the requirements of company surface regulations.

   • Assessed the competence, capability and objectivity of the actuary involved by the Company to value IBNR claims reserves for facultative claims.

   • Reviewed the valuation report of management

   • Evaluated the adequacy of disclosures given on outstanding claims including IBNR claims as per the insurance regulations and applicable accounting and reporting standards.

   • Obtained an understanding of the

   • Obtained the external confirmations of security

   
   
   
   
   

   S. No.	Key Audit Matters	How the matter was addressed in our audit
   	Refer to note 12 and 13 to the financial statements and the accounting policies in Note 5.7 for investment and note 41 for investment income.
   		» Assessed the appropriateness of accounting policy adopted by the Company for compliance with the requirements of applicable financial reporting framework.

   • Assessed the methodologies used to determine fair values such as quoted market prices or discounted cash flow models and performed recalculation by using the data used in valuation to evaluate the accuracy of carrying value of investments. Ensured that any fair value adjustments are accounted for in the other comprehensive income (OCI) or profit and loss account as appropriate.

   • Reviewed the impairment testing procedures, particularly for unlisted shares, and verified the adequacy of impairment losses recognized and ensure they have been properly recorded in accordance with the relevant financial reporting standards.

   • Performed substantive testing by checking dividend receipts, dividend announcements, and related documents to ensure that dividends are recognized in accordance with the Company's accounting policies. Performed tests to ensure the correct application of the effective interest rate method for recognition of interest income on Pakistan Investment Bonds and treasury bills.

   • Assessed the appropriateness of disclosures made in financial statements to ascertain whether these are in compliance with applicable financial reporting framework.

   
   
   
   
   
   
   
   
   
   
   
   
   

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

   
   
   

   The board of directors are 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, the requirements of Insurance Ordinance, 2000, Companies Act, 2017 (XIX of 2017) and the State-Owned Enterprises (Governance and Operations) Act, 2023 (SOE Act 2023) 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 is 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, except for the effects of the matters described in basis for qualified opinion section of our report:

   1. proper books of account have been kept by the Company as required by Insurance Ordinance, 2000 and the Companies Act, 2017 (XIX of 2017);

   2. the statement of financial position, the profit and loss account, the statement of comprehensive income, the statement of cash flows and the statement of changes in equity together with the notes thereon have been drawn up in conformity with the Insurance Ordinance, 2000, the Companies Act, 2017 (XIX of 2017) and the SOE Act, 2023 and are in agreement with the books of account and returns;

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

   4. Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.

The engagement partner on the audit resulting in this independent auditor's report is Mohammad Hanif Razzak.

Chartered Accountants Karac

Dated:

INDEPENDENT AUDITOR'S REPORT

To the members of Pakistan Reinsurance Company Limited - Window Retakaful Operations Report on the Audit of the Financial Statements

Qualified Opinion

We have audited the annexed financial statements of Pakistan Reinsurance Company Limited - Window Retakaful Operations (the Operator), which comprise the statement of financial position as at December 31, 2025, the profit and loss account, the statement of comprehensive income, the statement of cash flows, the statement of changes in funds for the year then ended, and notes to the financial statements, including 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.

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

Basis for Qualified Opinion

1. Unreconciled Balances

We conducted our audit in accordance with International Standards on Auditing (ISAs). 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 Operator 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 qualified opinion.

Emphasis of Matters

1. We draw attention to the notes 7, 10, 11, 17, IS, 25, 26, 31 and 34 to the annexed financial statements, which reflect the transactions and balances relating to the Operator's treaty retakaful business. Hitherto fore, no supporting documentation of the contributions and claims of the ceding takaful entities were made available to the auditors. However, the management in past few years has developed some control mechanism over treaty business contributions and claims which includes obtaining relevant information from cecting companies in support of periodic returns on random basis and performing ceding entity wise analysis of treaty business carried out with ceding entities as well as checking compliance of the treaty terms. However, this needs consistency and continuity .o( the internal control system over the years.

   
   
   

2. We draw attention to the note 24.1 to these financial statements which explains that notice was served by Sindh Revenue Board (SPxB) in 2016 for non-filing of sales tax returns and raised sales tax liability via same notice on conventional reinsurance service provider by the Operator.

   Our opinion is not further modified in respect of these matters.
   
   
   
   

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

   
   
   

   The 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. Wehave 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 the Insurance Ordinance, 2000, Companies Act, 2017 (XIX o1 2017) and the State-Owned Enterprises (Governance and Operations) Act, 2023 (SOE Act 2023) 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 Operator'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 Operator or to cease operations, or has no realistic alternative but to do so.

   Board of directors is responsible for overseeing the Operator'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 vrhole 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 Operator's internal control.

   • Evaluate the appropriateness of accounting policies used ancl 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 Operator's ability to continue as a going concern. If vre 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 Operator to cease to continue as a going concern.

     
     
     

   • Evaluate the overall presentation, Lecture and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a mariner 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.
   
   
   
   
   
   
   
   

   Report on Other Legal and Regulatory Requirements

   Based on our audit, we further report that in our opinion, except for the effects of the matter described in basis for qualified opinion section of our report:

   
   
   

   1. proper books of account have been kept by the Operator as required by Insurance Ordinance, 2000 and the Companies Act, 2017 (XIX of 2017);

      
      
      

   2. the statement of financial position, the profit and loss accoi:nt, the statement of comprehensive income, the statement of cash flows and the statement of changes in funds together with the notes thereon have been drawn up in conformity with the Insurance Ordinance, 2000, the Companies Act, 2017 (XIX of 2017) and the SOE Act, 2023 and are in agreement with the books of account;

      
      
      
      
      

   3. investments made, expenditure incurred and guar the Operator's business; and

      xtended during the year were for the purpose of

      -

      
      
      

   4. no zakat was deductible at source under the Zakat shr Ordin ce, 1980 (XVIII of 1980).

The engagement partner on the audit resulting in this independe itor's report is Mohammad Hanif Razzak.

Chartered Accountants

I(arac Dated: UDIN:

026