Octopus Digital : Transmission of Annual Report for the Year Ended 31 December 2023

1

Letter from the

Chief Executive Officer

Dear Shareholders & Associates

Reflecting on the journey of Octopus Digital throughout 2023, I am immensely proud of the strides we have made and the successes we have achieved together. As CEO, leading this dynamic team has been an enriching experience, filled with mutual growth, learning, and triumphs.

Central to our endeavors this year was the introduction of our flagship propriety solution, OmniConnect™, to the market. The positive response from the market serves as a resounding validation of our offerings and reinforces our decision to scale our product line. Our foray into new territories, including the dynamic markets of the Middle East and the USA, highlights our dedication to spearheading digital transformation at a global level.

Our journey hasn't been solely about product innovation; it has

also encompassed deep dives into Machine Learning techniques and Industrial Analytics. After exploring these domains, we aim to stay at the forefront of industry trends and deliver unparalleled value to our clientele.

And during our product launches and technological explorations, our marketing efforts have been robust.

Thanks to our newly formed marketing and pre-sales teams, we've revamped our website and product portfolios, that has helped us with enhanced visibility and engagement so far. Our outreach activities have commenced with a steady pace, promising fruitful outcomes.

Looking ahead to the coming year, our focus remains on scaling our marketing initiatives and cultivating strategic partnerships to targeted international markets. The future is bright, and we are steadfast in our dedication to continue creating value for our stakeholders with

a key focus on accelerating sales in the coming year.

Finally, I extend my heartfelt gratitude to each member of the Octopus Digital family, our shareholders, and associates for their unwavering support and dedication.

Together, we will navigate the path ahead with resilience, innovation, and a relentless pursuit of excellence.

Yours Sincerely,

Tanveer Karamat

Chief Executive Officer

Octopus Digital Limited

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Company

Information

Board of Directors

Bakhtiar Hameed Wain

Director / Chairman

Tanveer Karamat

Director / Chief Executive Officer

Asmar Ahmed Atif

Director

Adeel Khalid

Director

Mohammad Shahid Mir

Director

Mohammad Arif Janjua

Director

Saleha Asif

Director

Faisal Nadeem Sheikh

Chief Financial Officer

Ahsan Khalil

Company Secretary

Board Audit Committee

Mohammad Shahid Mir

Chairman

Bakhtiar Hameed Wain

Member

Mohammad Arif Janjua

Member

Human Resource &

Renumeration Committee

Mohammad Shahid Mir

Chairman

Bakhtiar Hameed Wain

Member

Tanveer Karamat

Member

Auditors

BDO Ebrahim & Co.

Chartered Accountants

Bankers

Faysal Bank Limited, Pakistan

JS Bank Limited,

MCB Islamic Bank Pakistan

Dubai Islamic Bank

Share Registrar

FAMCO Share Registration Services

(Pvt.) Ltd

8-F, Next to Hotel Faran, Nursery, Block-6, P.E.C.H.S, Shahra-e-Faisal, Karachi. Phone: [phone] Fax No: [phone] www.famcosrs.com

Registered Office

The Avanceon Building

19-KM , Main Multan Road, Lahore 54660, Punjab, Pakistan Phone: [phone] Fax No: [phone] Email: [e-mail]

Legal Advisor

Chima & Ibrahim Advocates and Corporate Counsel

Web Presence

www.octopusdtl.com

www.avanceon.ae

www.avanceon.qa

Headquarters

Lahore, Punjab, Pakistan

The Avanceon Building

19-KM, Main Multan Road, Lahore, 54660 Punjab, Pakistan Phone: [phone] Email: [e-mail]

Regional Headquarters

Karachi, Sindh, Pakistan

MA Tabba Foundation Building, First Floor, Gizri Road Block 9, Clifton Karachi, Sindh 75600 Phone: [phone] Email: [e-mail]

Regional Headquarters

- Middle East

Avanceon FZE - Dubai, UAE Office / Plot # MO-0240, Street # N403, Jabel Ali Free Zone (North) Po Box: 18590 Dubai, U.A.E Phone: [phone]

Octopus Digital FZ LLC

DMC-BLD05-VD-G00-792, ground floor, DMC5 Dubai Media City, U.A.E.

Phone: [phone]

Abu Dhabi, UAE

In Partnership with Ali & Sons

Ali & Sons Bldg., Zayed 2nd Street P.O. Box 915 Abu Dhabi, U.A.E. Phone: [phone]

Doha, Qatar

Avanceon Automation & Control WLL Office No. 12, M Floor, Al-Jaber Engg. HO Building, P.O. Box 15976, Fox Hills, Lusail, Doha, Qatar. Phone: [phone]

Avanceon QFZ LLC

PA-WH-04, Unit 16

Ras Bufontas Free Zone Doha Qatar Phone: [phone]

Email: [e-mail]

Avanceon Saudi for Energy Company 3141 Anas Ibn Malik-Al Malqa Dist. Unit no. 718, Riyadh 13521 - 8292 Kingdom of Saudi Arabia

Phone: [phone]

Email: [e-mail]

Trade Mark

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Board of Directors

BOARD OF DIRECTORS STRUCTURE & CORPORATE GOVERNANCE Composition of Board and Directors' Independence

Implementing good governance, the Chairman of the Board is a non-executive director. The board comprises of 7 directors out of which 3 are independent / non-executive directors, and include 1 non-executive directors. The roles of Chairman and the CEO has been clearly defined and segregated. The CEO is responsible for operations of the company whereas the board performs under the Chairman.

Bakhtiar Hameed Wain Chairman of the Board

BAKHTIAR HAMEED WAIN, Founder and Chairman of the Board - brings over 30 years of exemplary leadership. An engineer with experience in leading global companies such as Exxon Chemicals, Fauji Fertilizer and ICI Ltd, he founded Avanceon in 1984. His entrepreneurial drive found its roots in his faith towards the educated and technically qualified human resource of Pakistan. Mr. Bakhtiar Hameed Wain Bachelor of Engineering in Mechanical engineering from University of Engineering and Technology, Lahore, in 1983. From the onset, he wanted to build a company that could capitalize and promote this conviction globally, which he has implemented successfully ever since. Appointed chairman by the Board of Directors, he has spearheaded Octopus Digital towards market leadership in Pakistan and beyond. Mr. Bakhtiar Hameed Wain also serves in the capacity of Chief Executive Officer of Avanceon Limited, Non-

Executive Directors of Empiric AI (Private) Limited and also serve as a trustee of Avanceon Limited Employees Provident Fund.

Tanveer Karamat Executive Director and Chief Executive Officer

TANVEER KARAMAT, Director and Chief Executive Officer - brings a wealth of international business experience to Avanceon, with 20 out of 30 professional years spent selling automation solutions to the oil and gas sector. After receiving a Bachelor's degree in Chemical Engineering from the University of Pakistan he embarked on his career as an Application Engineer at Zelin Pvt Ltd in 1986. Developing his sales, management and business skills at key industry companies such as Wartsila NSD as well as Honeywell where he held the position of Country Head, Tanveer joined Avanceon in 2003 as Regional Manager. He transformed the South Region revenues in less than three years with wise strategic counsel, capitalizing on a dormant customer base and an internal reshuffle. He was promoted to GM Operations in 2006 before becoming COO in 2011. Over the past decade, Tanveer's leadership has been a major contribution towards building value for the company. He was nominated as a member of the Board of Directors to help make informed decisions. In year 2023, Mr. Tanveer Karamat was appointed as Director of Avanceon Limited and also appointed Chief Executive Officer Empiric AI (Private) Limited. He now serves as non-executive director on the Avanceon Limited Board and also serves as a trustee of Avanceon

Limited Employees Provident Fund.

Mohammad Shahid Mir Independent Director

A senior management professional with 32 years of experience in Corporate and Commercial banking, Risk Management, Credit Administration and Trade Finance. Over the last sixteen years, Mr. Mohammad Shahid Mir has held senior positions in Wholesale Banking and Risk Management. On the business side he has a proven track record of growing business and exceeding budgets whilst ensuring portfolio health remained within accepted parameters. Mr. Mir has strong knowledge of Economy & Banking in Pakistan and the GCC region. Mr. Mohammad Shahid Mir graduated with a BA (Hons) in Economics from the University of Sussex, Brighton, England, in 1985. He furthered his credentials by becoming a Certified Credit Risk Professional from American Express Bank in 1996. Mr. Mohammad Shahid Mir also serves in the capacity of the Board of Directors of Avanceon Limited.

Saleha Asif Independent Director

Saleha has experience in serving boards and C-level clients globally for 25+ years. She has worked with McKinsey & Company, PepsiCo, and Bank of America.

Mohammad Arif Janjua Non-Executive Director

Arif Janjua has over 35 years' experience in operational management and consulting in the software, mobile and internet services industry. Arif received his bachelor's in electrical engineering from the University of Engineering

• Technology in Lahore, Pakistan, master's in electrical engineering from the University of Windsor, Canada, and an
  MBA from the Haas School of Business at UC Berkeley.

Asmar Ahmed Atif Executive Director

Asmar works at the intersection of business, technology & regulation. His career spans over 15 years & 4 continents across the Artificial Intelligence space. He holds an MBA from Imperial College London.

Adeel Khalid Executive Director

Adeel has 15+ years of experience of managing Middle East and Central Asia AMS business. He has expertise in resource management systems via Digital Technology.

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Chairman of the

Board Review Report

Dear Shareholder,

Welcome to the first Chairman of the Board Review Report for	Asmar Ahmed Atif
Octopus Digital Limited for the year ended on December 31,	(Executive Director)
2023.	Adeel Khalid
Acquisition of Empiric AI - Octopus Digital Limited, in
(Executive Director)
accordance with the applicable provisions of the Companies
In 2023, the Board of Directors for Octopus Digital Limited met
Act, 2017, received transfer of entire shareholding of Empiric AI
(Private) Limited, constituting 100% of the outstanding paid-up	on four occasions in person and online. Business decisions were
capital from Avanceon Limited. The transfer was executed as	taken via circulation of board resolutions. The Board carries out
per the terms and conditions specified under the EPL Business	a review of its effectiveness and performance each year after
transfer/sale agreement dated 30 September 2023 between	the closure of the fiscal year, on a self-assessment basis. The
the Octopus Digital Limited and Avanceon Limited.	overall effectiveness of the Board was assessed as satisfactory.
Incorporation of Octopus Digital FZ-LLC - Octopus Digital	Suitable action plans were formulated and communicated to the
concerned personnel regarding areas needing improvement.
Limited has incorporated a new wholly owned subsidiary in
In the end, I would like to thank all our Shareholders for their
United Arab Emirates as a Free Zone Limited Liability Company
under the Dubai Development Authority. The UAE's thriving	support. I am confident we will meet your expectations in years
business environment and strategic location makes it an ideal	to come.
hub for Octopus Digital FZ-LLC to enhance its global presence	Best Regards,
and deliver unparalleled value to its customers in the Industry
4.0 domain.
Appointment of New Chief Financial Officer (Faisal Nadeem
Sheikh) - The board unanimously decided on the appointment
of Faisal Nadeem Sheikh as the Chief Financial Officer of	Bakhtiar H. Wain
Octopus Digital Limited. Faisal is an ACA who started his career
Chairman of the Board
in assurance at A F Ferguson and Co.
Lahore, Pakistan
Octopus Digital Limited's Performance in 2023
Octopus Digital Limited	April 2024

Here is a rundown of how Octopus Digital performed in FY 2023 as compared to FY 2022.

• Profit after Tax (PAT) decreased by 7.8% at 373 million PKR.

• Net Sales increased by 34% to 919 million PKR and

• Earnings Per Share decreased by 8% at 2.52 PKR.

• The team was very successful in developing and testing the intellectual property and products that are the cornerstone of future international business.

Octopus Digital Limited's Performance in 2023

The members of the Octopus Digital Limited Board are mentioned below with their respective roles.

Bakhtiar H. Wain

(Chairman of the Board and Non-Executive Director)

Tanveer Karamat

(Director and Chief Executive Officer)

Mohammad Shahid Mir

(Non-Executive/Independent Director)

Mohammad Arif Janjua

(Non-Executive/Independent Director)

Saleha Asif

(Non-Executive/Independent Director)

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6

Notice of

7th Annual General Meeting

Notice is hereby given that the 7th Annual General Meeting of Octopus Digital Limited "Company" will be held on Monday, 29 April 2024 at 10:00 A.M. at Nishat Hotel, Gate No. 7, Imperial Ball Room - B, Adjacent to Emporium Mall, Abdul Haq Road, Johar Town, Lahore, to transact the following business:

1. ORDINARY BUSINESS

1. To confirm the minutes of the Extraordinary General Meeting held on 22 December 2023.
2. To receive, consider and adopt the Standalone and Consolidated Audited Financial Statements of the Company for the year ended 31 December 2023 together with the Directors' and Auditors' Reports thereon and Chairman's Review Report.
   As required under section 223(7) of the Companies Act 2017, Financial Statements of the Company have been uploaded on the website of the Company which can be downloaded from the following link:
   https://octopusdtl.com/investor-information/
3. To appoint Auditors of the Company and fix their remuneration. The Members are hereby notified that the
   Board Audit Committee and the Board of Directors have recommended the name of M/s BDO Ebrahim & Co. Chartered Accountants for re-appointment as auditors of the Company for the year ending 31 December 2024.

1. ANY OTHER BUSINESS

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

	By Order of the Board
Lahore	Ahsan Khalil
Dated: 08 APRIL 2024	Company Secretary

WEBLINK FOR ONLINE MEETING VIA ZOOM:

Members are encouraged to attend the AGM through video conference facility managed by the Company, follow the below link:

https://us06web.zoom.us/webinar/register/WN_ delc1rlDQOa8CiqG_sSxhg

Shareholders can also provide their comments and questions for the agenda items of the AGM at the email address agm@ octopusdtl.com.

Guidance as how-to login on Zoom to attend the AGM link: https://octopusdtl.com/investor-informations/

Under Section 223(6) of The Companies Act, 2017, circulation of Audited Financial Statements has been allowed to be circulated in electronic format through email. The Annual Report of the Company and the Notice of Annual General Meeting shall be circulated via email to those shareholders whose email addresses are present in the records/database of the CDC and Share Registrar. The shareholders are encouraged to send/update their email addresses on the above-mentioned link or email or postal address. The Annual Report has also been uploaded at the Company's website https://octopusdtl.com/ and is readily

7

accessible to the shareholders.

NOTES:

1. The share transfer books of the Company will be closed and no transfer of shares will be accepted for registration from Monday, 22 April 2024 to Monday,
   29 April 2024 (both days inclusive). Transfer received in order at our Registrar, M/S FAMCO Share Registration Services (Private) Limited, 8-F, Near Hotel Faran, Nursery, Block-6, P.E.C.H.S., Shahra-e-Faisal, Karachi by the close of business hours on Friday, 19 April 2024 will be treated to have been in time for the purposes of attend & vote at the meeting.
2. A member entitled to attend and vote at this meeting shall be entitled to appoint another person, as his/her proxy to attend, speak and vote instead of him/her, and a proxy so appointed shall have such rights, as respects attending, speaking, and voting at the Meeting as are available to a member. Proxies in order to be effective, must be received by the Company not less than 48 hours before the meeting. A proxy need not be a member of the company.
3. Members are required to timely notify any change in their address to Company's Shares Registrar, M/S FAMCO Share Registration Services (Private) Limited, 8-F, Near Hotel Faran, Nursery, Block-6, P.E.C.H.S., Shahra-e-Faisal, Karachi.

FOR ATTENDING THE SHAREHOLDERS' MEETING

1. In case of individuals, the account holder or sub-account holder and/or the person whose securities are in group account and their registration details are up-loaded as per the Regulations, shall authenticate his/her identity by his/her Computerized National Identity Card (CNIC) or passport at the time of online registration/attending the meeting.
2. The shareholders registered on CDC are also requested to provide their particulars ID numbers and account numbers in CDS at the time of online registration/ attending the meeting.
3. In case of corporate entity, the Board of Directors' resolution/power of attorney with specimen signature of the nominee shall be provided at the time of online registration/attending the meeting.

FOR APPOINTING PROXIES:

1. In case of individual, the account holder or sub-account holder and/or the person whose securities are in group account and their registration details are uploaded as per the Regulations, shall submit the duly completed and stamped proxy form accordingly.

1. The proxy form shall be witnessed by the two persons whose names, addresses and CNIC numbers shall be mentioned on the form.
2. Attested copies of valid CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy form.
3. The proxy shall provide his/ her CNIC or passport at the time of online registration/attending the meeting.
4. In case of corporate entity, the Board of Directors resolution/power of attorney with specimen signature shall be submitted along with proxy form to the company.

8

Shareholders

Information

Notice is hereby given that the 7th Annual General Meeting of Octopus Digital Limited "Company" will be held on Monday, 29 April 2024 at 10:00 A.M. at Nishat Hotel, Gate No. 7, Imperial Ball Room - B, Adjacent to Emporium Mall, Abdul Haq Road, Johar Town, Lahore, any shareholder may appoint a proxy to vote on his or her behalf. The Proxies should be filed with the company at least 48 hours before the meeting time

WEBLINK FOR ONLINE MEETING VIA ZOOM:

Members are encouraged to attend the AGM through video conference facility managed by the Company, follow the below link: https://us06web.zoom.us/webinar/ register/WN_delc1rlDQOa8CiqG_ sSxhg

Shareholders can also provide their comments and questions for the agenda items of the AGM at the email address [e-mail] Guidance as how-to login on Zoom to attend the AGM link: https://octopusdtl.com/investor- information/

1. Approval of minutes of the Extraordinary General Meeting held on 22 December 2023.
2. Approval of Audited Financial Statements of the Company for the year ended 31 December 2023.
3. Appointment as external auditors

of the Company for the year ending 31 December 2024.

Ownership

As on 31 December 2023 there were 6,621 holders on record of the Company's ordinary shares.

Quarterly Results

The Company issues quarterly financial statements. The planned dates for release of the quarterly results in FY 2024 are

1st quarter	: 30 April 2024
Half yearly	: 29 August 2024
3rd quarter	: 30 October 2024

All our quarterly reports are regularly posted to Pakistan Stock Exchange, all annual/quarterly reports are also placed at the Company's website: https://octopusdtl.com/ The Company reserves the right to change any of the above dates.

As required under section 223(7) of the Companies Act 2017, Financial Statements of the Company have been uploaded on the website of the Company which can be downloaded from the following link:

https://octopusdtl.com/investor- information/

The shareholders are encouraged to

send/update their email addresses on the above-mentioned link or email or postal address. The Annual Report has also been uploaded at the Company's website https:// octopusdtl.com and is readily accessible to the shareholders.

All registered shareholders should send information on changes of address to:

FAMCO Share Registration Services (Pvt) Ltd.

8-F, Next to Hotel Faran, Nursery, Block-6, P.E.C.H.S, Shahra-e-Faisal, Karachi. Phone: +92 [21] 3438 0101-5

Fax No: +92 [21] 3438 0106 www.famcosrs.com

2023Contents

Corporate Information

10Octopus Timeline

11Financial Highlights

12Solutions at ADIPEC

14Our Goal

16Group Structure

18Code of Business Conduct

and Ethical Principles

20Organogram

22Nature of Our Business

24Octopus Value Addition

26Core Competencies

28Customer Portfolio

30HR

Updates

31Corporate Governance

34Whistle Blower

Policy

35Independent Auditor's

Review Report

36Statement of Compliance

38Corporate Policies

40Directors' Report

46Six Years

at a Glance

48Analysis of Financial Statements

52Six Years Vertical and Horizontal Analysis

55DuPont Analysis

56Graphical Representation

60Pattern of Shareholding

65Statement of Value Addition

Unconsolidated Financial Statements

72Independent Auditor's Report

73Statement of Financial Position

74Statement of Profit or Loss

75Statement of Comprehensive Income

76Statement of Changes in Equity

77Statement of Cash Flows

78Notes to the Financial Statements

Consolidated Financial

Statements

114Independent Auditor's Report

115Consolidated Statement of

Financial Position

116Consolidated Statement of Profit or Loss

117Consolidated Statement of Comprehensive Income

118Consolidated Statement of

Changes in Equity

119Consolidated Statement of Cash Flows

120Notes to the Consolidated Financial Statement

150Defination and Glossary of

Terms

151Event Calender

155Director's Report (Urdu)

157Notice of AGM (Urdu)

158Form of Proxy

(Urdu)

160Form of Proxy

(English)