Parwaaz Financial Services Limited ("PFSL" or "the Company") was incorporated on December 23, 2020, under the Companies Act 2017. The Company obtained its license to provide Investment Finance Services as a Non-Banking Finance Company (NBFC) under the Non-Banking Finance Companies (Establishment and Regulation) Rules 2003 (NBFC Rules) and the Non-Banking Finance Companies and Notified Entities Regulations, 2008 (the NBFC Regulations) on June 22, 2021. PFSL is a wholly owned subsidiary of Karandaaz Pakistan Limited ("KRN") and is mandated to deliver financing solutions that promote the growth and financial inclusion of Micro, Small and Medium Enterprises (SMEs) qualified as such under the International Finance Corporation's (IFC) definition. The Company commenced operations in 2022, offering both short-term and long-term credit facilities to SMEs across various sectors, particularly agricultural and industrial value chains, health, education, and renewable energy. Additionally, the Company finances SMEs through programs developed and managed by KRN in its capacity as the sponsor.As of March,2026, the Company’s Gross Loan Portfolio was recorded at PKR 3,560 mln.

The Company is a wholly owned subsidiary of Karandaaz Pakistan Ltd. (KRN), which holds a 99.99% stake in PFSL, with the remaining minority shares held by individual investors. The ownership structure is considered stable, considering that the majority stake is held by the parent entity. However, the sponsor may add another party going forward to further strengthen the equity base of the Company. The strong business acumen of the sponsors is demonstrated by their presence in the related industry since 2014, making substantial investments across multiple sectors reflecting a strong business profile and relevant experience. As of June 2025, KRN reported an asset base of ~PKR 49.5 billion. KRN has also strategic investments in several entities. Furthermore, the presence of the Foreign Commonwealth & Development Office, UK (FCDO), and the Bill and Melinda Gates Foundation (BMGF) as founding partners enhances the sponsor's financial strength.

The Company boasts a robust governance structure. The Board of Directors, consisting of seven members — two independent directors, including the Chairman; four nominee directors, one of whom is female; and one executive director (the CEO) — demonstrates adherence to the principles outlined in the Code of Corporate Governance. All board members are seasoned professionals with extensive experience in relevant fields. Notably, Mr. Shehzad Naqvi, the Chairman, brings over three decades of leadership experience across global and emerging markets, having held top executive roles at major financial institutions including Citigroup, ABN AMRO, and Royal Bank of Scotland. The independent directors are also highly regarded for their substantial expertise and industry exposure, as reflected in the profiles of Mr. Yameen Kerai, a qualified Chartered Accountant and former President & CEO of NIB Bank with extensive regional experience across Pakistan, Singapore, and Canada, and Mr. Navid Goraya, who brings over 25 years of global experience in asset management, investment strategy, and corporate finance across the US, Middle East, and South Asia. The nominee directors comprise Ms. Shumaila Rifaqat, a Harvard-educated public policy specialist and representative of KRN; Mr. Sharjeel Murtaza, Chief Digital Officer at KRN with over 18 years of digital transformation experience; and Mr. Amir Naeem, a Fellow Cost and Management Accountant with over 26 years of experience in financial management, regulatory compliance, and ESG-driven sustainability. Mr. Javed Iqbal serves as the executive director and CEO, bringing 30 years of banking experience across investment, corporate, commercial, and SME banking. The board maintains oversight through four committees: Human Resource Committee, Risk Management Committee, Information Technology Committee, and Audit Committee. These committees enhance the board's effectiveness in overseeing the management's performance and guiding the overall direction of the Company. The board and its committees convene at regular intervals with a predefined agenda, and meeting points are appropriately documented and communicated to the relevant stakeholders. The financial transparency of the Company is supported by the presence of A. F. Ferguson & Co. as the external auditors of the Company, who are among the Big Four and are listed in Category A on the State Bank of Pakistan's panel of auditors. They have issued an unqualified opinion on the Company's financial statements for the year ended December 2025.

The Company has a well-defined organizational structure with six functional departments: (i) Business, (ii) Risk & Compliance, (iii) IT, (iv) HR & Admin, (v) Finance & Secretariat, and (vi) Digital Services. All functional heads report directly to the CEO. Each department features a multi-layered management hierarchy, facilitating smooth operations. All the key positions are filled with a competent and experienced management team with diverse expertise in their respective fields. Mr. Javed Iqbal, the CEO, has over three decades of experience in investment, corporate, commercial, and SME banking. He is supported by a seasoned senior management team including Mr. Atif Kauser, the Chief Risk and Compliance Officer, a Master's degree holder in Business Administration and possesses ~29 years of banking experience across various domains including risk management, credit evaluation, and financial control. Furthermore, Mr. Bilal Mohyuddin, the CFO, is a qualified chartered accountant with over 2 decades of experience in audit and financial services sector. PFSL has established three management committees. These committees, along with clearly defined roles and responsibilities within an optimized structure, enhance the efficiency of operational decision-making by bridging inter-departmental gaps and ensuring alignment with strategic goals. The company utilizes an in-house Management Information System (MIS) named Cascade for digitizing the Loan Origination and Management System.

The operating environment for NBFCs remains evolving, supported by improving macroeconomic indicators and lower borrowing costs following the monetary easing cycle. As of Dec'25, the NBFC sector accounted for approximately 8.6% of Pakistan’s overall financial sector assets. The sector's asset base expanded by ~10.3% during CY25, while lending-oriented segments continued to exhibit stronger growth, with Non-Bank Microfinance Institutions (NBMFIs), Investment Finance Companies (IFCs), and Modarabas recording asset growth of ~27.7%, ~16.1%, and ~19.4%, respectively. The SME financing segment continues to offer considerable growth potential, given the persistent financing gap and limited penetration of formal credit channels. Additionally, the microfinance industry maintained its growth trajectory, with aggregate Gross Loan Portfolio (GLP) of Microfinance Banks and MFIs/RSPs reaching PKR ~918bln as of 3MCY26 (CY25: PKR ~854bln). However, asset quality pressures remain evident, with PAR>30 for Non-Bank Microfinance Companies increasing to ~6.9% as of 3MCY26 (CY25: ~6.0%). Within this landscape, Parwaaz Financial Services Limited (PFSL) continues to strengthen its market presence. The Company's gross loan portfolio stood at PKR 3.56bln as of Mar'26 (Dec'25: PKR 4.1bln; Dec'24: PKR 3.57bln), while total assets amounted to ~PKR 4.59bln (Dec'25: PKR 4.49bln). During 3MCY26, PFSL generated total income of PKR 95mln and reported a profit after tax of PKR 10mln, compared to total income of PKR 367mln and a net loss of PKR 77mln during CY25. The improvement in earnings was supported by lower provisioning requirements and continued focus on portfolio quality. Funding support from the parent continues to underpin capital adequacy, with equity increasing to PKR 1.75bln as of Mar'26 (Dec'25: PKR 1.74bln). Going forward, the Company's strategy remains focused on prudent portfolio expansion, preservation of asset quality, and gradual digitization of lending operations. The risk management framework is supported by a board-approved policy and an internally developed Obligor Risk Rating (ORR) Model; however, independent validation of the model remains important to further enhance its effectiveness and transparency.

PFSL has implemented a comprehensive credit management framework incorporating defined limits for group and sector exposures. The Company maintains a dedicated risk management function responsible for evaluating financing proposals and ensuring compliance with internal credit policies and documentation requirements. PFSL remains exposed to market risk arising from fluctuations in interest rates, which may impact both funding costs and lending spreads. Competition from banks and other financial institutions within the SME financing space also necessitates prudent pricing and portfolio management. The Company's funding profile continues to comprise equity and subordinated funding from its parent company at concessional rates, providing support to profitability and capital adequacy. As of 3MCY26, shareholders' equity stood at PKR 1.75bln (CY25: PKR 1.74bln), translating into an equity-to-assets ratio of 38.1% (CY25: 38.8%). The leverage profile remained manageable, with the debt-to-equity ratio recorded at 1.6x as of Mar'26 (CY25: 1.5x). Going forward, the Company's ability to secure diversified funding sources at competitive rates, while maintaining asset quality and capitalization levels, will remain important for sustainable growth and profitability.

PFSL has issued its first privately placed Term Finance Certificate (PPTFC) of PKR 1,000mln (Green Bond) with a tenor of 3 years on 21st March,2025, whereas the drawdown was completed in May'2025. The underlying instrument and its framework’s compliance with SECP’s Green Bond guidelines and International Capital Market Association (ICMA)’s Green Bond Principles has been validated through second party consultation and certification from PET Nature (Pvt.) Ltd. The bond carries profit rate of 3 months KIBOR + 1%. The amortization of Principal will occur in four quarterly installments, during the last year and payable along with markup quarterly in arrears.

The claims of the Bond holders will rank superior to the claims of ordinary shareholders.

The underlying instrument is secured by a registered hypothecation charge on existing and future books debts, receivables, loan and advances of PFSL with 25% margin. Additionally, an amount equal to 1 (One) Quarter’s peak profit installment amount shall be required to be maintained throughout the tenor of the green bond issue as the debt service reserve requirement (“Debt Service Reserve Requirement”). The Debt Service Reserve Requirement will be arranged by Karandaaz Pakistan Limited, through cash held in a Debt Service Reserve Account (DSRA) which shall be a profit bearing account of KRN maintained with any "AA" rated financial institution. The Investment Agent shall have a lien and right of set off over and in respect of the funds in the DSRA, equivalent to the Debt Service Reserve Requirement (i.e. 1 quarter’s peak profit instalment amount), with such lien being held throughout the tenor of the Green Bond issue.