SMARTCRAFT ASA

2023 ANNUAL REPORT

SMARTCRAFT ASA

2023

Contents

This is SmartCraft

Statement of the

Board of Directors

Letter from the CEO

11. 31.

Sustainability at

SmartCraft

Board of Directors

report on Corporate

Governance

38.

81.

43.

NotesCondensed

Consolidated

Financial Statements

Financial statements

- SmartCraft ASA

ANNUAL REPORT

This is SmartCraft

o Leading Nordic provider of Software-as-a-Service (SaaS) to small and medium

enterprises (SME) construction companies

o Our passion is to simplify business for construction companies

o More than 200 employees service 12.500 customers and more than 120.000 users

o Our Software-as-a-Service (SaaS) give overview and insight to increase revenue and

margin

o Attractive business model with high earnings visibility, low risk and strong cash flow

o High quality of earnings with 97 percent recurring revenue and low churn

o Targeting 15-20% organic revenue growth in the medium-term with increasing

adjusted EBITDA margin due to the scalability of the business

FULL YEAR 2023:

o Revenue 402 million, a growth of 20 percent

o Churn 7 percent

o Adjusted EBITDA NOK 167 million, a growth of 27 percent

o Adjusted EBITDA margin of 42 percent

o Net profit NOK 115 million, a growth of 71 percent

o NOK 153 million net cash from operating activities, a growth of 32 percent

ARR development per quarter (end of period, MNOK)

Adjusted EBITDA margin development per quarter (end of period, MNOK)

Q4’21

Q4’21 Q1’22

Q1’22

Q2’22

Q3’22

Q4’22

Q1’23

Q2’23

Q3’23

Q4’23

266.8

278.9

296.1

303.6

318.3

347.0

357.5

367.1

386.6

Adjusted EBITDA margin

Adjusted EBITDA - capex margin

36.8 %

40.4 %

36.2 %

38.8 %

40.8 %

41.8 %

43.5 %

41.9 %

39.3 %

23.9 %

32.9 %

29.7 %

33.1 %

32.0 %

31.1 %

32.7 %

33.8 %

31.4 %

0.0 %

10.0 %

20.0 %

30.0 %

40.0 %

50.0 %

Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023

2023

Key figures

ANNUAL REPORT

Letter from CEO

In SmartCraft, we are pleased to keep fulfilling our

vision to make everyday life easier for craftsmen

and the construction industry by helping them

gain business control and more productivity by

simplifying their work processes. The key is to

increase digitization in a hugely under digitized

industry and in 2023 we achieved strong growth

and high margins, despite a challenging macro

environment.

Taking a step back, I would highlight SmartCraft’s

attractive positioning with a solid and low-risk

business model. We have over many years worked to

shift our revenues towards recurring contracts, and

with a scalable organization and business model, our

margins continue to increase.

We increasingly see that our standardized, affordable

solutions with low implementation cost resonates

well in our target groups among small and medium

sized enterprises (SMEs). Our product people live

and breathe for the construction industry, and work

every day to design solutions that are easy to buy,

onboard and use, well fitted to the needs of our

customers as they prefer a low subscription fee with

no up-front costs.

2023 was also a proof point of SmartCraft’s resilience

against the economical fluctuations hitting the

general construction industry. The reason is that

most of our customers are mainly involved in the

stable renovation part of the construction industry,

which is larger than the new build.

We also experience that the demand for more

energy efficient buildings stimulate the business

for plumbers and electricians, which constitute the

majority of our customers.

The second pillar of our growth strategy is

acquisition. Over the last years SmartCraft has

successfully acquired ten solutions, the latest being

Coredination in July 2023. These are typically best-

of breed solution within the construction industry,

solving mission critical tasks. Our solid balance sheet

allows us to act on good opportunities in the M&A

market, and we continue to have a significant

pipeline of M&A targets both in our existing

geographies and beyond,

The SmartCraft group is not only getting bigger

year by year. We also work to weave the group

more closely together. In 2023, we organized all

employees in one team per country to be better

aligned and create synergies and scalability. At the

same time, we created a global finance team and

a global marketing organization. This has been

successful and we now have a strong platform

ready to include more solutions to the SmartCraft

family.

We have expanded our ESG report and have

an ambition to be net zero by 2050. We know

this will be challenging and we are working to

operationalize the ESG work throughout the whole

of SmartCraft in 2024 to move closer to the net

zero target.

Summing up, despite a challenging macro

environment, we are in a good position with our

low-cost solutions aimed at SME construction

companies with renovation as their main business.

Hence, we reiterate our medium-term targets

of 15-20 percent organic revenue growth with

increasing adjusted EBITDA margins due to the

scalability of the business.

2023

Statement of the Board of

Directors

ACTIVITIES

The SmartCraft Group provides software solutions

for the construction industry in Norway, Sweden

and Finland. The parent company is SmartCraft

ASA with head office in Hønefoss, Norway. In

addition to the parent company the Group

comprises of 6 companies in Norway, 4 companies

in Sweden and 2 companies in Finland. SmartCraft

ASA owns 81% of the shares in SMCRT MGMT

1 AS where management and key employees

holds 19% related to the long-term investment

program. Together, SmartCraft ASA and SMCRT

MGMT 1 AS owns 100% (~99/~1 split) of the shares

in SmartCraft Software AS, which owns 100% of

the shares in the subsidiaries. SmartCraft ASA is

a public limited company listed on the Oslo Stock

Exchange “Oslo Børs”.

The Group has an active M&A strategy and has

acquired complementary solutions the last years.

In 2023 the Group acquired the Coredination

solution in Sweden.

STRATEGY AND OBJECTIVES

The overall mission for the Group is to simplify

business for craftsmen. To accomplish this

SmartCraft has gathered several of the

leading providers of digital solutions to the

construction business ranging from quality and

risk management, procurement management

and project management tools. This way we can

provide out-of-the-box best-of-breed solutions

that exactly fit our customers’ needs, and ease the

digital transformation of one of the least digitized

industries.

The Group has a strategy to ensure sustained

pofitable growth and to capitalize on the market

leading position in the underpenetrated Nordic

market. A strong industry focus, a leading SaaS

solution and an efficient sales organization ensure

great sales execution with low customer touch.

We also recognize sustainability as a strategic

area, and we have increased focus on identifying

areas for improvement and areas SmartCraft can

have an impact. We will continue this work and set

sustainability targets that enables us to measure

our progress and contribution.

We strongly believe in a robust business model and

are pleased to see that recurring revenue in 2023

has increased to 97 percent of the total revenue

compared to 96 percent in 2022. This combined

with a consistently low churn, strong financial

position and the fact that we are self-funded puts

us in a great position to create further shareholder

value.

The Group has many opportunities to upsell on

our base of more than 12 500 customer and 120

000 users and will continue to explore these in

the short and medium term. We are looking to

integrate and synergize our solutions where it

makes sense. However, we are pragmatic and

do not want to jeopardize the uniqueness, flow

and functionalities in our solutions at any cost,

but will capitalize on areas where it benefits our

customers. The Group has successfully acquired

and consolidated Coredination AB during 2023.

We will continue to execute on our M&A strategy;

Targeting complementary functionality, customer

bases and new geographies, and focus on growth

through acquisitions in addition to the organic

growth.

GROUP FINANCIAL STATEMENTS

The consolidated financial statement for 2023 for

the SmartCraft Group is prepared in accordance

with the IFRS Accounting Standards as endorsed

by the European Union (EU) and Norwegian

ANNUAL REPORT

authorities and effective as of December 31st,

2023. These financial statements also provide

disclosures as specified under the Norwegian

Accounting Act (Regnskapsloven). In the Board’s

opinion, the financial statements provide an

accurate view of the company’s financial position at

the end of the fiscal year.

In 2023 the Group has a revenue of TNOK 401 654

(TNOK 333 423 in 2022), a growth of 20 percent

and an organic growth of 12 percent. The Group’s

two largest segments, which target the SME market

and represent 87 percent of the Group’s revenue,

grew organically by 17 percent. With a strong

customer base with high recurring revenue and

stable low churn, the Group is expecting continued

high organic growth going forward.

The SmartCraft Group has high profitability and is

guiding on increasing margin in the medium term.

In 2023 the Group has an adjusted EBITDA-R&D

capex margin of 41,6 (39,4 percent in 2022).

Total depreciation and amortization of tangible and

intangible assets in 2023 is TNOK 36 204 (TNOK 27

657 in 2022), where TNOK 15 894 (TNOK 14 050 in

2022) is amortization of intangible assets related to

M&A. Operating profit is TNOK 129 517 (TNOK 100

762 in 2022).

Profit before tax is TNOK 136 268 in 2023 (TNOK

89 173 in 2022). The increase in profit before tax

is mainly due to revenue growth, earn-out cost

related to acquisitions in 2021, and more positive

effect from increased interest rates on cash

holdings and changes in foreign exchange currency

as the Group is exposed to fluctuations in NOK

compared to SEK and EUR.

Net cash provided from operational activities was

TNOK 136 297 in 2023 (TNOK 115 774 in 2022),

a growth of 17,7 percent. The increase in net

cash provided from operational activities in 2023

is primarily due to increased profit but is also

negatively impacted by the payment of earn-out

related to acquisition in 2021.

Net cash outflows from investing activities were

TNOK 62 914 in 2023 (TNOK 59 492 in 2022).

This is primarily connected to the acquisition

of Coredination AB, together with capitalized

development costs of a total of TNOK 37 472

(TNOK 23 857 in 2022).

Net cash outflows from financing activities are

mainly affected by the acquisition of treasury

shares, and repayment of lease liabilities. The total

cash outflow related to purchase of treasury shares

in 2023 were TNOK 53 508(TNOK 7 012 in 2022). In

total the net cash outflows by financing activities

were TNOK 64 686 in 2023 (TNOK 19 522 in 2022).

In the Board’s opinion the Group’s liquidity is solid

and the Group has sufficient funds to settle all

obligations when due. As of December 31st, 2023,

the Group had cash and cash equivalents of TNOK

206 024 (TNOK 191 587 as of December 31st,

2022).

Shareholder’s equity was TNOK 843 675 as

of December 31st, 2023 (TNOK 765 569 as of

December 31st, 2022) with an equity ratio of 76.7

percent (78.6 percent as of December 31st, 2022).

The retained equity increased due to the profit

in 2023. During 2023 the Group has continued to

acquire treasury shares in SmartCraft ASA as part

of a buy-back program managed by Carnegie. The

difference between par value of the shares and the

purchase price gives a total reduction in retained

equity of TNOK 53 482 during 2023. As part of

establishing the LTIP there is also recognized a

non-controlling interest in the Group. The booked

value of the non-controlling interest is TNOK 4 631

as of December 31st, 2023. The LTIP is structured

as a geared instrument with a corresponding risk

for the participants. As of December 31st, 2023, the

LTIP is out-of-the-money and changes compared to

31.12.2022 is due to changes in participants in the

LTIP during 2023.

SMARTCRAFT ASA FINANCIAL

STATEMENT

The financial statement for 2023 for SmartCraft

ASA is prepared in accordance with the Norwegian

2023

Generally Accepted Accounting Principles. In the

Board’s opinion, the financial statements provide

an accurate view of the company’s financial

position at the end of the fiscal year.

SmartCraft ASA had a total revenue of TNOK 14

289 in 2023 (TNOK 11 332 in 2022), and operating

profit of TNOK -9 120 in 2023 (TNOK -6 534 om

2022). As of December 31st, 2023, the company

has a total equity of TNOK 616 491 with an equity

ratio of 76 percent.

In the Board’s opinion the company’s liquidity is

satisfactory and the company has sufficient funds

to settle all obligations when due.

RISK MANAGEMENT AND INTERNAL

CONTROL

The Group is subject to various types of risks

relating to operations and finance. The Group’s risk

managements system shall ensure a systematic

and uniform approach to identify, evaluate and

mitigate risks, and describe processes and internal

control actions.

Operational risks

The Group’s operations involve development and

maintenance of software solutions sold to a third

party. Trends within the software industry can

affect the overall level of demand for IT services

and accordingly influence the Group’s sales.

Further, the ability to attract and retain sufficient

competent personnel to secure the Group’s future

development of existing and new solutions is

crucial to the Group’s operations. The Group’s

Chief Technical Officer oversees the technical

resources within the Group and assesses any

measures if needed.

A significant part of the Group’s growth is

through acquisitions. The inability to secure

an acquisition in line with the Group’s product

portfolio, technology and culture could result in

negative effects in operational focus and financial

performance. A thorough and tested M&A and

onboarding process has historically limited any

negative effects of acquisitions.

Volatile, negative, or uncertain economic or

political conditions may have a negative effect on

the Group’s operations and financial performance.

Such events may result in a loss of revenue as

customers stop buying the solution, or increased

costs if the Group needs to change to a more

expensive business operation to keep the services

running. The recent years’ pandemic, war and

inflationary pressure have had relatively limited

effects on the Group. The extraordinary high

inflation in 2022-23 increased costs. However,

the Group decided against extraordinary price

increases to increase its competitiveness. The

Group annually adjusts prices in line with inflation,

and the effect is therefore considered temporary.

Although there are limited effects, we consider

the operational risks as moderate given the

uncertainty of the situation.

The Group’s customers are all in the same industry

which exposes the Group to an industry specific

risk. Changes in the macro environment may

affect the industry, and the Group, negatively. The

construction industry has seen macro-economic

challenges in the last years, resulting in fewer

new build projects. The Group’s focuses on small

and medium enterprises (SMEs) which have the

renovation segment as their primary target market.

The renovation segment is bigger than the new

build part of the industry and has proven to be

less volatile, growing steadily over the last years

and is expected to do so for the coming years.

Additionally, most of our customers are electricians

and plumbers that are experiencing high demand

due to energy efficiency initiatives of existing

buildings. The risk is considered moderate.

Financial risks

As the Group operates internationally it is exposed

to other currencies than NOK (functional currency).

However, there is a natural hedge on the currency

exchange risk as all operating entities have

material costs and revenue in their functional

currency, and the Group has both assets and

liabilities in foreign currency. The currency risk is

considered low/moderate.

ANNUAL REPORT

The active M&A strategy may be a significant

contributor to the Group’s growth. As the

Group’s profitability and financial position may

fluctuate, as well as the tech sector specifically

and general financial market changes, there is a

risk of the Group not being able to obtain funding

on favorable terms. In this event, the use of a

larger portion of the Group’s cash will reduce the

Group’s funds available for operations or future

business opportunities. The risk is considered

low/moderate. The Group’s financial position as

of December 31st, 2023, leaves the Group with

positive exposure to the increased interest rates

across the operating countries as the Group are in

a net cash position with no external loan facilities.

Credit risk is considered low as the Group invoice

a significant share of its services upfront and can

swiftly block access to non-paying customers. The

Group’s customers are however operating in the

same industry, exposing the Group to general

market/industry risk. On historical basis the market

risk is considered low/moderate. The Group has

ample cash to support operations and cover its

current liabilities.

WORKING ENVIRONMENT,

EQUAL OPPORTUNITIES AND

DISCRIMINATION

The SmartCraft Group has 206 employees as of

December 31st, 2023. There has been no reported

work-related injuries or accidents in 2023. Absence

due to sickness was 3.8%.

Society is increasing its expectations of companies’

corporate actions and transparency about

diversity and equal employment opportunities.

The Group is, by its Code of Conduct, committed

to build a highly skilled workforce and ensuring

that recruitment processes actively foster equal

opportunities and diversity. The company prohibits

discrimination in any form, whether based

on political views, union membership, sexual

orientation, disability, or age. As of December 31st,

2023, there are 4 men and 3 women in manager

positions including the Group executive suite.

SmartCraft ASA has 4 employees as of December

31st, 2023. There has been no reported work-

related injuries or accidents in 2023. There was no

absence due to sickness. The company’s human

resource policy is based on equal rights for all, and

there is no difference in treatment on any basis in

terms of salary or recruitment.

The Board of Directors is comprised of 4 men and

3 women.

The Transparency Act was implemented from July

1st, 2022, and the SmartCraft Group is according

to the Act required to carry out due diligence

assessments according to OECD’s guidelines. The

Group published an annual report in accordance

with the Transparency Act at smartcraft.com in

June 2023.

The Group’s corporate social responsibilities are

included in the Sustainability at SmartCraft in page

11.

EXTERNAL ENVIRONMENT

The Group does not pollute the external

environment beyond what ensues from normal

office operations. The Board of Directors and

employees are traveling as a part of daily

operations. The Group encourages the use of

environmentally friendly transport, and if possible,

video conferences, to reduce the effects on the

environment. See the Sustainability at SmartCraft

in page 11.

INSURANCE FOR BOARD MEMBERS

AND EXECUTIVE OFFICERS

The Company has directors’ and officers’ liability

insurance. The insurance covers the Board of

Directors as well as the executive officers of the

company from legal personal liability for financial

damage caused by the performance of their duties.

CORPORATE GOVERNANCE

Good corporate governance is essential to ensure

that the Group protects the long-term interest

of the stakeholders. The Group’s corporate

governance principles is compliant with the

2023

Norwegian Accounting Act and the Norwegian

Code of Practice for Corporate Governance. The

Group’s corporate governance practices are subject

to annual reviews and discussion by the Board of

Directors. The Group’s corporate governance policy

is available at smartcraft.com/investor-relations/

corporate-governance. The code is based on the

“comply or explain” principle and deviations, if

any, is explained under the relevant topic in the

report on Corporate Governance for 2023 which is

included in this Annual Report.

GOING CONCERN ASSUMPTION

In accordance with the Norwegian accounting act,

the Board confirms that the accounts have been

prepared in conformity with the going concern

assumption and this assumption is valid.

SUBSEQUENT EVENTS

There has been no material change globally, in any

of the current markets or solutions after December

31st, 2023, that have negative effects for the

Group. The SmartCraft Group follows the market

closely and are aware of a potential worsening of

the macro environmental climate. However, after

the latest years of unrest and uncertainty, certain

parts of the markets seem to have adapted to the

new situation with the war in the Ukraine, high

inflation and high interest rates and currently there

are no signs that the situation will deteriorate.

April 10th, 2024

Board of Directors and CEO, SmartCraft ASA

Bernt Ulstein

Board member

Maria Danell

Board member

Gustav Line

CEO

Isabella Alveberg

Board member

Marianne Bergmann Røren

Board member

Carl Ivarsson

Board member

Gunnar Haglund

Chairman of the Board

Allan Engström

Board member

ANNUAL REPORT

HIGHLIGHTS FROM 2023

GHG EMISSIONS AND ENERGY CONSUMPTION

At SmartCraft, we prioritize responsible business practices, aiming to reduce our

environmental impact and promote a safe, positive workplace. Our sustainability work

covers Environmental, Social and Governance (ESG) aligning with our mission to make a

meaningful impact. In 2022, we intensified our sustainability work, focusing on improvement

areas. Throughout 2023, we continued this work, evaluating our ESG impact, identifying

key data points required for compliance with standards like ESRS and CSRD, and crafting a

Climate Policy for the group.

The total climate accounting for the SmartCraft Group (Scope 1, 2 and 3) in 2023 was 690,3

tonnes of CO2 equivalents (tCO2e). Total energy consumption (Scope 1, 2 and 3) of 594,4

MWh in 2023. As a company we are aware that our GHG emissions from Scope 1, 2 and 3

affect the amount of greenhouse gases in the atmosphere and can thus be a contributing

factor to global warming and climate change.

Sustainability at SmartCraft

2023

o During 2023 we measured our emissions in Scope 1, 2 and 3 and we are

continuously improving our work. We have integrated climate change

measures into our ESG-work though our climate policy and double

materiality analysis. Our future goals:

o SmartCraft aims to become Net Zero by 2050.

o SmartCraft aims to improve energy efficiency in our facilities and

promote the use of green energy.

o SmartCraft wants to empower European construction workers to become

more productive by simplifying work processes. Our solutions improve

safety on site and help our customers to have sustainable businesses. Our

future goals:

o Within five years, SmartCraft wants to enable our customers to

substantially reduce their environmental impact with our digital

solutions.

o SmartCraft provides safe and healthy working environments. The

protection of workers, labour, and human rights are included in the social

sustainability. SmartCraft is doing business according to the UN Guiding

Principled on Business and Human Rights. Our future goals:

o SmartCraft aims to influence the supply chain through partnerships to

make sure that our suppliers and customers also take measures to live

up to the UN standards of a decent workplace.

THE SUSTAINABLE DEVELOPMENT GOALS

In our ESG work, we strive to have a positive impact on the Sustainable Development Goals (SDGs)

formulated by the United Nations. We have identified three global goals and associated sub-targets that

we believe have the greatest impact through our activities.

NEGATIVE IMPACT ON BIODIVERSITY, EMISSIONS TO WATER AND HAZARDOUS

WASTE RATIO

SmartCraft ASA considers the impact on biodiversity to be low as none of our offices are in biodiversity-

sensitive areas and our operations have limited to no negative impact on biodiversity. As SmartCraft does

not carry out any production of its own, we do not release any direct emissions to the water or contribute

to any hazardous waste.

ANNUAL REPORT

HUMAN RIGHTS

We will conduct our business consistently with

the United Nations Guiding Principles on Business

and Human Rights, The European Convention

on Human Rights, and the United Nations

Convention on the Rights of the Child. SmartCraft’s

social sustainability work is presented in the

Transparency report, Employee Code of Conduct

and Supplier Code of Conduct, available on our

sustainability webpage.

BOARD GENDER DIVERSITY

The Group’s corporate governance policy is

compliant with the Norwegian Accounting Act and

the Norwegian Code of Practice for Corporate

Governance (NUES). The Group’s corporate

governance practices are subject to annual

reviews and discussion by the Board of Directors.

SmartCraft, as a listed company, is required to have

a minimum of 40% of each gender represented on

the Board of Directors.

2022

2023

43%

57%

2023

About SmartCraft

OUR ESG VISION AND COMMITMENT

o SmartCraft’s solutions, employees, supply chain and

customers shall make a noticeable positive impact

for a more sustainable future.

o SmartCraft aims to become Net-Zero by 2050 and

work in line with the Paris Agreement and UN´s

Sustainable Development Goals.

OUR VALUES

Inspiring

Team player

Trustworthy

We lead, are innovative and

ambitious.

We think of our customers and

partners as our extended family, we

work together to achieve the best

results.

We deliver as planned, we have

integrity and are fair in business.

People

Material

Documentation

SmartCraft provides digital solutions for small and medium

enterprise construction companies. Our solutions enable

companies to control material flow, cost, documentation, and

people on projects.

Quality assurance documentation is captured in the field on

the actual projects, ensuring building rules and regulations are

followed. With mobile checklists, workers have safety precautions

at their fingertips ensuring a safe workplace. In addition, the digital

information flow our services provide, gives valuable information

for businesses to grow both their revenue and profit margin.

MISSION CRITICAL SOLUTIONS

ANNUAL REPORT

At SmartCraft, we prioritize running a responsible

business, striving to reduce our environmental

footprint while fostering a safe and happy

working environment. Our sustainability

strategy encompasses Environmental, Social and

Governance (ESG), aligning with SmartCraft’s

potential to make a meaningful impact in these

areas. The SmartCraft Group furthered its

sustainability agenda in 2022 and the focus was

to identify areas for improvement. During 2023

Environmental

Climate action

o GHG emission reductions

o Energy management

o Purchase and suppliers

Social

Ethical business

culture

o Working Environment

o Human rights

o Corruption and prohibited

business practices

Governance

Responsible

business partner

o Responsible value chain

management

o Compliance

o Transparency

we have continued the sustainability work by

evaluating our ESG impact through a Double

Materiality Analysis, identified which datapoints

that are mandatory for us to be able to comply

with the European Sustainability Report Standard

(ESRS) and the Corporate Sustainability Reporting

Directive (CSRD) and created a Climate Policy for

the group. Although it is not yet mandatory for

us to comply with the CSRD, we have started to

include the directive in our ESG report in 2023.

2023

DOUBLE MATERIALITY ANALYSIS

The purpose of the Double Materiality Analysis was to create a basis for SmartCraft’s ESG work where

we identified the company’s impact on the Environment, Social and Governance. With this analysis

we could evaluate which ESRS points from the CSRD-directive will be relevant for future ESG reporting

based on SmartCraft’s impact. The graph below provides an overview of SmartCraft’s assessment of the

environmental and social impact SmartCraft has on our surroundings and the financial impact different

sustainability aspects might have on SmartCraft. This describes double materiality and whether the impact

is of low or high character.

High

Low

High

o Human rights

o Diversity, inclusion and

equality

o Responsible value

chain management

o Biodiversity and

ecosystems

o Emissions into water

o Resource use and

circular economy

o Standards and new

legislation

o Corruption and

prohibited business

practices

o Climate change

o GHG emissions

o Energy management

o Purchase and our

suppliers impact

o Employees and working

conditions

Financial impact

Impact on social and environment

ANNUAL REPORT

STAKEHOLDER ENGAGEMENT

SmartCraft aims to provide and facilitate

data gathering for our customers for their

future sustainability reporting. SmartCrafts

ambition is to collaborate with suppliers to

enable our customers ESG-data collection

through our services. As a group, we will

look into collaborating with partners and

suppliers to promote sustainable choices in

different processes.

As a company we always strive to adhere

to both current and future legislation

through regulatory authorities. SmartCraft

will engage with employees, directors, and

other stakeholders to raise awareness

about sustainability and the ESG topics.

CONTINOUS IMPROVEMENT

2023 was the SmartCraft groups second

year of collecting CO2-data from our

operations in Scope 1, 2 and 3. Measuring

areas of importance creates opportunities

for us to benchmark our development

on a six-month basis, recognizing that we

cannot improve what we don’t measure.

The Double Materiality Analysis, Climate

policy and 2023’s ESG Report is a part of

the overall ESG Strategy at SmartCraft.

SmartCraft’s ESG work is continuously

improving and in 2024 the focus will be

on operationalizing the ESG work within

our business. By continuing to measure

and evaluate our impact, creating

internal processes and policies to ensure

sustainability and setting more specific ESG

targets based on the Science Based Targets

initiative, we continue to work in line with

our ESG strategy.

2023

Environment

As SmartCraft does not carry out any production

of its own, we do not release any direct emissions

to the water or contribute to any hazardous waste.

This is also the reason for our low impact on

resource use and circular economy as we do not

have the possibility to create sustainable products

through innovation and a circular perspective.

The SmartCraft Group has an indirect impact on

the resource use and circular economy through

which suppliers we use. This is also true for our

customers and their sustainability work. Our goal is

to investigate this further in 2024.

None of our offices are in biodiversity-sensitive

areas and our operations have limited to no

negative impact on biodiversity. As a company we

are aware that our GHG emissions from Scope 1,

2 and 3 affect the amount of greenhouse gases

in the atmosphere and can thus be a contributing

factor to global warming and climate change.

2023 was the second year the SmartCraft Group

collected CO2-data from our operation in Scope

1,2 and 3. The measurements in 2023 were more

accurate that in 2022, due to improvement in

ESG processes and tools. Hence, we believe 2023

gives a more correct picture of our environmental

footprint.

SmartCraft aims to be Net Zero by 2050. We

will create an action plan in 2024 to reduce the

emissions every year, with 2023 as our base year.

It is mandatory for SmartCraft to comply with the

CSRD directive during 2025. However, to prepare

for this, we have started to collect most of the

required data in 2023.

OUR APPROACH AND OVERALL IMPACT

SmartCraft has an impact on the environment through three major aspects, GHG emissions,

energy management and purchase. As a software company, SmartCraft’s main sources of

environmental and climate emissions are emissions from employee activities and purchases,

business travel, data hosting and software usage from data centers like Microsoft, Google

and Amazon, and indirect emissions from our leased offices such as electricity. In addition,

the Group affects the environment mostly through emissions from purchased goods and

services.

ANNUAL REPORT

SCOPE 1, 2, 3 AND TOTAL GHG

EMISSIONS

Developed by the World Resource Institute and

the World Business Council for Sustainable

Development, the GHG Protocol is the most widely

used method for carbon accounting globally.

Emissions data is gathered and classified by Scope

(1, 2 and 3), covering direct and indirect emission

sources as defined by the GHG protocol.

Carbon accounting is a fundamental tool in

identifying tangible measures to reduce GHG

emissions. The annual carbon accounting report

enables organizations to benchmark performance

indicators and evaluate progress over time.

The GHG Protocol includes a set of reporting

principles one should follow when reporting

carbon emissions. The five principles are relevance,

completeness, consistency, transparency and

accuracy. During 2022, SmartCraft invested in a

reporting tool that enables all group companies

to structure and report their consumptions and

emissions accordingly. As this was the first time we

reported the numbers, they are less accurate due

to limted systems and routines.

Total climate accounting for SmartCraft ASA

(Scope 1, 2 and 3) in 2023 was 690,3 tonnes

of CO2 equivalents (tCO2e) which resulted in

approximately 3,45 tCO2e per employee (3,15

tCO2e per employee in 2022). The number of

emissions increased during 2023 with 103,2 tCO2e

compared to 2022 due to more employees but

most likely primarily because of more accurate

measurements in 2023.

SCOPE 1 AND 2

Scope 1 and 2 refer to GHG emissions from our

direct operations and energy management.

Scope 1 is mandatory reporting of all emission

sources linked to operating assets where the

organization has operational control. This includes

all use of fossil fuel for stationary use or transport

needs (own, rented or leased vehicles, oil boilers

etc.). For SmartCraft ASA, Scope 1 emissions

include a total of 5,8 tCO2e in 2023. These

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Scope 1 Scope 2

2022 2023

Scope 1 and 2 in tCO2e

emissions include diesel and petrol consumption

from owned and rented cars. The emission

accounts for less than 1% of the emission share of

the entire SmartCraft Group.

Scope 2 is mandatory reporting of indirect

emissions linked to purchased energy; electricity or

district heating/cooling. This applies, for example,

to buildings that are rented and not necessarily

owned.

For SmartCraft ASA, emissions from Scope 2

include electricity from our offices and electric

vehicles. Emissions from Scope 2 in 2023 were 5,7

tCO2e. The emission accounts for 1% of the total

emission share of SmartCraft ASA. Emissions from

Scope 2 were calculated using a location-based

method.

Our total emissions in Scope 1 and 2 were

reduced by 40% during 2023 due to more accurate

measurements.

100

200

300

400

500

600

MWh MWh

Scope 1 Scope 2

2022 2023

Scope 1 and 2 in MWh

2023

Total energy consumption in 2022 reached 600,9

MWh were 79% origins from renewable energy

sources. In 2023 the energy consumption was reduced

to 594 MWh and 85% comes from renewable energy

sources.

SmartCraft aims to improve energy efficiency

in our facilities and promote the use of green

energy. As we are dependent on our landlords,

SmartCraft aims to have an open communication

and try to ensure the use of green electricity

through our agreements. However, the identified

risks are the volatility of energy prices and current

landlord agreements slowing down the change

to new green energy agreements. If SmartCraft

meets the targets, the group will save resources

by being energy efficient, but also reduce the

environmental impact by using renewable energy

sources. SmartCraft will also see the opportunity

in influencing the landlord to sign green energy

agreements.

SCOPE 3

Scope 3 includes voluntary reporting of indirect

emissions linked to purchased goods or services.

These are emissions that can be indirectly linked to

the organization’s activities, but which take place

outside their control. Typical Scope 3 reporting will

include travel, logistics/transport of goods, waste

and purchased goods and services. In general, a

climate statement should include enough relevant

information so that it can be used as a decision

support tool for the company’s management. To

achieve this, it is important to include the reporting

points that have financial relevance impact.

SmartCraft ASA has included emissions from the

categories Purchased goods and services, Business

travel, Capital goods, and Fuel and energy-related

activities. SmartCraft ASA Scope 3 emissions are in

total 679 tCO2, most emissions are in Purchased

goods and services, followed by Business travels.

Distribution in % of Scope 3 emissions:

ENERGY MANAGEMENT

Total energy consumption (Scope 1, 2 and 3) in

2023 was 594 MWh of which 85% consisted of total

renewable energy (Location-based).

Picture of the share of renewable and non-

renewable energy consumption during 2022 and

2023:

2022

2023

Scope 3

79.4%

20.6%

2022

Renewable energy Non-renewable energy

85.4%

14.6%

2023

Renewable energy Non-renewable energy

86.5%

0.5%

1.4%

11.7%

Purchased goods and services

Capital goods

Fuel-and-energy-related activiti es

Business travel

ANNUAL REPORT

Purchased goods and services account for 87% of

the total Scope 3 emissions.

For SmartCraft, purchased goods and services

includes software, cloud and facility management,

advertising and PR, consulting services, electronic

devices, office supplies and merchandise. In lack

of better information from suppliers we have used

spend based emission factors in the accouting for

2023.

Business travel accounts for 12% of the total Scope

3 emissions in 2023. The emissions include flights,

car mileage and taxi, hotel nights, bus travel, ferry,

and train.

Capital goods account for 1% of the total Scope 3

emissions in 2023. Capital goods are final products

that have an extended life and are used by the

company. These emissions include maintenance of

company vehicles.

The Fuel and energy-related activities category

includes emissions related to the production of

fuels and energy purchased and consumed by the

reporting company in the reporting year that are

not included in scope 1 or scope 2 and accounts for

1 % of the total Scope 3 emissions in 2023.

SmartCraft aims to become Net Zero by 2050 and

as the biggest impact lies within Scope 3, we as a

company must evaluate all our suppliers and their

impact to see where reductions could be made.

The identified risks with becoming Net Zero are

the cost of the reduction, what will happen if the

emissions are not reduced and how climate change

can affect SmartCraft’s targets and operations. The

target will contribute to resource efficiency, enable

employees to reduce their environmental impact

but also influence suppliers and customers to

become more environmentally adopted.

During 2024, SmartCraft will focus on prioritizing

suppliers with a commitment to ESG and not

purchasing office supplies when not necessary,

and to minimize suppliers’ transport by placing

collective orders when purchasing. The major

risk for the targets is that necessary suppliers

for our operations do not meet our standards

or unexpected events that require SmartCraft to

make an individual and unplanned purchase. By

performing planned purchases SmartCraft will

reduce unnecessary consumption and contribute

to less transportation and emissions in the

atmosphere. There is a great opportunity to

create a sustainable value chain if we eliminate all

suppliers that do not work or comply with the ESG

regulation.

FINANCIAL MATERIALITY

As the employee activities and purchases are the

main input resource to SmartCraft’s operations

any changes can have a high impact financially.

We are aware that risks that are perceived to have

limited financial impact today could increase going

forward due to climate changes. Extreme weather

like flooding, storms and high temperatures are

risks that can affect SmartCraft through physical

consequences. All our offices are located close

to water, and we are aware that it could affect

SmartCraft negatively because of flooding from

rising water levels in lakes and the sea. SmartCraft

have been affected by rising electricity prices and

more expensive insurance as a result of changing

weather conditions. Despite this, events connected

to climate change have not had a material financial

impact on SmartCraft as a group.

2023

Social

SmartCraft’s social sustainability work is presented

in the Transparency report, Employee Code

of Conduct and Supplier Code of Conduct.

These Codes apply to everyone working for or

representing SmartCraft in any form, irrespective

of the nature of the contract the relation is based

on. This includes, but is not limited to, directors,

employees, as well as hired contractors. Our

customers and stakeholders, both existing and

future, expect us to operate to a high ethical

standard. An ethical business culture is therefore

a crucial cornerstone of a sustainable business.

SmartCraft complies with the Norwegian

Transparency Act (Åpenhetsloven), which applies

to all Norwegian businesses that are not defined as

a small company and that sell goods and services

in or outside Norway. The Transparency Act

requires Norwegian companies to actively assess

their risks and report on their efforts to manage

their human rights impact throughout their value

chain. This creates opportunities for SmartCraft to

influence suppliers to work with topics regarding

sustainability, which also is a part of our ESG

targets.

OUR APPROACH

SmartCrafts has an impact on social sustainability through advocating working environment,

human rights, and prevention of corruption through the work with both employees and

suppliers. SmartCrafts have created a Code of Conduct for our employees. We aim to have

all our suppliers comply to our Supplier Code of Conduct by 2025. As the employees in

the group are the main contributors to the operations, changes for employees and their

working environment could have a high financial impact for the group. Nevertheless, our

focus on human rights and diversity is assessed to have a low financial impact on the group.

ANNUAL REPORT

CHARACTERISTICS OF SMARTCRAFT’S EMPLOYEES

SmartCraft aims to be a great place to work. SmartCraft shall foster a corporate culture characterized by

respect and concern for other people and their property. We shall behave in a way that inspires trust both

when collaborating with colleagues and interacting with suppliers, customers, other business partners or

authorities. Each of the SmartCraft subsidiaries has their individual HR and HSE management system and

supporting tools to follow up the Group wide policies.

Numbers on characteristics of SmartCrafts employees and non-employee workers:

Numbers on diversity indicators, social protection, health and safety indicators for

SmartCrafts employees:

Work-life balance indicators for SmartCrafts employees:

Work-life balance indicators Avg. in Qty Avg. in %

Number of employees entitle to take family-related leaves 195

Number of entitled employees that took family-related leaves 9

Number of entitled employees that took family-related leaves (female/male) 2/7 21/79 %

Characteristics of undertaking’s employees Avg. in Qty Avg. in %

Number of employees (female/male) 63/132 32/68 %

Permanent employees (female/male) 61/132 31/69 %

Temporary employees (female/male) 2/0 100/0 %

Non-guaranteed hours employees (female/male) 1/2 33/66 %

Characteristics of non-employee workers Avg. in Qty

Total number of non-employee workers in own workforce

(independent contractor, vendors, consultants and freelancers)

Diversity indicators Avg. in Qty

Number of employees under 30 years old 39

Number of employees between 30-50 years old 138

Number of employees over 50 years old 18

Social protection Avg. in Qty

Number of employees covered by social protection 195 100 %

Health and safety indicators Avg. in Qty

Number of employees covered by health and safety management systems 195 100 %

Number of incidents associated with work-related injuries and ill health 0

All SmartCraft’s workers are covered by social protection against loss of income due to major life events through

the payment of social security contributions by SmartCraft that enable employees to access public services. The

same applies to the health and safety management systems which are included in all our employment contracts.

SmartCraft as a group is not part of a union but we accept all our employees that are members and would not

prevent anyone from organizing.

2023

HUMAN RIGHTS

SmartCraft aims to improve performance in

accordance with the UN human rights action plan.

SmartCraft respects and promotes internationally

recognized human rights. We will conduct our

business consistently with the United Nations

Guiding Principles on Business and Human Rights,

The European Convention on Human Rights, and

the United Nations Convention on the Rights of the

Child. No exceptions are permitted, irrespective

of any reason at any time. In addition, we also

consider the conventions seriously, and see it

as our responsibility to contribute to a positive

change. SmartCraft will comply with all applicable

environmental laws and regulations.

For ethical reasons, SmartCraft is strongly against

the purchase of sexual services. Purchase of

sexual services may also be illegal, support

human trafficking and pose a security risk. Human

trafficking is a violation of human rights. When

employees are on assignments or business trips

for SmartCraft they are prohibited from purchasing

sexual services in any form, irrespective of whether

it is legal under local laws.

SmartCraft will take measures in 2024 to

confirm that our suppliers support and respect

internationally recognized human rights as

outlined by the UN Declaration of human rights

and related conventions. The suppliers need to

ANNUAL REPORT

confirm that they place great importance on ensuring compliance with

labor standards as outlined in the International Labor Organization’s

Core Conventions concerning freedom of association, the right to

collective bargaining and the elimination of forced labor, child labor and

discrimination in the workplace. They meet the responsibilities set out in

the UN Guiding Principles on Business and Human Rights and will take

necessary steps to identify if a child (person under 18 years) is employed,

the best interest of the child shall be primary consideration. Policies and

programs that assist any child found to be performing child labor shall be

contributed to, supported, or developed. Children shall not be employed

for any work likely to be hazardous or interfere with their health or

physical, mental, spiritual, moral, or social development.

During 2023 SmartCraft group had no work-related incidents or severe

human rights impact and incidents reported. One complaint was

received through SmartCraft’s whistleblowing channel, the complaint was

investigated and concluded during 2023.

SmartCraft has a zero tolerance policy for corruption in any parts of its

business. All suppliers shall comply with all applicable laws and regulations

concerning corruption and related prohibited business practices such

as bribery, and undue advantage. This applies regardless of whether

the undue advantage is offered directly or through an intermediary.

SmartCraft’s suppliers shall provide a safe and healthy working

environment in accordance with internationally accepted standards and

applicable laws. The suppliers should encourage employees to report

accidents, injuries, or unsafe conditions immediately.

Any payments made to a government authority in relation to the work for

SmartCraft shall be specifically required by law or regulation, be made

against receipt and to a government administrated account. No public

official shall benefit from the execution of the agreement with SmartCraft,

from the proceeds thereof or otherwise have a direct or indirect financial

interest in the company, unless explicitly disclosed to and accepted by

SmartCraft.

Incidents, compaints and severe human rights impacts Qty

Number of work-related incidents 0

Number of complaints 1

Number of severe human rights impacts and incidents 0

2023

Governance

OUR APPROACH

SmartCraft works in line with an ESG and sustainability governance structure. All employees

within the group are encouraged to be engaged in the ESG work while the Board of

Directors, executive leadership team and the ESG project manager have the main

responsibility. The ESG project manager has the main responsibility for the sustainability

work while the board and executive leadership team have an advisory, guiding, and

decision-making function.

Top management Board of directors

43% 57% 43% 57%

ANNUAL REPORT

COMPLIANCE AND TRANSPARENCY

The Group’s corporate governance policy is

compliant with the Norwegian Accounting Act and

the Norwegian Code of Practice for Corporate

Governance (NUES). The Group’s corporate

governance practices are subject to annual

reviews and discussion by the Board of Directors.

SmartCraft, as a listed company, is required to have

a minimum of 40% of each gender represented on

the Board of Directors. The Board of Directors and

Executive Management shall contribute to achieve

the following core objectives when honoring the

Company’s corporate governance policy:

Transparency: Communication with the Company’s

shareholders, stakeholders and other interest

groups shall be based on transparency and

openness regarding issues relevant for the

evaluation of the development and position of the

Company.

Independence: The relationship between the

Board of Directors, Executive Management and

shareholders shall be based on independence

principles. Independence shall ensure that all

decisions are made on an unbiased and neutral

basis.

Equal treatment: A fundamental objective for

good corporate governance is equal treatment and

equal rights for all the Company’s shareholders.

Control and management: Sound control and

corporate governance mechanisms shall contribute

to predictability and reduce the level of risk for the

Company’s shareholders, stakeholders, and other

interest groups.

As the group aims for compliance with new

regulations and standards, the financial impact

may be significant, depending on how much

new requirements impact the operations and

necessitate additional investments.

CORRUPTION

SmartCraft has a zero tolerance policy for

corruption in any parts of its business. During 2023

there were zero reported incidents of corruption

or bribery and no reported activities related to

political influence including lobbying activities. All

suppliers shall comply with all applicable laws and

regulations concerning corruption and related

prohibited business practices such as bribery,

and undue advantage. This applies regardless of

whether the undue advantage is offered directly

or through an intermediary. Any payments made

to a government authority in relation to the work

for SmartCraft shall be specifically required by

law or regulation, be made against receipt and to

a government administrated account. No public

official shall benefit from the execution of the

agreement with SmartCraft, from the proceeds

thereof or otherwise have a direct or indirect

financial interest in the company, unless explicitly

disclosed to and accepted by SmartCraft.

SUPPLIERS AND RESPONSIBLE VALUE

CHAIN MANAGEMENT

SmartCraft works with responsible value chain

management and aims to ensure that all new

suppliers sign the Code of conduct and participate

in the Transparency survey for suppliers. This is to

secure a value chain management that supports

a sustainable working environment, human rights

and prevents corruption.

2023

“Take urgent action

to combat climate

change and its

impacts.”

SDG sub-targets

13.2 Integrate climate change measures into policies, strategies, and planning.

SmartCraft’s targets

During 2023 we have integrated climate change measures into our ESG-work

though our climate policy and double materiality analysis.

During 2024 SmartCraft aims to start the process to formulate targets based on the

Science Based Targets initiative.

As the biggest impact lies within Scope 3, as a company we must evaluate all our

suppliers and their impact to see where reductions could be made. SmartCrafts

target for the GHG emission reduction is to reduce the emissions in Scope 3 to be

able to become Net Zero by 2050.

SmartCraft’s targets for energy management are to improve energy efficiency

in our facilities and promote the use of green energy in our energy agreements.

SmartCraft as a group aims to use only green energy by 2030.

SmartCraft aims to evaluate all suppliers ESG-work and compliance with CSRD and

human rights during 2024 to be able to choose suppliers in line with our ESG-work.

Impact analysis

Implementation of the Climate Policy including GHG emission reductions, climate-

controlling travel policy, sustainable thinking when purchasing, energy efficiency,

sustainable material uses and recycling.

SmartCraft’s biggest amount of GHG emissions in the value chain is included

in Scope 3. SmartCraft understands that the company must reduce the CO2

emissions, mostly in Scope 3, to work in line with the Paris Agreement.

SUSTAINABLE DEVELOPMENT GOALS

In our ESG work, we strive to have a positive impact on the Sustainable Development Goals (SDGs)

formulated by the United Nations. Below are the goals that SmartCraft has the opportunity to actually

influence through our operations.

ANNUAL REPORT

“Build resilient

infrastructure,

promote inclusive

and sustainable

industrialization and

foster innovation.”

SDG sub-targets

9.4 By 2030, upgrade infrastructure and retrofit industries to make them

sustainable, with increased resource-use efficiency and greater adoption of

clean and environmentally sound technologies and industrial processes, with all

countries acting in accordance with their respective capabilities.

SmartCraft’s targets

One of SmartCrafts medium-term goal is to enable our customers to reduce their

environmental impact and work more sustainable though our digital solutions. This

aligns with modernization and creates opportunities to work with sustainability

through innovation and digitalization.

SmartCraft aims to provide information and reporting through its solutions to

enable construction companies to make more sustainable choices.

Impact analysis

SmartCraft wants to empower European construction workers to become more

productive by simplifying work processes.

We go to work every day creating the best digital experiences for our users whether

working in an office or in the field.

Our solutions improve safety on site and help our customers to have sustainable

business.

By freeing up time from manual processes and admin work, we will make

construction workers’ everyday life easier, more profitable – and more fun!

2023

“Promote sustained,

inclusive and

sustainable

economic growth,

full and productive

employment and

decent work for all.”

SDG sub-targets

8.5 By 2030, achieve full and productive employment and decent work for all

women and men, including for young people and persons with disabilities, and

equal pay for work of equal value.

8.7 Take immediate and effective measures to eradicate forced labour, end modern

slavery and human trafficking and secure the prohibition and elimination of the

worst forms of child labour, including recruitment and use of child soldiers, and by

2025 end child labour in all its forms.

8.8 Protect labour rights and promote safe and secure working environments for

all workers, including migrant workers, in particular women migrants, and those in

precarious employment.

SmartCraft’s targets

SmartCraft’s aims to comply with the UN human rights action plan.

No events of child and forced labour within the SmartCraft group.

No high severity injury.

No unlawful discrimination against employees, board members, customers, and

suppliers on account of ethnic or national origin, age, sex, or religion.

All suppliers shall comply with all applicable laws and regulations concerning

corruption and related prohibited business practices such as bribery, such undue

advantage.

SmartCraft’s suppliers shall provide a safe and healthy working environment in

accordance with internationally accepted standards and applicable laws.

Impact analysis

SmartCraft provides safe and healthy working environments. The protection of

workers, labour, and human rights are included in the social sustainability.

SmartCraft is doing business according to the UN Guiding Principled on Business

and Human Rights.

SmartCraft influences the supply chain through partnerships to make sure that our

suppliers and customers also run their business in a responsible way. The most

important tool is the Code of Conduct.

ANNUAL REPORT

Board of Directors report on

Corporate Governance

REPORTING ON CORPORATE

GOVERNANCE

The Group’s corporate governance policy is

compliant with the Norwegian Accounting Act and

the Norwegian Code of Practice for Corporate

Governance (NUES). The Group’s corporate

governance practices are subject to annual

reviews and discussion by the Board of Directors.

The Group’s corporate governance policy is

available at smartcraft.com/investor-relations/

corporate-governance. The code is based on the

“comply or explain” principle and deviations, if

any, is explained under the relevant topic in the

report. The Group believes that good corporate

governance involves transparent and trustful

cooperation between all parties involved with

the Group and its business. This includes the

Company’s shareholders, Board of Directors

and Executive Management team, employees,

customers, suppliers, and other business partners,

as well as public authorities and society at large.

The Board of Directors and Executive Management

shall contribute to achieve the following core

objectives when honoring the Company’s corporate

governance policy:

o Transparency. Communication with the

Company’s shareholders, stakeholders and

other interest group’s shall be based on

transparency and openness on issues relevant

for the evaluation of the development and

position of the Company.

o Independence. The relationship between the

Board of Directors, Executive Management and

shareholders shall be based on independence

principles. Independence shall ensure that all

decisions are made on an unbiased and neutral

basis.

o Equal treatment. A fundamental objective for

good corporate governance is equal treatment

and equal rights for all of the Company’s

shareholders.

o Control and management. Sound control

and corporate governance mechanisms shall

contribute to predictability and reduce the

level of risk for the Company’s shareholders,

stakeholders, and other interest group’s.

BUSINESS OBJECTIVE

The Company’s business objective, as set out in the

Company’s articles of association, reads as follows:

“The Company’s objects is industry, trade and

investments in shares and other assets in other

companies and enterprises as well as all other

activities related to this.” The Board of Directors

has defined objectives, strategies, and risk profiles

for the Company’s business activities as an effort

to create value for its shareholders in a sustainable

manner. These objectives, strategies and risk

profiles are evaluated annually.

EQUITY AND DIVIDENDS

The Board of Directors is responsible for ensuring

that the Group is adequately capitalized relative

to the risk and scope of operations and that

the capital requirements set forth in laws and

regulations are met.

The Group’s consolidated equity was TNOK 843

675 on December 31st, 2023, representing an

equity ratio of 77 percent. The Board monitors

the capital situation and takes actions necessary

to ensure that the equity or liquidity is adequate.

The Company shall, at all times, have a clear and

predictable dividend policy. The company believes

that it will serve its shareholders best by investing

for the long term and growing and developing the

business.

2023

The company’s dividend policy is that the company

does not expect to pay any dividend in the short

to medium term as the company intends to use

its profit for both organic and inorganic growth

initiatives as well as product and technology

innovation. The company will in the future

continuously evaluate its capital allocation and

will prioritize organic growth investments and

acquisitions over dividends if the company expects

that this will generate an attractive return on

capital.

At the Annual General Meeting on April 28th, 2023,

the Board was granted the following authorities:

o Authorization to increase the share capital in

one or more rounds by up to NOK 17 152,305.

The authorization covers contribution in kind

and the right to incur specific obligations on

behalf of the Company and includes mergers.

There have not been issued any new shares

under this authorization. The authorization

is valid until the Company’s Annual General

Meeting in 2024, but not longer than June 30th,

2024.

o Authorization to acquire own shares with a

total nominal value up to NOK 85 761,15 which

is equivalent to 5 percent of the current share

capital. The maximum purchase price is NOK

50 and minimum NOK 1. As of December

31st, 2023, the authorization has been used to

purchase 3 076 249 shares for a total of TNOK

60 520. The authorization is valid until the

Company’s Annual General Meeting in 2024,

but not longer than June 30th, 2024.

EQUAL TREATMENT OF

SHAREHOLDERS

All shareholders shall be treated on an equal

basis unless there is a just and factual cause

for treating them differently. Each share in the

Company carries one vote, and all shares carry

equal rights, including the right to participate

in general meetings and the right to dividends.

Where the Board of Directors resolves to issue new

shares and deviate from existing shareholders’

pre-emptive rights pursuant to an authorization

granted to the Board of Directors, the stock

exchange announcement issued in connection with

the share issue shall also include a justification for

the deviation.

The Company’s transactions in treasury shares

shall be carried out through Oslo Stock Exchange’

trading platform at the prevailing trading price or

by making a public offer to all shareholders. All

transactions in treasury shares shall be publicly

disclosed in a stock exchange announcement.

There was a total of 239 transaction in treasury

shares in 2023 which was carried out by Carnegie

on behalf of the Company.

Transactions between the Company and its

shareholders, a shareholder’s parent company,

members of the Board of Directors, executive

management or closely associated persons to any

such party, that are deemed material under the

Norwegian Public Limited Liability Companies Act,

are subject to approval by the general meeting.

Furthermore, the Board of Directors is required

to arrange for an independent auditor’s valuation

of the transaction. When restructuring the Group

companies there was performed several transfers

of shares internally. The transactions were not

subject to approval by the general meeting as it

was defined as an intercompany transaction.

FREELY TRANSFERABLE SHARES

The shares of the Company are listed on the Oslo

Stock Exchange and are freely transferable and

there are no limitations on any party’s ability to

own or vote for the shares in the Company.

Deviation from the Code of Practice:

Sellers of the shares in Inprog AS and Coredination

AB has entered into a lock-up agreement for

shares purchased as part of the settlement. The

lock-up period for the sellers of Inprog AS was

valid until January 26th, 2024, and February 21st,

2024, while the lock-up period for the sellers of

Coredination AB is valid until July 7th 2024, August

7th 2024, and August 15th 2024.

ANNUAL REPORT

GENERAL MEETINGS

The General Meeting is the Company’s highest

authority, and open to all shareholders. The

Company encourages shareholders to participate

and exercise their rights. The 2023 Annual General

Meeting was held digitally on April 28th, 2023,

with 64,58 percent of the Company’s shares

represented.

The Board, auditor, or shareholders representing

at least 5 percent of the shares can call for

Extraordinary General Meetings when deemed

necessary.

The notice of the General Meeting and

supporting documents are made available on

the Company’s website no later than 3 weeks

prior to the date of the meeting. Shareholders

may request the documents by mail. Efforts are

made to ensure that proposed resolutions and

supporting information are sufficiently detailed

and comprehensive to allow the shareholders to

form a view on all matters to be considered at the

meeting. The notice includes information about

shareholders’ rights. The notice period, right to

attend and agenda proposals are regulated in the

Articles of Association.

The deadline for shareholders to notify the

Company if they wish to participate at the General

Meeting shall be set as close to the date of the

general meeting as practically possible, but at the

earliest two business days before the General

Meeting.

Shareholders who are unable to attend the

general meeting shall be given the opportunity

to be represented by proxy and to vote by proxy.

The Board of Directors shall in this respect, with

regards to the notice of the general meeting:

o provide information on the procedure for

attending by proxy;

o nominate a person who will be available to

vote on behalf of non-attending shareholders

as their proxy (normally being the chair of the

Board of Directors); and

o prepare a proxy form, which shall, to the extent

possible, be set up so that it is possible to vote

separately on each individual matter on the

agenda and each candidate nominated for

election.

Deviation from the Code of Practice: The Code

recommends separate voting for candidates to the

Board. However, the Board must be in accordance

with applicable legislation regarding gender

representation and qualifications for committee

assignments. The nomination committee’s

proposal is given with respect to such legislation.

Should a situation arise where the composition of

the Board might conflict with applicable legislation,

the situation and consequences of electing a board

contrary to legislation should be discussed at the

General Meeting and shareholders should base

their votes on the views discussed.

NOMINATION COMMITTEE

The Nomination Committee is governed by the

Articles of Association section 10. The nomination

committee does not include any executive

personnel or any member of the company’s Board

of Directors. Both members of the Nomination

committee are independent of the Board of

Directors and Group Management. The members

of the Nomination Committee were elected at the

Extraordinary General Meeting on April 28th, 2023.

Mr. Arild Bødal (chair) and Ms. Helen Fasth Gilstedt

were elected for two years at a time.

The General Meeting stipulates the rules of

procedure for the Nomination Committee and

determines the Committees’ remuneration. The

Nomination Committee gives its recommendation

to the General Meeting on election of and

compensation to members of the Board of

Directors, in addition to election of members of the

Nomination Committee. Each proposal is justified

on an individual basis. All shareholders are entitled

to nominate candidates to the Board of Directors,

and information on how to propose candidates can

be found on the company’s website.

2023

COMPOSITION AND INDEPENDENCE

OF THE BOARD OF DIRECTORS

In accordance with the articles of association

section 7, the company’s Board of Directors shall

consist of three to nine members. On December

31st, 2023, the Board of Directors consisted of

seven members (see table below), of which three

were female. The directors can be elected by the

General Meeting for a term no longer than two

years and may be re-elected.

The company’s website provides information

to illustrate the expertise of the members of

the Board of Directors. The Board of Directors

considers its composition to be diverse and

represent required competencies including

financial and industrial experience. Board

members are encouraged to own shares in the

company. An overview of board members’ share

ownership in the Company is available in note 25

to the consolidated financial statements.

Name Role Independent Served since

Term

expires

Meeting

participation

Gunnar Haglund Chairman Yes 15.03.2017 AGM 2025 12 of 12

Christina Skogster Stange Board member Yes 21.04.2021 28.04.2023 2 of 4

Bernt Ulstein Board member Yes 15.03.2017 AGM 2025 12 of 12

Maria Danell Board member Yes 21.04.2021 AGM 2025 11 of 12

Carl Ivarsson Board member No 14.02.2017 AGM 2025 12 of 12

Marianne Bergmann Røren Board member Yes 21.04.2021 AGM 2025 10 of 12

Allan Engström Board Member No 14.02.2017 AGM 2025 12 of 12

Isabella Alveberg Board Member Yes 28.04.2023 AGM 2025 8 of 8

Mr. Ivarsson and Mr. Engström represents Valedo Partners III AB which holds 39.6% of the shares in SmartCraft ASA. All board members are

independent of Group management and material business contacts.

WORK OF THE BOARD OF DIRECTORS

The objectives, responsibilities and functions

of the Board of Directors and the CEO shall

be in compliance with rules and standards

applicable to the Group, which are described

in the Company’s “Instructions for the board of

directors of SmartCraft ASA”. The Board has the

ultimate responsibility for the management of the

Company and the Group and for supervising Group

Management.

The Board of Directors shall annually evaluate its

performance and expertise for the previous year.

This evaluation shall include the composition of

the Board of Directors and the manner in which its

members function, individually and as a group, in

relation to the objectives set out for its work. The

report shall be made available to the nomination

committee.

The Board has established two committees, an

Audit Committee, and a Remuneration Committee.

Audit Committee

Pursuant to section 6-41 of the Norwegian

Public Limited Liability Companies Act, Rule

Book II and recommendations set out in the

Code, the Company is obliged to establish an

audit committee. The Committee members are

appointed by and among the Board of Directors.

Per December 31st, 2023, the audit committee

members were Mr. Gunnar Haglund (chair), Mrs.

Marianne Bergmann Røren and Mr. Carl Ivarsson,

all considered independent of Group Management.

The Audit Committee held 7 meetings in 2023.

Remuneration Committee

The remuneration committee shall provide

the Board of Directors with a guideline and

ANNUAL REPORT

recommendation for the salary and other

remuneration for executive management, which

shall be made in accordance with section 6-16a of

the Norwegian Public Limited Liability Companies

Act. The members of the remuneration committee

are elected by and among the members of the

Board of Directors for a term of up to two years.

Per December 31st, 2023, the compensation

committee members were Mr. Gunnar Haglund

(chair), Mr. Allan Engström and Mr. Bernt Ulstein,

all independent of the Group Management. For

2023, the Committee met 2 times.

RISK MANAGEMENT AND INTERNAL

CONTROL

The Group’s risk management system shall ensure

that the Group has a systematic and uniform

approach to risk management. The system

defines responsibilities, processes, tools and

documentation, including considerations related

to integrating stakeholders in relation to the

Company’s value creation.

Group Management sets the context in which risks

are managed and supervises the risk management

process. Risk assessments are presented to the

Audit Committee and the Board of Directors. The

Board performs a review of risks in connection

with the approval of the annual budget.

Group Management regularly updates the Board

of Directors including operational reviews, HSE

(Health, Safety and Environment) measures,

financial status and key performance indicators.

Prior to each Board meeting, the CEO and CFO

prepares a report to the Board of Directors, which

includes this information in addition to any items

requested by Board members and items requiring

action by the Board of Directors. Because the

Group operates internationally, it is required to

comply with numerous national and international

laws and regulations. All business activities and

processes must be conducted in accordance with

laws, and regulations.

The quarterly and yearly reporting process and

significant accounting and reporting issues

are discussed with the Audit Committee in the

presence of the external auditor.

REMUNERATION OF THE BOARD OF

DIRECTORS

The members of the Board of Directors receive

remuneration in accordance with their individual

roles. The remuneration is not linked to Company

performance and members are not granted share

options. Remuneration for each member of the

Board of Directors is detailed in note 11 to the

consolidated financial statements.

Members of the Board of Directors and/or

companies with which they are associated should

not take on specific assignments for the Company

in addition to their appointment as a member of

the Board of Directors, but if they do, this shall

be disclosed to the full Board. The remuneration

for such additional duties will be approved by

the Board of Directors. There were no such

assignments in 2023.

REMUNERATION OF EXECUTIVE

MANAGEMENT

The policy for remuneration of executive

management of the Group was last updated in

April 2023 and presented at the Annual General

Meeting in 2023. The remuneration policy must

be approved by the Annual General Meeting upon

any material changes and at minimum every four

years. The Board determines remuneration of

the Chief Executive Officer while remuneration

of Group Management is determined according

to guidelines. The Board’s statement regarding

compensation of leading employees, required by

accounting act §7-31b, is published on smartcraft.

com.

INFORMATION AND

COMMUNICATION

The Company treats its investors equally. Timely

information is published simultaneously to all

investors in accordance with applicable legislation

and regulation to provide the best possible basis

for evaluation of Company performance. All

information is provided in English. Interim reports

2023

are published on a quarterly basis, in line with Oslo

Stock Exchange’s recommendations.

Interim reports include presentations to provide

an overview of operational and financial

developments, market outlook, and the Company’s

prospects. The presentations are open to the

public and made available through a webcast.

The Chief Executive Officer and the Chief Financial

Officer are normally present at the quarterly

presentations. Furthermore, the Company keeps

an ongoing dialogue with its investors and makes

presentations to analysts and investors through

various conferences and events.

TAKEOVERS

The Board of Directors have established the

main principles for its actions in the event of a

takeover offer. In a takeover process, the Board

of Directors, and the Executive Management each

have independent responsibilities to ensure that

the Company’s shareholders are treated equally

and that there are no unnecessary interruptions

to the Company’s business activities. The Board

of Directors has a particular responsibility to

ensure that the shareholders are given sufficient

information and time to assess the offer. The

Company has no written guidelines for procedures

to be followed in the event of a takeover offer. The

Board is open to initiatives that are commercially

and financially attractive for the shareholders. The

Board will assess potential offers in accordance

with applicable legislation and Code of Practice

requirements in due course

STATUTORY AUDITOR

The Company’s external auditor, Ernst & Young

AS, is appointed by the General Meeting and is

independent from the Company.

The auditor shall participate in meeting(s) of the

Board of Directors where any of the following

topics is on the agenda: the annual accounts,

accounting principles, assessment of any important

accounting estimates and other matters of

importance where there has been disagreement

between the auditor and the Company’s executive

management and/or the audit committee.

The auditor shall at least once a year present to the

Board of Directors or the audit committee a review

of the Company’s internal control procedures,

including identification of weaknesses and

proposals for improvement. The audit committee

shall hold a meeting with the auditor at least once

a year in which no representative of the executive

management can be present. To strengthen the

Board of Directors’ work on financial reporting and

internal control, the auditor shall provide a report

to the audit committee on the main features of

the audit in respect to the previous financial year,

and especially mention any material weaknesses

identified in the internal control relating to the

financial reporting process.

Remuneration to the auditor is approved by the

General Meeting and the Board of Directors shall

specify the executive management’s right to use

the auditor for other purposes than auditing. For

remuneration to the auditor see note 21 to the

consolidate financial statements.

ANNUAL REPORT

Statement of compliance

The Board of Directors and the Chief Executive

Officer (CEO) have today considered and approved

the report from the Board of Directors and CEO,

the financial statements for the Group and for the

parent company SmartCraft ASA (the Company) for

the year ending December 31st, 2023.

The consolidated financial statements of the

Group have been prepared in accordance with

International Financial Reporting Standards as

adopted by the EU and additional disclosure

requirements as stated in the Norwegian

Accounting Act that are applicable at December

31st, 2023.

The financial statements for the Company have

been prepared in accordance with the Norwegian

Accounting Act and Generally Accepted Accounting

Principles in Norway that are applicable at

December 31st, 2023. The report from the Board

of Directors and CEO for the Group and the

Company has been prepared in accordance with

the Norwegian Accounting Act and the Norwegian

Accounting Standard no. 16 applicable at

December 31st, 2023.

We confirm that, to the best of our knowledge:

o the financial statements for the period from

January 1st to December 31st, 2023, for the

Group and the Company have been prepared

in accordance with applicable accounting

standards

o the financial statements give a true and

fair view of the Company’s and the Group’s

consolidated assets, liabilities, financial position

and results of operations

o the Board of Directors’ report provides a

true and fair view of the development and

performance of the business and the position

of the Company and the Group, together with

a description of the key risks and uncertainty

factors that the company is facing

April 10th, 2024

Board of Directors and CEO, SmartCraft ASA

Bernt Ulstein

Board member

Maria Danell

Board member

Gustav Line

CEO

Isabella Alveberg

Board member

Marianne Bergmann Røren

Board member

Carl Ivarsson

Board member

Gunnar Haglund

Chairman of the Board

Allan Engström

Board member

2023

Condensed Consolidated

Financial Statements

Amounts in NOK (thousands) Note 2023 2022

Revenue from customers 8 401 654 333 423

Total operating revenue 401 654 333 423

Purchase of goods and services 32 681 27 271

Payroll and related expences 10, 11 145 637 128 737

Other operating expenses 21 57 616 48 996

Depreciation and amortization 13, 23, 24 36 204 27 657

Total operating expenses 272 138 232 661

Operating profit (loss) before financial items and tax 129 517 100 762

Financial income 22 29 520 17 188

Earn-out related to acqusitions 22 - (12 364)

Financial expenses 22 (22 768) (16 413)

Financial income (expense), net 6 752 (11 589)

Profit (loss) before tax 136 268 89 173

Tax expense 20 28 640 21 083

Profit (loss) 107 628 68 090

Attributable to:

Shareholders in SmartCraft ASA 26 107 628 68 090

Non-controlling interests - -

Other comprehensive income

Items that will be reclassified to profit or loss:

Currency translation differences, net of tax 24 685 (2 073)

Other comprehensive income (loss) for the period net of tax 24 685 (2 073)

Total comprehensive income 132 313 66 016

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Amounts in NOK (thousands) Note 2023 2022

Profit for the year 107 628 68 090

Profit for the year attributable to non-controlling interests - -

Profit for the year attributable to equity holders of SmartCraft ASA 107 628 68 090

Average numbers of common shares 169 575 195 171 484 845

Earning per share and diluted earnings per share NOK 26 0,63 0,40

ANNUAL REPORT

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Amounts in NOK (thousands)

ASSETS Note 31.12.2023 31.12.2022

Goodwill 6, 12 547 580 517 302

Intangible assets 13 246 079 209 939

Right to use assets 24 24 656 14 152

Tangible Assets 23 3 001 3 314

Total non-current assets 821 316 744 707

Other current assets 7, 16 8 112 7 762

Accounts Receivable 7, 15 64 612 29 477

Cash and cash equivalents 7, 17 206 024 191 587

Total current assets 278 748 228 826

Total assets 1 100 063 973 533

EQUITY AND LIABILITIES

Share capital 25 1 715 1 715

Own shares (31) (5)

Share premium 605 893 605 893

Retained earnings 214 846 161 149

Other components of equity 16 621 (8 064)

Non-controlling interests 25 4 631 4 881

Total equity 843 675 765 569

Non-current lease liabilities 17, 24 14 764 7 002

Deferred tax liabilities 20 36 580 35 015

Total non-current liabilities 51 344 42 016

Current portion of deferred revenue 8 106 029 69 937

Current portion of lease liabilities 17, 24 10 360 7 602

Accounts payable 7, 18 8 628 7 829

Taxes payable 7, 20 22 402 14 845

Other current liabilities 7, 19, 28 57 626 65 736

Total current liabilities 205 044 165 948

Total liabilities 256 388 207 964

Total equity and liabilities 1 100 063 973 533

2023

April 10th, 2024

Board of Directors and CEO, SmartCraft ASA

Bernt Ulstein

Board member

Maria Danell

Board member

Gustav Line

CEO

Isabella Alveberg

Board member

Marianne Bergmann Røren

Board member

Carl Ivarsson

Board member

Gunnar Haglund

Chairman of the Board

Allan Engström

Board member

ANNUAL REPORT

CONSOLIDATED CASH FLOW STATEMENT

Amounts in NOK (thousands) Note 2023 2022

Operating activities

Profit before tax 136 268 89 173

Paid taxes 20 (24 058) (19 371)

Net financial income (6 752) (775)

Earn-out without cash effects 22 - 12 364

Gains/losses sold assets 13, 23, 24 (82) (7)

Depreciation 13, 23, 24 20 310 13 607

Amortisation of intangible assets 13 15 894 14 050

Payments related to acqusitions 7, 19 (16 861) -

Interest recevied 22 3 724 899

Items classified as investing or financing activities - 1 780

Net cash provided from operating activities before net

working capital changes

128 443 111 720

Working capital adjustments:

Changes in accounts receivable (33 619) (4 814)

Changes in deferred revenue 35 284 9 893

Changes in accounts payable 744 388

Changes in all other working capital items 5 445 (1 413)

Net cash provided from operating activities 136 297 115 774

Investing activities

Investments in tangible and intangible assets 13, 23 (1 474) (1 156)

Payments for acqusitions 6, 19 (23 968) (33 455)

Acquisition transaction costs 6 - (952)

Payments for software development costs 13 (37 472) (23 857)

Foreign currency effect - (72)

Net cash used in investing activities (62 914) (59 492)

Financing activities

Cash proceeds from capital increases 25 - 4 881

Downpayment on loan facilities 17 - (7 834)

Interest payments 22 (1 214) (951)

Repayments of lease liabilities 17 (9 964) (7 537)

Payments of treasury shares 25 (53 508) (7 012)

Other financial items - (1 067)

Net cash provided by (used in) financing activities (64 686) (19 522)

Net increase (decrease) in cash and cash equivalents 8 696 36 760

Cash and cash equivalents at the beginning of year 191 587 156 277

Foreign currency effects on cash and cash equivalents 5 740 (1 449)

Cash and cash equivalents at end of year 17 206 024 191 587

2023

Amounts in NOK (thousands)

capital

Treasury

premium

Retained

earnings

Currency

translation

reserve

Non-

controlling

interest

Total

equity

Total equity 31.12.2021 1 715 - 605 893 100 067 (5 990) - 701 685

Profit / (-) loss for the period - - - 68 090 - - 68 090

Other comprehensive income - - - - (2 073) - (2 073)

Capital increase 13.07.2022 - - - - - 4 881 4 881

Purchase of treasury shares - (5) - (7 008) - - (7 012)

Total equity 31.12.2022 1 715 (5) 605 893 161 149 (8 064) 4 881 765 569

Total equity 01.01.2023 1 715 (5) 605 893 161 149 (8 064) 4 881 765 569

Profit / (-) loss for the period - - - 107 628 - - 107 628

Other comprehensive income - - - - 24 685 - 24 685

Purchase of own shares - (26) - (53 482) - - (53 508)

Changes in non-controlling

interests

- - - - - (250) (250)

Other changes - - - (449) - - (449)

Total equity 31.12.2023 1 715 (31) 605 893 214 846 16 621 4 631 843 675

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

ANNUAL REPORT

Notes

NOTE 1 REPORTING ENTITY

The reporting entity reflected in these financial

statements is comprised of SmartCraft ASA and

the consolidated subsidiaries that make up the

SmartCraft Group. The parent company SmartCraft

ASA is a Norwegian entity and headquarters is

located at Hvervenmoeveien 45, 3511 Hønefoss,

Norway. The Group operates with offices in

Norway, Sweden and Finland.

SmartCraft ASA is a software company with a

portfolio of related software brands. Currently,

Bygglet, Cordel, Congrid, EL-VIS, HomeRun,

Kvalitetskontroll, El-verdi, Elinn and Coredination

are all brands in the Group’s portfolio. The Group

operates in the Nordic region and provides

SaaS and subscription software solutions for

construction- and craftsmen companies, with

market leading positions in the Nordics.

NOTE 2 BASIS OF PREPARATION

The consolidated financial statements of

SmartCraft ASA and its subsidiaries are prepared

in accordance with IFRS Accounting Standards

as endorsed by the European Union (EU) and

Norwegian authorities and effective as of

December 31st, 2023.

These financial statements also provide disclosures

as specified under the Norwegian Accounting Act

(Regnskapsloven). The financial statements are

prepared on a historical cost basis, except for

certain assets, liabilities, and financial instruments,

which are measured at fair value. Preparation of

financial statements including note disclosures

requires management to make estimates and

assumptions that affect amounts reported. The

estimates and associated assumptions are based

on historical experience and various other factors

that are believed to be reasonable under the

circumstances, the results of which form the basis

of making the judgments about carrying values

of assets and liabilities. Actual results may differ

from these estimates. Slight rounding differences

may occur between the financial statements and

the note disclosures. The estimates and underlying

assumptions are reviewed on an ongoing basis.

Revisions to accounting estimates are recognized

in the period in which the estimate is revised, if the

revision affects only that period, or in the period of

the revision and future periods, or if the revision

affects both current and future periods. Judgments

made by management in the application of IFRS

which have a significant effect on the consolidated

financial statements and estimates, with a

significant risk of material adjustment in the next

year, are discussed in note 4.

NOTE 3 MATERIAL ACCOUNTING

POLICIES

This following description of material accounting

principles applies to the SmartCraft Group’s 2023

financial reporting, including all comparative

figures. The relevant accounting policies for

selected financial statement line items are

described in detail in the specific notes in this set

of financial statements. Changes in accounting

policies and new pronouncements are discussed at

the end of this section.

3.1 Basis of consolidation

The consolidated financial statements include

SmartCraft ASA and subsidiaries, in which

SmartCraft ASA is exposed, or has the rights, to

variable returns from its involvement with the

subsidiary and has the ability to affect those

returns through its power over the investee. Power

is normally achieved through ownership, directly or

indirectly, of more than 50% of the voting power.

Subsidiaries are included from the date control

commences until the date control ceases.

There were nine acquisitions completed during

2019-2023. EL-Info Group where control was

commenced as of April 1st 2019, Congrid Oy as

of December 1st 2020, Homerunbynet Oy as of

2023

May 1st 2021, SmartCraft Norway AS as of June

1st 2021, Kvalitetskontroll AS as of July 1st 2021,

SMCRT MGMT 1 AS as of June 1st 2022, SmartCraft

Software AS as of June 1st 2022, Elverdi Norge AS

as of June 1st 2022, Inprog AS as of October 1st

2022 and Coredination AB as of July 1st 2023.

Intercompany transactions and intercompany

balances, including internal profits and unrealized

gains and losses, are eliminated.

Business combinations

The acquiree’s identifiable assets, liabilities and

contingent liabilities are recognized separately at

the acquisition date at their fair value irrespective

of any non-controlling interest, and goodwill

recognized to the extent the consideration exceeds

identified net assets.

Goodwill

Goodwill is recognized as a part of business

combinations. Goodwill is initially measured

either as the excess of the consideration over the

SmartCraft Group’s interest or the fair value of 100

percent of the acquiree in excess of the acquiree’s

identifiable net assets (full goodwill). Goodwill

is not amortized, but is tested for impairment

annually, and more frequently if indicators of

possible impairment are observed. Goodwill is

allocated to the cash generating units or group’s

of cash generating units expected to benefit from

the synergies of the combination and that are

monitored for internal management purposes.

Foreign currency translation

The Group presents its financial statements in the

Norwegian krone (NOK). This is also the parent

company’s functional currency. Each subsidiary

has local currency of their market as the functional

currency. For consolidation purposes, the balance

sheet figures for subsidiaries with a different

functional currency have been translated at the

rate applicable at the balance sheet date. The

income statement has been translated at the

average rate for the reported period. Exchange

rate differences are recognized in equity.

Changes in exchange rate are recognized in the

statement of comprehensive income as they occur

during the period. When investments in foreign

subsidiaries are sold the accumulated exchange

rate differences relating to the subsidiary are

recognized in the income statement.

3.2 Intangible assets

Intangible assets acquired individually or as a

group are recognized at cost when acquired.

Intangible assets acquired in a business

combination are recognized at fair value separately

from goodwill when they arise from contractual

or legal rights or can be separated from the

acquired entity and sold or transferred. Internally

generated intangible assets are recognized when

the expected future economic benefits that are

attributable to the asset will flow to the entity and

the cost of the asset can be measured reliably.

Development costs are capitalized as intangible

assets at cost in accordance with IAS 38 Intangible

Assets when the recognition criteria are met.

Research expenditures are expensed as incurred.

Intangible assets with indefinite useful life are

tested for impairment yearly. For intangible assets

with definite useful life, SmartCraft reviews the

residual value and useful life of its assets, with any

estimate changes accounted for prospectively over

the remaining useful life of the asset.

Internally generated development:

Expenses relating to research activities are

recognized as they occur. Expenses relating to

development activities are capitalized to the extent

that the product or process is technically and

commercially viable and the Group has sufficient

resources to complete the development work.

Expenses that are capitalized include the costs

of materials, direct wage costs and a share of the

directly attributable common expenses. Capitalized

development costs are recognized at their cost

minus accumulated amortization and impairment

losses.

Cost of building new features and functionality

together with significant and pervasive

improvements of the core platform, provided that

the significant and pervasive improvements of

ANNUAL REPORT

parts or main components of the core platform will

generate probable future economic benefits, are

capitalized as development costs and amortized on

a straight-line basis over the estimated economic

lifetime.

To the extent developers perform updates that are

required to maintain the products functionalities,

the costs are expensed.

Customer relationship:

Customer relationships are recognized as a part

of business combinations and measured initially

as the net present value of the lifetime revenue

from existing customers less cost to fulfill the

contractual obligations. Customer relationships

are depreciated on a straight-line basis over the

expected lifetime of the relationship.

Software:

Software is recognized both as a part of business

combinations and by internal development.

Acquired software in a business combination

is measured at fair value. The fair value

measurement is if possible based on observable

market date, if such date is not available, fair

value is estimated as the expected cost to develop

a similar software and internally developed

software are capitalized in accordance with the

measurement criteria in IAS 38, and amortized on

a straight-line basis over the estimated economic

lifetime.

Brand names:

Brand names that contribute to future economic

benefits are recognized separately from Goodwill

as a part of business combinations. Brand names

are measured using the royalty method, the

management evaluates whether to have indefinite

or definite useful lifetime and tested annually for

impairment.

3.6 Revenue from contracts with

customers

At contract inception, SmartCraft identifies the

promised licenses and services within the contract

and determines which of those are separate

performance obligations. SmartCraft performance

obligations within the contracts are described

below. The timing of the transfer is determined

based on when the customer obtains control of the

delivered licenses or services.

In general, SmartCraft does not pay sales

commission to its partners on sales to customers.

In the event sales commision has been paid,

SmartCraft has applied the practical expedient for

costs to obtain a contracts to immediately expense

sales commissions because the amortization

period of the asset otherwise would have used is

one year or less.

SmartCraft generates revenue from three main

sources and subcategories in total.

Subscriptions

Revenue from software subscriptions (right to

access) are recognized on a straight-line bases over

time, as the customer simultaneously receives and

consumes the benefits of the services. Subscription

contracts are invoiced in advance, up to and mainly

on a 12 month interval.

Integrated services and bundled services

Revenue from the transactional use of integrated

or bundled 3rd party services are recognized at

a point in time, on the time of the services being

rendered and invoiced subsequently at the end of

the month.

Other non-recurring revenue

Expert service-revenue from the sale of support,

consultancy, system set-up and other advisory

services are recognized at a point in time, on

the time of the services being rendered and

invoiced subsequently at the end of the month.

Expert services included in the SaaS and software

subscriptions is not recognized as independent

revenues.

Revenue from sale of hadware, books, manuals, ect

are recognized at the point in time upon delivery.

2023

3.7 Leasing

Identifying a lease

At the inception of a contract, The Group assesses

whether the contract is, or contains, a lease. A

contract is, or contains, a lease if the contract

conveys the right to control the use of an identified

asset for a period of time in exchange for

consideration.

The Group as a lessee

For contracts that constitute, or contain a lease,

the Group separates lease components if it

benefits from the use of each underlying asset

either on its own or together with other resources

that are readily available, and the underlying

asset is neither highly dependent on, nor highly

interrelated with, the other underlying assets in

the contract. The Group then accounts for each

lease component within the contract as a lease

separately from non-lease components of the

contract.

Recognition of leases and exemptions

At the lease commencement date, the Group

recognizes a lease liability and corresponding right-

of-use asset for all lease agreements in which it

is the lessee, except for the following exemptions

applied:

o Short-term leases (defined as 12 months or less)

o Low value assets (defined as less than NOK 50 000)

For these leases, the Group recognizes the lease

payments as other operating expenses in the

statement of profit or loss when they incur.

Lease liabilities

The lease liability is recognized at the

commencement date of the lease. The Group

measures the lease liability at the present value

of the lease payments for the right to use the

underlying asset during the lease term that are

not paid at the commencement date. The lease

term represents the non-cancellable period of the

lease, together with periods covered by an option

either to extend or to terminate the lease when the

Group is reasonably certain to exercise this option.

The lease payments included in the measurement

compromise of:

o Fixed lease payments (including in-substance

fixed payments), less any lease incentives

receivable.

o Variable lease payments that depend on an

index or a rate, initially measured using the

index or rate as at the commencement date.

o Amount expected to be payable by the Group

under residual value guarantees.

o The exercise price of a purchase option, if the

Group is reasonably certain to exercise that

option.

o Payments of penalties for terminating the

lease, if the lease term reflects the Group

exercising an option to terminate the lease.

The lease liability is subsequently measured by

increasing the carrying amount to reflect interest

on the lease liability, reducing the carrying

amount to reflect the lease payments made

and remeasuring the carrying amount to reflect

any reassessment or lease modifications, or to

reflect adjustments in lease payments due to an

adjustment in an index or rate.

The Group does not include variable lease

payments dependent upon an index or a rate, in

the lease liability. Instead, the Group recognizes

these variable lease expenses in the statement of

profit or loss.

SmartCraft presents its lease liabilities as separate

line items in the statement of financial position and

has initially applied weighted average incremental

borrowing rate in the range of 2.75% to 9.98%

when recognizing the lease liability.

Right-of-use assets

The Group measures the right-of-use asset at cost,

less any accumulated depreciation and impairment

losses, adjusted for any remeasurement of

lease liabilities. The cost of the right-of-use asset

comprise:

o The amount of the initial measurement of the

lease liability recognized.

ANNUAL REPORT

o Any lease payments made at or before the

commencement date, less any incentives

received.

o Any initial direct costs incurred by the Group.

An estimate of the costs to be incurred by

the Group in dismantling and removing the

underlying asset, restoring the site on which

it is located or restoring the underlying asset

to the condition required by the terms and

conditions of the lease, unless those costs are

incurred to produce inventories.

SmartCraft applies the depreciation requirements

in IAS 16 Property, Plant and Equipment in

depreciating the right-of-use asset, except that

the right-of-use asset is depreciated from the

commencement date to the earlier of the lease

term and the remaining useful life of the right-of-

use asset.

The Group applies IAS 36 Impairment of Assets

to determine whether the right-of-use asset is

impaired and to account for any impairment loss

identified.

3.8 Financial instruments

Financial assets

Financial assets represent a contractual right by

the SmartCraft Group to receive cash or another

financial asset in the future. Financial assets

include cash and cash equivalents, accounts

receivable and withheld cash receivable. On initial

recognition, a financial asset is measured at fair

value, and classified for subsequent measurement

at amortized cost; at fair value through other

comprehensive income (FVOCI) or at fair value

through profit or loss (FVTPL). Classification

depends on the business model and, for some

instruments, the entity’s choice. Financial assets

are derecognized when the rights to receive cash

from the asset have expired or when SmartCraft

has transferred the asset.

Financial liabilities

Financial liabilities represent a contractual

obligation by the SmartCraft Group to deliver cash

in the future and are classified as either current

or non-current. Financial liabilities include the

long-term loan, contingent liabilities, accounts

payable and other financial liabilities. Financial

liabilities are initially recognized at fair value,

including transaction costs directly attributable to

the transaction, and are subsequently measured

at amortized cost. Financial liabilities are

derecognized when the obligation is discharged

through payment or when SmartCraft is legally

released from the primary responsibility for the

liability.

3.9 Measurement of fair value

SmartCraft measures certain assets and liabilities

at fair value for the purposes of recognition or

disclosure. Non-recurring fair value measurement

is used for transactions, such as business

combinations, contingent consideration and other

non-routine transactions. SmartCraft does not

have any recurring fair value measurement as

the group does not have any derivative financial

instruments, equity investments or other similar

financial assets or liabilities that are measured at

fair value.

3.10 Employee benefit expense

Payments to employees, such as wages, salaries,

social security contributions, paid annual leave

and bonus agreements are accrued in the period

in which the associated services are rendered by

the employee. All Group companies have defined

contribution pension plans. The Group has no

other obligations after payment of the pension

premium has been made. The pension premiums

are charged to expenses as they are incurred.

The company has established a pension scheme

as required by Norwegian law for employees in the

Norwegian entities.

3.11 Current and deferred income tax

The income tax expense consists of tax payable

and changes to deferred tax. Deferred tax liability/

tax assets are calculated on all taxable temporary

differences, except for goodwill for which

amortization is not deductible for tax purposes.

2023

Deferred tax assets are recognized when it is

probable that the company will have sufficient

profit for tax purposes to utilize the tax asset.

SmartCraft recognizes formerly unrecognized

deferred tax assets to the extent that it has

become probable that the Group can utilize the

deferred tax asset. Similarly, the company reduces

its deferred tax assets to the extent that it can no

longer utilize these.

Deferred tax liabilities and deferred tax assets are

measured based on the expected future tax rates

applicable to the companies in the Group where

temporary differences have arisen. Deferred tax

liabilities and deferred tax assets are recognized

at their nominal value and are classified as non-

current liabilities or non-current assets in the

balance sheet. The tax payable and deferred taxes

are recognized directly in equity to the extent they

relate to equity transactions.

3.12 Provisions

Provisions are recognized when, and only when,

the Group has a valid liability (legal or estimated)

because of events that have taken place and it can

be proven probable (more probable than not) that

a financial settlement will take place, as a result of

a liability, and that the size of the amount can be

measured reliably.

3.13 Changes in accounting policies and

new pronouncements

There are no changes in accounting principles

compared to previous years. The Group has

applied all relevant IFRS standards that were in

effect for 2023.

None of the issued, not yet effective, accounting

standards or amendments to such standards

are expected to have significant effects for the

SmartCraft Group’s financial reporting.

3.14 Equity

Treasury shares are shares in SmartCraft ASA

controlled by the Group. When there are

transactions with treasury shares the nominal

value of the shares are booked as treasury shares.

Differences between nominal value of the shares

and the acquisition cost/selling price of the shares

are booked towards other components of equity.

NOTE 4 SIGNIFICANT ESTIMATES AND

JUDGEMENTS

The application of accounting policies requires that

management makes estimates and judgements

in determining certain revenues, expenses, assets

and liabilities. The following areas involve a

significant degree of judgement and complexity,

and may result in significant variation in amounts:

o Identification and initial measurement of

intangible assets acquired in a business

combination – see note 6

o Capitalization of internally generated intangible

assets - see note 13

o Measurement of right of use assets and lease

liabilities - see notes 24

ANNUAL REPORT

The Group policy is to keep its cash in a checking

account. The banks where SmartCraft keeps excess

liquidity are well established and reputable with a

long history of holding deposits without defaults.

Interest risk

The Group has no financial liabilities to lenders

which bear an interest as of 31.12.2023. See notes

7, 22 and 28 for more information. The group has

no hedging of interest risk.

Foreign exchange risk

As of December 31st 2023 the Group has financial

liabilities in foreign currency of TNOK 34 812,

and financial assets in foreign currency in total of

TNOK 226 695. Net amount in foreign currency

translates to a financial asset of TNOK 261 507, and

the exposure of foreign currency risk is considered

low.

NOTE 5 FINANCIAL RISK DISCLOSURES

Credit risk

Credit risk for the Group consists of balances of

accounts receivable in addition to cash deposits

held at several banks that have a long history

and credible reputations. Management believes

customer risk is very low as customers generally

need to pay upfront in order to receive services.

As the Group has a very diverse customer base

and limited customer acquisition cost as well as

no material customer exposures, credit checks

of new and existing customers are not deemed

necessary. If existing customers are not paying for

subscriptions the Group can block access to their

systems. Exposure to default risk on individual

customers is low as the Group has a large number

of customers. However, most customers are

related to the same industry and this exposes the

Group to the industry specific risk. For additional

information regarding loss and loss allowance, see

note 15.

Liquidity risk

The Group needs to maintain enough liquidity

in order to pay running operating costs. Non-

current lease liabilities and non-current financial

liabilities have a maturity of up to 7 years, and all

other financial liabilities (current lease liabilities

and accounts payable) are due within 12 months.

The SmartCraft Group has ample cash to support

operations and liabilities. The SmartCraft Group

has no investments in equity securities and does

not use financial derivatives. For information

regarding future payments of liability, see note 28.

Capital management

Management believes that SmartCraft is in a

growth phase with the intention of increasing

market share and expand into new markets.

Management will undertake M&A where it sees

market growth opportunities. The Group intends

to fund M&A and internal growth through current

cash balances, equity, and external capital from

bonds, banks and similar lenders. The Group

prepares an annual detailed liquidity budget to

ensure sufficient liquidity throughout the year.

2023

Amount Effect on EBT Effect on EBT Amounts in NOK (thousands)31.12.2023+ 5%- 5%Foreign exchange risk sensitivityFinancial assets in foreign currency 226 695 11 335 (11 335)Financial liabilities in foreign currency (34 812) (1 741) 1 741 Total for SmartCraft Group 191 882 9 594 (9 594)Amount Effect on EBT Effect on EBT Amounts in NOK (thousands)31.12.2022+ 5%- 5%Foreign exchange risk sensitivityFinancial assets in foreign currency 113 013 5 651 (5 651)Financial liabilities in foreign currency (46 808) (2 340) 2 340 Total for SmartCraft ASA 66 205 3 310 (3 310)

Revenue Effect on revenue EBITDA Effect on EBITDA Amounts in NOK (thousands)2023+/- 5%2023+/- 5%Foreign exchange risk sensitivitySmartCraft Group consolidated 401 654 +/- 11 698 165 721 +/- 5 724Revenue Effect on revenue EBITDA Effect on EBITDA Amounts in NOK (thousands)2022+/- 5%2022+/- 5%Foreign exchange risk sensitivitySmartCraft Group consolidated 333 423 +/- 9 634 128 419 +/- 4 475

The Group earns revenue in NOK, SEK and EUR.

All operating entities have all material costs and

revenue in their functional currency. This works

as a natural hedge on the currency exchange risk

and as such the management considers the foreign

exchange risk exposure for the group to be low/

moderate. The calculated effect on revenue and

EBITDA is based on a change of 5% in the currency

rate for SEK and EUR towards NOK.

ANNUAL REPORT

NOTE 6 BUSINESS COMBINATIONS

Significant judgment in accounting for

business combinations

In a business combination, consideration, assets

and liabilities are recognized at estimated fair

value, and any excess purchase price included in

goodwill. In the businesses SmartCraft operates,

fair values of individual assets and liabilities are

normally not readily observable in active markets.

Estimation of fair values requires the use of

valuation models for acquired assets and liabilities

as well as ownership interests. Such valuations are

subject to numerous assumptions and are thus

uncertain. The quality of fair value estimates may

impact periodic depreciation and amortization

of fixed assets, and assessment of possible

impairment of assets and/or goodwill in future

periods. The specific significant judgements for

SmartCraft during 2023 include the identification

and fair value of the acquired intangible assets in

Coredination AB. These are all discussed below in

the specific relevant section.

Acquisition in 2023

In 2023 SmartCraft Sweden AB has acquired

100% of the share capital and voting rights of

Coredination AB with the solution Coredination

that provides a digital project tool for fieldwork

management. Coredination further complements

the SmartCraft solutions by adding important

functionality to the SmartCraft portfolio. This

acquisition was financed by cash transfer.

Net profit for Coredination AB is included in

the consolidated financial statements from July

1st, 2023. For the year 2023 the companies’

contribution to the SmartCraft Group amounted to

Purchase consideration: Amounts in NOK (thousands)Cash paid 25 325 Total purchase consideration 25 325 The assets and liabilities recognized as a result of the acquisition are as follows:Amounts in NOK (thousands) Fair value as of acquisition dateCash 1 559 Trade receivables 1 534 Office machinery and equipment 34 Right-of-use assets 1 185 Other receivables 27 Brand 2 043 Technology 10 908 Customer relationships 3 007 Total assets 20 297 Trade creditors 55 Lease liabilities 1 097 Public duties payable 615 Other short-term liabilities 1 430 Deferred tax liability 3 314 Total Liabilites 6 512 Net identifiable assets 13 786 Goodwill 11 539 Total consideration for the shares 25 325

2023

Purchase consideration: Amounts in NOK (thousands)Cash paid 30 650 Contingent consideration (fair value at date of acquisition) 4 000 Total purchase consideration 34 650 The assets and liabilities recognized as a result of the acquisition are as follows:Amounts in NOK (thousands) Fair value as of acquisition dateCash 2 186 Receivables 1 925 Office machinery and equipment 16 Brand 1 654 Technology 13 776 Deferred tax asset 2 983 Customer relationships 1 270 Total assets 23 810 Short-term liabilities 6 014 Other long-term liabilites 5 177 Deferred tax liability 3 674 Total Liabilites 14 864 Net identifiable assets 8 946 Goodwill 25 704 Total consideration for the shares 34 650

TNOK 6 119 in revenues, an EBITDA of TNOK 2 455

and EBT of TNOK 1 590.

If the companies had been included from January

1st, the SmartCraft Group had ended the year with

TNOK 406 990 (+5 335) in revenues, an EBITDA of

TNOK 165 863 (+143) and EBT of TNOK 136 400

(+131).

Significant judgement related to the identification of

the acquired intangible assets and their valuation

Coredination provides a SaaS application for

construction companies, covering workforce

management, machine rental and fleet

management that are highly complementary to

the existing software portfolio for SmartCraft. The

Goodwill arising on the transaction are related

to anticipated profitability of the operations and

anticipated synergies with the existing SmartCraft

solutions. The Goodwill is not tax deductible.

The management places a significant value on the

technology and estimates its value based on the

cost incurred related to the development of the

technology at the time of acquisition. The brand

is established in Sweden and registered for use

in Europe. The brand’s value is based on existing

customers and customer loyalty and the potential

revenue growth for the brand.

Acquisitions in 2022

In 2022 SmartCraft Norway AS has acquired

100% of the share capital and voting rights of two

companies:

o June 1st, 2022, Elverdi Norge AS with the

solution El-verdi that provides a digital

sales tool for electricians. El-verdi further

complements the SmartCraft solutions

by adding important functionality to the

SmartCraft portfolio. This acquisition was

financed by cash transfer.

ANNUAL REPORT

o October 1st, 2022, Inprog AS with the solution

ELinn that provides a SaaS based service for

craftsmen and contractors. ELinn strengthens

the SmartCraft portfolio in the electro domain

even further. This acquisition was financed

by cash transfer and a possible earn-out.

The earn-out is calculated based on achieved

EBITDA for FY2023. Management has assessed

the likelihood of achieving the earn-out.

Net profit for Elverdi Norge AS is included in the

consolidated financial statements from June 1st,

2022, while Inprog AS is included from October

1st, 2022. For the year 2022 the companies’

contribution to the SmartCraft Group amounted to

TNOK 3 823 in revenues, an EBITDA of TNOK 1 844

and EBT of TNOK 730.

If the companies had been included from January

1st, the SmartCraft Group had ended the year with

TNOK 340 483 (+7 060) in revenues, an EBITDA of

TNOK 129 591 (+1 172) and EBT of TNOK 88 986

(-187).

Significant judgement related to the identification of

the acquired intangible assets and their valuation

ELinn and El-verdi are digital industry systems

for electricians that covers orders, project

management and the sales process. The solutions

is at an early stage in their life cycles but is popular

among smaller and new established electrician

companies.

The management places a significant value on the

technology and estimates their value based on the

cost incurred related to the development of the

technology at the time of acquisition.

The brands are established in Norway and

registered for use in Europe. The brand’s value

is based on existing Norwegian customers and

customer loyalty and the potential revenue growth

for the brand.

NOTE 7 FINANCIAL ASSETS AND FINANCIAL LIABILITIES

Amounts in NOK (thousands) Category 31.12.2023 31.12.2022Financial assetsCurrent financial assets FAAC 1 393 660 Accounts Receivable FAAC 64 612 29 478 Accrued revenue FAAC 395 416 Cash and cash equivalents FAAC 206 024 191 587 Total financial assets 272 423 222 141 Financial liabilitiesNon-current financial liabilities FLAC - - VAT and other public taxes FLAC 28 374 21 460 Accrued operating cost FLAC 25 213 19 773 Accounts payable FLAC 8 628 7 829 Current financial liabilities FLAC 39 - Earn-outs related to aqcustions FVTPL 4 000 20 063 Total financial liabilities 66 253 69 124

FAAC - Financial Assets at Amortized Costs

FLAC - Financial Liabilities at Amortized Costs

FVTPL - Fair Value Through P&L

2023

NOTE 8 REVENUE FROM CUSTOMERS

Disaggregation of revenue from contracts with customers

Amounts in NOK (thousands) 2023 2022Revenue from contracts with customers 401 654 333 423 At a point in time revenue recognition 2023 2022Integrated services and bundled services 20 051 18 376 Expert services 7 361 9 759 Other revenue 18 032 14 035 Total at a point in time revenue recognition 45 444 42 170 Over time revenue recognition 2023 2022SaaS (software as a service) 340 277 263 772 Software subscriptions 15 933 27 481 Total over time revenue recognition 356 211 291 253

Deferred revenue

Amounts in NOK (thousands) 31.12.2023 31.12.2022Opening balance 69 936 59 593 Revenue recognized in this period that was included in the deferred revenue (69 936) (59 593)balance at the beginning of the periodAquired through business combinations 25 1 842 Additions in the period 106 004 68 094 Deferred revenue in balance sheet 106 029 69 936

There are not identified any performance obligations related to contracts with costumers that has an

original expected duration more than one year.

Acrrued revenue

Amounts in NOK (thousands) 31.12.2023 31.12.2022Opening balance 416 707 Revenue recognized previous period that was accrued in the beginning of the (416) (707)periodAquired through business combinations - - Revenue recognized in this period that is accrued in the end of the period 395 416 Deferred revenue in balance sheet 395 416

The contract assets are costs incurred on specific customer contracts which has been used to satisfy

performance obligations and are recoverable. There are not identified any contract assets that will not be

recovered during the next year.

ANNUAL REPORT

NOTE 9 SEGMENT INFORMATION

The Group regularly reports detailed profit/loss

statements with emphasis on operating revenue

and EBITDA in functional operating segments to

the Board of Directors. While the Group uses both

measures to analyze performance, the Group’s

strategy of profitable growth means that EBITDA is

the prevailing measure of performance. Operating

segments are reported in the consolidated

financial statements by the emphasized measures

as is presented to the Board of Directors.

The operating units through 2023 have been

countries as a focus area is to expand the

solutions across borders. This also aligns with the

organizational structure that have been settled

with Country Managements and the reporting

structure.

Revenue

Amounts in NOK (thousands) 2023 2022Norway 167 684 140 742 Sweden 183 234 143 164 Finland 50 736 49 517 Total revenue 401 654 333 423

Disaggregation of recurring and non-recurring revenue

Amounts in NOK (thousands) Revenue recognition 2023 2022Fixed price subscriptions Over time 356 219 291 253 - Norway 155 526 127 859 - Sweden 157 836 122 482 - Finland 42 857 40 912 Transaction priced subscriptions (add-on features) Point in time 32 922 29 169 - Norway 5 545 4 503 - Sweden 20 122 18 103 - Finland 7 256 6 564 Total recurring revenue 389 141 320 423 Non-recurring revenue Point in time 12 513 13 001 - Norway 6 613 8 380 - Sweden 5 276 2 579 - Finland 624 2 041 Total revenue 401 654 333 423

2023

Recurring revenue is related to subscription

agreements with customers. The subscription

periods vary between monthly and annual, where

the subscription periods are renewed automatically

unless canceled. All subscription agreements have

a minimum cancelation period of three months.

EBITDA

Amounts in NOK (thousands) 2023 2022Norway 73 692 56 731 Sweden 97 625 74 033 Finland 17 225 15 465 Group/eliminations (22 821) (17 809) Total EBITDA 165 721 128 419

EBT

Amounts in NOK (thousands) 2023 2022Norway 52 121 50 770 Sweden 86 088 67 993 Finland 9 668 (59) Group/eliminations (11 609) (29 532) Total EBT 136 268 89 173

Non/current assets

Amounts in NOK (thousands) 2023 2022Norway 384 397 367 222 Sweden 284 151 233 117 Finland 152 208 143 845 Group/eliminations 559 522 Total non-current assets 821 316 744 707

ANNUAL REPORT

NOTE 10 PAYROLL AND RELATED EXPENSES

Amounts in NOK (thousands) 2023 2022Salaries 128 621 109 521 Social security costs 24 590 19 534 Governmental tax relief (SkatteFUNN) (511) (489)Other personnel related costs 11 228 8 800 Pension expense defined contribution plans 11 192 9 834 Total payroll and related expenses 175 119 147 200 Less capitalized personnel costs 29 482 18 463 Total payroll and related expenses recognized in the P&L 145 637 128 737 Average number of FTEs 189 183

NOTE 11 MANAGEMENT AND BOARD OF DIRECTORS REMUNERATION

Payments to Management and Board of Directors

2023Pension Other Total Amounts in NOK (thousands) Salary Bonusbenefitremunerationremuneration1Gustav Line, CEO 2 530 879 85 10 3 504 2Kjartan Bø, CFO 1 685 167 83 10 1 945 Christian Saleki, CTO 1 340 50 287 97 1 774 Katja Widlund, CMO 1 206 75 189 87 1 557 3Gunnar Haglund, Chairman of the Board - - - 400 400 4Carl Ivarsson, Board member - - - - - 5Allan Engström, Board member - - - - - 6Christina Skogster Stange, Board member - - - 175 175 7Marianne Røren, Board member - - - 215 215 Maria Danell, Board member - - - 175 175 8Bernt Ulstein, Board member - - - 185 185 9Isabell Alvberg , Board member - - - - - Total 6 761 1 171 644 1 354 9 930

1. If the company terminates the employment, Mr. Line is entitled to 6 months’ salary after a 6-month termination period.

2. If the company terminates the employment, Mr. Bø is entitled to 3 months’ salary after a 3-month termination period.

3. Mr. Haglund also serves as Chairman of the Audit Committee and Remuneration Committee.

4. Mr. Ivarsson represents Valedo Partners III AB on the Board of Directors. Mr. Ivarsson receives salary from Valedo and has refrained from remuneration

as a member of the Board. Mr. Ivarsson also serves as a member of the Audit Committee.

5. Mr. Engström represents Valedo Partners III AB on the Board of Directors. Mr. Engström receives salary from Valedo and has refrained from

remuneration as a member of the Board. Mr. Engström also serves as a member of the Remuneration Committee.

6. Ms. Stange served as a member of the Board of Directors until the Annual General Meeting in 2023.

7. Ms. Røren also serves as a member of the Audit Committee.

8. Mr. Ulstein also serves as a member of the Remuneration committee.

9. Ms. Alvberg has served as a member of the Board of Directors from the Annual General Meeting in 2023.

2023

2022Pension Other Total Amounts in NOK (thousands) Salary Bonusbenefitremunerationremuneration1Gustav Line, CEO 2 313 998 40 10 3 361 2Kjartan Bø, CFO 1 370 - 40 10 1 420 Christian Saleki, CTO 1 269 - 265 84 1 618 3Gunnar Haglund, Chairman of the Board - - - 400 400 4Carl Ivarsson, Board member - - - - - 5Allan Engström, Board member - - - - - Christina Skogster Stange, Board member - - - 175 175 6Marianne Røren, Board member - - - 215 215 Maria Danell, Board member - - - 175 175 7Bernt Ulstein, Board member - - - 185 185 Total 4 952 998 345 1 254 7 549

1. If the company terminates the employment, Mr. Line is entitled to 6 months’ salary after a 6-month termination period.

2. If the company terminates the employment, Mr. Bø is entitled to 3 months’ salary after a 3-month termination period.

3. Mr. Haglund also serves as Chairman of the Audit Committee and Remuneration Committee.

4. Mr. Ivarsson represents Valedo Partners III AB on the Board of Directors. Mr. Ivarsson receives salary from Valedo and has refrained from remuneration

as a member of the Board. Mr. Ivarsson also serves as a member of the Audit Committee.

5. Mr. Engström represents Valedo Partners III AB on the Board of Directors. Mr. Engström receives salary from Valedo and has refrained from

remuneration as a member of the Board. Mr. Engström also serves as a member of the Remuneration Committee.

6. Ms. Røren also serves as a member of the Audit Committee.

7. Mr. Ulstein also serves as a member of the Remuneration committee.

The Group senior executive management consists

of the Chief Officer Suite.

The Group has not given any loans or security

deposits to the CEO, the Chairman of the Board or

their related parties for either 2022 or 2023.

A bonus program exists for the senior executive

management of SmartCraft. A limit is set for the

amount of bonus that can be achieved. The size of

the bonus payment is dependent on actual group

performance compared to a set of predefined

targets. The bonus for the CEO is decided on by the

Board of Directors.

The Group has issued a separate report for

remuneration of Group senior executive

management in accordance with The Public

Limited Liability Companies Act § 6-16b. The report

is available at the Group’s website smartcraft.com/

investor-relations/

For shares owned by the management and Board

of Directors see note 25.

ANNUAL REPORT

Goodwill Amounts in NOK (thousands) 2023 2022Acquisition cost 01.01 517 302 491 223 Additions 11 539 25 744 Currency translation 18 739 335 Acquisition cost 31.12 547 580 517 302 Impairment 01.01 - - Impairment - - Accumulated impairment 31.12 - - Net value 31.12 547 580 517 302

Goodwill is recognized as a part of business

combinations. Goodwill is initially measured

either as the excess of the consideration over the

SmartCraft Group’s interest or the fair value of

100% of the acquiree in excess of the acquiree’s

identifiable net assets (full goodwill). Goodwill

is not amortized, but is tested for impairment

annually, and more frequently if indicators of

possible impairment are observed, in accordance

with IAS 36 Impairment of Assets. Goodwill is

allocated to the cash generating units or groups

NOTE 12 GOODWILL AND IMPAIRMENT TESTING OF GOODWILL

of cash generating units expected to benefit from

the synergies of the combination and that are

monitored for internal management purposes.

The SmartCraft Group has goodwill in connection

with the acquisitions of Cordel Norge AS in 2017,

the Bygglet Group in 2018, the EL-Info Group in

2019, Congrid Oy in 2020, Homerunbynet Oy and

Kvalitetskontroll AS in 2021, Elverdi Norge AS and

Inprog AS in 2022, Coredination AB in 2023.

The goodwill is related to know-how and other

non-identified assets from the acquisitions of

shares in the acquired companies. Impairment

testing of the goodwill is carried out at the end of

the year for the respective cash generating units

to which the goodwill relates to. Recoverable

amount, which is determined based on the higher

of the value in use or fair value, is derived from

an assessment of the expected future cash flows

before tax for the next five years, discounted at an

appropriate discount rate before tax that takes into

account the maturity and risk. Recoverable amount

will therefore demonstrate what the value of the

asset is expected to contribute.

The estimated recoverable amount exceeds the

carrying amount with a significant headroom for

all Cash Generating Units (CGU). No impairment

losses are recognized during 2023. In connection

with the impairment testing of goodwill, sensitivity

analysis has been carried out. The sensitivity

analysis has tested changes in WACC, revenue

growth rates, net working capital and EBITDA

margins. There is significant headroom on all

CGUs.

Estimates relating to the impairment test are as

follows:

Goodwill per CGU Amounts in NOK (thousands) 2023 2022The SmartCraft Sweden Group 172 619 150 314 The SmartCraft Finland Group 105 872 99 027 The SmartCraft Norway Group 269 082 267 961 Total 547 573 517 302

2023

Budget and forecast period

The basis for the projection of the future cash

flows estimated is based on the financial budget of

one year approved by the Board of Directors. The

budget in combination with the forecasts represent

the management’s best estimate of the range of

economic conditions that will exist over the useful

life of the asset. The remaining four years of the

forecast period are estimated based on budget and

projected performance. After the five-year period

the growth rate is based on the risk-free rate in the

applicable market.

Growth rate

Growth rate is represented by five-year CAGR,

which is defined as the average annual gross

profit growth rate over a five-year projected

cash flow period. Average rates of growth in

operating revenue are based on the management’s

expectations of future conditions in the markets

in which the business operates, and historical

growth rate for the CGUs. The projected cash flow

also includes a growth assumption of 1.5% in the

terminal value.

The 5-year Compound Annual Growth Rate

(CAGR) is the rate of return that is required for an

investment to grow from its beginning balance to

its ending balance five years later. The calculation

assumes that profits are reinvested at the end

of each period. When testing for impairment

the Group has used a 5-year CAGR in the range

between 16.5% and 17.3% to project the cash flows

beyond the period covered by the most recent

budgets. The discount rates applied to the cash

flow projections range between 15.1% and 17.8%.

When testing for impairment in 2022 the applied

5-year CAGR were between 13% and 15.2% and

WACC ranging from 14% to 15.5%.

EBITDA margin

EBITDA margins are based on the margins

achieved historically, adjusted for expected future

developments in market conditions.

WACC

Future cash flows are discounted to present value

using a discount rate based on a calculation of

a weighted average cost of capital (WACC). The

pre-tax WACC for each CGU is calculated on basis

of a risk-free rate and a risk premium, adjusted by

a beta for the software market. Adjustments for

country specific risks are applied where necessary.

Sensitivity

As of December 31st 2023, the Group’s value in

use for each CGU was significantly higher than the

carrying amount of tested goodwill in all CGUs.

A sensitivity analysis has been performed in

order to determine if a reasonable change in key

assumptions would cause the carrying amount to

exceed the recoverable amount. No such changes

indicate impairment needs. Even with no growth

after the budget/forecast period, it would not

trigger impairment.

ANNUAL REPORT

NOTE 13 INTANGIBLE ASSETS

SmartCraft has capitalized expenses related to

new research and development activities that

are technically and commercially viable for the

business according to IAS 38. Activities related

to maintenance of existing software have not

been capitalized but is recognized in the income

statement.

Total additions in 2023 is TNOK 53 431 that is

reduced by TNOK 980 due to government grants.

Depreciations came to TNOK 24 732 in 2023. TNOK

31 311 has been recognized as development cost

in the income statement (TNOK 31 291 in 2022).

The directly attributable development costs that

are capitalized as a part of the products include

the software development employee costs and an

appropriate portion of the relevant overhead costs.

The costs of product development not fulfilling

the criteria of capitalization are expensed over

the income statement. Amortization of capitalized

development projects are included in other

operating expenses in the table below.

Customer relationships

Customer relationships is related to the purchase

of the Bygglet Group in 2018, the EL-Info Group in

2019, Congrid Oy in 2020, Homerunbynet Oy and

Kvalitetskontroll AS in 2021, Elverdi Norge AS and

Inprog AS in 2022 and Coredination AB in 2023.

The customer relationships are depreciated on a

straight-line basis over 10-20 years as the history

indicates at least 10 to 20-year average lifetime of

customers. The SmartCraft Group has a significant

number of recurring subscriptions.

Software

Software is related to the purchase of the Bygglet

Group in 2018, the EL-Info Group in 2019, Congrid

Oy in 2020, Homerunbynet Oy and Kvalitetskontroll

AS in 2021, Elverdi Norge AS and Inprog AS in 2022

and Coredination AB in 2023 where the group

acquired the Bygglet, EL-VIS, Congrid, Homerun,

Kvalitetskontroll, El-verdi, Elinn and Coredination

software. Software is depreciated on a straight-line

basis over 10 years as the management expects

economic benefits from the software over such

period of time before the software are replaced or

substituted by continuous improvements.

Individual significant assets are:

o Cordel: The original Cordel software has

no allocated value as an asset. The Cordel

SaaS solution consists of several modules,

but the framework is included as capitalized

development with a book value of 11 859 per

31.12.2023 and remaining life of 9 years.

o Bygglet: Bygglet is a true-SaaS born in the

cloud solution with accessibility on multiple

platforms, book value 31.12.2023 is TNOK 10

130 and remaining useful life of 5 years.

o EL-VIS: The EL-VIS software is a modular

solution offering mission critical services in

the electricians’ daily operations, book value

31.12.2023 is TNOK 7 694 and remaining useful

life of 5 years.

o Congrid: The Congrid solution is a cloud-based

tool for complete project management in

construction companies, book value 31.12.2023

is TNOK 10 564 and remaining useful life of 7

years.

o Homerun: The Homerun solution is a digital

tool for construction project communication,

document and procurement management,

book value 31.12.2023 is TNOK 2 562 and

remaining useful life of 7 years.

o Kvalitetskontroll: The Kvalitetskontroll

solution is a cloud-based project management

solution and quality assurance platform for

construction companies, book value 31.12.2023

is TNOK 14 415 and remaining useful life of 7

years.

o El-verdi: The El-verdi solution is a digital sales

tool for electricians, book value 31.12.2023

is TNOK 4 637 and remaining useful life of 8

years.

o ELinn: The ELinn solution is a cloud based

solution for electricians to make offers and

handle project management, book value

31.12.2023 is TNOK 7 233 and remaining useful

life of 8 years.

Further information can be found in note 6 for

acquired intangible assets.

2023

Internally generated development Internally under generated Customer Amounts in NOK (thousands)constructiondevelopmentrelationships Software Brand TotalBalance SmartCraft 01.01.2023 27 910 40 207 90 997 84 214 15 894 259 222 Additions - - - - - - Additions from business - - 10 908 3 007 2 043 15 958 combinationsCapitalized employee benefit and 26 688 10 785 - - - 37 472 other expensesDisposals - - - - - - Reclassification (22 806) 22 806 - - - - Other changes* (980) - - - - (980) Foreign currency translation effect 116 1 470 5 206 3 245 644 10 681 Acquired cost 31.12.2023 30 927 75 268 107 111 90 466 18 581 322 353 Balance SmartCraft 01.01.2023 - 6 475 21 692 20 124 991 49 283 Amortization of the year - 8 700 7 107 8 882 43 24 732 Accumulated amortization - - - - - - disposalsForeign currency translation effect - 301 993 872 94 2 259 Accumulated amortization - 15 476 29 791 29 879 1 128 76 274 31.12.2023Carrying value 31.12.2023 30 927 59 791 77 321 60 587 17 453 246 079 Estimated lifetime 5-10 years 10-20 years 10 years 3 years/indefiniteAmortization schedule Straight line Straight line Straight Straight lineline

* Other changes comprises of government grants related to SkatteFUNN.

ANNUAL REPORT

Internally Customer generated Amounts in NOK (thousands)developmentrelationships Software Brand TotalBalance SmartCraft 01.01.2022 44 892 90 016 69 952 14 083 218 943 Additions - 1 270 14 239 1 812 17 321 Capitalized employee benefit and 23 286 - - - 23 286 other expensesDisposals - - - - - Foreign currency translation effect (61) (289) 23 (1) (328) Acquired cost 31.12.2022 68 117 90 997 84 214 15 894 259 222 Balance SmartCraft 01.01.2022 2 951 15 524 12 636 484 31 596 Amortization of the year 3 524 6 168 7 488 507 17 687 Accumulated amortization disposals - - - - - Accumulated amortization 31.12.2022 6 475 21 692 20 124 991 49 283 Carrying value 31.12.2022 61 642 69 305 64 090 14 903 209 939 Estimated lifetime 5-10 years 10-20 years 10 years 2 years/indefiniteAmortization schedule Straight line Straight line Straight line Straight line

Spesification of expensed research and development costsAmounts in NOK (thousands) 2023 2022Wages and personell costs 25 287 27 128 Consultancy 6 024 4 163 Total expenses 31 311 31 291

NOTE 14 GOVERNMENT GRANTS

Amounts in NOK (thousands) 2023 2022Government grant booked as reduction in payroll expences 511 489 Government grant booked as reduction of the carrying value of the asset 980 571 Total government grants 1 491 1 060

The 2023 government grant has not been received and is included in the Group’s receivables.

2023

NOTE 15 ACCOUNTS RECEIVABLE

Amounts in NOK (thousands) 31.12.2023 31.12.2022Accounts receivable 65 490 30 477 Loss allowance 878 1 000 Total 64 612 29 477

Accounts receivables are initially recognized at

transaction price, subsequently accounted for at

amortized cost and are reviewed for impairment

on an ongoing basis. Individual significant

accounts are assessed for impairment taking into

consideration indicators of financial difficulty

and management assessment. The remaining

receivables are impaired based on an Estimated

Credit Loss-model (ECL). The SmartCraft Group’s

business model for accounts receivable is to hold

the receivables to collect the contractual cash

flows.

Distribution by currency

Amounts in NOK (thousands) 31.12.2023 31.12.2022Accounts receivable NOK 31 773 6 528 Accounts receivable SEK 26 126 18 966 Accounts receivable EUR 7 589 4 983 Total 65 490 30 477

Aging of gross trade receivables

Amounts in NOK (thousands) Total Not overdue < 30 days 30-60 days 60-90 days >90 days31.12.2023 65 490 53 641 9 388 1 387 466 599 Loss allowance 878 107 21 226 143 381 Book value 31.12.2023 64 612 53 534 9 367 1 161 323 217 31.12.2022 30 477 24 649 3 544 1 064 391 829 Loss allowance 1 000 84 14 150 199 553 Book value 31.12.2022 29 477 24 564 3 530 915 192 276

ANNUAL REPORT

Loss and loss allowances

The Group has minor losses historically, which also is expected going forward. The Group tests for loss

allowance by reviewing historical losses against each interval of aging receivables. As of December 31st

2023, the Group has estimated TNOK 878 in loss allowance based on the ECL-model.

Amounts in NOK (thousands) 31.12.2023 31.12.2022Opening balance 01.01. 1 000 742 Foreign currency translation effect 63 (4)Acquired in business combinations - 21 Net allowance / (reversal) (186) 240 Closing balance 31.12. 878 1 000 Realised losses 786 786

NOTE 16 OTHER CURRENT ASSETS

Other current assets

Amounts in NOK (thousands) 31.12.2023 31.12.2022Prepaid expenses 5 640 5 769 Accrued revenue 395 416 Inventory 175 182 Other accruals 1 902 1 394 Total Other current asset 8 112 7 761

Other current accruals consist primarily of accrued revenue, tax claim and prepayments to employees.

NOTE 17 CASH AND CASH EQUIVALENTS

For the purpose of the consolidated statement of cash flow, cash and cash equivalents comprise the

following on December 31st:

Amounts in NOK (thousands) 31.12.2023 31.12.2022Cash at banks and on hand 203 111 188 873 Restricted cash balances 2 913 2 714 Total cash and cash equivalents 206 024 191 587

The Group has restricted cash related to employees’ tax withholding account. The restricted cash can only

be deposited to the Norwegian tax authorities.

2023

Changes in liabilities arising from financing activities

Amounts in NOK (thousands) 31.12.2023 31.12.2022Balance at the beginning of the period 14 604 18 023 Cash changesPrincipal payment to lender/lessor (9 964) (15 371)Interest payment to lender/lessor (776) (560)Non-cash changesBuisniess combinations 1 185 6 677 Inital recognition 4 530 4 513 Change in liability 39 Changes in accrued interest 778 560 Lease modifications 13 491 948 Foreign currency translation effect 501 (185)Balance at the end of the period 25 163 14 604

NOTE 18 ACCOUNTS PAYABLE

Amounts in NOK (thousands) 31.12.2023 31.12.2022Accounts payable 8 628 7 829 Total 8 628 7 829

All accounts payable to suppliers are due within 12 months.

NOTE 19 OTHER CURRENT LIABILITIES

Amounts in NOK (thousands) 31.12.2023 31.12.2022Payroll related liabilities 25 809 24 306 VAT 16 176 10 971 Accrued operating expenses 4 492 4 106 Earn-out for acqusitions 4 000 20 048 Pre-payments from customers* 3 769 3 093 Accrued payroll and bonuses 2 656 1 962 Other 725 1 251 Total Other current liabilities 57 626 65 736

*Pre-payments from customers are payments made from customers to register credits that later can be converted into

transaction-based services or special reports. The prepayments are converted to revenue when the service is acquired. If the

customers doesn’t utilize the credits they are entitled to a payback of the outstanding amount.

The liability for the earn-out for acquisitions pr 31.12.2023 are related to Inprog AS. The liability related to

Inprog AS is estimated to TNOK 4 000 and have been included in the purchase price allocation. The earn-

out is a contingent liability related to the financial performance of Inprog AS by the end of 31.12.2023.

The earn-out is not discounted as the time effects from initial recognition and time for settlement is

considered not significant.

ANNUAL REPORT

NOTE 20 TAXES

Calculation of deferred tax/deferred tax benefit

Amounts in NOK (thousands) 2023 2022Differences evaluated to be offset:Intangible assets arising from business combinations 154 781 147 589 Property, plant and equipment (1 403) 1 684 Non-current receivables 5 046 4 382 Liabilities - 381 Tax losses carry -forward (58) - Other differences 17 190 3 933 Total 175 555 157 969 Deferred tax assets (-) - - Deferred tax (+) 36 580 35 015 Deferred tax (-) / tax assets (+) in balance sheet of 31.12.Tax assets (-)/ deferred tax (+) Norwegian companies 10 012 11 347 Tax assets (-)/ deferred tax (+) foreign companies 26 568 23 668 Total tax assets (-) / deferred tax (+) 36 580 35 015

Amounts in NOK (thousands) 2023 2022Total tax expense for the periodTaxes payable on this years profit 31 630 24 291 Adjusted allocated tax from last year 409 - Change in deferred tax for Norwegian companies (1 349) (834)Change in deferred tax for foreign companies (2 049) (2 374)Total 28 641 21 083 Tax rate 22% 22%Taxes payable for the yearProfit before tax 136 268 89 173 Permanent differences (2 955) 14 443 Change in temporary differences 16 776 11 498 Utilisation of previously unrecognised tax losses - (13 655)Basis for taxes payable 150 089 101 459

Basis for income tax expense, changes in deferred tax and tax payable

2023

Amounts in NOK (thousands) 2023 2022Specification of taxes payableTaxes payable on this years profit 31 865 21 262 Advance tax payment, foreign companies (8 034) (8 424)Tax reduction by SkatteFunn grant (1 491) (1 233)Tax obligation related to merger or acquisition 63 - Carried forward tax compensation - 3 239 Total taxes payable 22 402 14 845

Amounts in NOK (thousands) 2023 2022Reconciling the tax costEarnings before tax 136 268 89 173 Calculated tax at 22 % 29 979 19 618 Tax result permanent differences and tax rate difference (1 910) 3 580 Use of previously unrecognised loss carried (351) (2 129)forward (-) / Increase in valuation allowanceAdjusted allocated tax from last year 922 13 Tax expense 28 640 21 083

Deferred tax assets are recognized when the

Group can document future taxable profits to

utilize the tax asset per company. The deferred tax

asset is recognized for the amount corresponding

to the expected taxable profit based on the

convincing evidence. The carrying amount of

deferred tax assets is reviewed at each reporting

date and reduced to the extent that convincing

evidence no longer exists for the utilization.

Unrecognized deferred tax assets are reassessed

at each reporting date and are recognized to the

extent that convincing evidence exists supporting

that taxable profits will allow the deferred tax asset

to be recovered. The actual outcome of future tax

costs may deviate from these estimates.

ANNUAL REPORT

NOTE 21 OTHER OPERATING EXPENSES

Amounts in NOK (thousands) 2023 2022Miscellaneous office expenses 3 505 2 825 Office premises 4 930 4 186 Fixtures and fittings 4 238 4 434 External services 17 459 13 841 Travel and vehicle expenses 3 436 3 942 Marketing 14 937 11 217 Loss on receivables 828 786 Transaction costs on acquisitions 221 952 Other 8 061 6 813 Total 57 616 48 996

Audit fees

The Group has the following audit related fees,

provided by our elected auditor, included in

the legal and audit fees in the table above (all

figures excl. VAT). The table below shows the

remuneration to the group auditors in 2023 and

2022. Other audit related services in 2022 are

mainly related to attestation required as part of the

restructuring of the Group.

Amounts in NOK (thousands) 2023 2022Statutory audit 1 723 1 220 Other audit related services - 261 Total 1 723 1 482

2023

NOTE 22 FINANCIAL ITEMS

Financial items

Amounts in NOK (thousands) 2023 2022Interest income 3 544 895 Exchange rate gains 25 795 16 289 Other financial income 180 4 Financial income 29 520 17 188 Interest expense 388 544 Interest expense on lease liabilties 776 560 Exchange rate losses 21 554 15 187 Other financial expense 51 122 Financial expense 22 768 16 414 Change in earnout - 12 364 Net financial items 6 752 (11 589)

When acquiring Elverdi Norge AS and Inprog AS the Group also acquired financial liabilities to financial

institutions that were repaid during 2022.

NOTE 23 TANGIBLE ASSETS

Tangible assets consisting of office equipment and vehicles are recognized at acquisition cost. The carrying

value is comprised of the historical cost less accumulated depreciation and accumulated impairment

losses (if any).

Depreciation expenses are measured on a straight-line basis over the estimated useful life of the asset,

commencing when the asset is ready for its intended use.

At each financial year-end SmartCraft reviews the residual value and useful life of its assets, with any

estimate changes accounted for prospectively over the remaining useful life of the asset.

ANNUAL REPORT

Amounts in NOK (thousands) Vehicles Office equipment TotalBalance SmartCraft 01.01.2023 1 122 9 676 10 797 Additions - 1 474 1 474 Acquisitions of a subidiary - 34 34 Disposals - - - Foreign currency translation effect - 273 273 Acquried cost 31.12.2023 1 122 11 457 12 578 Accumulated depreciation and impairmentBalance SmartCraft 01.01.2023 353 7 131 7 483 Depreciation of the year 207 1 691 1 898 Impairment of the year - - - Accumulated depreciation disposals - - - Foreing currency translation effect - 196 196 Accumulated depreciation and impairments 31.12.2023 560 9 018 9 578 Carrying value 31.12.2023 562 2 439 3 001 Amounts in NOK (thousands) Vehicles Office equipment TotalBalance SmartCraft 01.01.2022 1 424 8 981 10 405 Additions - 1 003 1 003 Acquisitions of a subidiary - 16 16 Disposals (302) (269) (571)Foreign currency translation effect - (55) (55)Acquried cost 31.12.2022 1 122 9 676 10 798 Accumulated depreciation and impairmentBalance SmartCraft 01.01.2022 146 5 527 5 673 Depreciation of the year 207 1 662 1 869 Impairment of the year - - - Accumulated depreciation disposals - (58) (58)Accumulated depreciation and impairments 31.12.2022 353 7 131 7 483 Carrying value 31.12.2022 769 2 545 3 314

NOTE 24 LEASING

Office buildings consist of leased assets (right-of-use assets). The Group has contracts divided into the

category’s office buildings, vehicles and machinery. Short-term and low-value leases are excluded from

the lease accounting. When measuring leases, SmartCraft includes fixed lease payments for extension

periods reasonably certain to be used. As a practical expedient, non-lease components are not separated

from lease contracts, and not recognized but expensed in the period when the lease expense is incurred.

Judgement is applied in assessing whether renewal options are reasonably certain to be utilized.

2023

Office buildings Vehicles Machinery (Right-of-use (Right-of-use (Right-of-use Amounts in NOK (thousands)assets)assets)assets) TotalBalance SmartCraft 01.01.2023 32 931 4 863 645 38 439 Additions and adjustments 15 772 3 340 - 19 112 Acquisitions of a subidiary 571 613 - 1 185 Disposals (619) (282) - (901)Foreign currency translation effect 932 6 (0) 938 Acquried cost 31.12.2023 49 587 8 540 645 58 772 Accumulated depreciation and impairmentBalance SmartCraft 01.01.2023 20 401 3 242 645 24 288 Depreciation of the year 7 629 1 945 - 9 574 Impairment of the year - - - - Accumulated depreciation disposals (236) (110) - (345)Foreign currency translation effect 655 (55) - 600 Accumulated depreciation and impairments 31.12.2023 28 450 5 022 645 34 117 Carrying value 31.12.2023 21 137 3 519 0 24 656 Balance SmartCraft 01.01.2022 28 264 4 286 645 33 195 Additions 4 081 616 - 4 697 Acquisitions of a subidiary 764 - - 764 Disposals - - - - Foreign currency translation effect (178) (39) - (217)Acquried cost 31.12.2022 32 931 4 863 645 38 439 Accumulated depreciation and impairmentBalance SmartCraft 01.01.2022 13 628 2 021 537 16 186 Depreciation of the year 6 773 1 221 107 8 101 Impairment of the year - - - - Accumulated depreciation disposals - - - - Accumulated depreciation and impairments 31.12.2022 20 401 3 242 645 24 288 Carrying value 31.12.2022 12 530 1 621 0 14 152

Depreciation expenses are measured on a straight-line basis over the contract period of the asset,

commencing when the asset is ready for its intended use.

ANNUAL REPORT

Lease liabilities

Amounts in NOK (thousands) 31.12.2023 31.12.2022Current lease liabilities 10 360 7 602 Non-current lease liabilites 14 764 7 002 Balance at the beginning of the period 14 604 16 865 Cash changesPayment to lessor (9 964) (8 097)Non-cash changesInitial recognition 4 530 4 513 Buisness combinations 1 185 Accrued interest 778 560 Lease modifications 13 491 948 Foreign currency translation effect 501 (185)Balance at the end of the period 25 124 14 604

Total undiscounted lease liabilities

Amounts in NOK (thousands) Maturity analysis Total 2023Less than 1 year 10 234 10 234 1-2-years 6 540 6 540 2-3 years 5 658 5 658 3-4 years 1 822 1 822 4-5 years 1 715 1 715 More than 5 years 196 196 Total undiscounted lease liability 26 165 26 165

The SmartCraft Group has some leases that are not accounted for as right-of-use assets and lease

liabilities at the balance sheet date because they are exempted as low-value or short-term leases. The

amount of the future minimum lease payments due under these leases is considered to not be material.

Expenses related to the right of use assets and lease liabilites recongized in the P&L

2023 2022Total lease expenses related to short-term or low value leases 972 1 367 Depreciation 9 574 8 101 Interest on lease liabilites 778 560 Total expenses from leases recognized in the P&L 11 324 10 028

The Group has not included any extension options in recognizing right-of-use assets and lease liabilities,

based on the high level of uncertainty regarding future needs.

2023

NOTE 25 SUBSIDIARIES AND SHAREHOLDERS

The consolidated Group financial statements include the financial statements of SmartCraft ASA and the

subsidiaries listed in the following table:

Functional Ownership Voting rights Acquired LocationcurrencySMCRT MGMT 1 AS 81 % 81 % 2022 Hønefoss, Norway NOKSmartCraft Software AS 99.8 % 99.8 % 2022 Hønefoss, Norway NOKSmartCraft Norway AS (indirect) 100 % 100 % 2021 Hønefoss, Norway NOKCordel Norge AS (indirect) 100 % 100 % 2017 Ålesund, Norway NOKKvalitetskontroll AS (indirect) 100 % 100 % 2021 Rong, Norway NOKInprog AS (indirect) 100 % 100 % 2022 Verdal, Norway NOKSmartCraft Sweden AB (indirect) 100 % 100 % 2018 Gothenburg, Sweden SEKBygglet AB (indirect) 100 % 100 % 2018 Gothenburg, Sweden SEKEl-Info i Växjö AB (indirect) 100 % 100 % 2019 Växjö, Sweden SEKCoredination AB (indirect) 100 % 100 % 2023 Stockholm, Sweden SEKCongrid Oy (indirect) 100 % 100 % 2020 Helsinki, Finland EURHomerunbynet OY (indirect) 100 % 100 % 2021 Iisalmi, Finland EUR

When establishing the LTIP invited personnel signed up for 20 % of the shares in SMCRT MGMT AS. The

signing was a total of TNOK 4 881. Changes in non-controlling interests is due to changes in participants in

the LTIP during 2023.

All subsidiaries follow the same financial calendar as the Group with year end on December 31st.

As of December 31st 2023, SmartCraft ASA has 171 522 305 issued common shares, each with a nominal

value of NOK 0,01. Each share grants 1 voting right. Total share capital amounts to NOK 1 715 223.

ANNUAL REPORT

SmartCraft ASA shareholders as of December 31st, 2023

Number of Percent of Shareholderscommon sharesshareholdingValedo Partners III AB 67 903 692 39.6 %State Street Bank and Trust Comp 25 103 311 14.6 %Bernt Ulstein (via B. Ulstein AS) 11 306 975 6.6 %HSBC Bank Plc 4 264 661 2.5 %Svenska Handelsbanken AB 3 082 918 1.8 %1SmartCraft ASA (Treasury shares) 3 053 862 1.8 %The Northern Trust Comp, London Br 2 760 410 1.6 %Swedbank AB 2 654 120 1.5 %BNP Paribas 2 377 564 1.4 %Skandinaviska Enskilda Banken AB 2 344 420 1.4 %State Street Bank and Trust Comp 2 336 700 1.4 %BNP Paribas 2 335 165 1.4 %J.P. Morgan SE 2 211 887 1.3 %Gustav Line (via Line Invest AS) 2 078 025 1.2 %CACEIS Bank 2 066 831 1.2 %State Street Bank and Trust Comp 2 060 271 1.2 %Mustad Industrier AS 1 900 000 1.1 %Gunnar Haglund, Chairman of the Board (via Skarvhagen Förvaltning AB) 1 004 800 0.6 %Marianne Bergman Røren, Board member 5 617 0.0 %Maria Danell, Board member 5 617 0.0 %Isabella Alveberg, Board member 575 0.0 %Kjartan Bø, CFO (via KBI AS) 298 000 0.2 %Christian Saleki, CTO 18 149 0.0 %Katja Widlund, CMO 70 809 0.0 %Other (< 1%) 30 277 926 17.7 %Total 171 522 305 100.0 %

1. There were performed transactions 28.12.2023 and 29.12.2023 where SmartCraft ASA purchased additionally 7 423 and 14 964

treasury shares. Due to holidays these transactions were not registered in VPS pr 31.12.2023.

2023

SmartCraft ASA shareholders as of December 31st, 2022

Number of Percent of Shareholderscommon sharesshareholdingValedo Partners III AB 67 903 692 39.6 %State Street Bank and Trust Comp 24 018 025 14.0 %Bernt Ulstein (via B. Ulstein AS) 10 736 010 6.3 %The Northern Trust Comp, London Br 4 475 443 2.6 %Skandinaviska Enskilda Banken AB 3 938 930 2.3 %Svenska Handelsbanken AB 3 501 241 2.0 %HSBC Bank Plc 3 491 134 2.0 %Swedbank AB 3 061 264 1.8 %J.P. Morgan SE 2 880 411 1.7 %BNP Paribas 2 411 904 1.4 %Clearstream Banking S.A. 2 297 996 1.3 %State Street Bank and Trust Comp 2 289 190 1.3 %BNP Paribas SA Luxembourg 2 243 964 1.3 %J.P. Morgan SE 2 211 887 1.3 %Gustav Line (via Line Invest AS) 2 078 025 1.2 %State Street Bank and Trust Comp 2 020 557 1.2 %CACEIS Bank 1 662 344 1.0 %Gunnar Haglund, Chairman of the Board (via Skarvhagen Förvaltning AB) 1 004 800 0.6 %Marianne Bergman Røren, Board member 5 617 0.0 %Maria Danell, Board member 5 617 0.0 %Christine Skogster Stange, Board member 589 0.0 %Kjartan Bø, CFO (via KBI AS) 298 000 0.2 %Christian Saleki, CTO 18 149 0.0 %Other (< 1%) 28 967 516 16.9 %Total 171 522 305 100.0 %

ANNUAL REPORT

NOTE 26 EARNING PER SHARE

The calculation of earnings per share is based on the profit of the year attributable to the shareholders

of the parent company and a weighted average number of shares outstanding during the year ending

31st December. Treasury shares purchased during the period is excluded in the calculation of weighted

average number of shares from the date the shares are purchased.

Amounts in NOK (thousands) 2023 2022Profit for the year 107 628 68 090 Profit for the year attributable to non-controlling interests - - Profit for the year attributable to equity holders of SmartCraft ASA 107 628 68 090 Average numbers of common shares 169 575 195 171 484 845 Earning per share and diluted earnings per share NOK 0,63 0,40

2023 Own shares Number of shares Ytd average01.01.2023 451 001 171 071 304 468 689 January 181 932 170 889 372 14 052 480 February 308 406 170 580 966 13 097 738 March 317 364 170 263 602 14 475 943 April 103 325 170 160 277 14 457 058 May 340 678 169 819 599 13 969 068 June 353 348 169 466 251 14 875 986 July 388 840 169 077 411 13 445 339 August 159 231 168 918 180 14 352 398 September 114 446 168 803 734 14 340 746 October 115 240 168 688 494 13 869 878 November 126 784 168 561 710 13 858 821 December 115 654 168 446 056 14 311 051 Shares outstanding 31.12 3 076 249 168 446 056 169 575 195 2022 Own shares Number of shares Ytd average01.01.2022 171 522 305 143 796 782 November 216 759 171 305 546 13 149 273 December 234 242 171 071 304 14 538 791 Shares outstanding 31.12 451 001 171 071 304 171 484 845

SmartCraft ASA has during 2023 bought 2 625 248 own shares at total of TNOK 53 508. In 2022, SmartCraft

ASA bought 451 001 own shares at total of TNOK 7 012 as part of a share buy-back program. The buy-back

program was authorized by the Extraordinary General Meeting held November 2nd 2022 and is managed

by Carnegie AS.

As of December 31st 2023, the SmartCraft Group has no share options, share incentive schemes or

employee share purchase programs.

2023

NOTE 27 RELATED PARTIES

The sales to and purchases from related parties are made at arm’s length prices. Outstanding balances at

the year-end are unsecured, interest free and settlement occurs in cash. There have been no guarantees

provided or received for any related party receivables or payables.

There are no such transactions in 2023 and 2022. All transactions are at arm’s length market prices.

NOTE 28 CURRENT AND NON-CURRENT FINANCIAL LIABILITIES

NOTE 29 SUBSEQUENT EVENTS

There have been no significant subsequent events that could affect the Group financial statements as of

31st December 2023.

Current financial liabilities

Amounts in NOK (thousands) 31.12.2023 31.12.2022Current portion of loan facilities - - Accrued interest - - Current portion of lease liabilities 10 360 7 602 Other current financial liabilities 39 - Total current financial liabilities at 31.12 10 399 7 602

Non-current financial liabilities

Amounts in NOK (thousands) Lease liabilities Financial liabilities Total 2022Less than 1 year 10 234 - 10 234 1-2-years 6 540 - 6 540 2-3 years 5 658 - 5 658 3-4 years 1 822 - 1 822 4-5 years 1 715 - 1 715 More than 5 years 196 - 196 Total undiscounted financial liabilities at 31.12 26 165 - 26 165

Covenants

There are no financial liabilities related to external loans as of December 31st 2023. The Group has no

covenants regarding its financial liabilities.

Collateral

The Groups had no collateral related to the financial liabilities as of December 31st 2023.

ANNUAL REPORT

Alternative Performance

Measures (APMs)

The following terms are used by the Group in definitions of APMs:

o EBITDA: Is defined as operating income before depreciation of tangible and intangible non-current

assets.

o Adjusted EBITDA: Is defined as EBITDA adjusted for special operating items that distorts comparison,

such as acquisition related expenses, listing preparation costs and other items which are special in

nature compared to ordinary operational income or expenses.

o Adjusted EBITDA margin (%): Is defined as Adjusted EBITDA divided by sales, expressed as a

percentage.

o Adjusted EBITDA – Capex margin (%): Is defined as Adjusted EBITDA – R&D capex divided by sales,

expressed as a percentage.

o Annual Recurring Revenue (“ARR”): Is defined as a 12 month subscription value of the Group’s

customer base at the end of the reporting period. The ARR metric only includes fixed price

subscriptions.

o Recurring Revenue (%): Is defined as subscription revenue generated over the historical period

divided by sales for the same period, expressed as a percentage. Recurring Revenue includes both

fixed price and transaction-based subscription revenues.

o Average Revenue Per Customer (“ARPC”): Is defined as the annualized monthly total operating

revenue divided by the number of customers at the end of the month.

o Churn Rate (%): Is a measure of loss of ARR on a rolling 12-month basis, expressed as a percentage of

average monthly ingoing ARR for the same 12-month period.

2023

Amounts in NOK (thousands) Note 2023 2022

Revenue from customers 8 401 654 333 423

Total operating revenue 401 654 333 423

Amounts in NOK (thousands) Note 2023 2022

EBITDA 165 721 128 419

Adjustments of special items 1 525 2 911

Adjusted EBITDA 167 245 131 331

EBITDA-margin 41.3 % 38.5 %

Adjusted EBITDA-margin 41.6 % 39.4 %

Amounts in NOK (thousands) Note 2023 2022

Adjusted EBITDA 167 245 131 331

Capitalized development expenses 37 472 23 857

Adjusted EBITDA - CAPEX margin 32.3 % 32.2 %

2023 2022

Annual Recurring Revenue (ARR) (EoP) TNOK 386 641 318 348

Recurring revenue 96.9 % 96.1 %

Average Revenue per Customer (ARPC) NOK 32 452 27 857

Churn rate (R12m) 7.2 % 6.1 %

ANNUAL REPORT

Financial statements -

SmartCraft ASA

REVENUE STATEMENT

Amounts in NOK (thousands) Note 2023 2022

Operating income and operating expenses

Revenue 2 14 289 11 332

Total income 14 289 11 332

Employee benefits expense 3 15 719 11 334

Depreciation and amortisation expenses 4 50 19

Other expenses 3, 5 7 640 17 866

Total expenses 23 409 17 866

Operating profit (9 120) (6 534)

Financial income and expenses

Income from subsidiaries 1 911 31 455

Interest income from group companies 6 818 2 728

Other interest income 6 3 237 875

Other financial income 6 25 108 16 190

Interest expense to group companies 5 332 686

Other interest expenses 6 278 1 406

Other financial expenses 6 20 961 14 718

Net financial items 10 503 34 437

Net profit before tax 1 383 27 903

Income tax expense 7 290 6 143

Net profit / loss 8 1 093 21 760

Distributed profit / loss

Other equity 1 093 21 760

Total distributed 1 093 21 760

2023

BALANCE SHEET

Assets

Amounts in NOK (thousands) Note 2023 2022

Non-current assets

Trademark and other intangible assets 399 446

Total intangible assets 399 446

Fixtures and office equipment 4 12 16

Total property, plant and equipment 4 12 16

Non-current financial assets

Investments in subsidiaries 9 508 119 507 786

Total non-current financial assets 508 119 507 786

Total non-current assets 508 531 508 248

Current assets

Debtors

Other short-term receivables 371 435

Receivables from group companies 10 128 100 184 728

Total receivables 128 471 185 163

Cash and cash equivalents 11 178 616 67 617

Total current assets 307 087 252 780

Total assets 815 618 761 028

ANNUAL REPORT

Equity and liabilities

Amounts in NOK (thousands) Note 2023 2022

Equity

Contributed equity

Share capital 12 1 715 1 715

Treasury stock 12, 13 (31) (5)

Share premium reserve 605 893 605 893

Total contributed equity 607 577 607 603

Retained earnings

Other equity 8 910 61 299

Total retained earnings 8 910 61 299

Total equity 8 616 487 668 902

Liabilities

Deferred tax 7 1 113 1 069

Total provisions 1 113 1 069

Current liabilities

Trade payables 324 232

Tax payable 7 247 6 462

Public duties payable 512 545

Liabilities to group companies 10 194 125 79 990

Other current liabilities 14 2 810 3 826

Total current liabilities 198 018 91 056

Total liabilities 199 131 92 125

Total equity and liabilities 815 618 761 028

2023

April 10th, 2024

Board of Directors and CEO, SmartCraft ASA

Bernt Ulstein

Board member

Maria Danell

Board member

Gustav Line

CEO

Isabella Alveberg

Board member

Marianne Bergmann Røren

Board member

Carl Ivarsson

Board member

Gunnar Haglund

Chairman of the Board

Allan Engström

Board member

ANNUAL REPORT

INDIRECT CASH FLOW

Amounts in NOK (thousands) Note 2023 2022

Cash flows from operating activities

Profit/loss before tax 27 903 27 903

Taxation paid (1 146) (1 146)

Loss/gain on the sale of fixed assets 5 (131) -

Ordinary depreciation 50 19

Change in accounts payable 92 (969)

Items classified as investment or financing activities - 1 406

Change in other accrual items (985) 647

Net cash flows from operating activities 6 053 27 861

Cash flows from investment activities

Payments to buy tangible assets - (481)

Proceeds from sale of shares 331 -

Payments to buy shares and participations in other companies (533) (19 663)

Group contributions 24 166 64 194

Net cash flows from investment activities 23 964 44 050

Cash flows from financing activities

Change in intercompany debt (39 647) (17 580)

Change in cashpool account 186 244 (46 537)

Interest paid - (1 406)

Other financial items 13 (53 508) (7 012)

Net cash flows from financing activities 93 089 (72 536)

Net change in cash and cash equivalents 111 000 (1 105)

Cash and cash equivalents at the start of the period 67 617 68 242

Cash and cash equivalents at the end of the period 11 178 616 67 617

2023

ACCOUNTING PRINCIPLES

The annual accounts have been prepared in

conformity with the provisions of the Accounting

Act and good accounting practice.

Use of estimates

In the preparation of the annual accounts

estimates and assumptions have been made that

have affected the profit and loss account and the

valuation of assets and liabilities, and uncertain

assets and liabilities on the balance sheet date in

accordance with generally accepted accounting

practice. Areas which to a large extent contain such

subjective evaluations, a high degree of complexity,

or areas where the assumptions and estimates are

material for the annual accounts, are described in

the notes.

Revenues

Services are posted as income as they are

delivered. The company provides management

services for the other companies in the SmartCraft

Group.

Tax

The tax charge in the profit and loss account

consists of tax payable for the period and the

change in deferred tax. Deferred tax is calculated

at the tax rate at 22 % on the basis of tax-reducing

and tax-increasing temporary differences that exist

between accounting and tax values, and the tax

loss carried forward at the end of the accounting

year. Tax-increasing and tax-reducing temporary

differences that reverse or may reverse in the

same period are set off and entered net. The net

deferred tax receivable is entered on the

balance sheet to the extent that it is likely that it

can be utilised.

Classification and valuation of fixed

assets

Fixed assets consist of assets intended for long-

term ownership and use. Fixed assets are valued at

acquisition cost less depreciation and write-downs.

Long-term liabilities are entered on the balance

sheet at the nominal amount at the time of the

transaction.

Plant and equipment is capitalised and appreciated

over the economic lifetime of the asset. Significant

items of plant and equipment that consist of

several material components with different

lifetimes are broken down in order to establish

different depreciation periods for the different

components. Direct maintenance of plant and

equipment is expensed on an ongoing basis under

operating costs, while additions or improvements

are added to the asset’s cost price and depreciated

in line with the asset. Plant and equipment is

written down to the recoverable amount in the

event of a fall in value that is not expected to be

temporary. The recoverable amount is the higher

of the net sales value and the value in use. Value

in use is the present value of future cash flows

related to the asset. The write-down is reversed

when the basis for the write-down is no longer

present.

Classification and valuation of current

assets

Current assets and short-term liabilities consist

normally of items that fall due for payment within

one year of the balance sheet date, as well as items

related to the stock cycle. Current assets are valued

at the lower of acquisition cost and fair value.

Short-term liabilities are entered on the balance

sheet at the nominal amount at the time of the

transaction.

Subsidiaries and associated companies

Subsidiaries and associated companies are valued

using the cost method in the company accounts.

The investment is valued at acquisition cost for the

shares unless a write-down has been necessary.

A write-down to fair value is made when a fall in

value is due to reasons that cannot be expected

to be temporary and such write-down must be

considered as necessary in accordance with good

accounting practice. Write-downs are reversed

when the basis for the write-down is no longer

present.

Dividends, group contributions and other

distributions from subsidiaries are posted to

ANNUAL REPORT

income in the same year as provided for in the

distributor’s accounts. To the extent that dividends/

group contributions exceed the share of profits

earned after the date of acquisition, the excess

amounts represents a repayment of invested

capital, and distributions are deducted from the

investment’s value in the balance sheet of the

parent company.

Receivables

Receivables from customers and other receivables

are entered at par value after deducting a

provision for expected losses. The provision

for losses is made on the basis of an individual

assessment of the respective receivables. In

addition an unspecified provision is made to cover

expected losses on claims in respect of customer

receivables.

Revenues

Income from the sale of goods is recognised on

the date of delivery. Services are posted as income

as they are delivered. Income from the sale of

services and long-term manufacturing projects

(construction contracts) are posted to the profit

and loss account in line with the project’s degree of

completion, when the outcome of the transaction

can be estimated in a reliable manner. When the

transaction’s outcome cannot be estimated

reliably, only income corresponding to a projects’

incurred costs can be posted as revenue. At the

time when it is identified that the project will give a

negative result, the estimated loss on the contract

is posted in full to the profit and loss account.

Cash flow statement

The cash flow statement has been prepared using

the indirect method. Cash and cash equivalents

consist of cash, bank deposits and other short-

term, liquid investments.

2023

NOTE 1 FINANCIAL MARKET RISK

Smartcraft ASA have a limited activity other than management of group companies.

Credit risk

The company has a credit risk related to receivables from group companies. The risk of a counterpart not

having the financial capacity to fulfil its obligations is considered to be low. Historically, there have been no

losses on intercompany receivables.

Currency risk

The company’s currency exposure is related to intercompany balances being booked in the local currency

of the counterpart. As of December 31, 2023 SmartCraft ASA has financial liabilities of TSEK 51 315, and

financial assets of TEUR 5 654 and TSEK 64 397. The exposure of foreign currency is concidered low.

NOTE 2 SALES INCOME

Amounts in NOK (thousands) 2023 2022

By business area

Management services 14 289 11 332

Total 14 289 11 332

Geographic breakdown

Norway 14 178 7 867

Sweden 53 2 401

Finland 58 1 065

Total 14 289 11 332

NOTE 3 SALARY COSTS AND BENEFITS, REMUNERATION TO THE CHIEF

EXECUTIVE, BOARD AND AUDITOR

Salary cost

Amounts in NOK (thousands) 2023 2022

Salaries 7 795 7 522

Employment tax 1 486 1 067

Pension costs 285 138

Other benefits 6 153 2 498

Total 15 719 11 225

In 2023 the company employed 4 full time employees.

Pension liabilities

The company is liable to maintain an occupational pension scheme under the Mandatory Occupational

Pensions Act. The company’s pension schemes are defined contribution schemes and satisfy the

requirements of this Act.

ANNUAL REPORT

Remuneration to leading personnel

Amounts in NOK (thousands) Chief Executive Officer Board

Salaries 2 530 -

Pension costs 85 -

Other remuneration 889 1 150

Total 3504 1 150

If the company terminates the employment the CEO is entitled to 6 monts’ salary after a 6 month

termination period. There are no loans or collateral granted the CEO or members of the Board. SmartCraft

ASA has prepared a report for remuneration to leading personnel in accordance with the Accounting Act §

7-31b.

Auditor

Remuneration to the elected auditor for 2023 amount to TNOK 838 ex. vat. where TNOK 381 is

remuneration for auditors elected at the Annual General Meeting in 2023.

NOTE 4 NON-CURRENT ASSETS

Amounts in NOK (thousands)

Fixtures

and office

equipment

Trademark and

other intangible

assets Total

Purchase cost as of 01.01.23 17 464 481

Acquisition cost 31.12.2023 17 464 481

Accumulated depreciations 31.12.23 5 65 70

Book value 31.12.2023 12 399 411

This year’s ordinary depreciation 3 47 50

Economic lifetime 5 years 10 years

Decreciation plan Linear Linear

NOTE 5 INDIVIDUAL TRANSACTIONS

In 2022 the company performed a restructuring of the Group companies as part of implementing a

Management Investment Program. As part of the restructuring the shares in SmartCraft Norway AS,

SmartCraft Sweden AB and Congrid Oy were transferred to SmartCraft Software AS, while the shares in

Cordel Norge AS were transferred to SmartCraft Norway AS. The transfer was booked at fair value but due

to the requirement of continuity for non-transactions in accordance with the Accounting Act the gains of

TNOK 2 052 255 were reversed.

2023

NOTE 6 ITEMS THAT ARE AGGREGATED IN THE ACCOUNTS

Finacial income

Amounts in NOK 2023 2022

Interest income CashPool 3 237 875

Agio 25 108 16 190

Total financial income 28 344 17 065

Financial costs

Amounts in NOK 2023 2022

Interest costs from companies in the same group - -

Interest and provisions for CashPool 213 1 402

Other interest expenses 65 5

Disagio 20 961 14 718

Total financial costs 21 239 16 124

ANNUAL REPORT

NOTE 7 TAX

This year’s tax expense

Amounts in NOK (thousands) 2023 2022

Entered tax on ordinary profit/loss:

Payable tax 247 6 462

Changes in deferred tax 43 (319)

Tax expense on ordinary profit/loss 290 6 143

Taxable income:

Ordinary result before tax 1 383 27 903

Permanent differences (1 843) (31 435)

Changes in temporary differences (197) 1 450

Received intra-group contribution 1 780 31 455

Taxable income 1 123 29 373

Payable tax in the balance:

Payable tax on this year's result (145) (458)

Payable tax on received Group contribution 392 6 920

Total payable tax in the balance 247 6 462

Calculation of effective tax rate

Profit before tax 1 383 27 903

Calculated tax on profit before tax 304 6 139

Tax effect of permanent differences (14) 4

Total 290 6 143

Effective tax rate 21.0% 22.0%

The tax effect of temporary differences that has formed the basis for deferred tax and deferred tax

advantages, specified on type of temporary differences

Amounts in NOK (thousands) 2023 2022 Difference

Tangible assets 12 4 (8)

Long-term receivables and liabilities in foreign currency 5 046 4 857 (189)

Total 5 058 4 860 (197)

Basis for deferred tax 5 058 4 860 (197)

Deferred tax (22%) 1 113 1 069 (43)

2023

NOTE 8 EQUITY

Share capital Own shares

premium

Other equity

captial

Total equity

capital

Pr. 31.12.2022 1 715 (5) 605 893 61 299 668 902

Purchase of own shares - (26) - (53 482) (53 508)

Result of the year - - - 1 093 1 093

Pr. 31.12.2023 1 715 (31) 605 893 8 910 616 487

NOTE 9 SUBSIDIARIES, ASSOCIATED COMPANIES ETC.

Amounts in NOK (thousands)

Subsidiary Office

Acquisition

registered

Ownership

interest Book value

Share of

equity

Share of

result

SmartCraft Software AS Hønefoss, NOR 2022 99 % 488 263 507 927 -

SMCRT MGMT 1 AS Hønefoss, NOR 2022 81 % 19 856 19 759 3

Total 508 119

NOTE 10 INTERCOMPANY ITEMS BETWEEN COMPANIES IN THE SAME GROUP ETC.

Customer receivables Other receivables

Amounts in NOK (thousands) 2023 2022 2023 2022

Companies in the same group - - 128 100 184 728

Total - - 128 100 184 728

Debt to suppliers Other long-term liabilities

Amounts in NOK (thousands) 2023 2022 2023 2022

Companies in the same group - - 194 125 79 990

Total - - 194 125 79 990

NOTE 11 BANK DEPOSITS

Funds standing on the tax deduction account (restricted funds) are TNOK 325.

SmartCraft ASA is the owner of the Cash Pool organized together with:

o SmartCraft Norway AS

o Cordel Norge AS

o Kvalitetskontroll AS

o Inprog AS

o SmartCraft Sweden AB

o Bygglet AB

o EL-Info AB

o Congrid Oy

ANNUAL REPORT

NOTE 12 SHAREHOLDERS

Share capital in Smartcraft ASA pr. December 31st 2023 consists of:

Total Nominal value Share capital

Common shares 171 522 305 0.01 1 715

Total 171 522 305 1 715

Shareholders

The largest shareholders as of December 31st 2023 were:

Shareholders

Number of

common shares

Percent of

shareholding

Valedo Partners III AB 67 903 692 39.6 %

State Street Bank and Trust Comp 25 103 311 14.6 %

B. Ulstein AS (Bernt Ulstein, Board member) 11 306 975 6.6 %

HSBC Bank Plc 4 264 661 2.5 %

Svenska Handelsbanken AB 3 082 918 1.8 %

SmartCraft ASA (treasury shares) 3 053 862 1.8 %

The Northern Trust Comp, London Br 2 760 410 1.6 %

Swedbank AB 2 654 120 1.5 %

BNP Paribas 2 377 564 1.4 %

Skandinaviska Enskilda Banken AB 2 344 420 1.4 %

State Street Bank and Trust Comp 2 336 700 1.4 %

BNP Paribas 2 335 165 1.4 %

J.P. Morgan SE 2 211 887 1.3 %

Line Invest AS (Gustav Line, CEO) 2 078 025 1.2 %

CACEIS Bank 2 066 837 1.2 %

State Street Bank and Trust Comp 2 060 271 1.2 %

Mustad Industrier AS 1 900 000 1.1 %

Shares owned by Boardmembers and leading personnel

Gunnar Haglund, Chairman of the Board (via Skarvhagen Förvaltning AB) 1 004 800 0.6 %

Kjartan Bø, CFO (via KBI AS) 298 000 0.2 %

Katja Widlund, CMO 70 809 0.0 %

Christian Saleki, CTO 18 149 0.0 %

Marianne Bergmann Røren, Board member 5 617 0.0 %

Maria Danell, Board member 5 617 0.0 %

Isabella Alveberg, Board memeber 589 0.0 %

Other 24 310 605 14.2 %

Total 171 522 305 100.0 %

SmartCraft ASA is the parent company in the SmartCraft Group and prepares consolidated accounts which

can be handed out at the company’s offices in Hvervenmoveien 45, 3511 Hønefoss.

2023

NOTE 13 TREASURY SHARES

During 2023 the company acquired 2 625 248 shares in the market at TNOK 53 508. The purchase of

shares are in accordance with the share buy-back program authorized by the Annual General Meeting

held April 28th 2023. The buy-back program is managed by Carnegie AS

Development in the company’s purchase of treasury shares

Development in the company's own shares

Number of

Par value per

Total

amount

Amount of

share capital

Holding as at 1.1.2023 451 001 0.01 5 0.3 %

Acquisition of own shares 2 625 248 0.01 26 1.5 %

Disposal of own shares - - (5) -

Holding as at 31.12.2023 3 076 199 0.01 31 1.8 %

NOTE 14 PROVISIONS FOR LIABILITIES

Short-term provisions

Restructuring

Accrued

costs Total

Balance 01.01.2023 1 021 2 805 3 826

Provisions - 2 810 2 810

Provisions utilised (1 021) (2 805) (3 826)

Balance 31.12.2023 - 2 810 2 810

There are no contingent liabilites as of 31.12.2023.

ANNUAL REPORT

2023

ANNUAL REPORT

2023

ANNUAL REPORT

2023

100