Transmission of Annual Report for the Year Ended 30.06.2025

Sitara Energy Limited

Consolidated Accounts

(Sitara Energy Ltd and Its Subsidiary Company)

BOARD OF DIRECTORS

Ms. Noureen Javed (Chairperson) Mr. Javed Iqbal (Chief Executive Ofcer) Mr. Shahid Hameed Sheikh

Mr. Tahir Ibraheem Ms. Haniah Javed

Mr. Mubashir Ahmed Zareen Mr. Sheikh Javaid Islam

CHIEF FINANCIAL OFFICER

Mr. Ijaz A. Babar - FCA

COMPANY SECRETARY

Mr. Mazhar Ali Khan

LEGAL ADVISOR

Sahibzada Muhammad Arif

SHARE REGISTRAR

THK Associates (Private) Limited

Plot No. 32-C, Jami Commercial Street 2,

D.H.A. Phase VII, Karachi UAN : +92 (21) 111-000-322

E-mail: aa@thk.com.pk

REGISTERED OFFICE

601-602 Business Centre, Mumtaz Hassan Road, Karachi 74000

PLANT

33 K.M., Sheikhupura Road, Faisalabad

AUDIT COMMITTEE

Mr. Shahid Hameed Sheikh (Chairman)

Mr. Sheikh Javaid Islam Mr. Tahir Ibrahim

HUMAN RESOURCE & REMUNERATION COMMITTEE

Mr. Mubashir Ahmed Zareen (Chairman)

Mr. Javed Iqbal Ms. Haniah Javed

AUDITORS

RSM Avais Hyder Liaquat Nauman (Chartered Accountants)

BANKERS

Standrad Chartered Bank (Pak) Limited Albaraka Bank (Pakistan) Limited National Bank of Pakistan

First Women Bank Limited Bank Alfalah Limited Faysal Bank Limited

The Bank of Punjab MCB Bank Limited United Bank Limited Meezan Bank Limited Allied Bank Limited Silk Bank Limited Askari Bank Limited

Bank Makramah Limited Habib Bank Limited

WEB SITE

https://http://www.sitara.pk

Sitara Energy Limited through its innovative technology and effective resource management has maintained high ethical and professional standards to create a work environment that fosters pride, job satisfaction and equal opportunity for career growth for the employees.

Annual Report 2025 3

Our principled and honest business practices are focused to provide reliable & economical power to our customers, to maximize return to the shareholders and to respect all other stakeholders & community

Notice is hereby given that the Annual General Meeting ("AGM") of Sitara Energy Limited (the "Company") will be held on Thursday, November 27, 2025 at 3:00 pm at the Auditorium of Institute of Chartered Accountants of Pakistan, chartered Accountants Avenue, Block 8 Clifton, Karachi in person and via video link to transact the following business:

ORDINARY BUSINESS

1. To confirm the minutes of the Extra Ordinary General Meeting held on April 15, 2025.

2. To receive, consider and adopt the Annual Audited Financial Statements of the Company for the year ended June 30, 2025 together with the Reports of Directors and Auditors thereon.

3. To appoint Auditors and to fix their remuneration for the year ending June 30, 2026. The present auditors, M/s. RSM Avais Hyder Liaquat Nauman, Chartered Accountants, have retired and being eligible, have offered themselves for re-appointment. The Board of Directors recommends, based on the recommendation of Board Audit Committee, appointment of M/s. RSM Avais Hyder Liaquat Nauman, as auditors for the ensuing year.

4. To transact any other ordinary business with the permission of the Chair.

By Order of the Board

Karachi Mazhar Ali Khan

November 07, 2025 Company Secretary

NOTES:

CLOSURE OF SHARE TRANSFER BOOKS

The Share Transfer Books of the Company will remain closed from November 21, 2025 to November 27, 2025 (both days inclusive). Transfers received in order at the office of Share Registrar M/s. THK Associates (Pvt.) Limited, Plot no. 32-C, Jami Commercial Street 2, D.H.A Phase VII, Karachi before the close of business on November 20, 2025 will be treated in time for the purpose to attend the Annual General Meeting of the Company.

PARTICIPATION IN THE ANNUAL GENERAL MEETING.

A member entitled to attend and vote at this meeting is entitled to appoint another person as his/ her proxy to attend and vote. Proxies in order to be effective must be received at Company's Share Registrar's Office M/s. THK Associates (Pvt.) Limited, Plot No. 32-C, Jami Commercial Street 2, D.H.A Phase VII, Karachi duly stamped and signed not less than 48 hours before the time of meeting.

CDC ACCOUNT HOLDERS WILL HAVE TO FOLLOW FURTHER UNDER MENTIONED GUIDELINES AS LAID DOWN BY THE SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN.

1. For attending the meeting:

   1. In case of individuals, the account holders or sub-account holders and their registration details are uploaded as per the regulations, shall authenticate their identity by showing their original Computerized National Identity Card (CNIC), or Original Passport at the time of attending the meeting.

   2. In case of Corporate Entities, the Board of Directors' resolution/power of attorney with specimen signature of the nominees shall be produced (unless it has been provided earlier) at the time of the meeting.

2. For appointing proxies:

   1. In case of individuals, the account holders or sub account holders and their registration details are uploaded as per the regulations, shall submit the proxy form as per the above requirements. The proxy form shall be witnessed by two persons whose names, addresses and CNIC numbers shall be mentioned on the form. Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy form.

   2. In case of corporate entities, the Board of Directors' resolution/power of attorney with specimen signature of the person nominated to represent and vote on behalf of the corporate entity, shall be submitted (unless it has been provided earlier) along with proxy form to the company's registrar.

   3. Form of proxy is attached to the notice of meeting being sent to the members. Proxy Form may also be downloaded from the Company's website i.e. https://www.sitara.pk

CONVERSION OF PHYSICAL SHARES INTO BOOK ENTRY FORM

The Securities and Exchange Commission of Pakistan (SECP) through its letter No.CSD/ED/ Misc/2016-639-640 dated March 26, 2021 has advised the Listed Companies to adhere with the provision of the Section 72 of the Companies Act, 2017 (the Act) by replacing shares issued by them in Physical Form with the shares to be issued in the Book-Entry Form. Sitara Energy Limited (the "Company"), being a listed company is also required to comply with aforesaid provision of Act.

The shareholders of Sitara Energy Limited having physical folios/share certificates are requested to convert their shares from Physical Form into Book Entry Form as soon as possible. The shareholders may contact their Broker, a PSX Member, CDC Participant or CDC Investor Account Service provider for assistance in opening CDS Account and subsequent induction of the physical shares into Book Entry Form.

It would facilitate the shareholders in many ways including safe custody of shares, no loss of shares, avoidance of formalities required for the issuance of duplicate shares and readily available for sale and purchase in open market at better rates. The shareholders of Company may contact the Share Registrar and Transfer Agent of the Company, namely M/s. THK Associates (Pvt.) Limited, Plot no. 32-C, Jami Commercial Street 2, D.H.A Phase VII, Karachi for the conversion of Physical Shares into Book-Entry Form.

SUBMISSION OF COPIES OF CNIC NOT PROVIDED EARLIER

Individual Shareholders are once again reminded to submit a copy of their valid CNIC, if not provided earlier to the Company's Share Registrar, M/s. THK Associates (Private) Limited. In case of non-availability of a valid copy of the shareholders' CNIC in the records of the Company, the company shall withhold the dividend under the provisions of Section 243 of the Companies Act, 2017 and Regulation 6 of The Companies (Distribution of Dividend) Regulations 2017.

ELECTRONIC CIRCULATION OF ANNUAL REPORTS VIA EMAIL OR CD/DVD:

Pursuant to the provision of Companies Act, 2017, annual reports are being sent to the shareholders electronically (Email or CD/DVD).

However, shareholders who wish to receive hardcopy of Financial Statements shall have to fill the attached standard request form (also available on the company's website https://www.sitara.pk) and send at the Company's address.

The Company has made arrangements to ensure that all participants, including shareholders, can now participate in the AGM proceedings via video link. Those members who are willing to attend and participate in the AGM via video link are requested to register themselves by sending an email along with following particulars and valid copy of both sides of Computerized National Identity Card (CNIC) at reg.agm@sitara.pk with subject of 'Registration for AGM' not less than 48 hours before the time of the meeting:

Members who will be registered, after necessary verification as per the above requirement, will be provided a password protected video link by the Company via email. The said link will remain open from 2:30 p.m. on the date of AGM till the end of the meeting.

PLACEMENT OF FINANCIAL STATEMENTS:

The audited financial statements of the Company for the year ended June 30, 2025 have been placed at the Company's website: https://www.sitara.pk.

Members are requested to promptly notify any change in their addresses.

It is a fundamental policy of Sitara Energy Limited to conduct its business with honesty, integrity and in accordance with the highest professional, ethical and legal standards. The Company has adopted comprehensive Code of Conduct (Code) for members of the Board of Directors and Employees. The Code defines acceptable and unacceptable behaviors, provides guidance to directors / employees in specific situations that may arise and foster a culture of honesty, accountability and high standards of personal and professional integrity.

Salient Features of the Code for the Directors

1. Conflict of Interest

   Each director must avoid any conflict of interest between the director and the Company, its associated or subsidiary undertaking. Any situation that involves, or may reasonably be expected to involve, a conflict of interest with the Company, should be disclosed promptly.

2. Corporate Opportunities

   Directors are prohibited from taking for themselves personally, opportunities related to the Company's business; using the Company's property, information or position for personal gain or competing with the Company for business opportunities.

3. Confidentiality

   Directors must maintain the confidentiality of information entrusted to them by the Company and any other confidential information about the Company and its associated or subsidiary undertaking that comes to them, except when disclosure is authorized by the Chairman of the Board or legally mandated.

4. Honesty, Integrity and Fair Dealing

   Directors must act honestly and fairly and exhibit high ethical standards in dealing with all stakeholders of the Company.

5. Compliance with Laws, Rules and Regulations

   Directors shall comply with laws, rules and regulations applicable to the Company including but not limited to the Companies Ordinance 1984, Listing Regulations of the Stock Exchanges and insider trading laws.

6. Encouraging the Reporting of Any Possible Illegal or Unethical Behavior

   Directors should take steps to ensure that the Company promotes ethical behavior; encourages employees to talk to supervisors, managers and other appropriate personnel when in doubt about the best course of action in a particular situation; encourages employees to report violations of laws, rules, regulations, Company policies and procedures or the Company's Code of Conduct to appropriate personnel; and informs employees that the Company will not allow retaliation for reports made in good faith.

7. Trading in Company Shares

   Certain restrictions / reporting requirements apply to trading by the Directors in Company shares. Directors shall make sure that they remain compliant with these statutory requirements.

8. Compliance Procedures

Directors should disclose any suspected violations of this Code promptly in the immediately subsequent meeting of the board of Directors.

Salient Features of the Code for Employees

1. Conflict of Interests

   Employees / trainees must not engage in activities or transactions which may give rise, or which may be seen to have given rise, to conflict between their personal interests and the interest of the Company.

2. Confidentiality and Disclosure of Information

   Employees / trainees are expected to safeguard confidential information and must not, without authority, disclose such information about Company activities to the press, to any outside source, or to employees/ trainees who are not entitled to such information.

3. Political Contribution

   No funds or assets of the Company maybe contributed to any political party or organization or to any individual who either holds public office or is a candidate for public office except where such a contribution is permitted by law.

4. Bribes and Commercial Payments

   An employee / trainee must not give or receive bribes or other payments, which are intended to influence a business decision or compromise independent judgment; nor must any employee / trainee give money in order to obtain business for the Company, nor receive money for having given Company business to an outside agency.

5. Proper Recording of Funds, Assets, Receipts and Disbursements

   All funds, assets, receipts and disbursements must be properly recorded in the books of the Company.

6. Agreements with Agents, Sales Representatives or Consultant

   Agreements with agents, sales representatives or consultants should state clearly the services to be performed for the Company, the amount to be paid and all other relevant terms and conditions.

7. Relations and Dealings with Suppliers, Consultants, Agents, Intermediaries and Other Third Parties

   SEL's relations and dealings with suppliers, consultants, agents, intermediaries and other third parties should at all times be such that SEL's integrity and its reputation should not be damaged if details of the relationship or dealings were to become public knowledge.

8. Health, Safety & Environment (HSE) Policy

   Every employee / trainee at work must take reasonable care for the health and safety of him / her and others including visitors who may be affected by his / her acts or omissions at work and cooperate in Company's efforts to protect the environment.

9. Smoking Policy

   Smoking and exposure of workplace to tobacco poses serious health hazard to the employee / trainees besides potential risks of fire and explosions considering this, smoking is permitted only in designated 'Smoking Areas'.

10. Seat Belt Policy

    As per policy it is mandatory for all SEL employees / trainees, contractors, visitors and all other persons to fasten seat belts in the front seats of the vehicle while traveling.

11. Other Employment, Outside Interests, Civic Activities

    SEL does not allow its employees / trainees to take any part-time and / or full-time second employment during employees' / trainees' engagement with the Company.

12. Unsolicited Gifts

    Accepting gifts that might place an employee / trainee under obligation is prohibited. Employees / trainees must politely but firmly decline any such offer and explain that in accordance with the Company's instructions, they are unable to accept the offer.

13. Family Connections and Employment of Relatives

    Any dealings between staff and outside organizations, in which they have a direct, indirect or family connection must be fully disclosed to the Management.

14. Company and Personal Property

    An employee / trainee must not take or use Company property or the property of another employee / trainee without permission; nor must the employee / trainee use Company property for private purposes without the Management's permission.

15. Alcohol and Drugs

    Alcohol in any form and the use of drugs, except under medical advice, is prohibited at all locations.

16. Gambling

    All forms of organized gambling or betting on the Company's premises are forbidden.

17. Rumor Mongering & Gossiping

    Rumor mongering, persuasive allegations, accusations and exaggerations with the main purpose of negatively influencing and manipulating the minds and emotions of the fellow employees / trainees are strictly prohibited.

18. Harassment

    It is the policy of the Company to promote productive work environment and not to tolerate verbal or physical conduct by any employee / trainee that harasses, disrupts, or interferes with another's work performance or that creates an intimidating, humiliating, offensive, or hostile environment.

19. Grievance Handling

    SEL strives to provide a fair & impartial process to its employees / trainees and ensure timely resolution of their grievance.

20. Whistle Blowing

    In order to enhance good governance and Transparency, SEL has introduced a Whistle Blowing Policy. The Policy provides an avenue to employees / trainees and vendors to raise concerns and report legal and ethical issues like fraud, corruption or any other unlawful conduct or dangers to the public or the environment.

21. General Discipline

    Every employee / trainee must adhere to Company's rules of service and make sure that he / she is familiar with all of them.

22. Reporting Violations / Disciplinary Actions

Any violation of this Code shall be promptly reported to the Human Resources department by any employee / trainee having knowledge thereof or having reasonable belief that such violation has occurred.

By the Order of the Board

JAVED IQBAL

Chief Executive Officer

I am pleased to welcome you on 35th Annual General Meeting of your Company and present, on behalf of the Board of Directors, audited financial statements for the year ended 30th June 2025 along with my review on the overall performance of the Board of Directors.

The performance of the Board of Directors is satisfactory as evident from the operational results of the Company. The Board has been playing effective role and guidance to the management of the Company. Moreover, the management of the Company has managed rescheduling at competitive terms as a step towards viability of the Company in the long run.

The Board complied with the requirements as set out in the Companies Act, 2017 and the Listed Companies (Code of Corporate Governance) Regulations, 2019 with respect to the composition, procedures and meetings of the Board of Directors and its committees. As required under the Code of Corporate Governance, an annual evaluation of the Board of Directors has been carried out and found satisfactory.

The overall performance of the Board remained up to mark under the given circumstances. The Board is endeavoring hard for the achievement of Company's objectives, including its Vision and Mission Statements. The Board also meets frequently to discharge its responsibilities in a timely manner.

On my behalf and on behalf of the Board of Directors of the Company, I take this opportunity to acknowledge the dedicated and sincere services of employees of the company. I am also grateful to our financial institutions, shareholders, vendors and valued customers who are reposing confidence in such difficult circumstances.

Faisalabad Ms. Noureen Javed

November 07, 2025 Chairperson

The Board of Directors of Sitara Energy Limited feels pleasure in submitting Annual Report along with audited Financial Statements and Auditors' Report thereon for the financial year ended June 30, 2025.

Financial Results

The sales revenue of the Company decreased to Rs. 176.070 million in financial year 2025 in comparison with Rs. 916.056 million in financial year 2024 due to fall in demand by our Bulk Power Consumers (BPCs). The key factor for fall in demand is higher electricity cost on account of exorbitantly high fuel price during financial year 2025. Accordingly, gross loss of the Company is Rs. 38.592 million in financial year 2025 as compared with gross profit of Rs. 7.270 million in financial year 2024.

During the current financial year 2025, the Company disposed of certain investment properties for the purpose repayment of rescheduled credit facilities which resulted into substantial reduction in finance cost to Rs 53.923 Mln in comparison with last year Rs 163.235 Mln. Further, SBP policy rate also reduced to 11% in May 2025 starting from gradual reductions from 19.50% in July 2024, a key factor in the reduction of cost of funds.

Accordingly, the Company earned a net profit of Rs 167.137 million during current financial year 2025 as compared with net profit of Rs. 41.991 million during last financial year 2024. Accordingly, earning per share increased to Rs 8.75 during the current financial year as compared with earnings per share of Rs 2.20 during the last financial year.

Financial results for the year ended June 30, 2025 are summarized below

Corporate and Financial Reporting Framework

In compliance of the Code of Corporate Governance, we give below the statement on corporate and financial reporting frame work:

1. The financial statements have been drawn up in conformity with the requirements of the Companies Act, 2017 and present fairly its state of affairs, operating results, cash flow statement and statement of changes in equity.

2. Proper books of accounts have been maintained.

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

4. International Financial Reporting Standards, as applicable in Pakistan, have been followed in preparation of financial statements and any departures therefrom has been adequately disclosed and explained.

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

6. There has been no material departure from the best practices of Code of Corporate Governance, as detailed in listing regulations.

7. Summary of key operating and financial data for the last ten years is annexed.

8. Cost of investments of Staff Provident Fund Trust as at June 30, 2025 was Rs. 4.603 million.

9. During the year four meetings of the Board of Directors were held. Attendance by each director was as follow: -

   Name	Designation	Meetings Attended
   Mrs. Noureen Javed	Chairperson	4
   Mr. Javed Iqbal	Chief Executive Officer	4
   Ms. Haniah Javed	Director	4
   Mr. Shahid Hameed Sheikh	Director	4
   Mr. Sheikh Javaid Islam	Director	4
   Mr. Mubashir Ahmed Zareen	Director	4
   Mr. Tahir Ibrahim	Director	4
   Mr. Ijaz Ahmad Babar	Chief Financial Officer	4
   Mr. Mazhar Ali Khan	Company Secretary	4

10. During the year, four meetings of the Audit Committee were held. Attendance by each member was as follow: -

    Name	Designation	Meetings Attended
    Mr. Shahid Hameed Sheikh	Chairman	4
    Mr. Sheikh Javaid Islam	Member	4
    Mr. Tahir Ibrahim	Member	4

11. During the year, two meetings of the Human Resource and Remuneration Committee were held. Attendance by each member was as follow: -

    Name	Designation	Meetings Attended
    Mr. Mubashir Ahmed Zareen	Chairman	2
    Mr. Javed Iqbal	Member	2
    Ms. Haniah Javed	Member	2

12. Pattern of Shareholding as at June 30, 2025 is annexed.

13. Following persons have shareholding of 5% and above in the company.

    Name of person	Shareholding
    Mr. Javed Iqbal, CEO	6,677,303
    Ms Nazia Aamir	1,895,500
    State Life Insurance Corporation of Pakistan	1,628,500
    National Bank of Pakistan	1,550,000
    Mr. Naureen Javed, Chairperson	1,073,237

    No trade in the shares of the company was carried out by its directors, CEO, CFO, Company Secretary and their spouses and minor children during the year 2024-25.

14. Statement of compliance with Code of Corporate Governance is also annexed.

15. All transactions with related parties and associated undertakings are carried out at arm's length price determined in accordance with comparable uncontrolled price method.

Directors'/Chief Executive Officer Remuneration

There is no change in Chief Executive Officer Remuneration from last year. The complete information on remuneration and perquisites is given in Note No. 37 to Financial Statements.

Web Reference

In compliance with SRO 634 (1)/2014 dated July 10, 2014, the company is maintaining a functional website. Annual, half-yearly and quarterly reports and other notices are regularly posted at the company's website address (https://http://www.sitara.pk).

Related Parties

Transactions with related parties were carried out at arm's length prices determined in accordance with the comparable uncontrolled prices method. The Company has fully complied with the best practices on transfer pricing as contained in the Listing Regulations of Stock Exchanges in Pakistan.

Human Resources Management

Our commitment to excellence plays a significant role in our ability to be successful. This commitment enables us to continue investing behind talent development of our people across all functional departments. They are provided with a learning environment that encourages and fosters new ideas, initiatives and teamwork.

Corporate Social Responsibility

It is Company's policy to contribute to the uplift and welfare of the community in order to fulfill its social responsibility. During the year 2025, the Company has donated Rs. 784,620 (2024: Rs 617,350) to the welfare institution operating in the fields of education.

Future Prospects and Outlook

The profitability of the Company during financial year 2025-26 will depends upon viable prices of fuels (RFO & RLNG) and offering of competitive tariff to our BPCs. Moreover, the Company is adding solar power plant in its generation facilities and will continue its addition during succeeding years subject to conducive regulatory frame work and timely approvals. Addition of solar power plant will help in the reduction of cost of generation and viable tariff for BPCs in the long run.

Appellate Tribunal (NEPRA) vide its decision dated 13.06.2024 set aside the impugned decisions dated 14.04.2017 and 19.12.2019 passed by NEPRA Authority with the direction decide the same afresh with statutory period, in accordance with law and rules. The management of the Company is confident for a favorable decision.

Auditors

The auditors of the company M/S RSM Avais Hyder Liaquat Nauman, Chartered Accountants, retire and being eligible has offered themselves for re-appointment. The Audit Committee has recommended re-appointment of the retiring auditors.

Appreciation

The Board of Directors appreciates all its stakeholders for their trust and continued support to the Company. The Board also recognizes the contribution made by its dedicated team of professionals and all employees who served the Company with great passion and zeal in difficult times.

Javed Iqbal Sheikh Javaid Islam

Chief Executive Officer Director

November 07, 2025 Faisalabad

2025 07

617,350 2024

784,620

5

4.603

SITARA ENERGY LIMITED PATTERN OF SHAREHOLDINGS

As at June 30, 2025

SITARA ENERGY LIMITED PATTERN OF SHAREHOLDINGS

As at June 30, 2025

Detail of Purchase/Sale of company's shares by Directors, Company Secretary, Head of Internal Audit Department, Chief Financial Officer and their spouses/minor children during 2024-2025.

NIL

Following persons have shareholding of 5% and above in the company.

KEY OPERATING AND FINANCIAL DATA FOR THE LAST TEN YEARS

20

Sitara Energy Limited

PARTICULARS 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016

Rupees in thousand

Name of Company: SITARA ENERGY LIMITED

Year Ended: June 30, 2025

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

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

   Gender	Number
   Male	5
   Female	2

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

   Category	Names
   Independent Director	Mr. Shahid Hameed Sheikh Mr. Mubashir Ahmed Zareen Mr. Sheikh Javaid Islam
   Non-Executive Director	Mr.Tahir Ibrahim
   Executive Director	Mr. Javed Iqbal
   Female Director	Mrs. Naureen Javed Ms. Haniah Javed

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 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 board;

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

9. Six (06) directors have already completed directors' training program in prior years. The remaining One (01) director shall obtain certification under the DTP in due course of time;

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;

    STATEMENT OF COMPLIANCE

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

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

       • Mr. Shahid Hameed Sheikh, Independent Director (Chairman)

       • Mr. Sheikh Javaid Islam, Independent Director (Member)

       • Mr. Tahir Ibrahim, Non- Executive Director (Member)

    2. Human Resource & Remuneration Committee

       • Mr. Mubashir Ahmed Zareen, Independent Director (Chairman)

       • Mr. Javed Iqbal, Chief Executive (Member)

       • Ms. Haniah Javed, Non-Executive Director (Member)

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: Four meetings during the financial year ended June 30, 2025

    2. HR and Remuneration Committee: Two meetings during the financial year ended June 30, 2025

15. The board has set up an effective internal audit function which is 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.

19. Explanation for non-compliance with requirement, other than regulations 3,6,7,8,27,32,33 and 36 are below:

Faisalabad Ms. Naureen Javed

Dated: 07 November 2025 Chairperson

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Qualified Opinion

We have audited the annexed financial statements of Sitara Energy Limited (the Company), which comprise the statement of financial position as at June 30, 2025 and the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity, the statement of cash flows for the year then ended, and notes to the financial statements, including 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, except for the possible effects of the matters described in "Basis for Qualified Opinion" section of our report, the statement of financial position, the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows together with the notes forming part thereof conform with the accounting and reporting standards as applicable in Pakistan and give the information required by the Companies Act, 2017 (XIX of 2017), in the manner so required and respectively give a true and fair view of the state of the Company's affairs as at June 30, 2025 and of the profit, other comprehensive income, the changes in equity and its cash flows for the year then ended.

Basis for Qualified Opinion

An advance for purchase of land amounting to Rs. 16.50 million (refer Note 14) and trade debts of Rs. 356.64 million (Refer Note 42.2.1) are long outstanding / past due, however, no assessment and no provision, on the basis of expected credit loss (ECL) method, have been made in respect of these balances, as required under IFRS 9. In the absence of such assessment, the quantum of provision required under IFRS 9 cannot be determined, however, in our view, the quantum is expected to be material considering the quantum of such long outstanding / past due amounts.

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

Material Uncertainty relating to Going Concern

The Company suffered financial and operational difficulties. These conditions as set forth in Note 1.3, indicates the existence of a material uncertainty which may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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 as separate opinion on these matters.

In addition to matters described in the "Basis for Qualified Opinion" and "Material uncertainty relating to Going Concern" section of our report, we have determined the matter described below as the Key audit matter:

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

Management is responsible for other information. The other information comprises the information in the annual report, but does not include the financial statements and our auditor's report thereon.

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

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

Responsibilities of Management and Board of Directors for the Financial Statements

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

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

Board of directors 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:

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

2. Except for the possible effects of the matters described in "Basis for Qualified Opinion" section of our report, the statement of financial position, the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows together with the notes thereon have been drawn up in conformity with the Companies Act, 2017 (XIX of 2017). These 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. no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980).

The engagement partner on the audit resulting in this independent auditor's report is Inam ul Haque.

RSM AVAIS HYDER LIAQUAT NAUMAN CHARTERED ACCOUNTANTS

Place: Lahore

Date: 07 November 2025

UDIN: AR202510226nbhfIK9Ra

INDEPENDENT AUDITOR'S REVIEW REPORT

TO THE MEMBERS OF SITARA ENERGY LIMITED

Review Report on the statement of Compliance contained in Listed Companies (Code of Corporate Governance) Regulations, 2019

We have reviewed the enclosed Statement of Compliance with the listed companies (Code of Corporate Governance) Regulations, 2019 (the Regulations) prepared by the Board of Directors of Sitara Energy Limited (the Company) for the year ended June 30, 2025 in accordance with the requirements of regulations 36 of the Regulations.

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

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

The Regulations require the Company to place before the Audit Committee, and upon recommendation of the Audit Committee, place before the Board of Directors for their review and approval, its related party transactions. We are only required and have ensured compliance of this requirement to the extent of the approval of the related party transactions by the Board of Directors upon the recommendations of the Audit Committee.

Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Company's compliance, in all material respects, with the requirements contained in the Regulations as applicable to the Company for the year ended June 30, 2025.

RSM AVAIS HYDER LIAQUAT NAUMAN CHARTERED ACCOUNTANTS

Place: Lahore

Date: 07 November 2025

UDIN: CR202510226mOh3xEtVj