Transmission of Annual Report for the Year Ended 30.06.2025

Vision 02

Mission 02

Company Information 03

Notice of Annual General Meeting 04

Chairperson's Review 07

Directors' Report 08

Six Years Financial Summary 17

Pattern of Shareholding 18

Code of Conduct 20

Independent Auditor's Review Report 21

Statement of Compliance with the

Code of Corporate Governance 22

Independent Auditors' Report 26

Financial Statements 28

Circulation of Annual Audited Accounts 68

Proxy Form 69

Sitara Proxide Limited

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Strive to develop and employ innovative technological solutions to add value to business with progressive and proactive approach.

The Leading Chemical Company. Commitment towards uncompromised Reliability,

Quality, Services and Safety.

Assure customer the most complete value package to become chosen partner in customer's view.

High return generation for sustainable growth. View change as rule of life.

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ANNUAL REPORT 2025

Together with the employees, to ensure success.

MISSION STATEMENT

Better bottom line results with well contained risks through continuing growth and diversification.

Create opportunities for success through trusted and reliable partnership.

Board of Directors

Mr. Yasir Ahmed Awan

Chairman

Mr. Imran Ghafoor Chief Executive Officer Mrs. Sharmeen Imran Non-Executive Director

Mr. Haroon Ahmed Zuberi

Independent Director

Board Human Resource & Remuneration Committee

Mrs. Sharmeen Imran

Chairperson

Mr. Imran Ghafoor

Member

Mr. Saqib Anjum

Member

Registered Office

External Auditors RSM-Avais Hyder Liaqat Nauman

Chartered Accountants

Legal Advisor Sahibzada Waqar Arif

Mr. Junaid Makda

Non-Executive Director

Mr. Saqib Anjum

Non-Executive Director

Mr. Saim Bin Saeed

Independent Director

Chief Financial Officer

Mr. Shahid Irshad

Company Secretary

Mr. Mazhar Ali Khan

Head of Internal Audit

Mr. Hafiz M. Tariq

Audit Committee Mr. Saim Bin Saeed Chairman

Mr. Yasir Ahmed Awan

Member

Mr. Haroon Ahmed Zuberi

Member

Share Registrar

THK Associates (Private) Limited

Plot No. 32-C, Jami Commercial Street 2, DHA, Phase VII, Karachi - 75500, Pakistan.

UAN: (92 21) 111-000-322

Ph: (92 21) 35310183-84

Fax: (92 21) 35310191

601-602, Business Centre, Mumtaz Hassan Road, Off. I. I. Chundrigar Road, Karachi - 74000 Ph : (92 21) 32401373, 32413944

Company Website

https://www.sitaraperoxide.com.pk

Bankers

Al Baraka Bank (Pakistan) Limited Askari Bank Limited

Bank Alfalah Limited Faysal Bank Limited Habib Bank Limited MCB Bank Limited Meezan Bank Limited National Bank Limited Soneri Bank Limited

Standard Chartered Bank (Pakistan) Limited Bank Makramah Limited (BML)

United Bank Limited JS Bank Limited

First Women Bank Limited Bank Al Habib Limited

Habib Metropolitan Bank Limited

Head Office & Project Location 26 - KM Sheikhupura Road, Faisalabad.

Sitara Proxide Limited

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Ph : (92 41) 2600108, 2600747

Pursuant to the Notice of AGM published on November 12, 2025 in newspapers and informed to PSX, which was subsequently adjourned due to unforeseen issues, it has now been decided by the Board of Directors of the Company to convene the AGM on January 7, 2026, at the same venue and time.

Since one of the agenda items of the Annual General Meeting is the Election of Directors, and the new date has now been finalized, all members who wish to contest for the position of Director are advised to submit their Consent to Act as Director to the Company Secretary on or before December 24, 2025, at the Company's registered office.

Furthermore, all consents previously submitted for the Election of Directors are hereby declared null and void. Any member who had earlier submitted consent and still wishes to contest is required to resubmit their Consent to Act as Director of the Company.

The share transfer book of the Company will remain closed from December 31, 2025 to January 07, 2026 (both days inclusive) for determining voting rights. Transfers received at M/s. THK Associates (Private) Limited, Plot No. 32-C, Jami Commercial Street 2, D.H.A. Phase VII, Karachi. Tel: (021) 111 000 322, the Share Registrar of the Company by the close of business on December 30, 2025 will be treated in time to attend the meeting.

Notice is hereby given that the Annual General Meeting ("AGM") of Sitara Peroxide Limited (the "Company") will be held on Thursday, November 27, 2025 at 4:00 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 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.

2. 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

3. To elect 7 (seven) Directors of the Company as fixed by the Board of Directors in accordance with the provision of Section 159 of the Companies Act, 2017 ("the Act") for a term of three years commencing from November 27, 2025. The retiring Directors are as under:

   1. Mr. Imran Ghafoor 2. Mrs. Sharmeen Imran

      3. Mr. Yasir Ahmad Awan 4. Mr. Saim Bin Saeed

      5. Mr. Haroon Ahmed Zuberi 6. Mr. Saqib Anjum

      7. Mr. Junaid Makda

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

By Order of the Board

KARACHI Mazhar Ali Khan

November 7, 2025 Company Secretary

NOTES:

1. Book Closure

   The share transfer book of the Company will remain closed from November 21, 2025 to November 27, 2025 (both days inclusive) for determining voting rights. Transfers received at M/s. THK Associates (Private) Limited, Plot No. 32-C, Jami Commercial Street 2, D.H.A. Phase VII, Karachi. Tel: (021) 111 000 322, the Share Registrar of the Company by the close of business on November 20, 2025 will be treated in time to attend the meeting.

2. Election of Directors

   1. In terms of Section 159(1) of the Act, the Board has fixed the number of Directors at 7 (seven) through a resolution passed in the meeting of Board of Directors for a period of next 3 (three) years

   2. Any person who is desirous to contest the election of Director shall file with the Company a notice of his / her intention to offer himself / herself for election as a Director under Section 159(3) of the Act, along with the consent to act as a Director under Section 167 of the Act and a detailed profile along with office address, for placement onto the Company's website, in terms of SRO 1196(I)/2019 dated October 3, 2019 issued by Securities and Exchange Commission of Pakistan ("SECP") AGM.

      Furthermore, Declarations be provided, confirming being compliant with the requirements of the Listed Companies (Code of Corporate Governance) Regulations, 2019 ("the Code") and the eligibility criteria,

      NOTICE OF ANNUAL GENERAL MEETING

      for a director under Section 153 of the Act.

   3. A director must be a member of the Company at the time of filing his/ her consent for contesting election of directors except a person representing a member, which is not a natural person.

   4. The selection of Independent Directors will be complied with the requirements of Section 166 of the Act and Regulation 6 of the Code.

   5. The final list of contesting Directors will be circulated not later than 7 (seven) days before the date of the AGM, in terms of Section 159(4) of the Act, Further, the website of the Company will also be updated with required information.

3. Attending the Meeting

1. In case of individuals, the account holder or sub-account holder and/ or the person whose securities and registration details as 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 a corporate entity, the Board of the Director's resolution / power of attorney with specimen signature of the nominee shall be produced at the time of the meeting.

1. Appointment of Proxy

   A member entitled to attend and vote at the above meeting may appoint a Proxy to attend, speak and vote on his behalf at the meeting. Instrument appointing a proxy must be deposited at the Registered Office of the Company at least 48 (forty-eight) hours before the time of the meeting, along with attested copy of CNIC of the shareholder appointed as Proxy. For the convenience of shareholders, proxy forms (both in English and Urdu) are available on the company's website https://www.sitaraperoxide.com.pk.

   In the case of corporate entity, the Board of Directors' resolution/ power of attorney with specimen signature of the nominee shall be provided at least 48 (forty-eight) hours before the meeting. The individual members or representatives of corporate members of the Company in CDC must bring original CNIC or Passport and CDC Account and Participant ID Numbers to prove identity and verification at the time of the meeting.

   CDC Account Holders will further have to follow the guidelines as laid down in Circular No.1 dated January 26, 2000 issued by the Securities and Exchange Commission of Pakistan.

2. Postal Ballot

   Pursuant to Companies (Postal Ballot) Regulations, 2018, for the purpose of election of Directors, where in case number of contestants are more than the number of directors to be elected, members will be allowed to exercise their right to vote through postal ballot, that is voting by post or through any electric mode, in accordance with the requirements and procedure contained in the aforesaid regulations.

3. Virtual Participation in the AGM Proceedings

   Shareholders interested in attending the AGM virtually are hereby advised to get themselves registered with the company by providing the following information through email at election2025@sitaraperoxide.com.pk.

   Name of Shareholder	CNIC Number	CDC Account No./Folio No.	Cell Number	Email Address

   Online meeting link and login credentials will be shared with only those members whose emails, containing all the required particulars, are received at the given email address by 05:00 pm on Tuesday, November 25, 2025. The login facility shall remain open from 3:15 pm till the end of the meeting.

4. Consent for Video Conference Facility

   Pursuant to Section 132(2) of the Companies Act, 2017, members may avail video conference facility for this AGM, provided the Company receives consent from the members residing in a city holding aggregate 10% or more shareholding at least 7 days prior to the date of the meeting.

   NOTICE OF ANNUAL GENERAL MEETING

   In this regard, please send a duly signed request as per the following format at the

   
   
   

   Registered Office of the Company within prescribed timeline:

   The Company will intimate members regarding venue of video conferencing facility at least 5 days before the date of Annual General Meeting along with complete information necessary to enable them to access such facility.

5. Conversion of Physical Shares into Book-Entry Form

   As per Section 72 of the Act, all listed companies are required to replace shares issued by them in physical form to book-entry form.

   Accordingly, all shareholders of Sitara Peroxide Limited having physical folios / share certificates are requested to convert their shares into book-entry form at the earliest. Maintaining shares in book- entry form will make the process of share handling more efficient and risk free and will facilitate shareholders in the safe custody of shares. Shareholders may contact the Company or Share Registrar, M/s. THK Associates (Private) Ltd for the conversion of physical shares into book- entry form.

6. 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, in case of non-availability of a valid copy of Shareholders' CNIC in the records of the Company, the Company shall withhold the Dividend under the provisions of Section 243 of the Act.

7. 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.sitaraperoxide.com.pk) and send at the Company's address.

8. Change of Address

   The Shareholders are requested to immediately notify the change in their mailing address, if any, to the Company's Share Registrar.

9. Website

The Notice of Annual General Meeting has been placed on the Company's website https://www.sitaraperoixde.com. pk. in addition to its dispatch to the shareholders.

Appointment of Scrutinizer

In accordance with the Regulation 11 of the Companies (Postal Ballot) Regulations, 2018 (the "Regulation"), the Board of the Company has appointed M/s. RSM Avais hyder Liaquat Nauman, Chartered Accountants, a QCR rated audit firm, to act as scrutinizer of the Company for

election of Directors in the meeting and to undertake other responsibilities as defined in regulation 11A of the Regulation.

Statement of Material Facts under Section 166(3) of the Companies Act, 2017 in respect of Election of Directors

Independent Directors will be elected through the process of election of directors in terms of Section 159 of the Act, and they meet the criteria laid down under Section 166(2) of the Act and shall be listed on the data bank of Independent Directors maintained by Pakistan Institute of Corporate Governance. Further their selection shall be made due to their respective core competencies, diversity, skill, knowledge and experience.

(On the overall performance of the Board u/s of Companies Act 2017)

Dear Shareholders,

It is my great pleasure to present the review report as mandated u/s 192 of the Companies Act, 2017, that I address the performance of Sitara Peroxide Limited ("Company" / "SPL").

As stated in my previous 2024 review report, the Management needs to perform towards the company and its shareholders with sincerity, diligence, care and foresight required for success.

Furthermore, running the operations in the profitable manner and with dividend's to the shareholders is of paramount importance.

Overall performance of the Board

For the financial year ended June 30, 2025, Board's overall performance and effectiveness has been assessed as fair. The Board elections are due in the upcoming AGM.

As we move to address these critical challenges, it is clear that a reconstitution of the management team is imperative. The new Management must reinvigorate the processes to ensure transparency and timely communication of all significant operational developments to its shareholders.

Rest assured, best possible efforts are being made.

November 07, 2025 Yasir Ahmed Awan

Lahore. Chairman

The board of directors of the Company is pleased to present annual audited financial statements along with auditors' report thereon for the year ended 30th June 2025.

Business and financial review

Financial year 2025 has been another challenging year for the Company in view of overall restructuring of the company and economic conditions of the country. The key financial highlights of financial year under review are as follows.

The management of the company took austerity measures to reduce expenses, including finance cost. During the current financial year , the company incurred (Loss) before levies and income tax Rs 311.354 million, including depreciation Rs 180.263 million, as compared with loss for corresponding financial year Rs 305.511 million, including depreciation Rs 183.818 million. Further, loss per share (after provision for taxation) for current year increased to Rs.4.04 in comparison with loss for corresponding financial year Rs.3.07. The reasons for losses are the closure of the plant for envisaged Balancing, Modernization and Replacement (BMR). The company cannot be run in profits without complete BMR which will ensure expansion in capacity, improved yield & efficiency and viable operations on long term basis.

The repayment to the financial institutions were made in order to avoid litigation and consequential huge litigation cost and default while envisaged BMR is pending for want of requisite financing either through right issue or fresh financing from financial institutions. The board of directors had already approved funding requirement of Rs 1,500,000,000 in December 2023.

A Settlement Agreement was signed on 29th December 2023 with UBL (Trustee of Sukuk Certificate Holders) with an agreed Settlement Amount Rs 167,160,603 along with future cost of fund with effect from October 1, 2023 till full and final payment of Settlement Amount on or before 30.06.2024. This agreement has been extended till 30.11.2025, through making partial payments amounting to Rs 81.500 million from time to time out of internal resources including interest free loan from Chief Executive Officer under compelling circumstances in order to avoid default with the financial institutions, protracted litigations and heavy legal expenses thereon. The export proceeds of palladium catalyst has been received in the subsequent period and waiver of accrued rental component and deferred rental component amounting to Rs 296,696,690 will be availed in terms of aforesaid Settlement Agreement. The management of the Company also prepaid Rs 131.753 million (prepayment/adjustments) to Askari Bank Ltd against Demand Finance Facility of Rs

147.214 million during the last financial year 30.06.2024 and remaining balance Rs 15.461 million is under negotiation for application of cost of fund on the entire amount and substantial relief thereon at the time of full & final settlement in due course of time. The management is moving forward to achieve the status of debt free company in the foreseeable future.

However, the requisite repair and maintenance of the plant and machinery is being carried out during this shut down in spite of severe financial constraints and arrangements of additional finances.

Board of Directors

During the year, three (3) Board meetings were held and attended as follows:

The board of directors of the Company, representing the interests of all shareholders including minority stockholders, played its role effectively. There are four (4) non-executive directors, Two (2) independent director and one (1) executive director. The independent director has been representing non-controlling/ minority interests, while non-executive directors are possessing relevant industry and capital market experience. The status of directorship (independent, executive, non-executive) is indicated in the Statement of Compliance with the Code of Corporate Governance, issued by the Company. To ensure effective, efficient and independent decision making, the Board comprises of qualified professionals having knowledge, experience and expertise to run the affairs of the Company. In order to effectively monitor Company's performance and keep its management accountable, the board held three meetings.

The board held three (3) meetings during the year for which notices and agenda items were timely circulated. The decisions made during the board meetings were clearly stated in minutes of meetings maintained by Company Secretary and were duly circulated to all the directors for endorsement and were duly approved in the subsequent board meetings. The meetings of the board held during the year fulfilled minimum quorum requirements of attendance as prescribed by the applicable regulations and were also attended by Chief Financial Officer, Company Secretary and Senior Financial Adviser (by invitation)

Audit Committee comprises of three non-executive directors with chairman being an independent non-executive director. The Internal Audit Department, being a key component of the Company's internal control and risk governance framework, provides independent and objective evaluations on effectiveness of governance, risk management and control processes reporting directly to the Audit Committee.

Human Resource and Remuneration Committee comprise of two non-executive directors and one executive director with chairperson being a non-executive director.

Compliance with Corporate Governance

The board emphasizes on maintaining high governance standards across the Company. Being collectively responsible for the company's vision and strategic direction and its values, the board is accountable for business performance and long-term success of the company.

Within a framework of internal controls, the board provides leadership necessary for the company to meet its performance objectives and achievement of core values. Generally accepted best practices have been

implemented in addition to stipulated criteria and voluntary standards, with demonstration of highest level of moral and ethical values, in addition to decision making based on honesty and responsibility in keeping with business sense, through a top-down approach, flowing downwards to all individuals either serving or closely associated with the company.

Transparency in our operations and business decisions is prioritized with an equal importance to corporate accountability.

Corporate Governance exists at the very core of our policies for structuring, operating and controlling the company with a view to achieve long term strategic goals to satisfy shareholders, creditors, employees, customers and the suppliers. Adherence to the best ethical practices and compliance with applicable legal and regulatory requirements is ensured in a manner that is environment and people friendly and supports the local community needs.

Understanding that good corporate governance is an essential prerequisite for the integrity and credibility of any company, building confidence and trust by ensuring fairness and accountability, we surpass the minimum legal requirements for good corporate governance. Our board has laid down solid foundations, which are reviewed and updated periodically, of oversight and management of the company, through establishing a clear division of responsibilities between the chairman and the board, recognizing respective roles of the board and management and establishing an effective ethics and compliance framework.

As required under the Code of Corporate Governance, the directors are pleased to state as follows:

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

• Proper books of account have been maintained by the company.

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

• International Financial Reporting Standards, as applicable in Pakistan, have been followed in preparation of the financial statements and departures there from, if any, have been adequately disclosed.

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

• There are no significant doubts on 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.

Pattern of Shareholding

The pattern of shareholding of the company is annexed. No trading was made in shares of the Company by its Directors, CEO, CFO, Company Secretary, their spouses and minor Children, except as disclosed in pattern of shareholding.

Employees Benefit Plan

The Company operates a non-funded defined benefit plan (gratuity scheme) for its permanent employees. The latest actuarial valuation was carried out on July 11, 2025.

Remuneration to Chief Executive Officer, Directors And Executives

Detailed information regarding remuneration to Chief Executive Officer, Directors and Executives has been disclosed in Note. 33 to the financial statements.

Auditors:

The existing external Auditors M/S RSM Avais Hyder Liaquat Nauman, Chartered Accountants, shall retire on the conclusion of 22nd annual general meeting.

M/S RSM Avais Hyder Liaquat Nauman, Chartered Accountants have offered themselves for appointment as external auditors of the company for financial year ending June 30, 2026. The audit committee has recommended appointment of aforesaid M/S RSM Avais Hyder Liaquat Nauman, Chartered Accountants as external auditors of the company for the financial year ending June 30, 2026.

Future Outlook, Risks and Uncertainties :

The management of the company is making efforts for the envisaged BMR which will be financed either through equity and/or loans from the shareholders and financial institutions , with due support from the board of directors. The aforesaid funding will be utilized to import state of the art plant & machinery to enhance production capacity, bring in efficiency and improved yield resulting into significant reduction in the cost of production and competitiveness in the market. There is a potential for the product of the company, nationally and internationally. The management of the company will be able to fetch back its share after completion of envisaged BMR in the foreseeable future.

Chief Executive Officer (CEO) has already given an interest free loan of Rs. 387.508 million to the company over the years to support operations, repayment to financial institutions and other liabilities and meet all emergent needs of the company under compelling circumstances and in the supreme interest of the all stakeholders.

The company need an immediate electric connection from distribution company (FESCO) for prime load operation as a part of its BMR plan while existing in-house captive power plant can only serve as standby load. Other contingent liabilities have been fully explained in Note 17.2 and Note 22 to the financial statements.

During the pendency of funding arrangements and the requisite BMR, the statutory auditors expressed "disclaimer of opinion" in the Independent Auditor's Report for the year ended 30.06.2025.

In view of the aforesaid actions and strategies, the management of the company is confident to implement envisaged BMR and viable operation of the company in the foreseeable future.

Acknowledgements:

The management of the company is thankful to the financial institutions, the shareholders, the suppliers, the dealers, the customers, , the employees who supported the company during this difficult time.

For and on behalf of the Board of Directors

HAROON AHMED ZUBERI IMRAN GHAFOOR

Director Chief Executive Officer

November 07, 2025

Sitara Proxide Limited

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ANNUAL REPORT 2025

Sitara Proxide Limited

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ANNUAL REPORT 2025

AS AT JUNE 30, 2025

AS AT JUNE 30, 2025

Detail of purchase/sale of shares by Directors, Company Secretary, Head of Internal Audit Department, Chief Financial Officer and their spouses/minor children during 2024-2025.

Mrs. Sharmeen Imran (Director) purchased =410,000= shares during the year. Following persons have shareholding of 5% and above in the company.

It is a fundamental policy of Sitara Peroxide 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 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.

• Directors should take steps to ensures 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.

• Directors and employees must maintain the confidentiality of information entrusted to them by the Company and any other confidential information about the Company.

• Directors and employees must avoid any conflict of interest between them and the Company. Any situation that involves, or may reasonable be expected to involve, a conflict of interest with the Company, should be disclosed promptly.

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

• Directors and employees 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.

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

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

• The Company's activities and operations will be carried out in strict compliance with all applicable laws and the highest ethical standards. The directors and employees will ensure that the Company deals in all fairness with its customers, suppliers and competitors.

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

• 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.

• Company will support and respect the protection of international human rights within its sphere of influence, in particular the effective elimination of all sorts of compulsory labour and child labour, and it will make this a criterion in the choice and management of its suppliers and sub contractors.

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

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

• In order to enhance good governance and transparency, Company has introduced a Whistle Blowing Policy. The Policy provides an avenue to employees, vendors and customers to raise concerns and report illegal and unethical issues like fraud, corruption or any other unlawful conduct or dangers to the public or the environment.

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

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

TO THE MEMBERS OF SITARA PEROXIDE 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 Peroxide 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 noncompliance with the requirenments 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 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 control or to form an opinion on 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.

Further, we highlight below instance of non-compliance with the requirement of Regulations, as reflected in the note 18 where these are stated in the statement of compliance:

Reference : DESCRIPTION

28 (2) As per the Code of Corporate Governance, Chairman of the "Human Resource & Remuneration Committee" shall be an Independent Director However, the board has appointed a Non-Executive Director to this position.

28 (3) The Human Resource & Remuneration Committee to meet at least once during the financial year. However, no meeting was held during the year under review, resulting in non-compliance.

20 The Board shall appoint, determine remuneration, and renew contracts and terms of employment for the Head of Internal Audit. The Head of Internal Audit resigned in July 2023, and the position is still vacant.

31 There shall be an internal audit function in every company. This obligation has not been fulfilled.

27 (2)/34 The Code of Corporate Governance requires the Audit Committee to meet quarterly before the Board approves interim financial results. Financial statements along with director report during the period from July 2024 to June 2025, except for one quarter, were not filed on time resulting in non-compliance of filing of financial statement and conducting the board meeting and audit committee meeting.

RSM AVAIS HYDER LIAQUAT NAUMAN CHARTERED ACCOUNTANTS

Place: Faisalabad.

Date: 07-11-2025

UDIN: CR202510194KhCEupaVi

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

Name of Company: SITARA PEROXIDE 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:

   Male 6

   Female 1

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

   Category	Names
   Independent Director	Mr. Saim Bin Saeed Mr. Haroon Ahmed Zuberi
   Executive Directors	Mr. Imran Ghafoor
   Non-Executive Directors	Mr. Yasir Ahmed Awan Mr. Saqib Anjum Mr. Junaid Makda
   Female Director	Mrs. Sharmeen Imran

   The company did not round up independent director's fraction, as the company is confident that two independent directors are sufficiently qualified and have requisite competencies, skills, knowledge and experience to discharge and execute their duties competently, as per applicable laws and regulations. They fulfill the necessary requirements as per applicable laws and regulations.

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 recording and circulating minutes of meeting of board and in total three (3) board meetings were held due to discontinuance of operations;

8. The board has 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. 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;

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

       	Independent Director	(Chairman)
       	Non-Executive Director	(Member)
       	Independent Director	(Member)

       • Mr. Saim Bin Saeed

       • Mr. Yasir Ahmad Awan

       • Mr. Haroon Ahmed Zuberi

    2. Human Resource & Remuneration Committee

       • Mrs. Sharmeen Imran Non-Executive Director (Chairperson)

       • Mr. Imran Ghafoor Chief Executive Officer (Member)

       • Mr. Saqib Anjum 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 was as per following:

    1. Audit Committee: Three meetings during the financial year ended June 30, 2025

    2. HR and Remuneration Committee: No meetings during the financial year ended June 30, 2025.

15. The company has no Internal Audit function during the year due to non-continuation of operation. Head of the internal audit resigned in July, 2023.

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 except for the following as mentioned below:

    Sr. No	Mandatory Requirement	Explanation	Reg No
    1	Chairman of Human Resource & Remuneration Committee: As per the Code of Corporate Governance, Chairman of the "Human Resource & Remuneration Committee" shall be an Independent Director.	The Board of Sitara Peroxide Limited has appointed their Non-Executive Director Mrs. Sharmeen Imran as the Chairman of Human Resource & Remuneration Committee which is a non-compliance of the Code of Corporate Governance.	28 (2)
    2	Meetings of Human Resource and Remuneration Committee: The committee shall meet at least once in a financial year and may meet more often if requested by a member of the Board, or committee itself or the chief executive officer.	Due to the discontinued operations of the company, no Human Resource Committee meeting was held during the financial year.	28(3)
    3	Head of Internal Audit of company: The Board shall appoint, determine remuneration, renew contracts and terms and conditions of employment of head of internal audit of the company.	Head of Internal Audit resigned in July 2023 and internal audit function is being run as stop gap arrangement till fill up of vacancy due to closure of operations.	20
    4	Composition of internal audit function: There shall be an internal audit function in every company.	The internal audit function is being carried out as an interim arrangement until the position is filled, following the closure of operations.	31

    5	Meetings of the audit committee/Board of directors: The audit committee of a company shall meet at least once every quarter of the financial year. These meetings shall be held prior to the approval of interim results of the company by its Board and after completion of external audit.	Due to the discontinuation of the company's operations, financial statements were not filed on time during the period from July 2024 to June 2025. As a result, the Audit Committee / Board of directors was unable to fulfill the requirement to conduct timely meetings.	27(2)/10
    6	Directors' Report: The quarterly financial statements of companies shall be published and circulated along with directors' report on the affairs of the company.	The company did not prepare its quarterly financial statements in a timely manner, as a result of which the Directors' Reports on quarterly basis were not timely published.	34

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

(Mr. Imran Ghafoor) (Mr. Haroon Ahmed Zuberi)

Chief Executive Officer Director

Lahore

Dated: November 7, 2025

Sitara Proxide Limited

27

To the members of Sitara Peroxide Limited

Report on the Audit of the Financial Statements Disclaimer of Opinion

We were engaged to audit the annexed financial statements of Sitara Peroxide Limited (the Company) which comprise the statement of financial position as at June 30, 2025, 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.

We do not express an opinion on the accompanying financial statements of the Company. Because of the significance of matters described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.

Basis for Disclaimer of Opinion

1. As described in Note 1.3 to the financial statements, the financial statements have been prepared on going concern basis. (a) As described in Note 1.3 to the financial statements, the financial statements have been prepared on going concern basis. The Company has incurred a net loss for the year of Rs. 222.52 million (June 30, 2024: Rs. 169.35 million), and as at June 30, 2025, current liabilities exceed current assets by Rs. 1104.99 million (June 30, 2024: Rs 973 million). The Company was unable to pay installments of long term financing of Rs. 101.73 million (June 30, 2024: Rs. 126.73 million). The plant of the company has remained shut down from June 12, 2023 to date. The Company is facing operational and financial problems. These factors indicate the existence of a material uncertainty, which may cast significant doubt about the company's ability to continue as going concern. However, the company's management is of the opinion that preparation of financial statements on going concern basis is appropriate in view of Balancing, Modernization and Rehabilitation (BMR) plans which require significant injection of funds. The sponsors' plan to inject further funds for BMR by exploring different funding options. The company has applied for rescheduling of its loans. The financial statements have been prepared on going concern basis on the assumptions that the company will be able to implement its BMR plan and sponsors will be able to generate and provide required funds to the company.

   We were unable to obtain sufficient and appropriate audit evidence in support of management's contention that the company and its sponsors would be able to provide required funding for BMR plans and working capital requirements of the company. therefore, we were unable to conclude whether the use of going concern assumption in preparation of financial statements is appropriate. If the plant operations of the company remained suspended for foreseeable future, the company may not be able to realize its assets and discharge its liabilities in the normal course of business.

2. The Company's property, plant and equipment is carried in statement of financial position at Rs. 2,146 million. The management has not performed an impairment assessment of the plant as required under International Accounting Standard 36 "Impairment of Assets, despite the plant of the Company has remained shut down from June 12, 2023 to date, moreover, the existing plant requires BMR to operate efficiently. We were unable to confirm or verify by alternative means whether any adjustments might have been found necessary in respect of property, plant and equipment, and the elements making up the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows.

3. Long term advances of Rs. 109.6 million and Advances to employees of Rs.8 million are long outstanding balances. These outstanding balances, in our opinion are impaired against which no provision has been made. Had the provision been made, the loss for the year would have been increased by Rs. 117.6 million and accumulated loss by Rs. 117.6 million.

4. Physical existence and valuation of inventories as of June 30, 2025 Rs.338.4 million could not be verified by us in the absence of appropriate record and inherent limitation. Owing to the nature of company's record, we were unable to satisfy ourselves as to inventory quantities and valuation by other audit procedures.