Webstep

Annual Report • Apr 13, 2023

WEBSTEP | ANNUAL REPORT 2022

Contents

Key figures	2
Letter from the CEO	3
Board of directors' report	5
Equality and anti-discrimination statement	21
Financial statements – Group	27
Financial statements – Parent company	74
Annual statement on corporate governance	92
Statement by the Board of directors and CEO	101
Auditor's report	104
Appendix	110

Key figures

NOK million	2022	2021	2020	2019
Operating revenues	888.4	775.0	690.0	660.5
EBITDA	76.2	81.2	63.9	60.4
EBITDA margin	8.6%	10.5%	9.3%	9.1%
EBIT	54.6	65.9	50.0	49.1
EBIT margin	6.2%	8.5%	7.2%	7.4%
Net profit	38.4	48.5	36.7	36.1
Net cash flow	15.7	7.0	14.3	-8.0
Earnings per share (NOK)	1.40	1.80	1.38	1.36
Earnings per share, fully diluted (NOK)	1.39	1.77	1.38	1.36
Number of employees, average (FTE)	512	449	410	397
Number of employees, end of period	538	478	415	409
Operating revenue per employee (NOKt)	1,736	1,725	1,681	1,663
EBIT per employee (NOKt)	106.8	146.7	122.0	124.0

Successful growth, sets focus on increased profitability

In the last two years, Webstep has demonstrated its ability to grow organically and showcase its capabilities. The company has experienced a 30 per cent increase in the number of employees since December 2020, which is a clear indication of renewed growth capacity.

Webstep attracts top-tier professionals, and I am proud to conclude that Webstep's overall 2022 growth includes an increase of over 60 employees, accounting for a 13 per cent rise for the year.

The revenues rose by almost 15 per cent to 888 million, primarily due to an increase in the number of employees and hourly rates. However, the company's EBIT for 2022 was lower compared to 2021 and below our expectations.

Steady long term goal

At Webstep, achieving profitable growth is crucial. While headcount growth can increase our capacity, it also incurs short term onboarding costs that can affect our profitability. To mitigate this, we have optimised our sales activities to improve utilisation and are focusing more on cost management.

Despite these short-term challenges, we remain committed to our long-term goal of achieving an EBIT margin above 10 per cent. With the current initiatives we have in place, I am confident that we are well on our way to reaching our profitability target going forward.

The digital transformation continues

The speed and scale of the digital transformation in society has no historical precedent and the long term trend of digitalisation continues. Software development services are core in these markets, and software solutions are key for increased efficiency, improved customer service and better competitiveness.

At Webstep, we have designed our organisation to operate on two key dimensions - primary competency areas and diverse delivery models.

Competence and delivery models

Our primary competency areas encompass systems development through software craftsmanship, architecture, technology management, user experiences, business intelligence, and machine learning.

On the other hand, the delivery models are Experts-for-hire, Team-as-a-Service, and Projects-/Solution deliveries. The

team-as-a-service offering has become the fastest-growing segment within the company, driven by enterprise customers like DNB and Equinor.

Webstep offers expert services in digitalisation and IT projects across various industries. Our company's service portfolio and go-to-market approach has proven to be well suited to navigate changing market conditions due to geopolitical turbulence, energy crises and high interest rates. The fact that Webstep continuously enhances our competencies by leveraging strategic partnerships with dominant global technology vendors and platforms, has further strengthened our position.

Webstep's strongest asset

Webstep's success is attributed to our people. Our employees are Webstep's - by far - strongest asset, and the company prioritises the development of its workplace as a product to attract and retain top-tier professionals. Our consultants are offered meaningful assignments, professional networking opportunities, support for learning and a fair and transparent employment environment. The Webstep work culture is driven by the values of being skilled, innovative, generous, and uncomplicated.

Webstep's open door policy, transparent processes, and incentivised compensation structure, is vital to the company. Webstep also recognises the importance of corporate responsibility and sustainability and is implementing a new initiative to increase the number of women in its organisation.

Teamwork for profitable growth

To sum up, Webstep has further established itself as a leading software development partner in Norway and Sweden thanks to several key factors. Emphasis on professional craftsmanship and quality recruitments have played crucial roles to this end. Additionally, the company's strong growth in capacity and revenue has further solidified its position as a top player in the industry, in favour of Webstep employees, our customers, strategic partners - and long-term shareholder value.

Honours and thanks

All our great employees deserve honours and thanks for their adaptability and their solid efforts in 2022. The market is, more than ever, facing continuous macroeconomic changes. The need for reliable, experienced support and deep IT competence is important to our customers, and we are offering a strong and flexible service portfolio.

Based on our robust business model and our ability to adapt, I strongly believe that Webstep is well positioned to continue to deliver on our promise to the market: Developing for tomorrow.

Save Asmervik CEO Webstep ASA

Board of directors' report

Highlights

Webstep reported growth in revenues and capacity for 2022, respectively 14.6 per cent and 12.6 per cent, and a decrease in EBIT of 17.1 per cent. With the Company's robust business model Webstep has achieved a strong position in the market, and continues to deliver expertise for comprehensive projects and solutions. Webstep enters 2023 with a solid order book.

Strong financial position and positive outlook supports a dividend proposal of NOK 1.70 per share for 2022.

Webstep recorded consolidated revenues in 2022 of NOK 888.4 million from NOK 775.0 million in 2021. Consolidated EBIT for 2022 amounted to NOK 54.6 million from NOK 65.9 million in 2021. During 2022 Webstep has started the transitioning from a period focused on growth to one focused on profitability. The company has implemented structural actions, improved cost management and optimising sales activities to improve profitability.

At Webstep, we aim to be the top software development partner in Norway and Sweden. We work hard to be the preferred choice for our clients and create a work environment that attracts and keeps the top-tier professionals. Webstep's team of skilled experts reflects our unique DNA, that values expertise, simplicity, innovation, and generosity. As we plan for the future, we remain dedicated to maintaining these core values that set us apart from our competitors and drive our success.

Digital technology plays a vital role in driving societal development. However, customers and markets are increasingly confronted with an evolving macroeconomic landscape, marked by geopolitical turbulence, energy crises, high interest rates, and supply chain disruptions that may impact purchasing behaviour in select segments. Nevertheless, the steady long-term trend of digitalization remains unaltered.

To enable businesses to successfully navigate this dynamic environment, robust IT capabilities and experience are essential. This requires dependable IT resources, predictability, and a steadfast focus on cultivating long-term strategic partnerships. This is especially true when it comes to managing team deliveries, custom solutions, and

large-scale IT initiatives. Fortunately, Webstep's current service portfolio and go-to-market approach are ideally suited to this scenario.

Moreover, we continuously enhance our competencies by leveraging strategic partnerships with dominant global technology vendors and platforms. This is essential to maintaining our reputation as a trusted technology partner.

Our people - Our strongest asset

Webstep is an organisation built out of the people, by the people, for the people. Everything starts and ends with our people. We are Norway's largest, purely senior consulting company within IT and growing rapidly in Sweden. We focus on quality recruitment, which results in attracting the best professionals in the industry. Our employees have on average more than 10 years of relevant experience. This creates a solid foundation for a strong professional environment and high-quality deliveries.

We are proud of continuing to show growth in all of our geographical regions throughout 2022. The company's overall growth includes an increase of over 60 employees, accounting for a 13 per cent rise for the year.

Conceptually, our organisation is structured based on two primary dimensions: Key competency areas and delivery models.

The key competency areas we work with are system development, architecture, technology management, user experiences, business intelligence, and machine learning.

System Development is the core to our organisation and our deliveries across our go-to-market model. We represent one of the market's strongest professional environments within systems development, with approximately 450 service-minded senior consultants specialising in Java, .NET, Open source, Android, IOS and more.

Methodical work with architecture provides scalable, robust, and future-oriented solutions that enhance a business's ability to adapt over time. Working with architecture is a natural part of developing any digital solution and systems, and our employees often assume the role of architects in client projects.

Technology management encompasses a wide range of areas. We work with project and program management, technical project management, as product owners, with process,- and change management, and agile coaching. This area of expertise is a natural extension of our other areas and is an essential ingredient in the delivery of teams or projects.

Excellent user experiences are crucial for the success of digital solutions. We work with insight, concept development, interaction design, visual design, measurement and metrics, and adoption of solutions. As with technology management, working with user experiences is a natural extension and an essential ingredient in our deliveries.

Business Intelligence (BI) is about providing sound decision support. Webstep develops solutions that extract new insights and valuable information based on a company's data and compile data for better decision-making. Our employees are often responsible for and/or involved in the data-engineering side, meaning the more complex tasks on the back-end, such as integration, data collection, and data organisation.

Great software developers can be extremely valuable to a customer in terms of both time-to-market and total cost of ownership compared to ordinary ones. By taking a holistic approach to software development they not only produce functional code but also well-designed, maintainable, and extensible code. At the heart of our approach across all of our competency areas is the notion of "software craftsmanship". Software craftsmanship is an approach to software development that emphasises the importance of producing high-quality code that is not only functional but also well-crafted. Like any craft, it requires skill, experience, and dedication to produce great work.

To achieve this goal, software craftsmen and -women take a holistic approach to software development that encompasses everything from the architecture and design of the code to the way it is written and tested. They use best practices such as test-driven development, continuous integration, and code reviews to ensure that their code is of the highest quality.

Software craftsmanship also emphasises the importance of communication and collaboration within development teams. This includes working closely with stakeholders to understand their requirements and feedback, as well as collaborating with other developers to share knowledge, improve processes, and provide feedback on each other's work.

Go-to-market model

Webstep delivers highly qualified technical expert services on three levels:

1. Experts-for-hire: The traditional way of delivering advisory services

2. Team-as-a-service: This offering allows Webstep to build multidisciplinary teams to solve the customer's challenges. 3. Project deliveries and solution deliveries: This includes

development projects and complete solutions with a mix of third-party software and system development.

To provide clients with hand-picked technology experts who, in an efficient and effective manner, help to solve the client's challenges, is the traditional Webstep go-to-market model. The projects are normally run and managed by the clients. These services will continue and grow based on customer needs.

Since the clients to an increasing extent request full scale developer teams ("team-as-a-service"), projects and end-to-end solutions that are managed and executed by their IT service vendors, Webstep has invested in the expertise and methodologies required in order to be a provider of these services. Team deliveries are also correlated with stronger strategic partnerships. What distinguishes this delivery from the traditional Webstep model, is the fact that Webstep will provide the client with full scale development teams as opposed to single consultants for expert roles. TaaS is the fastest growing segment within the corporation, largely driven by further development within enterprise customers like DNB and Equinor.

DNB is utilising our teams to develop key functionality to their pension portal project. Team training and preparation are core elements in Webstep Team-as-a-service deliveries. Our TaaS deliveries within Equinor are part of a digital transformation of Equinor. All six office locations in Norway are involved in delivering services to Equinor.

The third delivery method is project deliveries and solution deliveries. This includes development projects and complete solutions with a mix of third-party software and system development. Diar, Enova and Norwegian Environment Agency (Miljødirektoratet) are typical examples of customers that have requested full solution deliveries.

Our workplace

As an IT consultancy, we operate in two distinct markets: one for candidates and the other for customers. To keep our position as a premium brand in this competitive landscape, we recognize the importance of remaining attractive to both markets. We believe that the most critical tool at our disposal to achieve this is the design and implementation of our workplace.

Webstep strives to be the best place to work in a highly competitive market. Our models have been emulated by our competitors, and we continue to focus on improving the design and implementation of our workplace.

To continue our success, we prioritise the development of our workplace as a product, ensuring our employees thrive in a supportive and challenging environment. Our approach to development is both local and centralised, and involves providing our consultants with meaningful assignments, professional networking opportunities, support for learning and a fair and transparent employment environment.

The further development of our go-to-market model is a key part in providing our employees with more and varied assignments. Webstep consultants can now work their way through projects at customer premises, customer projects run from Webstep offices and even remote work.

Working at Webstep offers our consultants a unique opportunity to expand their professional network. By engaging with high-level clients and partnering with industry-leading experts, they are exposed to a diverse range of experiences and insights that fuel their professional growth. This expanded professional network not only enhances their current skill sets but also opens doors to new opportunities and career advancements. Working at a senior IT consultancy provides a unique opportunity for our consultants to continue their professional development and learning. Through us they work with clients from a wide range of industries, providing exposure to a variety of business models and challenges. This exposure, coupled with our investment in ongoing training and development, allows consultants to expand their knowledge and skills. Additionally, the collaborative nature of consultancy work fosters a culture of learning, where consultants can share best practices, learn from each other's experiences, and continually improve their capabilities.

We prioritise simplicity, transparency, and fairness in all aspects of our organisation. Our flat hierarchy, transparent processes and incentivised compensation structure attract top-tier professionals. We also recognize the importance of corporate responsibility and sustainability as described below. Additionally, we are implementing a new initiative to increase the number of women in our organisation, aiming to bring diverse perspectives, experiences, and skills to our team.

Operations

The board of directors' report for the Webstep group ("Webstep" or "the Group") comprises the parent company Webstep ASA ("the Company") and its subsidiaries. Webstep ASA is a Norwegian public limited liability company headquartered in Oslo, Norway. The Group has offices in Norway and Sweden and had 538 employees as of 31 December 2022. The Company's shares are listed and traded on Oslo Børs under the ticker WSTEP. Webstep's business is conducted through the Group's two subsidiaries, Webstep AS in Norway and Webstep AB in Sweden. The Group has offices in Oslo, Bergen, Stavanger, Trondheim, Kristiansand and Haugesund (Norway), and in Stockholm, Malmö and Uppsala (Sweden). Webstep believes in the flexibility and responsiveness of a decentralised model based on strong local presence. The regional offices serve local clients with considerable autonomy, while leveraging the full expertise and capacity of Webstep.

Webstep is a provider of IT consultancy services and offers expertise to solve demanding digitalization and IT projects in the private and public sector, in a number of different industries including banking, finance and insurance, public administration, agriculture and food production, IT and telecommunication, commerce and transportation.

Webstep aims to be at the forefront of technological development and offers cutting-edge IT expertise such as digitalization, cloud migration and integration, Internet of Things (IoT), machine learning, IT security, robotics and analytics.

An important part of the Group's strategy is to employ and offer highly qualified senior IT consultants with significant experience. As of 31 December 2022, the Group employed 538 employees, of which approximately 480 were IT consultants. The Group's consultants have on average more than 10 years of experience. This creates a solid foundation for a strong professional environment and high-quality deliveries. The Webstep work culture is driven by the values of being skilled, innovative, generous and uncomplicated.

Financial review

The following financial review is based on the consolidated financial statements of Webstep ASA and its subsidiaries. The statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU as well as the Norwegian accounting legislation.

In the view of the board, the income statement, the statements of comprehensive income, changes in equity and cash flow, the balance sheet and the accompanying notes, provide satisfactory information about the operations, financial results and position of the Group and the parent company 31 December 2022.

(All amounts in brackets are comparative figures for 2021 unless otherwise specifically stated).

Consolidated statement of income and comprehensive income

Total operating revenues amounted to NOK 888.4 million, up 14.6 per cent from NOK 775.0 million in 2021. The revenue growth was driven by an increased number of consultants and hourly rates, and negatively affected by lower utilisation. Revenues from subcontractors amounted to NOK 69.6 million (NOK 68.8 million).

Webstep's revenue model is primarily based on hourly fees, with revenue capacity depending on the number of consultants and number of working days available. Calendar effects may therefore cause differences in revenue capacity between years. The average number of employees in 2022 was 512 (449) and the number of working days was 253 (252) and 253 (253) in Norway and Sweden, respectively.

Cost of services and goods sold, mostly from use of subcontractors, amounted to NOK 74.7 million (NOK 70.2 million) for the year.

Personnel expenses include salaries and benefits, pension, tax, vacation pay and other items. A high proportion of salary is variable. New consultants receive a guaranteed base salary in the onboarding phase, which is the main driver for higher personnel expenses in periods with high onboarding activity. Webstep's salary model is a merit-based model where the consultants have a base salary in addition to a variable pay as a fixed share of the billate rate.

Salaries and personnel costs amounted to NOK 686.7 million (NOK 583.7 million) for the full year. The increase is explained by a higher number of employees, increased revenues and culture building activities.

Other operating expenses amounted to NOK 50.8 million (NOK 40.0 million) for the full year. Increased conference and course attendance, as well as travel, have impacted operating expenses in addition to structural action with regard to office locations.

Depreciation and impairment costs were NOK 21.6 million (NOK 15.3 million). The increase is explained by new office locations, inventory and equipment in addition to write-down of lease obligation.

Total consolidated EBITDA amounted to NOK 76.2 million (NOK 81.2 million), and EBIT amounted to NOK 54.6 million (NOK 65.9 million).

Net financial costs were NOK 4.4 million (NOK 3.5 million) and income tax amounted to NOK 11.8 million (NOK 13.9 million). Net profit for the year was NOK 38.4 million (NOK 48.5 million).

Consolidated financial position

Total assets on 31 December amounted to NOK 679.0 million (NOK 649.0 million). Non-current assets were NOK 461.8 million (NOK 458.1 million) and consisted mainly of intangible assets. Intangible assets amounted to NOK 380.1 million (NOK 383.6 million), and comprised primarily acquisition-related goodwill of NOK 378.5 million (NOK 380.5 million). Currently, there are no indications that impairment is required for any of the reporting units. Right-of-use assets related to office rentals and car leases have been recognized in the balance sheet at the total amount of NOK 65.1 million (NOK 62.5 million). Total current assets of NOK 217.2 million (NOK 190.9 million) consisted of trade receivables, other current receivables and cash and short-term deposits. Trade receivables amounted to NOK 145.7 million (NOK 132.8 million). Revenues are invoiced on a monthly basis, and receivables are primarily due 30 days after invoicing. Other current receivables were NOK 9.1 million (NOK 11.4 million). Cash and short-term deposits amounted to NOK 62.3 million (NOK 46.7 million).

Total equity on 31 December was NOK 393.4 million (NOK 393.7 million). The change is mainly related to earnings generated, offset by 2021 dividends paid in 2022.

Non-current liabilities amounted to NOK 54.4 million (NOK 51.0 million) and consisted mainly of non-current leasing liabilities of NOK 52.9 million (NOK 49.5 million). Current liabilities of NOK 231.2 million (NOK 204.3 million) consisted of current leasing liabilities, trade payables, tax payables, social taxes and VAT and other short-term liabilities.

Cash flow

Net cash flow from operating activities amounted to NOK 74.0 million (NOK 54.7 million) in 2022. The change in cash flow from operations compared to 2021 can primarily be explained by change in receivables and liabilities.

Net cash flow from investing activities was negative NOK 10.7 million (negative NOK 7.8 million). The investments are mainly related to equipment for new employees and office upgrades. The nature of the Company's operations requires relatively low levels of investments, and the Company has a sufficient ability to finance any investment required as part of its regular operations through its net cash flow from operating activities and the RCF.

Net cash flow from financing activities was negative NOK 47.6 million (negative NOK 40.0 million). The financing activities in 2022 mainly consist of payment of dividends and payment of lease liabilities.

The Webstep Group had an unutilized Revolving Credit Facility (RCF) with SpareBank1 SR-Bank of NOK 110 million and SEK 5 million with SEB. The Group has not been in breach with the covenants of the RCF during 2022. See note 17 and 21 for further details.

Segment information

The Group's activities are organised in two geographical segments, Norway and Sweden. Revenues and results are recorded in the entity where they occur and hence reported in the segment, in which the legal entity belongs. Segment performance is evaluated on the basis of revenue and EBIT performance. Assets and liabilities are not allocated between the segments.

Norway is the largest segment, accounting for 85 per cent of the consolidated operating revenues in 2022.

Norway

Webstep Norway is headquartered in Oslo and also has offices in Bergen, Stavanger, Trondheim, Kristiansand and Haugesund. The Group provides high-end IT consultancy services to a broad range of public and private clients across the country.

Total operating revenues for 2022 came to NOK 761.6 million (NOK 668.4 million), up 13.9 per cent compared to 2021. The change in revenue is mainly driven by a higher number of employees in addition to hourly rates, although offset by lower utilisation. Revenues from subcontractors amounted to NOK 45.7 million (NOK 45.8 million).

EBIT for the full year came to NOK 47.7 million (NOK 61.1 million). The change in EBIT is primarily explained by one-off costs related to overhead cost reduction and write-down of 2023 lease obligation, in addition to other operating expenses.

Webstep Norway had 444 employees on 31 December 2022 (403 employees). The average number of employees in 2022 was 425 (379).

Sweden

Webstep Sweden has offices in Stockholm, Malmö, and Uppsala. Webstep Sweden serves clients in different industries, mainly in the private sector, and delivers the same high-end IT consultancy services as Webstep Norway, primarily within the Group's core digitalization offering.

Operating revenues for the full year came to NOK 126.9 million (NOK 106.7 million), an increase of 19.0 per cent. Revenues were primarily impacted by increased number of consultants and hourly rates.

Adjusted for fluctuation in exchange rates, revenue grew by 25.5 per cent compared to 2021. EBIT came to NOK 6.9 million (NOK 4.8 million) for the full year. The change in EBIT is primarily related to increased revenues and therefore also increased salaries in line with the salary model. EBIT was also impacted by increased course attendance.

Webstep Sweden had 95 employees 31 December 2022 (75 employees). The average number of employees in 2022 was 86 (70).

Research and development

The nature of the business of Webstep, is to contribute to the digital R&D processes of the Group's customers, and to explore the opportunities created by new technologies.

The Group did not have any defined R&D initiative in 2022 which met the criteria of an intangible asset. The recognition as an asset is based on the management's assessment of future economic benefits from the projects and that the criteria in IAS 38.57 is met.

The group had no R&D initiative that qualified for the government R&D tax incentive scheme (SkatteFUNN) in 2022.

Risk and risk management

The Group is exposed to various risks and uncertainties of operational, market, financial and regulatory character. Webstep identifies and manages risks on an ongoing basis as part of our established structure for internal control. The risk assessment gives input to both the annual strategy process as well as the annual revision of the established control structure and control activities, to verify that these have a good coverage and work efficiently according to the identified risks.

The risk factors described below have been identified as key risks by the management. The list is not exhaustive. See note 4 for further information on Financial Risk.

Business Risk

The Group is exposed to business risk especially related to:

• market development
• regulatory risk in the relevant markets
• its ability to attract and retain talents
• project risk and potential legal liability
• climate change

The Group's results are affected by macroeconomic development and demand for its services. The large diversity of customers combined with various projects in different sectors and geographic areas, have a somewhat mitigating effect on the market risk exposure of the Group. Long-term contracts and consistent deliveries over time have secured a low-volatility price structure. The variable salary model for the majority of the consultants also reduces market risk exposure as the salary expenses to a large extent correlate with revenues.

Webstep has a strong local presence. The proximity to our customers and local market insight is making it easier to actively use the collaboration between regions to mitigate the risk of local market changes.

The employees are the most important asset of Webstep. In order to ensure stable growth, the Group is dependent on being an attractive employer to retain and attract new employees. Webstep's strategy is to continuously invest in new technological trends and services, provide interesting and challenging assignments, and to offer attractive remuneration and benefits to its employees. The compensation model is based on a high proportion of variable salary, which is closely linked to the consultants' individual performance.

Consultancy businesses are exposed to the risk of disagreements and legal disputes related to client projects. A majority of the Group's assignments are based on standardised agreements with "Time & Material" pricing and monthly invoicing, which implies limited risk per contract.

If the consultant can be held responsible for gross negligence or willful misconduct, the Group may be liable to damages. In order to reduce these risks, according to market practice, the Group has insurance coverage for professional liability, occupational injury, general liability and employee dishonesty.

The Group has in the past been, and may in the future be, subject to legal claims, including those arising in the normal course of business. Contracts may contain penalty clauses for the Group's failure to timely deliver or failure to meet agreed service levels and the Group may face claims as a result of breach of contract.

An unfavourable outcome on any litigation or arbitration matter could require that the Group pays substantial damages, could prevent the Group from selling certain of its products or services, or in connection with any intellectual property infringement claims, it could require that the Group pays ongoing royalty payments.

A settlement or an unfavourable outcome on any litigation or arbitration matter could have an adverse effect on the Group's operating revenue and profitability.

Changes in laws and regulations in the markets where Webstep operates could hinder or delay the Group's operations, increase the Group's operating costs and reduce demand for its services. Changes in laws and regulations applicable to the Group could increase compliance costs, mandate significant and costly changes to the way the Group implements its services and solutions, and threaten the Group's ability to continue to serve certain markets.

Climate change can have a direct impact on both our customers and investors. This could further lead to behavioural change which Webstep would need to adapt to.

If the Group fails to meet present and future regulatory requirements regarding climate change and sustainability, the Group could experience both a financial and reputational loss.

The Group monitors risks related to climate change in the overall risk assessment of the Company and takes necessary action if needed.

Financial Risk

The Group is exposed to financial risk such as:

• credit risk
• currency risk
• interest rate risk
• liquidity risk

The Group's executive management team and the board of directors monitor these risk factors on an ongoing basis and take the necessary actions when required.

The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. Webstep engages with large and regular customers and has had low historical losses on receivables. Webstep has a diversified portfolio of customers in various industries, and there is no single customer that represents a significant proportion of total revenues.

Currency risk refers to the exposure through operations across different countries, in regard to unpredictable gains or losses due to changes in the value of one currency in relation to another currency. Webstep operates in Norway and Sweden and fluctuations in exchange rates between NOK and SEK could affect the Group's business, results of

operations, cash flows, financial condition and/or prospects. Currently, the Group does not have any hedging positions in place to limit the exposure to exchange rate fluctuations. The Group has assessed the currency risk to be limited, since the Group entities endeavour to match income and expenses as well as assets and liabilities in the same currency.

The Group is exposed to interest rate risk primarily in relation to its revolving credit facility, issued at floating interest rates based on NIBOR (Norwegian Interbank Offer Rate). As such, movements in interest rates could affect the Group's business, results of operations, cash flows, financial condition and/or prospects. The Group does not currently have any hedging positions in place to limit the exposure to interest rate fluctuations, but are monitoring the development. The Group evaluates the interest rate risk to be low due to the stable financial situation in Norway, combined with low net debt and strong financial position for the Group.

Liquidity risk arising from the Group not being able to meet its financial obligations as they fall due, is considered low. The Group's approach to manage liquidity risk is through proper liquidity planning to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation. Executive management has monitoring controls in place to ensure that the Group has sufficient liquidity.

Going concern

The annual accounts have been prepared on a going concern assumption. The board has confirmed that this assumption can be made on the basis of the Group's budgets and long-term forecasts.

Parent company results and allocation of net profit

Webstep ASA is the parent company of the Group. The Company facilitates and supports internal processes throughout the Group, especially in areas such as finance, business development, communication and marketing. The annual financial statements for Webstep ASA are prepared in accordance with the Norwegian Accounting Act and the regulations on simplified application of international accounting standards (IFRS).

The Company had an operating loss of NOK 25.6 million (NOK 20.9 million) in 2022. The Company's net financial revenue for 2022 was NOK 54.4 million (NOK 59.1 million) and mainly consists of group contributions from its subsidiary, Webstep AS. Profit before tax came to NOK 28.8 million (NOK 38.3 million), while net profit was NOK 22.4 million (NOK 29.8 million). The overall decrease in profit before taxes, relates to the decrease in Group contribution

NOK 59.1 million (NOK 61.1 million) and increased operating expenses.

The board proposes the following allocation of the net profit of NOK 22.5 million for the parent company:

Transferred from other equity	NOK 24.5 million
Proposed dividends for 2021	NOK 47.0 million

The book value of the Company's investments in the subsidiary companies 31 December 2022 is NOK 432.1 million (NOK 432.1 million). The Company is the administrator and owner of the Group's bank accounts in Norway, and hence the positive cash flow generated by the Group increases the cash position of the Company. Any deposits generated by the Norwegian subsidiary are classified as liabilities to Group companies. At year end the cash and short-term deposits amounted to NOK 42.1 million (NOK 31.1 million), and the liabilities to Group companies amounted to NOK 205.2 million (NOK 182.2 million). Total receivables from Group companies amounted to NOK 65.2 million (NOK 66.0 million). Equity amounted to NOK 273.5 million (NOK 287.7 million), which corresponds to an equity ratio of 50.6 per cent (54.2 per cent). Changes in equity is mainly explained by profit for the period offset by the proposed dividend for 2022.

The board of directors considers that Webstep ASA had adequate equity and liquidity at the end of 2022. The board of directors will propose an ordinary dividend of NOK 1.70 per share for approval by the Annual General Meeting 4 May 2023. The proposed dividend represents 210 per cent of the annual net profit of the Company, and 122 per cent of the consolidated annual net profit of the Group. This is in accordance with the Company's dividend policy.

Corporate Responsibility Statement

Within all the Corporate Responsibility areas there are a broad set of relevant laws and regulations. The most prominent ones are:

The Equality and Anti-Discrimination Act - To secure and improve the position of women and minorities.

The Working Environment Act - To ensure safe working conditions and equal treatment among workers, and to ensure that the working environment forms a basis for a health-promoting and meaningful work situation.

The Transparency Act - To promote and secure enterprises' respect and compliance with fundamental human rights and decent working conditions in the entire value chain.

Webstep has a strong vision to make an impact on how society is being developed, and by recognizing our responsibilities, Webstep seeks to influence and help support the work of individuals and groups that are dedicated to making a positive change creating safe and sustainable societies.

For Webstep, the most strategic element of Corporate Responsibility is the people's focus. Webstep is a people company and our employees are our most important asset.

Our business model thrives when our consultants stay with the company over a long time. At a strategic level, in order to secure both low churn and a steady inflow of new employees, we are continuously building the best workplace for Webstep employees.

In addition to the people aspect, we are pro-actively using compliant suppliers and will be tracking our customers' contribution to improved sustainability when the EU taxonomy for sustainable activities is implemented.

UN's Sustainable Development Goals

Both as an organisation and an employer Webstep recognises our responsibility to contribute to the achievement of UN's Sustainable Development Goals (SDGs). Among the listed SDGs, Webstep believes we can have a significant impact on - hence a strong internal focus on - the following five goals:

In short, our focus on the five goals are as follows:

4 - Quality Education

Focusing competency building through involvement and cooperation with institutions for higher education and competence network organisations.

5 - Gender Equality

Focusing on equal pay, career possibilities, life phase policies and work-life balance

8 - Decent work and economic growth

Addressing the combination of great working conditions and focus on profitable growth

9 - Industry, innovation and infrastructure

Combining technology and knowledge in order to create innovative, inclusive and sustainable customer solutions in the fields of environmental- and climate challenges

12 - Responsible consumption and production

Promoting sustainable consumption- and production practices through low energy solutions and increased operational efficiency

To ensure that we achieve our ambitions within these areas, Webstep has recently established a renewed internal control.

Internal Control Framework

Webstep has now in place an overall internal control structure based on the COSO (Committee of Sponsoring organisations) Internal Control Integrated Framework, securing strong and sustainable corporate governance.

The COSO Framework is a system used to establish internal controls to be integrated into the business processes. Collectively, these controls provide reasonable assurance that the organisation is operating ethically, transparently and in accordance with established industry standards. The main elements of the framework are:

• The Control Structure
• Risk Assessment
• Controls (Mitigation of Risks)
• Communication
• Review

The Webstep Control Structure guides the daily operations and decisions in Webstep. The prominent laws and external guidelines within Corporate responsibility are well covered.

The key documents of the Webstep Control Structure are:

Corporate Governance Policy

Webstep ASA considers good corporate governance to be a prerequisite for value creation and trustworthiness, and for access to capital. (See the Annual statement on corporate governance for more information.)

Webstep Values

The meaning and consequences following the four Webstep core values: skilled, innovative, generous and uncomplicated

Corporate Guidelines

Rules for business conduct, including guidelines for ethical behaviour, social responsibility and whistleblowing.

Quality Policy

Guidelines securing that all deliveries satisfy agreed upon customer and employee's expectations.

Due Diligence Policy

Address human rights respect in accordance with our Corporate Governance statement and Company Guidelines.

The Equality and Anti-Discrimination Act

Websteps work on equality and anti-discrimination is well integrated in our Corporate Governance Policy, Webstep Values and the Corporate Guidelines.

Increasing the proportion of female employees is an explicit strategic initiative for Webstep. In our work on equality, we emphasise a four-step model, assessing possible risks of discrimination and potential obstacles, putting in place initiatives and measures to further promote diversity and evaluating this work to make further progress.

The complete Webstep Equality and anti-discrimination statement follows the Board of director's report.

The Working Environment Act

Websteps work on the working environment is strongly integrated in our Corporate Governance Policy, Webstep Values and the Corporate Guidelines.

Creating an attractive working environment, both physically and psychologically, is key to attracting and retaining employees. This makes the work environment a strategic area of investment for Webstep.

The Transparency Act

Webstep has established a Due Diligence Policy built upon the Corporate Governance Policy and Webstep Values.

Webstep is working to ensure accountability in its own operations and our value chains. Due diligence assessments in Webstep ensure that we respect human rights in accordance with our Corporate Governance and our Guidelines.

The policy provides an overview of the steps in the due diligence assessment, what this means for Webstep and how it is integrated in our policies, systems and routines.

UN's Sustainable Development Goal

Webstep's commitment to the UN Sustainable Development Goals is founded on the Corporate Governance Policy, Webstep Values, Corporate Guidelines and Due Diligence Policy.

The people aspects of the goals are the most important ones for Webstep. In addition Webstep put substantial effort into contributing with - and through - our customers, to secure sustainable solutions within a long range of industries.

Risks

Webstep performs an annual risk assessment of business and financial matters as well as Corporate Responsibility. The assessments are carried out annually and the results are reported to the board of directors.

The Webstep risk assessment procedure provides input both to the annual strategy process and the annual revision of the established control structure and controls. The aim is to verify that these secure proper control coverage and work efficiently according to the identified risks.

The nature of Webstep's operations implies relatively low inherent risk within most areas for corporate responsibility, such as environment, social conditions, work environment, discrimination, human rights, corruption, bribery and equal opportunities.

For 2022 the most important risks uncovered in the risk assessment were:

Risk of sickness and absence due to psychological insecurity, work expectations and impostor syndrome

These are well known risks within the software consultant business, due to a continuous expectation of mastering new technology and solving complex matters. During 2022 Webstep has run several activities to build subject matter awareness and competency among employees and management. Going forward we plan a range of activities to build an even stronger culture, better competence and improved processes for onboarding and follow-up.

● The Work Environment Survey confirms that the probability of the risk is limited.

Risk of missing opportunities for the employees for life-long learning

Webstep considers itself to have a rich, high quality competence offering, making lifelong learning a core process within the company. Webstep makes significant annual investments in this area and plans to continue to do so in the years to come.

● The Work Environment Survey strongly confirms that the probability of the risk is minimal.

Risk of lacking equality and undermine the women's position in the company

The IT consulting industry is characterised by a high share of male employees. Webstep works actively to attract female employees and recognizes its responsibility to always strive for a better gender balance. We also recognize that there is an inherent risk that discrimination could occur in different processes within the company. As such, we aim to be a role model within the tech industry by recognizing and addressing such risks.

Significant risks are identified with relevance to our work on equality and anti-discrimination, including recruitment and promotions. Hand-picking experts and operating in a fiercely competitive recruitment market, leads to a majority of hires being identified by the company through various channels. The recruitment work, both management and consultant recruitments, are generally not covered by our working environment surveys, hence a need to establish risk reducing policies and procedures in this field. This risk is particularly relevant for management positions. In addition we have assessed other areas as required by Norway's Equality and Anti-Discrimination Act.

● Work-life balance, employer assisted provisions, equal pay and working conditions are all areas where our surveys strongly confirm that the probability of risks is minimal.

Risk of poor working environment and non-profitable growth or lack of growth

Webstep has a long tradition of providing a great work experience for our employees. Webstep also has had a sound growth and good profits relative to the issue of Corporate responsibility of running a sound business.

● The Work Environment Survey and regular external financial reporting strongly confirms that the probability of the risk is minimal.

Risk of unauthorised access to, manipulation of or denial of access to sensitive and critical information

Webstep consultants are engaged in business critical systems for customers, and cyber security is key to protect the customers' data and processes. Webstep ensures that consultants are trained on cyber security, and has the past few years recruited many experts within this area of expertise. This is regarded as an important part of maintaining the Company's professional integrity.

Security policies are also integrated in Webstep's internal corporate governance, providing a platform for effective risk assessment and activities preventing security breaches and loss of data. There is ongoing work in the digital security area making sure Webstep avoids being affected by cyber security incidents affecting operations.

● In place and automated control mechanisms, preventive measures and system and regulatory follow-up indicate that the risk is low

Mitigation of risks

Data protection and digital security are key priorities at Webstep, and the Company is continuously monitoring the situation. Based on the Control structure and the risk assessment, Webstep has established a set of control activities to mitigate risks to the achievement of the company's overall objectives.

The Control activities are performed at all levels of the company. They may be preventive or detective in nature and may encompass a range of manual and automated activities such as authorizations and approvals, verifications, reconciliations, and business performance reviews.

For the Corporate responsibility areas Webstep has established a range of control activities:

The Equality and Anti-Discrimination Act

• Standard Employee contract with standard salary structure
• Whistleblowing routines
• Working Environment Committee (AMU)
• Standard HSE agenda in board meetings and executive management meetings

The Working Environment Act

• Webstep has an established working environment committee with representatives from Webstep consultants and management respectively.
• Three selected employees serving as board members in Webstep AS and observers to the board of directors in Webstep ASA
• Standard HSE agenda in board meetings and executive management meetings
• Function of Safety Representative
• Instructions for the HSE area
• Occupational health services for the employees for each location
• Annual review of the HSE-area on each office location

The Transparency Act

● Webstep has established a Policy for Transparency and has carried out the initial assessment of suppliers. We are currently implementing controls within this area.

UN's Sustainable Development Goal

• Education Structured registering and overview of competency in CV-system
• Education Periodic follow-up of the employees with respect to competence
• Gender equality see "The Equality and Anti-Discrimination Act"
• Decent Work and Economic Growth see The Working Environment Act and Financial statement
• Industry, innovation and infrastructure Evaluation of contribution to sustainability of customer projects
• Responsible Consumption Bi-annual review of Eco-Lighthouse compliance

Personal Data Act

• Review of GDPR foundation to store personal information in CRM-system
• Annual employee self-assessment of compliance to ICT Guidelines

Relevant information and metrics for the Corporate responsible area

Webstep communicates information related to intern control internally and externally.

Internally we use the information to build awareness, to educate about the intern control and relevant regulations. Externally we use information from internal control to create transparency and to document the compliance to relevant regulations. Quarterly and annual reports are key elements.

Websteps internal control includes monitoring of key metrics to secure the efficiency of our business processes and control activities. In addition to the metrics, it is relevant to present activities for the Corporate responsibility areas.

The Equality and Anti-Discrimination Act

The table below gives an overview of key metrics regarding gender equality in numbers of employees and salaries.

Pay differential - female proportion of male pay in %

	2022		2021
Norway	Share women	Share	men Salary%	Share women	Share men Salary%
Total	16%	84%	97%	14%	86%
Consultants	13%	87%	91%	13%	87%	92%
Advisors	37%	63%	105%	32%	68%	94%
Administration	60%	40%	121%	43%	57%	110%
Management	0%	100%	N/A	11%	89%	104%

	2022			2021
Sweden	Share women	Share	men Salary%	Share women	Share	men Salary%
Total	19%	81%	74%	17%	83%	67%
Consultants	12%	88%	70%	9%	91%	75%
Advisors	40%	60%	101%	20%	80%	N/A
Administration	83%	17%	157%	100%	0%	N/A
Management	29%	71%	61%	33%	67%	N/A

We have a general increase in the share of female employees from 14% to 16%. This is an expected response to proactive activities within recruiting. In 2022 the share of signed female employees was 22%.

The female representation in Executive Management is lower than acceptable.

Executive management team salary details are shown in note 7 of the consolidated financial statement and the Company's remuneration report.

Below is a list of relevant activities through 2022:

• Women of Webstep Webstep internal network for women running a range of activities
• The launch of a strategic initiative to raise the number of women, women role models and multi level women managers in Webstep.
• Sponsor and actively contribute to multiple initiatives that promote the position of women in tech like TENK tech camp, Women in Tech by NHO and the annual scoring of 50 most prominent Norwegian Tech Women by Abelia / ODA network.

● Improved internal availability of information related to relevant guidelines, values and procedures

The Working Environment Act

The table below shows key indexes from the Employee Survey and the sick leave per cent for 2022 and 2021.

	2022		2021
	Women	Men	Women	Men
Employee Satisfaction index (0 to 100)	91	90	95	91
Employee Loyalty Index (-100 to 100)	64	62	86	63
Employee Satisfaction (1-5) "I'm proud to work at Webstep"	4,55	4,50	4,84	4,64
Sick leave in percent	2,9%		2,2%

Webstep has higher results than Netigate's benchmark for all question areas. (Netigate being a recognized survey supplier). A positive Employee Loyalty Index is perceived to be good and >+20 to be very good.

Webstep works systematically with health, safety and environment management and makes efforts to mitigate health risks and prevent injuries.

No accidents or injuries were registered neither in 2022 nor 2021. The employees on long-term sick leave are closely followed up by their respective managers, and the reasons for the sick leave are not considered to be work environment related. Below is a list of relevant activities through 2022:

• Annual working environment committee report
• Annual employee survey
• Established improved employee contracts with guarantee salary and care leave
• Updated corporate guidelines
• Extended risk assessment for the corporate responsibility area
• Improved insurance package for employees
• Social and competency activities back to normal post Covid
• New HSE portal
• Education of management of HSE area

The Transparency Act

The report on the transparency act will be made available on our web homepage by the end of June 2023.

UN's Sustainable Development Goal

The most relevant monitoring of relevant metrics for the ESG area are covered by the previous sections.

Below is a list of relevant activities through 2022:

• Eco Lighthouse certification 2022-2025
• Humanitarian aid donations through regional, national and international NGOs (Non governmental Organisations),
• ESG materiality assessment
• ESG education of executive management and the board of directors

Information Security

Webstep did not experience any data security breaches in 2022, nor 2021. The most relevant monitoring of relevant metrics for the ESG area are covered by the previous sections.

Below is a list of relevant activities through 2022:

• Information Security Assessment of key applications
• Risk assessment of salary reports for consultants
• Upgrade to more secure platform for office applications (Google Workspace Enterprise)
• Annual self-assessment for employees based on ICT-guidelines
• Education on information security for employees

Corporate governance

Good corporate governance provides the foundation for long-term value creation, to the benefit of shareholders, employees and other stakeholders. The board of directors of Webstep has established a set of governance principles in order to ensure a clear division of roles between the board of directors, the executive management and the shareholders. The principles are based on the Norwegian Code of Practice for Corporate Governance.

Webstep is subject to annual corporate governance reporting requirements under section 3-3b of the Norwegian Accounting Act and the Norwegian Code of Practice for Corporate Governance, cf. section 4.4 of the continuing obligations for issuers of shares pursuant to Oslo Rule Book II – Issuer Rules. The Accounting Act may be found (in Norwegian) at www.lovdata.no. The Norwegian Code of Practice for Corporate Governance, which was last revised on 14 October 2021, may be found at www.nues.no.

The annual statement on corporate governance for 2022 has been approved by the board and can be found at this section in the Annual Report.

Share and shareholder matters

The Company's shares have been listed on Oslo Stock Exchange since 11 October 2017. Webstep has only one share class, where all shares have equal rights in the Company.

The shares are traded under the ticker WSTEP and had a closing price 30 December 2022 of NOK 24.80.

The total number of outstanding shares 31 December 2022 was 27.6 million (excl. treasury shares). The shares are registered in the Norwegian Central Securities Depository (VPS). The Company's registrar is SR-Bank ASA. The shares carry the securities number ISIN NO 0010609662.

Dividend policy

Webstep has an ambition to create long term shareholder value in the form of dividend payments and share price appreciation over time. Dividend payments will be considered in light of the Company's financial situation and investment plans. The Company's objective is to pay annual dividends representing minimum 75 per cent of the Group's net profit.

In deciding whether to propose a dividend and in determining the dividend amount, the board of directors will take into account legal restrictions, the Company's capital requirements, including capital expenditure requirements, its financial condition, general business conditions and any restrictions that its contractual arrangements in place at the time of the dividend resolution may place on its ability to pay dividends and the maintaining of appropriate financial flexibility. Except in certain specific and limited circumstances set out in the Norwegian Public Limited Companies Act, the amount of dividend paid may not exceed the amount recommended by the board of directors.

Employee share purchase program

In the fourth quarter of 2022, all employees in Webstep AS and Webstep ASA were given the opportunity to purchase shares in Webstep ASA through a share purchase program. 40 per cent of the eligible employees participated in the program. They acquired a total of 166,850 shares with a 15 per cent discount to the market price. The shares acquired were subject to a lock-up period of two years, and the reduced offer price reflected the value-reducing effect of the lock-up period. The share capital was increased to issue new shares related to the program.

Long-term incentive program

The annual general meeting in 2019 approved a three year long long-term incentive program (the "Long-term Incentive Program" or "LTIP") for the Company's executive management and other managers as decided by the board of directors. The LTIP has an initial term of three years. The

number of options granted in each respective year cannot exceed 2.5 per cent of the Company's share capital. The total number of issued options under the program cannot constitute more than 8 per cent of the Company's share capital at any time. The LTIP is structured so that 25 per cent of the options may be exercised following the first anniversary of the grant date, an additional 25 per cent of the options may be exercised following the second anniversary of the grant date and the outstanding 50 per cent of the options may be exercised following the third anniversary of the grant date. The options expire following the fifth anniversary of the grant date. The exercise of options is conditional on continued employment in the group at the exercise date.

The exercise price of the share options is equal to the volume-weighted average market price for the Company's shares on the Oslo Stock Exchange the six trading days prior to the grant date of the relevant option. The share options vest if the senior executive remains employed during the vesting period. The total number of outstanding options in the Company is 1,344,631 on 31 December 2022.

The potential dilution through the LTIP accounts for 155,548 shares. During the year a total of 163,151 vested shares were exercised. The outstanding options may be settled in cash. See note 22 for further details.

Changes to the executive management and board of directors

Rolf Helle stepped down from his position as Director Business Development and the executive management in February 2022 and held the role Strategic Advisor until February 2023. Erlend Nævdal took over the position as Director Business Development from February 2022.

Anders Høibakk started as Manager Oslo in February 2022.

Geir Jåthun Hindenes stepped down from his position as Regional Manager in Stavanger 31 July 2022. Arne Sværen-Bryne took over the position from 1 August 2022.

Liv Annike Kverneland stepped down as CFO 31 August 2022. The Company continued with interims - CFO Truls Oftedal Ellingsen until 31 December 2022. Ida Amalie Oma was appointed CFO from 1 January 2023.

Otto Backer Solberg, Communication Officer, stepped down from the executive management at the end of 2022.

At the annual general meeting 28 April 2022 Kjetil Bakke Eriksen was elected as chair of the board after Trond K. Johannessen made his directorship available. Kjetil Bakke Eriksen is a former CEO of Webstep and brings good insight into the Company's operations.

Directors' and Officers' Liability Insurance

Webstep has signed a directors' and officers' liability insurance agreement with QBE Europe SA/NV covering the board of directors and executive management.

Events after the balance date

Material events after the balance sheet date that occur before the Board of Directors has approved the financial statements may make it necessary to change the annual financial statements or to disclose the matter in the notes to the financial statements. If new information emerges regarding a matter that existed on the balance sheet date, and the matter is material, the financial statements must be changed.

No events have taken place after the balance sheet date that would have had a material effect on the financial statements or any assessments carried out. No material acquisitions or disposals of companies were carried out after the balance sheet date.

Outlook

These forward-looking statements reflect current views about future events and are, by their nature, subject to significant risks and uncertainties.

Unprecedented in history, the rapid and vast digital transformation persists. At its core lies software development services. Digitalised services and solutions enhance efficiency, customer service, and competitiveness.

However, the ongoing macroeconomic situation has led to higher global instability and risk in 2023 and foreseeable future. Although the IT consultancy market is known to have a higher resistance to global uncertainty, its impact on our operations cannot be ruled out.

Profitable growth is key. Headcount growth provides increased capacity, but this also comes with a short term cost affecting profitability. We now optimise our sales activities in order to improve utilisation. In addition, we will focus on cost management. In the long run we are aiming at an EBIT margin above 10 per cent.

We are transitioning from a period focusing on growth to one focused on profitability and the steps taken today will support us in achieving tomorrow's long-term ambitions. Actively collaborating with significant strategic clients through team-based and project-oriented deliveries is essential for consolidating and fortifying our standing. Concentrating on profitability enables us to identify and emphasise the areas where we excel and provide the

greatest value to our customers. This approach allows us to refine and concentrate on our core competencies.

In order to ensure our long-term competitiveness, we will continue to evolve our services and go-to-market model. This includes ongoing innovation in both our offerings and the ways we deliver them, while further strengthening our brand and market reputation.

We believe that by expanding our expertise across various areas, we can create valuable synergies and provide enhanced benefits to our clients. Webstep has traditionally served stable customers through long-term contracts. We expect this trend to continue, and we remain optimistic about our ability to maintain our market position in the foreseeable future.

We recognize that adapting our approach is necessary, and we are committed to investing the time, resources, and energy needed for success. Our ultimate objective is to develop an even more dynamic, innovative and robust business that flourishes in an evolving marketplace. With our solid business model and adaptability, Webstep is well positioned to fulfil our market promise: Developing for tomorrow.

The dividend policy remains unchanged, and the board of directors intend to propose a dividend of NOK 1.70 representing 122 per cent of the annual net profit of the Group for 2022.

Kjetil Bakke Eriksen Siw Ødegaard Toril Nag Chair of the Board Board member Board member

Trond Klethagen Johannessen Trygve Christian Moe Save Asmervik Board member Board member Chief Executive Officer

Webstep ASA Oslo, 12 April 2023

Equality and anti-discrimination statement

To stay a preferred employer in our industry, requires that Webstep utilise the full width of an increasingly diverse talent pool. Equal and fair treatment and opportunities are crucial parts of ensuring success in our work on diversity.

In this context, diversity represents more to us than ethnicity, beliefs and gender. Variety in the traits, skills and experience broadens our perspective and improves the understanding of employer and customer needs.

2022 core issues are:

● Raise in women employees

Increasing the proportion of female employees is an explicit strategic initiative for Webstep. During 2022, the proportion of women increased from 14% (68) to 16% (84).

● Work-life balance

Our permanent jobs are full-time. For this reason, we have no involuntary part-time working. Employees who reduce from full-time to part-time do so for welfare reasons. On 31 December 2022, we have no temporary employees.

• Flexible parental leave opportunities On average, women choose to take longer parental leave than men. We promote equal opportunity for
  • both genders to take full parental leave. Webstep partially covers the gap between regular pay and national insurance rates.

Webstep work on equality and anti-discrimination

We compete for our position as a great place to work, and to be a preferred employer in the IT services industry. Part of this employee offering is the individual experience of equal opportunity, inclusion and involvement.

Our work on equality emphasises a four-step model, assessing possible risks of discrimination and potential obstacles, putting in place initiatives and measures to further promote diversity and evaluating this work to make further progress.

Specific areas include recruitment, pay and working conditions, promotions, training & development, employer assisted provisions and work-life balance.

In order to comply with the Norwegian Equality and Anti-Discrimination Act, certain areas are evaluated based on the requirements outlined in the act. The act aims to ensure

that all individuals have equal opportunities and rights, and prohibits discrimination on the basis of ethnicity, skin colour, language, religion, and beliefs.

To the best knowledge of the board and the executive management, Webstep does not discriminate on the grounds of gender, disability, ethnicity, religion or the like. Awareness and guidelines on equal opportunities are emphasised throughout the organisation in processes such as recruitment, appointment, pay and customization of working conditions, and in work on developing attitudes.

Procedures, guidelines and values

Webstep acts upon its procedures, guidelines and values as follows:

• In order to achieve equality and avoid discrimination, our efforts are aligned with Webstep guidelines, values and procedures
• Our governance structure defines that the management reports regularly on specific relevant governance areas. The board holds management accountable for risks in all governance areas, including equality and anti-discrimination
• The working environment committee (AMU) at Webstep, which includes employee representatives, meets quarterly with equality and anti-discrimination as a regular item on the agenda
• Webstep values of being skilled, innovative, generous and uncomplicated serve as a foundation for our choices and behaviour to the point where all employees, regardless of their background, should experience the width of our offerings and benefits
• Current guidelines promote equality, respect and prohibit discrimination. It is clearly stated in the employee guidelines that discrimination is not tolerated, and should be reported immediately. Our guidelines and routines are revised on a yearly basis by AMU and top management
• As part of our internal guidelines, we have whistleblowing routines with clear channels of communication. Our whistleblowing routines are based on the principles of confidentiality, impartiality and contradiction

Risk assessment

The IT consulting industry is characterised by a high share of male employees. Webstep works actively to attract female employees and recognises its responsibility to always strive for a better gender balance. We also recognise that there is an inherent risk that discrimination could occur in different processes within the company. As such, we aim to be a role model within the tech industry by addressing such risks.

Significant risks identified with relevance to our work on equality and anti-discrimination at Webstep, include recruitment and promotions. Hand-picking experts and operating in a fiercely competitive recruitment market leads to a majority of hires being identified by the company through various channels. These areas are also not a natural part of surveys related to our working environment. For this reason, we have put in place targeted policies and procedures which serve to minimise these risks. This risk is particularly relevant for management positions.

Opportunities for training and development are available for all employees. Being a consultancy company in a knowledge intensive industry, it is in the best interest of the company and employees to offer such opportunities to maintain competitive advantages. Thus, the risk within this area is minimal.

We have assessed other areas as required by Norway's Equality and Anti-Discrimination Act. Work-life balance, employer assisted provisions, pay and working conditions are all areas where our surveys strongly confirm that the probability of risks is minimal.

However, considering the statistics for gender balance, Webstep recognizes the need for improvement both for the IT industry at large, and within the Company. Webstep works hard to promote IT to future generations of women in order to contribute to the closing of this gender gap. The activities include actively participating in the public debate as well at supporting events focused on women in technology.

Webstep work on equality and anti-discrimination in practice

As part of our effort to promote equality and prevent discrimination, we adopt measures to mitigate potential risks and evaluate to make further progress. HSE is also entrenched in the board and an important item in board and executive management meetings.

In 2022, we redefined and strengthened our quality management system. This work standardises our recruitment process, and serves to ensure candidates equal

and fair treatment.

For key recruitments and promotions at the managerial level, we require underrepresented groups, such as women, to be represented as candidates in all processes. This is done in order to acquire highly qualified diverse talent, and avoid systematic discrimination.

Employee surveys are conducted for the whole group, and serve as a basis of mapping our efforts and improving further. In 2022, our annual Work Environment Survey also included questions regarding the experience of inclusion and psychological safety. The results are systematically reviewed to remain an attractive employer to highly qualified experts, regardless of background.

We devote time and resources to initiatives that promote the position of both current and future women in the tech industry. Our equality and anti-discrimination efforts include the following:

• At Webstep, we make it clear that increasing the number of women in our workforce is a strategic initiative, and we continually work to raise awareness about this goal
• Our internal network for women, "Women of Webstep", is an important arena for ensuring gender inclusion. This includes local events for all female employees, and a workshop event for female managers addressing an increase in women employees
• During 2022, we signed the "CEO commitment" by Oda, a network for women in technology. This expresses our commitment to promote equality and anti-discrimination
• We sponsor and actively contribute to multiple initiatives that promote the position of women in tech. TENK tech camp encourages future generations of female technologists, while Women in Tech by NHO and Top 50 women in tech by Abelia promote the position of current women in our industry
• Webstep actively supports and encourages external visibility for internal role models at our company
• During 2022, we improved the internal availability of information related to relevant guidelines, values and procedures
• Status checks are conducted several times a year between each employee and their manager. This ensures a dialogue and opportunity for each

individual employee to express their Webstep experience, needs and development

Results of our work

In our surveys, no systematic deficiencies were identified that could lead to discriminatory treatment. No cases were reported to the AMU or through our whistleblowing routines in 2022.

Our 2022 annual survey results show:

• Insignificant or no differences between women and men, and generally very positive feedback on employee experiences
• An average score for women (95) is slightly higher than men (94) on the employee satisfaction index. (ESI 0-100 index)
• Average scores for women (68) are also higher than men (62) on the Employee Loyalty Index (eNPS -100 to +100 index)
• 86% of Webstep women, and 88 % of men respectively, strongly agree or agree that they experience high levels of psychological safety
• 91% of Webstep women and 92% of Webstep men, respectively, strongly agree or agree they can act according to who they are at Webstep
• Women at Webstep experience the same high levels of development as men

96% of women and 92% of men strongly agree or agree that their work-life balance at Webstep is good.

WEBSTEP | ANNUAL REPORT 2022

WEBSTEP | ANNUAL REPORT 2022

Financial statements – Group

Consolidated statement of comprehensive income

NOK 000's	Note	2022	2021
Sales Revenues	5	888,439	775,023
Total revenues		888,439	775,023
Cost of goods and services (COGS)
Salaries and personnel expenses		(74,713)	(70,200)
Depreciation and impairment	7,8,22	(686,728)	(583,665)
Other operating expenses	11,12	(21,580)	(15,273)
Total operating expenses	7,24	(50,769)	(39,961)
		(833,790)	(709,100)
Operating profit (loss)		54,649	65,923
Finance income	9	1,014	120
Finance expense	9,24	(5,389)	(3,633)
Profit before tax		50,274	62,411
Income tax expense	10	(11,838)	(13,916)
Profit for the year		38,436	48,495
Attributable to:
Equity holders of the parent		38,436	48,495
Non-controlling interest		0	0
Other comprehensive income that will
be reclassified to the income statement
Foreign currency translation:
Exchange differences on translation of
foreign operations		(2,589)	(5,929)
Other comprehensive income for the
year, net of tax		(2,589)	(5,929)
Total comprehensive income for the
year, net of tax		35,848	42,566
Attributable to:
Equity holders of the parent		35,848	42,566
Non-controlling interest		0	0
Earnings per share	23	1.40	1.80
Earnings per share, fully diluted	23	1.39	1.77

Consolidated statement of financial position

		31 Dec	31 Dec
NOK 000's	Note	2022	2021
Assets
Intangible assets	11	380,054	383,575
Fixed assets	12	14,447	10,355
Right-of-use assets	12,24	65,060	62,548
Non-current financial assets	13	2	0
Deferred tax asset	10	2,193	1,619
Total non-current assets		461,756	458,097
Trade receivables	14	145,742	132,761
Other receivables	14	9,129	11,439
Cash and short-term deposits	15	62,340	46,690
Total current assets		217,211	190,889
Total assets		678,967	648,986
Equity
Share capital	15	27,628	27,322
Treasury shares	15	(30)	(54)
Share premium		179,192	172,779
Retained earnings		186,610	193,645
Shareholders equity	16, 22	393,400	393,692
Liabilities
Deferred tax	10	1,451	1,486
Non-current leasing liabilities	24	52,933	49,507
Total non-current liabilities		54,384	50,993
Current leasing liabilities	24	13,153	12,029
Trade and other payables	18	15,215	15,745
Tax payables	10	11,879	14,599
Social Taxes and VAT	18	81,524	72,114
Other short-term debt	18,19	109,411	89,814
Total current liabilities		231,182	204,301
Total liabilities		285,566	255,294
Total equity and liabilities		678,967	648,986

Kjetil Bakke Eriksen Siw Ødegaard Toril Nag Chair of the Board Board member Board member

Trond Klethagen Johannessen Trygve Christian Moe Save Asmervik Board member Board member Chief Executive Officer

Webstep ASA Oslo, 12 April 2023

Consolidated statement of change in equity

					Foreign
NOK 000's	Note	Issued capital	Treasury shares	Share premium	currency translation reserve	Retained earnings	Total earned equity	Non-cont rolling interests	Total equity
01.01.2021		26,967	-59	162,021	16,212	175,044	380,184	-	380,184
Profit for the period Other comprehensive income/(loss)					(5,929)	48,495	48,495 (5,929)		48,495 (5,929)
Sales of treasury shares	22		6	111			117		117
Share incentive program	22					2,878	2,878		2,878
Share issue	22	355		10,644			10,999		10,999
Dividends	26					(43,052)	(43,052)		(43,052)
31 December 2021		27,322	-53	172,776	10,283	183,365	393,692	-	393,692
Profit for the period Other comprehensive income/(loss)					(2,589)	38,436	38,436 (2,589)		38,436 (2,589)
Sales of treasury shares	22		24	432			456		456
Share incentive program	22					3,606	3,606		3,606
Share issue	22	306		5,982			6,288		6,288
Dividends	26					(46,489)	(46,489)		(46,489)
31 December 2022		27,628	-29	179,190	7,695	178,918	393,400	-	393,400

Consolidated statement of cash flows

NOK 000's	Note	2022	2021
Operating activities
Profit/ (loss) before tax		50,274	62,411
Adjustments for:
Depreciation of property, plant and equipment	11,12,24	21,580	15,273
Interest income	9	(1,014)	(120)
Interest expense	9	5,389	3,633
Net change in trade and other receivables	14	(10,673)	(24,390)
Net change in trade and other liabilities	18,19	28,477	12,682
Net foreign exchange differences		(456)	(1,323)
Income tax expense	10	(15,209)	(9,959)
Interest received	9	1,014	120
Interest paid	9	(5,389)	(3,633)
Net cash flow from operating activities		73,993	54,695
Investing activities
Investments in property and equipment	12	(10,724)	(7,750)
Net cash flow from investing activities		(10,724)	(7,750)
Financing activities
Payment of principal portion of lease liabilities	24	(11,480)	(10,920)
Change in bank overdraft	17
Net proceeds from equity		6,288	10,999
Sales of treasury shares/employment incentive plan		4,062	2,995
Payment of dividends		(46,489)	(43,052)
Net cash flow from financing activities		(47,619)	(39,978)
Net increase/(decrease) in cash and cash equivalents		15,650	6,966
Cash and cash equivalents at 1 January	15	46,690	39,724
Cash and cash equivalents at 31 December	15	62,340	46,690

l

Notes to the consolidated financial statements

Note 1 General information

The Company and the Group

Webstep ASA, the parent company ("the Company") of the Webstep Group ("the Group") is a limited liability company incorporated and domiciled in Norway, with its head office at Rebel, Universitetsgata 2, 0164 Oslo, Norway.

The Company and its subsidiaries (together "the Webstep Group"/"the Group") are leading providers of IT expert consultant services in Norway and Sweden. The Group aims to be at the forefront of technological development and to assist its customers in their digitalization through the offering of cutting-edge IT expertise. The Group's core offerings are digitalization, cloud migration and integration, in addition to its other focus areas Internet of Things (IoT), machine learning, IT security, robotics and analytics.

These consolidated financial statements have been approved for issuance by the Board of Directors on 12 April 2023 and are subject to approval by the Annual General Meeting on 4 May 2023.

Note 2 Significant accounting principles

Basis for preparation

The consolidated financial statements at 31 December 2022 for Webstep ASA have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union.

The consolidated financial statements for the year ended 31 December 2022 were authorised for issue by the Board of Directors on 12 April 2023.

The consolidated financial statements are presented in Norwegian kroner (NOK) and all values are rounded to the nearest thousand (NOK 000's), except when otherwise indicated.

The format for presenting the income statement is based on the nature of the expenditure.

Going concern

The Group has adopted the going concern basis in preparing its consolidated financial statements. When assessing this assumption, management has assessed all available information about the future. This comprises information about net cash flows from existing contracts and debt service obligations. Forecasts take into consideration expected future net income. Management has a reasonable expectation that the Group has adequate resources to continue its operational existence for the foreseeable future.

Basis of measurement

The consolidated financial statements have been prepared under the historical cost convention.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates.

It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving higher degree of judgement or complexity, or areas where the assumptions and estimates are significant to the consolidated financial statements are disclosed in note 3.

Basis of consolidation

The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 31 December 2022. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income ("OCI") are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.

Foreign currency translation

The Group's consolidated financial statements are presented in Norwegian kroner (NOK), which is also the parent company's functional currency. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded by the Group's entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition.

Receivables, debt and other monetary items denominated in foreign currencies are translated using the exchange rate at the balance sheet date. Differences between the exchange rate at the balance sheet date and the date on which the receivable or debt arose, or was included in the latest balance sheet, are recognised in the income statement and presented as financial income and expenses.

Differences in exchange rates arising from the translation of foreign subsidiaries' equity at the beginning of the year at the exchange rates at the balance sheet date and from the translation of income statements from the monthly average exchange rates for the currency exchange rates at the balance sheet date are recognised directly in other comprehensive income.

Segment reporting

Operating segments are reported by country of operation, which currently is Norway and Sweden. The board of Webstep ASA has appointed a strategic steering committee which assesses the financial performance and position of the Group and makes strategic decisions. The steering committee, which has been identified as being the chief operating decision maker, consists of the chief executive officer (CEO) and the chief financial officer (CFO).

Changes in accounting policies and disclosures

Standards issued but not yet effective

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's financial statements are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:

• What is meant by a right to defer settlement

• That a right to defer must exist at the end of the reporting period

• That classification is unaffected by the likelihood that an entity will exercise its deferral right

• That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification

The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must be applied retrospectively. The standard is assessed to have no impact on the Group's reporting.

New and amended standards and interpretations

The Group has not early adopted any new standard, interpretation or amendment that has been issued but is not yet effective.

Amendments to IFRS 3: Definition of a Business

The amendment to IFRS 3 Business Combinations clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that, together, significantly contribute to the ability to create output. Furthermore, it clarifies that a business can exist without including all of the inputs and processes needed to create outputs. These amendments had no impact on the consolidated financial statements of the Group, but may

impact future periods should the Group enter into any business combinations.

Amendments to IFRS 7, IFRS 9 and IAS 39 Interest Rate Benchmark Reform

The amendments to IFRS 9 and IAS 39 Financial Instruments: Recognition and Measurement provide a number of reliefs, which apply to all hedging relationships that are directly affected by interest rate benchmark reform. A hedging relationship is affected if the reform gives rise to uncertainty about the timing and/or amount of benchmark-based cash flows of the hedged item or the hedging instrument. These amendments have no impact on the consolidated financial statements of the Group as it does not have any interest rate hedge relationships.

Amendments to IAS 1 and IAS 8 Definition of Material

The amendments provide a new definition of material that states, "information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity." The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the consolidated financial statements of, nor is there expected to be any future impact to, the Group.

Summary of significant accounting policies

Revenues from contracts with customers

The Group is in the business of selling IT-consultancy manhours to its customers. Revenue for IT- services are to be recognised over time because the customer simultaneously receives and consumes the benefits provided by the Group, and satisfies each of its performance obligations (that is, it fulfils its promises to the customer) over time by transferring control of the promised service underlying that performance obligation to the customer. The fact that another entity would not need to re-perform the services that the Group has provided to date demonstrates that the customer simultaneously receives and consumes the benefits of the group's performance as it performs. The input method is considered to be the best method when recognising revenue over time because there is a direct relationship between the group's effort (i.e., labour hours incurred) and the transfer of service to the customer. The contracts are normally based on service agreements with hourly fees. Fixed price contracts are recognised as revenue according to the stage of completion, using an input method to measure progress towards complete satisfaction of the service, because the customer simultaneously receives and consumes the benefits provided by the group. The input method used to measure progress is based on the number of hours worked, as this is considered to provide a faithful depiction of the transfer of services.

Estimated loss on contracts will be recognised in the income statement in its entirety in the period when it has been identified.

Contract balances

Contract assets

A contract asset is initially recognised for revenue earned from billable hours delivered yet not invoiced the customer. When the billable hours are invoiced, the invoiced amount is transferred to trade receivables. Contract assets are subject to impairment assessment.

Trade receivables

A receivable is recognised if an amount of consideration that is unconditional is due from the customer.

Contract liabilities

A contract liability is recognised if a payment is received or a payment is due from the customer before the Group transfers the related services. Contract liabilities are recognised as revenue when the Group performs under the contract and delivers or transfers the services to the customer.

Cost of goods and services (COGS)

Cost of goods and services is recognised at the point in time when the corresponding service or good is delivered to the customer. Cost of goods and services mainly comprises cost to subcontractors which are engaged by the Group to deliver consultancy hours to the customers.

Salaries and personnel expenses

Salaries and personnel expenses include salaries and wages, as well as social benefits, pensions, etc. for the Group's employees.

Other operating expenses

Other operating expenses include expenditure for sales, marketing, advertising, IT, administration, facilities, etc.

Finance income and expense

"Finance income" and "Finance expense" respectively, include interest, capital gains and losses concerning securities, debt and exchange differences on transactions in foreign currency.

Government grants

For contributions received accounted for as government grants related to income under IAS 20, the accounting policy of the Group is to recognize such grants when there is reasonable assurance that the conditions attaching to the grant will be complied with and that the grants will be received. The grants are recognized as income unless directly related to specific items of expense.

Taxes

The income tax expense or credit for the period is the tax payable on the current period's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and tax losses carried forward.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in Norway and Sweden where the Group operates and generates taxable income. Management

periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill.

Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and tax laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.

Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the method are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.

Intangible assets with an indefinite economic life are tested for impairment at least once a year, either individually or as a part of a cash-generating unit. Intangible assets with an indefinite economic life are not amortised. Economic life is assessed annually with regard to whether the assumption of an indefinite economic life can be justified. If it cannot, the change to a definite economic life is made prospectively.

Research and development costs

Expenses relating to research activities are recognised in the statement of comprehensive income as they incur. Expenses relating to development activities are capitalised 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 capitalised include the costs of materials, direct wage costs and a share of the directly attributable common expenses. Capitalised development costs are recognised at their cost less accumulated depreciation and accumulated impairment losses. Depreciation of the asset begins when development is complete and the asset is available for use. Capitalised development costs are depreciated on a straight-line basis over the period of expected future benefits. During the period of development, the asset is tested for impairment annually.

Business combination and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date, fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Goodwill is tested for impairment annually as at 31 December and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group's CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. A long-term growth rate is calculated and applied to project future cash flows after the fifth year. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.

Current versus non-current classification

An asset is classified as current when it is expected to be realised or sold, or to be used in the Group's normal operating cycle or falls due or is expected to be realised within 12 months after the end of the reporting period. Other assets are classified as non-current. Liabilities are classified as current when they are expected to be settled in the normal operating cycle of the Group, are held for trading, are expected to be settled within 12 months of the end of the reporting period, or if the group does not have an unconditional right to postpone settlement for at least 12 months after the reporting date. Provisions for obligations and other liabilities are classified as non-current.

Property, plant and equipment

Office machinery and operating equipment are measured at cost less accumulated depreciation.

Where individual components of an item of property, plant and equipment have different useful lives, they are depreciated separately. Depreciation is provided on a straight-line basis over the expected useful lives of the assets/components. Depreciation on machinery and operating equipment is linear over the expected useful lives of the assets based on the following assessments of the expected useful lives of the assets:

• Office machinery 3-5 years
• Operating equipment 3-5 years

Impairment of assets

The carrying amount of intangible assets and property, plant and equipment alike is assessed annually for indications of impairment.

Should indications of impairment occur, each asset or group of assets, respectively, will be assessed in terms of impairment. Assets are written down to the recoverable amount if this is lower than the carrying amount. The highest value of the net realisable value and the estimated value in use is used as the recoverable amount.

The value in use is calculated as the present value of the anticipated net income from the use of the asset or group of assets.

Leases

The Group, as a lessee, assesses at contract inception whether a contract is, or contains, a lease. That is, 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, applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group, as a lessee, recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

Right-of-use assets

The Group recognises right-of-use assets at the

commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease

payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on an amortisation basis, so that depreciation equals instalments on the lease liabilities, over the shorter of the lease term and the estimated useful lives of the assets, as follows:

• Offices 1-10 years
• Company cars 1-3 years

If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the 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.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group reasonably certain would be exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. If the implicit rate is determinable, the implicit rate is applied. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment. It also applies the lease of low-value assets recognition exemption to leases of equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expenses on a straightline basis over the lease term.

Receivables

Receivables, which comprise receivables from sales, group companies and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

Receivables are initially measured at fair value.

After initial measurement, they are subsequently measured at amortised cost using the effective interest rate method (EIR), less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or

costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss.

The losses arising from impairment are recognised in the statement of profit or loss in finance costs for loans and in cost of sales or other operating expenses for receivables.

Cash and short-term deposits

Cash and short-term deposits in the statement of financial position comprise cash at banks and at hand and short-term highly liquid deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group's cash management.

Treasury shares

Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity.

No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group's own equity instruments. Any difference between the carrying amount and the consideration, if reissued, is recognised in the share premium.

Fair value measurement

The Group measures financial instruments at fair value at each balance sheet date. Fair-value related disclosures for financial instruments and non-financial assets that are measured at fair value or where fair values are disclosed, are summarised in the following note 13.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market or, if not available, in the most advantageous market.

The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest

level input that is significant to the fair value measurement as a whole:

• Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
• Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.

Dividends

Dividends are recognised when the Group's right to receive the payment is established, which is generally when shareholders approve the dividend. Dividends to the Company's shareholders are classified as a liability when the dividends proposed have been approved by the Annual General Meeting.

Employee benefits

The Group has defined contribution pension plans. The pension premiums are charged to expenses as they are incurred and classified as salary.

Share-based payments

Employees, including senior executives of the Group, receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions). Group employees in the Norwegian entities have been granted shares at discounted prices, within the limit for such grants according to Norwegian tax legislation (equity-settled transactions).

Equity-settled transactions

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. The cost is recognised in employee benefits expense, together with a corresponding increase in equity, over the period in which the service and the performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

The discounts granted to employees in the Norwegian entities are recognised as a cost in salaries and personnel cost in the profit and loss statement.

Cash flow statement

The cash flow statement shows the Group's cash flow for the year divided into operating, investing and financing activities during the year, as well as the year's changes in cash and cash equivalents and the Group's cash and cash equivalents at the beginning and end of the year.

Cash flow from operating activities

Cash flow from operating activities is presented using the indirect presentation form and is stated as the year's profit/loss before tax plus depreciation and impairment losses and with adjustments for changes in working capital and paid corporate tax.

Cash flow from investing activities

Cash flow from investing activities includes payments in connection with the purchase and sale of non-current assets.

Cash flow from financing activities

Cash flow from financing activities includes changes in volume after the pooling of the Company's share capital and related costs as well as raising of loans, repayments on interest-bearing debt, and payment of dividends to owners.

Note 3 Estimates, judgments and assumptions

Significant accounting judgement, estimates and assumptions

The preparation of the Group's consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below.

The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

Judgements

In the process of applying the Group's accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the consolidated financial statements:

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use.

The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm's length, for similar assets or observable market prices less incremental costs of disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the strategic plans for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the performance of the assets of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill and other intangibles with indefinite useful lives recognised by the Group.

The key assumptions used to determine the recoverable amount for the different CGUs are disclosed and further explained in the notes.

Note 4 Financial risks and financial instruments

The Group's principal financial liabilities comprise loans and borrowings and trade and other payables. The main purpose of these financial liabilities is to finance the Group's operations.

The Group's principal financial assets include trade and other receivables, and cash and short-term deposits that derive directly from its operations.

The Group is exposed to market risk, credit risk, and liquidity risk. The Group's Executive Directors oversee the management of these risks. A description of the different risks is given below.

Market risk

The Group has a good order backlog and list of sales prospects, with competencies that are highly attractive in the market. The outlook is robust for the market for IT consultancy services. The Group acknowledge that there is a risk that macroeconomic factors can cause a downturn in the economy and reduced demand for the Group's services. The condemnable invasion of Ukraine and the sanctions against Russia incorporated in Norwegian Law in March 2022, have not and are not expected to have a direct impact on Webstep's business activities. The consequences of the acts of war are uncertain, and Webstep is following the developments closely to detect any direct or indirect consequences that may follow.

In addition, market risk comprises interest rate risk, foreign currency risk and market price risk which are treated separately below.

Market risk - interest rate risk

The short-term revolving credit facility is exposed to interest rate risk because of floating interest rate conditions which makes the Group's financial cost exposed to changes in the market rate. The Group considers this risk to be minimal due to the stable financial situation in Norway, combined with low level of debt and strong financial position for the Group. The Group has no long-term debt exposed to floating interest-rate.

Current financing and capital structure has limited interest rate risk, and variation in interest expenses due to changes in Nibor would have insignificant impact on financial expenses in the Group and presentation of "Analysis of sensitivity" is therefore left out.

Market risk - currency risk

Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activities in Sweden (when revenue or expense is denominated in a foreign currency) and the Group's net investment in the Swedish subsidiary.

The Group has not assessed it as necessary to enter into hedging of these risks due to materiality of the exposure. The following tables demonstrate the sensitivity to a reasonably possible change in SEK exchange rates as assessed by chief operating decision maker, with all other variables held constant. The impact on the Group's profit before tax is due to changes in applied rate for translation of the profit in the Swedish subsidiary, while the change in pre-tax equity is due to change in the fair value of monetary assets, intangible assets, receivables and all liabilities including current and non-current leasing liabilities and all current payables, including net tax payables in the Swedish subsidiary. The Group's exposure to foreign currency changes for all other currencies is not material.

Currency sensitivity		Change in SEK rate	Effect on profit before tax NOK 000's	Effect on pre-tax equity NOK 000's
	2022	10 %	616	8,982
		(10 %)	(616)	(8,982)
	2021	10 %	340	8,580
		(10 %)	(340)	(8,580)

Market risk - market price risk

Consistent deliveries over time in the different market segments according to established group policies have secured a low-volatility price structure that has proven stable over time. The variable salary model for the majority of the consultants also reduces market risk exposure as the salary expenses to a large extent correlate with revenues.

Credit risk

Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or fail to pay amounts due causing financial loss to the Group. The Group's exposure to credit risk is mainly related to its outstanding trade debtors (see Note 14). Other counterparty credit risk exposure to the Group is related to its cash deposits with financial institutions. The table below provides an overview of financial assets exposed to credit risk at year-end 2022 and 2021. Liquidity and credit risk management is performed on a monthly basis and is evaluated in board meetings.

NOK 000's	2022	2021
Trade and other receivables	154,871	144,200
Cash and cash equivalents	62,340	46,690
Total	217,211	190,889

Climate risk

Behavioural change for both the Group's customers and investors due to climate change can be a risk to the business model.

Climate change can have a direct impact on the Group's customers operating in sectors most exposed to physical climate change including conventional energy, heavy industry and manufacturing, transport and construction, which will further impact Webstep.

Failure to comply with regulatory requirements or to meet market expectations can lead to both financial and reputational loss.

The Group monitors risks related to climate change in the overall risk assessment of the Company and takes necessary action if needed.

Trade receivables

The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group engages with large and regular customers and has had low historical losses on receivables. In response to the COVID-19 pandemic, the Group was monitoring the economic environment and took actions to limit its exposure to customers that were severely impacted. In accordance with IFRS 9, receivables are recognised and carried at their anticipated realisable value, which implies that a provision for a loss allowance on lifetime expected credit losses of the receivable is recognised. A provision for loss allowance for expected credit losses is performed at each statutory reporting date and is based on a multifactor and holistic analysis depending on several considerations.

Aging trade debtors

		Day past due
NOK 000's	Not due	<30 days	30-60 days	>60 days	Total
As of December 31 2022
Trade debtors (note 14)	99,957	42,202	1,174	3,395	146,730
Expected credit loss rate (per cent)					0.67%
Expected credit loss (NOK 000's)					988
As of December 31 2021
Trade debtors (note 14)	93,720	36,271	3,009	749	133,749
Expected credit loss rate (per cent)					0.74%
Expected credit loss (NOK 000's)					988

Cash deposits

Credit risk from balances with financial institutions is managed by the Group's treasury function. The Group limits its counterparty credit risk by maintaining its cash deposits with financial institutions with high credit ratings as displayed below.

Financial institution	Country	Rater	Report date	Rating (LT)
Sparebank 1 SR-bank ASA	Norway	Moody's	30.09.2022	A1
SEB AB (publ)	Sweden	Moody's	22.12.2022	Aa2

Liquidity risk

Liquidity risk arising from the Group not being able to meet its financial obligations as they fall due, is considered low. The Group's approach to manage liquidity risk is through proper liquidity planning to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation. Executive management has monitoring controls in place to ensure that the Group has sufficient liquidity.

Maturity profile of liabilities	2022 Carrying
NOK'000	amount	Total		Contractual maturity
			< 1 year	1 - 5 years	> 5 years
Lease liabilities (note 24)	66,086	75,819	15,697	49,370	10,752
Trade and other payables	15,215	15,215	15,215	0	0
Tax payable (note 10)	11,879	11,879	11,879	0	0
Social Taxes and VAT	81,524	81,524	81,524	0	0
Other short-term debt	109,411	109,411	109,411	0	0
Total 31 December 2022	284,115	293,848	233,726	49,370	10,752

Maturity profile of liabilities	2021 Carrying
NOK'000	amount	Total		Contractual maturity
			< 1 year	1 - 5 years	> 5 years
Debt to credit institutions	0	0	0	0	0
Lease liabilities (note 24)	61,536	72,422	14,464	44,593	13,365
Trade and other payables	15,745	15,745	15,745	0	0
Tax payable (note 10)	14,599	14,599	14,599	0	0
Social Taxes and VAT	72,114	72,114	72,114	0	0
Other short-term debt	89,814	89,814	89,814	0	0
Total 31 December 2021	253,808	264,694	206,736	44,593	13,365

Categories of financial instruments

NOK'000	2022	2021
Trade receivables	145,742	132,761
Other receivables	9,129	11,439
Cash and short-term deposits	62,340	46,690
Financial assets measured at amortised cost	217,211	190,889
Debt to credit instututions	0	0
Trade payables	15,215	15,745
Other payables	81,524	72,114
Other short-term debt	109,411	89,814
Financial liabilities measured at amortised cost	206,150	177,673

The methods and assumptions used to estimate the fair value of debt instruments are described in note 2. Carrying amount is based on amortised cost and is assessed as a reasonable approximation of fair value, and has been applied accordingly

Note 5 Revenue from contracts with customers

In the following table, the major revenue lines are disaggregated by geographical areas as disclosed in our segment note (note 6). Figures are in local currencies and do not include eliminations except Group.

2022 Segments (in 000' )	Norway (NOK)		Group (NOK)
Type of goods or service
IT-related consulting services	721,050	110,528	823,284
Subcontractors	42,984	22,666	64,490
Other	173	519	665
Total revenue from contracts with customers	764,207	133,713	888,438
Timing of revenue recognition
Goods and services transferred at a point in time	764,034	133,194	887,774
Services transferred over time	150	-
Total revenue from contracts with customers	764,184	133,194	887,774
2021 Segments (in 000' )	Norway (NOK)	Sweden (SEK)	Group (NOK)
Type of goods or service
IT-related consulting services	624,847	83,155	705,690
Subcontractors	45,763	23,029	68,821
Other	271	392	512
Total revenue from contracts with customers	670,881	106,576	775,023
Timing of revenue recognition
Goods and services transferred at a point in time	670,610	106,184	774,510
Services transferred over time	150	-
Total revenue from contracts with customers	670,760	106,184	774,510

Set out below, is the reconciliation of the revenue from contracts with customers with the amounts disclosed in the segment information (Note 6):

		2022	2021
Revenue (in 000' NOK)	Norway	Sweden	Norway	Sweden
External customer	764,034	123,740	670,610	103,900
Inter-segment	150	2,634	150	2,358
Inter-segment adjustments and eliminations	(150)	(2,634)	(150)	(2,358)
Total revenue from contracts with customers	764,034	123,740	670,610	103,900

Contract balances:

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.

NOK 000'	12/31/2022	12/31/2021
Receivables which are included in Trade receivables	143,550	129,315
Contract assets	2,192	3,446
Contract liabilities	757	0

The contract assets primarily relate to revenues accrued, but not invoiced. The contract assets are transferred to Trade receivables when the rights to receive payment become unconditional.

The contract liabilities primarily consist of advance considerations received from customers, before revenue is earned. Revenue is recognised as (or when) the Group fulfils its performance obligation(s) under the contracts, and accrued expenses related to supply of goods and services, not yet recorded in Accounts Payable.

Changes in the contract assets and the contract liabilities balances during the period are as follows:

Contract assets (NOK 000')	2022	2021
At January 1	3,446	6,041
Additions	2,192	3,446
Transfers from contract assets recognised at the beginning of the period to receivables	(3,446)	(6,041)
Impairment losses and allowances recognised in the period	0	0
At December 31	2,192	3,446
Contract liabilities (NOK 000')	2022	2021
At January 1	0	838
Invoiced in advance for the period	757	0
Revenues recognised that was included in the contract liability balance at the beginning of
the period	0	(838)
Current contract liabilities at December 31	757	0

Note 6 Segment information

NOK 000's

The Group provides IT related high-end consulting services. Operating segments are reported by country of operation. The Chief Operating Decision-Maker (CODM), who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee consisting of the CEO and the CFO. The CODM examines the Group's performance by country of operation. Segment performance is evaluated based on the profit or loss measure "Earnings before interest and tax" (EBIT) and is measured consistently with profit or loss in the consolidated financial statements. Assets and liabilities are not allocated to segments.

The Group has currently two reportable segments: Norway and Sweden, and revenue breakdown for Oslo (Norway), Regional Offices (Norway) and Subcontractors (Norway and Sweden).

2022	Norway	Sweden	Elimination*	Total
Revenues Oslo	324,651
Revenues Regional Offices	393,656
Revenues Sweden		102,747
Revenues Subcontractors	45,666	23,916
Other	233	203
Total revenue (IT-related consulting services)	764,207	126,866	(2,784)	888,289
Total operating expenses less depreciation and impairment	716,480	119,945	(2,784)	833,640
EBIT	47,727	6,922		54,649
EBIT margin (% of total revenue)	6.2 %	5.5 %		6.2 %

2021	Norway	Sweden	Elimination*	Total
Revenues Oslo	280,998
Revenues Regional Offices	343,525
Sweden		83,489
Subcontractors	45,763	23,058
Other	595	103
Total revenue (IT-related consulting services)	670,881	106,651	(2,508)	775,023
Total operating expenses less depreciation and impairment	609,783	101,825	(2,508)	709,100
EBIT	61,097	4,826		65,923
EBIT margin (% of total revenue)	9.1 %	4.5 %		8.5 %

*Elimination consists of hiring of consultants from Sweden to Norway and management fee from Sweden to Norway.

Major customers

The Group does not disclose a breakdown per customer, as sales revenues for any customer does not exceed 10% of the total revenue in the Group.

Geographical analysis of assets

Analysis of non-current assets by geographical location

	Elimination
2022	Norway	Sweden	*	Total
RIght-of-use assets	49.2	15.9		65.1
Research and development	1.5			1.5
Fixed assets	13.9	0.5		14.4
Total non-current assets operating assets 2022	64.6	16.4	0.0	81.0

		Elimination
2021	Norway	Sweden	*	Total
RIght-of-use assets	45.8	16.8		62.5
Research and development	3.0			3.0
Fixed assets	10.2	0.1		10.4
Total non-current assets operating assets 2021	59.0	16.9	0.0	75.9

Asset location	2022	2021
Norway	64,612	59,021
Sweden	16,395	16,910
Non-current segment assets	81,007	75,932
Other intangible assets	378,554	380,546
Non-current financial assets	2	0
Deferred tax asset	2,193	1,619
Trade receivables	145,742	132,761
Other receivables	9,129	11,439
Cash and short-term deposits	62,340	46,690
Consolidated total assets	678,967	648,986

Non-current assets for this purpose consist of right-of-use assets, research and development and fixed assets.

Note 7 Salaries, remuneration and audit fees

NOK 000's
Salaries and personnel expenses (NOK'000)	2022	2021
Salaries	540,411	465,896
Social security costs	86,457	77,726
Pensions	24,117	21,722
Share-based compensation	3,606	2,878
Other benefits and refunds	32,137	15,442
Total salaries and personnel expenses	686,728	583,665

Number of employees, average FTEs 538 478

				Total
Remuner ation to executive management NOK'000	Base salary	Variable pay	Other*	remuneration	Pension
Total remuneration to executive management 2022	14,642	3,713	1,910	20,265	626
Total remuneration to executive management 2021	15,000	2,840	480	18,320	626

*Other consists of e.g. health insurance plans, car allowance, telephone/mobile communication, share-options (NOK 1.2 million in 2022) and housing allowance.

** There have been changes in the executive management since 2021

***Due to reduction of executive management effective from 2023 the Company had severance pay of NOK 1.2 million in the financial year 2022.

The table above is exclusive severance pay.

Board remuneration

Compensation to board members is not performance-related. Compensation to the Board is determined by the Annual General Meeting, and the accrued cost for 2022 and 2021 is based on the decision made by the Annual General Meetings. The compensation is paid in arrears.

	2022	2021
Remuneration to board members and nomination committee	Compensation	Compensation
Chairman of the board - Kjetil Bakke Eriksen (from 28 April 2022)	373	247
Board member - Trond Klethagen Johannessen (Chairman until 27 April 2022)	327	410
Board member - Siw Ødegaard	276	288
Board member - Trygve Christian Moe	287	257
Board member - Toril Nag	258	233
Nomination committee - Bjørn Ivar Danielsen (board member until 5 May 2021)	30	19
Nomination committee - Petter Tusvik	18	17
Nomination committee - Trude Sleire (until 28 April 2021)		6
Nomination committee - John Morten Bjerkan (until 28 April 2021)		9
Total remuneration to board members and nomination committee	1,569	1,487

Determination of remuneration to executive management

The Company's executive management comprises the Chief Executive Officer (CEO), the Chief Financial Officer (CFO), Director Business Development, Regional Managers, Directors Communication and marketing and Group Advisor. Remuneration to executive management is mainly fixed salary as well as performance based bonus. CEO and CFOs bonus is decided by the remuneration committee and regional managers bonus is calculated by pre-determined KPIs, in line with the Remuneration Policy.

The CEO and the CFO were entitled to bonuses for 2021 which were accrued for in the consolidated statement of comprehensive income for 2021 and paid in Q1 2022. The CEO received a bonus of NOK 0.7 million. The CFO received a bonus of NOK 0.15 million. The executive management is entitled to participate in the Long-term incentive programme as described in note 22.

Bonuses for 2022 were accrued for in the consolidated statement of comprehensive income for 2022 and paid in Q1 2023. The CEO was paid a bonus of NOK 0.42 million

The accrued bonuses are included in the table above.

The board of directors has established a remuneration committee. Chairman of the board Kjetil Bakke Eriksen serves as chair of the committee. Toril Nag and Trond K. Johannessen serve as members. The remuneration committee functions as an advisory body to the board of directors, with the purpose of ensuring a thorough and independent preparation of matters regarding remuneration to the Company's executive management.

The main principle for the Company's remuneration policy is that the executive management shall be offered competitive terms when their total remuneration package is taken into account. Such packages may consist of elements such as base-salary, bonus, share and option schemes, benefits in kind and pension arrangements. The Company shall seek to offer a remuneration level that is considered competitive and on market terms, compared to the level offered by its peers, and which seeks to satisfy the Company's need to recruit and keep highly qualified personnel in the executive management.

The current guidelines have been prepared in accordance with the provisions of section 6-16a of the Norwegian Public Limited Companies Act, approved 28 April 2022 at the Annual General Meeting.

The base salary paid to the executive management shall constitute the main part of their total remuneration. For executive management also having a performance-based bonus, the base salary constitutes approximately 70-80% of the total remuneration package.

The executive management is offered contributions in kind such as coverage of phone and phone expenses, private broadband, company health services, insurances, car allowance and coverage of travel expenses.

The executive management participates in the Company's defined contribution pension scheme in accordance with mandatory law.

The company's CEO receives a fixed car allowance at NOK 15,000 per month.

The executive management may be offered performance-based bonuses in addition to their fixed remuneration. Such performance-based bonus shall be agreed on an individual basis if applicable. The criteria for any performance-based bonus shall be determined by the board of directors and shall be linked to measurable factors, such as the achievement of pre-determined KPIs. The Company's CEO and CFO performance-based profit may constitute up to 40% and 35% respectively, and shall be determined by the board of directors. For department managers the performance-based bonus is linked to the following KPIs

• Revenue compared to budget/forecast
• Number of employees compared to budget/forecast
• Operating revenue compared to budget/forecast

The executive management may be offered Company shares and options to shares as a part of the total remuneration package.

The executive management, and other managers as decided by the board of directors, are included in Websteps Long-term incentive program approved at the Annual General Meeting 2019. The program is further described in note 22.

The other Group companies shall follow the main principles for remuneration of executives as described herein and guidelines for determination of salary and other remuneration to executive personnel in Webstep.

Audit fees *	2022	2021
Statutory audit fees	909	1,052
Audit-related assistance	213	0
Total fee	1,122	1,052

* VAT is not included

Note 8 Pension costs

All companies within the Group have defined contribution plans for all of its employees, governed by the local employment laws. The Group pays a contribution to the plan based on a fixed per centage of the salary, limited to 12 times the base amount (G). The total pension premium charge in 2022 is NOK 24,1 million (2021: NOK 21,7 million).

The Norwegian companies within the Group are bound to have mandatory occupational pension scheme pursuant to the Norwegian law of Occupational pension scheme. The Group's pension scheme meets the requirements of this Act.

Note 9 Financial items

Finance income
NOK'000	2022	2021
Interest income	595	98
Other finance income (including foreign exchange effects)	419	22
Total finance income	1,014	120

Interest income primarily comprises interest received on bank deposits and effects of foreign exchange.

Finance expense

NOK'000	2022	2021
Interest expense	(4,512)	(2,987)
Other finance expense (including foreign exchange effects)	(877)	(646)
Total finance expense	(5,389)	(3,633)

Interest expense primarily comprises interest and expenses paid on revolving credit facility (Note 21) and estimated interest on leasing liabilities (Note 24).

Note 10 Taxes

NOK 000's

Consolidated statement of profit or loss	2022	2021
Current income tax	12,404	14,384
Unprovided income tax charge from previous year	0	252
Deferred tax	(566)	(720)
Income tax expense reported in the statement of profit or loss	11,838	13,916

Reconciliation of tax expense and the accounting profit multiplied by the Group's tax rate for 2022 and 2021:

Reconciliation of tax base	2022	2021
Accounting profit before tax	50,274	62,411
Permanent differences	3,985	1,147
Change in temporary differences	2,577	3,288
Tax base for the year	56,836	66,846
Tax payable (22%)	12,504	14,706
Prepaid tax	(525)	(30)
Differences in tax rates on foreign subsidiary	(101)	(77)
Tax payable in the balance sheet	11,878	14,599
Deferred tax	2022	2021
Fixed assets	2,003	1,131
Receivables	988	988
Provisions, not yet tax deductible	8,529	6,036
Statutory tax provisions in Sweden	(8,593)	(8,010)
Total	2,927	144
Net deferred tax asset/(liability) (22%)	644	32
Effect of difference in tax rates Sweden (20,6%/22%)	99	101
Total adjusted for differences in tax rates	742	133
Reflected in the statement of financial position as follows:
Deferred tax assets	2,193	1,619
Deferred tax liabilities	(1,451)	(1,486)
Deferred tax liabilities, net	742	133
Effective tax rate:
Expected income tax	11,060	13,730
Permanent differences	877	252
Effect of change in tax rate and other	(99)	(67)
Income tax expense*	11,838	13,916

* Income tax expense in relation to income before tax 23.5 % 22.3 %

The group had no R&D initiative that qualified for the government R&D tax incentive scheme (SkatteFUNN) in 2022. In 2021 NOK 693 thousand was recognised as income under the R&D tax incentive scheme (SkatteFUNN), whereof NOK 308 thousand originated from 2020. This was related to an approved adjustment to one of the applications.

Note 11 Intangible assets and goodwill

Cost,	Goodwill	Goodwill
NOK 000's	Norway	Sweden		R&D	Total
At 1 January 2021	313,575		71,713	7,573	392,861
Additions	0		0	0	0
Disposals	0		0	0	0
Exchange adjustment	0		(4,742)	0	(4,742)
At 31 December 2021	313,575		66,971	7,573	388,119
Additions	0		0	0	0
Disposals	0		0	0	0
Exchange adjustment	0		(2,007)	0	(2,007)
At 31 December 2022	313,575		64,964	7,573	386,112
Depreciation and impairment
At January 1 2021	0		0	(3,029)	(3,029)
Impairment				0	0
Depreciation charge for the year	0		0	(1,515)	(1,515)
At 31 December 2021	0		0	(4,543)	(4,543)
Impairment				0	0
Depreciation charge for the year	0		0	(1,515)	(1,515)
At 31 December 2022	0		0	(6,058)	(6,058)
Net book value
At 31 December 2021	313,575		66,971	3,030	383,575
At 31 December 2022	313,575		64,964	1,515	380,054
Useful life	Infinite	Infinite		5 years
Depreciation method	NA	NA		Straight line

Goodwill includes the value from acquisition of Webstep AS in 2011 and Webstep AB in 2012, where NOK 313.5 million and NOK 58.6 million was added to goodwill respectively. Goodwill is not amortised, but tested yearly for impairment.

Capitalised R&D comprises investments in the strategic initiative Webstep Internet of Things (IoT), where a total of NOK 1.5 million is recognised at balance date. The reclassification and recognition as an intangible asset is based on the management's assessment of future economic benefits from the projects and that the criteria in IAS 38.57 is met.

R&D activities that have been recognised as costs in the consolidated statement of comprehensive income in 2022 amount to NOK 0.0 million (NOK 2.0 million in 2021).

Impairment testing

Goodwill acquired through business combinations has been allocated to two individual cash generating units (CGU), which are also defined as reportable segments according to note 6.

Cash generating unit
NOK'000	2022	2021
Norway	313,575	313,575
Sweden	64,964	66,971
	378,539	380,546

Goodwill is tested for impairment at least annually, or when there are indications of impairment. The impairment test is conducted for each cash generating unit, by evaluating the present value of future cash flows, based on cash flow projections five years ahead. The recoverable amount is set to the estimated value in use. The value in use is the net present value of the estimated cash flow before tax, using a discount rate reflecting the timing of the cash flow and the expected risk.

Key assumptions used in value in use calculations and sensitivity to changes in assumptions:

The calculation of value in use for goodwill related to the acquisition of Webstep AS and Webstep AB is most sensitive to the following assumptions:

• Discount rates
• EBITDA

• Growth rates used to extrapolate cash flows beyond the forecast period

The calculated weighted average cost of capital (WACC) after tax for Norway was 8.4 % and 6.7 % for Sweden. The risk free interest rate was 3.1% for Norway and 1.7 % for Sweden. The risk premium is calculated based on market statistics for comparable companies. The cash flow forecast takes into account both historical results, expected future growth rates, and market conditions. These budgets and forecast calculations generally cover a period of five years. For Norway and Sweden, the underlying model calculates annual cash flows per department, based on periodised employee development, utilisation rate, expected trend in hourly rate, sales / management / overhead changes, wage growth and cost growth. The annualised compound growth rate over the next 4 year period is 2% for each CGUs. The terminal growth rate used in calculating the terminal value is 1%. The EBITDA-margin in both the Norwegian CGU and the Swedish CGU is expected to be in line with historical levels. The impairment model has significant headroom between estimated value and carrying amount.

Based on the impairment tests performed, there are no indications that impairment is required for any of the CGUs.

The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group's CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. Market conditions are changing rapidly due to geopolitical instability, invasion of Ukraine and climate risk, and Webstep is following the development closely, however the Group does not expect any substantial implications on the Group's business activities. A long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Note 12 Fixed assets

	Equipment,
Cost,	fixtures and	Right-of-use
NOK'000	furniture	assets	Total
At 1 January 2021	26,029	50,811	76,840
Additions	7,750	38,801	46,551
Disposals	0	(16,172)	(16,172)
Exchange adjustment	0	(920)	(920)
Cost at 31 December 2021	33,779	72,520	106,299
Cost at 1 January 2022	33,779	72,520	106,299
Additions	10,724	19,136	29,860
Disposals	0	(4,179)	(4,179)
Exchange adjustment	0	(508)	(508)
Cost at 31 December 2022	44,503	86,969	131,472
Depreciation and impairment
At 1 January 2021	(19,539)	(16,003)	(35,542)
Disposals	0	15,913	0
Impairment	0	0	0
Depreciation charge for the year	(3,884)	(9,881)	(12,390)
Exchange adjustment	0	0	0
Other	0	0	0
At 31 December 2021	(23,423)	(9,971)	(33,395)
Disposals	0	1,500	1,500
Impairment	0	(1,785)	(1,785)
Depreciation charge for the year	(6,626)	(11,654)	(18,280)
Exchange adjustment	(7)	0	(7)
Other	0	0	0
At 31 December 2022	(30,056)	(21,910)	(51,967)
Net book value
At 31 December 2021	10,355	62,548	72,903
At 31 December 2022	14,447	65,059	79,507
Useful life	3 - 5 year	1-5 year
Depreciation method	Straight line	Amortisation

Note 13 Financial assets – non-current vs current

The only non-current, financial asset is a deposit.

Financial assets,
NOK'000	2022	2021
Other long term deposit	2	0
Total	2	0

Note 14 Trade and other receivables

Trade and other receivables

NOK'000	2022	2021
Trade receivables - net of related parties	146,730	133,749
Provision for bad debt	(988)	(988)
Trade Receivables net of provision	145,742	132,761
Prepayments and other receivables	9,129	11,439
Receivables from related parties	0	0
Payables to related parties	0	0
Total trade receivables and prepayments	154,872	144,200
Of which long-term receivables from related parties	0	0
Short-term Receivables and prepayments	154,872	144,200

Specification of receivables

NOK'000	2022	2021
Trade receivables	143,550	129,315
Accrued income	2,192	3,446
Other receivables	0	0
Trade and other receivables	145,742	132,761
Prepaid costs	8,222	10,585
Prepaid public duty debt	142	478
Prepaid rent	765	376
Prepayments	9,129	11,439
Total receivables and prepayments	154,871	144,200

Due dates and fair value of trade and other receivables

NOK'000	2022	2021
Due within one year*)	154,871	144,200
After one year **)	0	0
Fair Value	154,871	144,200

*) For receivables due within one year, fair value is equal to nominal value.

**) Receivables that are due later than one year are discounted and stated as fair value.

Group has a bad debt provision of NOK 988 thousand in 2022 equal to NOK 988 thousand in 2021.

				30-60
NOK'000	Total	Not due	<30 days	days	>60 days
2022	146,730	99,957	42,202	1,174	3,395
2021	133,749	93,720	36,271	3,009	749

Trade receivables at year end were NOK 146.7 million (NOK 133,7 million).

Note 15 Cash and short-term deposits

Cash and Cash Equivalents,
NOK'000	2022	2021
Cash in bank	62,340	46,690
Cash equivalents	0	0
Total Cash and Cash Equivalents	62,340	46,690
Utilised bank overdraft	0	0
Net Cash and Cash Equivalents/Bank overdraft	62,340	46,690
Of which Restricted Cash:
Guarantees for leases and credits from suppliers	1,116	1,149
Taxes withheld	581	744
Other restricted cash	0	0
Total Restricted Cash	1,697	1,893

For further details on the Group's cash reporting and cash pooling system, see note 17.

Note 16 Shareholders capital and largest shareholders

NOK 000's

Share capital

The Company has only one share class and all shares have equal voting rights.

	2022	2021
	No. of	No. of
Authorised	thousands	thousands
Ordinary shares of NOK 1 each	27,628	27,322
	No. of	No. of
Ordinary shares	thousands	thousands
Issued and fully paid:
At 1 January	27,322	26,967
Issued	306	355
At 31 December	27,628	27,322
	No. of	No. of
Treasury shares	thousands	thousands
At 1 January	(54)	(60)
Sale of treasury shares	24	6
At 31 December	(29)	(54)
Foreign currency translation reserve	NOK 000's	NOK 000's
At 1 January 2021	16,212	16,212
Foreign currency translation	(5,929)	7,892
At 31 December 2021	10,284	16,213
Foreign currency translation	(2,589)	-5,929
At 31 December 2022	7,695	10,284
	2022	2021
Share capital	27,628	27,323
Treasury shares	(29)	(54)
Share premium	179,190	172,775
Retained earnings	178,918	183,365
Non-controlling interest	0	0
Shareholders equity inclusive currency translation	393,401	393,692

Statement of changes in equity					Foreign currency		Total	Non-cont
NOK 000's	Note	Issued capital	Treasury shares	Share premium	translation reserve	Retained earnings	earned equity	rolling interests	Total equity
At 1 January 2021		26,967		-59 162,020	16,212		175,045 380,185		- 380,185
Profit for the period Other comprehensive		-	-	-	-	48,495	48,495	-	48,495
income/(loss)		-	-	-	-5,929	-	-5,929	-	-5,929
Sales of treasury shares		-	6	111	-	-	117	-	117
Share incentive program		-	-			2,878	2,878	-	2,878
Share issue		355	-	10,644	-	-	10,999		10,999
Dividends	26	-	-	-	-	-43,052	-43,052	-	-43,052
At 31 December 2021		27,322		-53 172,775	10,283		183,366 393,692		- 393,692
Profit for the period Other comprehensive		-	-	-	-	38,436	38,436	-	38,436
income/(loss)		-	-	-	-2,589	-	-2,589	-	-2,589
Sales of treasury shares			24	432			456	-	456
Share incentive program						3,606	3,606	-	3,606
Dividends	26					-46,489	-46,489	-	-46,489
Share issue		306		5,982			6,288		6,288
At 31 December 2022		27,628		-29 179,189	7,695		178,919 393,401		- 393,401

Top 20 shareholders 31 December 2022

Shareholder name	Shares	Ownership	Voting rights
Embro Eiendom AS	8,312,727	30.1%	30.1%
J.P. Morgan SE	1,970,890	7.1%	7.1%
SALT VALUE AS	1,430,121	5.2%	5.2%
VERDIPAPIRFONDET DNB SMB	1,139,284	4.1%	4.1%
JAKOB HATTELAND HOLDING AS	1,000,000	3.6%	3.6%
PROTECTOR FORSIKRING ASA	1,000,000	3.6%	3.6%
J.P. Morgan SE	900,000	3.3%	3.3%
HOLMEN SPESIALFOND	861,524	3.1%	3.1%
VERDIPAPIRFONDET NORDEA NORGE VERD	664,317	2.4%	2.4%
Danske Invest Norge Vekst	542,000	2.0%	2.0%
HVALER INVEST AS	500,000	1.8%	1.8%
Goldman Sachs International	416,571	1.5%	1.5%
HAUSTA INVESTOR AS	400,000	1.4%	1.4%
INTERTRADE SHIPPING AS	400,000	1.4%	1.4%
Danske Bank A/S	320,000	1.2%	1.2%
ESPEDAL & CO AS	308,980	1.1%	1.1%
IVAR LØGE AS	250,000	0.9%	0.9%
Pictet & Cie (Europe) S.A.	232,675	0.8%	0.8%
VERDIPAPIRFONDET NORDEA AVKASTNING	230,383	0.8%	0.8%
EUROVEST AS	230,000	0.8%	0.8%
Other shareholders	6,489,043	23.5%	23.5%
Total number of shares excluding treasury shares	27,598,515	99.89%	100.00%
Treasury shares as of 31 December 2022	29,983	0.11%
Total shares issued	27,628,498	100.00%

Shareholding by board members, management and their related parties as of 31 December 2022

	Shares	Ownership	Voting rights
Kjetil Bakke Eriksen (Suelo AS)	26,925	0.10%	0.10%
Trond K. Johannessen	63,000	0.23%	0.23%
Trygve Christian Moe (Birkeland & Salvesen AS)	23,925	0.09%	0.09%
Siw Ødegaard (Kvinnesiden AS)	13,025	0.05%	0.05%
Toril Nag	3,570	0.01%	0.01%
Save Asmervik	13,293	0.05%	0.05%
Jacob Cardell (Nominee)	20,020	0.07%	0.07%
Terje Orvedal (Illari AS)	9,143	0.03%	0.03%
Joar Krohn (Kronoko Holding AS and privatly held)	99,320	0.36%	0.36%
Dagfinn Haslebrekk	7,618	0.03%	0.03%
Arnt Roger Aasen (Aravi AS and privatly held)	26,032	0.09%	0.09%
Otto Backer Solberg	18,627	0.07%	0.07%
Rolf Helle (Xerxes AS and privatly held)	41,247	0.15%	0.15%
Erlend Nævdal	845	0.00%	0.00%
Anders Høibakk	7,615	0.03%	0.03%
Arne Sværen-Bryne	5,637	0.02%	0.02%

Trygve Christian Moe is employed by Embron Group AS, which is owned by J.C. Broch AS.

Webstep ASA holds 29,983 treasury shares. These shares have no voting rights nor dividend rights.

Note 17 Interest bearing loans and borrowings

NOK 000's

The Group has a NOK 110 million Revolving Credit Facility ("RCF") with SpareBank 1 SR-Bank ASA. The RCF may be utilised by each member of the Group having access to the cash pooling account system related to the RCF. The accounts included in the cash pooling structure are presented as a net figure for the Group: As cash and short term receivables if the net balance is positive, or debt to credit institutions if the net balance is negative.

The term of the RCF is two years, after which it is subject to renewal. The facility was renewed in 2021. The total payable interest rate is based on 3 months NIBOR in addition to an agreed margin of 2.25 per cent per annum. The interest calculation is based on the net of cash and overdraft. The annual charge for the credit facility is 0.5 per cent of the granted credit. Under the RCF, the Company has pledged security over the shares, inventory, insurance payouts and accounts receivable in Webstep AS and negative pledge over the shares in Webstep AB.

Covenant conditions: Book equity for the Group shall consist of at least 30 per cent of total capital, measured quarterly. Ratio of NIBD / EBITDA maximum 3, measured quarterly, rolling 12 months. See note 21 for further details.

Webstep AB has a local revolving credit facility of SEK 5 million which was unutilised 31 December 2022.

NOK'000	2022	2021
Non-current borrowings
Debt to credit institutions	0	0
Lease liabilities	52,933	49,507
Current borrowings
Debt to credit institutions	0	0
Lease liabilities	13,153	12,029
Total borrowings	66,087	61,537
NOK'000	2022	2021
Booked value of assets pledged as security
Shares	432,119	432,119
Fixed assets	14,447	10,355
Receivables	145,742	132,761
Cash	62,340	46,690
Total	654,648	621,925

Other financial liabilities at amortised cost, other than interest-bearing loans and borrowings

NOK'000	2022	2021
Trade payables	15,215	15,745
Other payables	81,524	72,114
Other short-term debt	109,411	89,814
Total financial liabilities	272,237	239,210
Total current	272,237	239,210
Total non-current	0	0

Other short-term debt mainly consists of; 1) accrued salaries for the past month, for payment

to employees in accordance with the salary model, 2) accrued holiday pay as required by law, for payment to

employees in June the following year.

Changes in liabilities arising from financing activities

			Changes foreign exchange
Year ended 2021	1 Jan 2021	Cash flows	rate	Other	31 Dec 2021
Debt to credit institutions non-current	0	0	0	0	0
Lease liabilities non-current and current (note 24)	34,807	(10,920)	(920)	38,570	61,537
Debt to credit institutions current	0	0	0	0	0
Total liabilities from financing activities	34,807	(10,920)	(920)	38,570	61,537
			Changes foreign exchange
Year ended 2022	1 Jan 2022	Cash flows	rate	Other	31 Dec 2022
Debt to credit institutions non-current	0	0	0	0	0
Lease liabilities non-current and current (note 24)	61,537	(11,481)	(508)	16,540	66,086
Debt to credit institutions current	0	0	0	0	0
Total liabilities from financing activities	61,537	(11,481)	(508)	16,540	66,086

Note 18 Trade and other payables

NOK 000's	2022	2021
Trade and other payables	15,215	15,745
Social Taxes and VAT	81,524	72,114
Accrued vacation pay	51,572	44,470
Accrued expenses including salaries payable	56,898	44,795
Other current payables (note 19)	941	550
Total Trade and Other Payables	206,150	177,674

Terms and conditions of the above financial liabilities:

Trade payables are non-interest bearing and are normally settled on 30-day terms Social Taxes and VAT are normally settled six times per year ( Norway) or monthly (Sweden) Accrued vacation pay is paid in June (Norway) Salaries payable are normally settled monthly

For explanations on the Group's liquidity risk management processes, refer to Note 21

Note 19 Other short-term debt

NOK 000's	2022	2021
Salaries payable, vacation pay, bonus etc.	103,233	84,967
Other accrued expenses	5,237	4,298
Received prepayments of revenues	757	0
Other	184	550
Total other short-term debt	109,411	89,814

Note 20 Related party disclosure

The consolidated financial statements of the Group include:

		% Equity interest
	Country of
Name	in-corporation	Business Address	2022	2021
Webstep AS	Norway	c/o Rebel, Universitetsgata 2, 0164 Oslo	100%	100%
Webstep AB	Sweden	Kungsgatan 44, 111 35 Stockholm	100%	100%

Webstep ASA is the ultimate parent of the Group, and sole owner of Webstep AS and Webstep AB. Balances and transactions between the Company and its subsidiaries, which are related parties to the Company, have been eliminated in the consolidation and are not disclosed in this Note. The Group does not have any material transactions with related parties, except for remuneration to management (note 7).

Note 21 Capital management

Capital management

For the purpose of the Group's capital management, capital includes issued capital, treasury shares, share premium and all other equity reserves attributable to the equity holders of the parent.

The Group is financed by equity with a revolving credit facility to finance fluctuations in net working capital.

The primary objective of the Group's capital management is to maximise shareholder value. The policies shall ensure that the Group complies with externally imposed capital requirements and maintains strong credit ratings and healthy capital ratios in order to support its business objectives. The policies shall ensure sufficient, financial flexibility. The objectives for capital management are regarded as achieved as of December 31 2022.

The Group manages its capital structure and makes adjustments to it according to changes in economic conditions and the risk characteristics of its activities. In order to maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue capital securities. Capital structure is reported monthly and measured, amongst other criterias, against covenants.

No changes have been made to the objectives, policies and processes from the previous years. However, they are under constant review by the board of directors.

The Group monitors equity ratio (equity to total assets) and the ratio of Net Interest Bearing Debt (NIBD) to Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) as part of the capital management to ensure the Group is complying with current covenants.

Note 22 Share based payments

Employee share purchase programme ("ESPP")

An employee share purchase programme was implemented in November 2018, and similar programmes have been carried out yearly since 2018.

In the fourth quarter of 2022 each of the employees in the Norwegian entities, including executive management, were invited to acquire shares in the company for an amount between NOK 5,000 and NOK 24,000 each with a discount of 15%. The shares acquired were subject to a lock-up period of two years, and the reduced offer price reflected the value-reducing effect of the lock-up period. 180 employees participated in the program, and the share capital was increased 15 December 2022 to issue new shares related to the ESPP.

Long-term incentive programme ("LTI")

Under the Long-term incentive programme, share options of the parent are granted to senior executives of the Group. The exercise price of the share options is equal to the market price of the underlying shares on the date of grant. The share options vest if the senior executive remains employed during the vesting period.

The fair value of the share options is estimated at the grant date using the Black-Scholes option pricing model, taking into account the terms and conditions on which the share options were granted.

515,876 options were granted 18 November 2019, whereof 46,884 were terminated during 2020, 23,461 were terminated during 2021 and 46 884 were terminated during 2022.

The options will vest, or have vested, in the following tranches:

• 111,381 options vested 18 November 2020
• 111,381 options vested 18 November 2021
• 175,885 options vested 18 November 2022

546,000 options were granted 24 November 2020, whereof 52,000 were terminated during 2021 and 78,000 were terminated during 2022.

The options will vest in the following tranches:

• 123,500 options vested 24 November 2021
• 123,500 options vest 24 November 2022
• 247,000 options vest 24 November 2023

98,000 options were granted 10 February 2021, the options will vest in the following tranches:

• 24,500 options vested 10 February 2022
• 24,500 options vest 10 February 2023
• 49,000 options vest 10 February 2024

26,000 options were granted 26 May 2021, the options will vest in the following tranches:

• 6,500 options vested 26 May 2022
• 6,500 options vest 26 May 2023
• 13,000 options vest 26 May 2024

650,000 options were granted 25 November 2021, whereof 100,000 were terminated during 2022. The options will vest in the following tranches:

• 137,500 options vested 25 November 2022
• 137,500 options vest 25 November 2023
• 275,000 options vest 25 November 2024

25,000 options were granted 21 February 2022, the options will vest in the following tranches:

• 6,250 options vest 21 February 2023
• 6,250 options vest 21 February 2024
• 12,500 options vest 21 February 2025

Exercise price

• Exercise price for options granted 18 November 2019 is NOK 18.20
• Exercise price for options granted 24 November 2020 is NOK 19.43
• Exercise price for options granted 10 February 2021 is NOK 20.12
• Exercise price for options granted 26 May 2021 is NOK 29.35
• Exercise price for options granted 25 November 2021 is NOK 34.94
• Exercise price for options granted 21 February 2022 is NOK 34.94

The potential dilution through the LTIP accounts for 155,548 shares. 169,016 of the vested shares have been exercised.

The share options can be exercised up to five years after the grant date. Therefore, the contractual term of each option granted is five years. In the event the Company is not capable of delivering shares following an exercise of options, the Company shall fulfil its obligations through a cash-out.

NOK'000	2022	2021
Expense arising from equity-settled share-based payment transactions related to the Long-term incentive	3,606	2,878
programme
Social security tax provisions	-1,122	1,747
Granted instruments:	Option	Option
Quantity	25,000	774,000
Contractual life*	5	5
Strike price*	36.64	34.78
Share price*	33.00	35.34
Expected lifetime*	3.25	3.25
Expected volatility*	34.98%	35.48%
Risk-free interest rate*	1.88%	1.33%
Dividend yield	0	0
Model used	Black-Schole	Black-Schole
	s	s
Fair value per instrument*	7.54	9.55

*Weighted average parameters at grant of instrument

The expected life of the share options is according to IFRS-2, shorter than the time from grant until expiry. Due to the taxation of options and "non-transferability", earlier exercise is expected . These are current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility for the company and peers over a period similar to the expected life of the options is indicative of future trends, which may not necessarily be the actual outcome.

Expenses

The expenses recognised for equity settled share-based payment transactions under the programs during the year are presented in the table below:

NOK'000	2022	2021
Expenses related to the Employee Share Purchase Programme (ESPP)	3,569	2,060
Expenses related to the Long-term Incentive Programme	3,606	2,878
(LIP)
Total share based payment expenses in the period	7,175	4,938
Social security tax expense for the period	-1,122	1,747
Social security tax accrual for the period	658	1,780
Number of discounted shares sold through the Employee
Share Purchase Programme (ESPP)	166,850	232,103
Discounted share price	18.2	26.6
	NOK/share	NOK/share
Weighted average fair value of each discounted share sold
through the ESPP	9	9

Movements during the year (LTI programme)

The following table illustrate the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year:

Long-term incentive programme	2022	2022	2021	2021
	Number of instruments	Weighted Average Strike Price	Number of instruments	Weighted Average Strike Price
Outstanding at 1 January	1,707,666	25.28	1,014,992	20.66
Granted	25,000	34.94	774,000	34.58
Exercised	163,151	19.41	5,865	19.90
Released
Adjusted
Performance Adjusted
Cancelled
Terminated	(224,884)	26.07	(75,461)	21.85
Expired
Outstanding at 31 December	1,344,631		1,707,666
Vested at 31 December	619,131	22.43	340,397	20.36
The weighted average remaining contractual life The weighted average exercise prices for options				4 years
outstanding		26.04		26.91

		Total share
Number of share options	Title	options per 31.12.22	Granted 2022	Granted 2021
Save Asmervik	CEO	296,884	-	198,000
Liv Annike Kverneland	CFO, until 31 August 2022	-	-	50,000
Jacob Cardell	COO Sweden	112,442	-	50,000
Arnt Roger Aasen	Communications Officer	74,461	-	25,000
Otto Backer Solberg	Communications Officer Director Business	74,461	-	25,000
Erlend Nævdal	Development Manager	25,000	25,000 -
Anders Høibakk	Oslo	74,461	-	25,000
Terje Orvedal	Head of Consulting Oslo	148,884	-	50,000
Joar Krohn	Regional Manager Bergen Regional Manager Stavanger, until 31 July	148,884	-	50,000
Geir Jåthun Hindenes	2022 Regional Manager	-	-	50,000
Dagfinn Haslebrekk	Trondheim	76,000	-	76,000

The options were granted on the 18 November 2019, 24 November 2020, 10 February 2021, 26 May 2021, 25 November 2021 and 21 February 2022.

At 31 December 2022 a total of 489,227 remaining options to key employees have vested. During the year 109,326 vested shares have been exercised by key employees, and 224,884 non-vested share options have been terminated due to resignations of key employees.

Note 23 Earnings per share

The Company had one share class and a total of 27,598,515 outstanding shares (excl. treasury shares) 31 December 2022.

In 2022 the Long-term Incentive Programme as described in note 22 had dilutive effects.

Basic earnings per share calculations are based on the weighted average number of shares outstanding during the period, while diluted earnings per share calculations are performed using the average number of shares and dilutive shares equivalents outstanding during each period.

NOK'000	2022	2021
Profit for the year	38,602	48,495
Average number of shares outstanding	27,391	27,000
Average number of outstanding shares, fully diluted	27,663	27,330
Basic earnings per share (NOK/Share)	1.40	1.80
Diluted earnings per share	1.39	1.77
Average number of shares outstanding	27,391	27,000
Average dilutive effects	272	330
Warrants	-	-
Average number of shares outstanding adjusted for dilutive effects	27,663	27,330
Dilutive effect of options issued 18 November 2019	70,372	189,373
Dilutive effect of options issued 24 November 2020	69,054	195,394
Dilutive effect of options issued 10 February 2021	16,122	36,828
Dilutive effect of options issued 26 May 2021	-	2,906
Dilutive effect of options issued 25 November 2021	-	-
Dilutive effect of options issued 21 February 2022	-

Note 24 Rent and lease agreements

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Group as a lessee

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:

• Office rents 1 to 10 years

• Company cars and other equipment 1 to 3 years

If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.

The right-of-use assets are also subject to impairment.

The Group has applied it's incremental borrowing rate for all leases except where rates are implicit in the contracts for company cars.

The weighted, average incremental borrowing rate applied at December 2022 is 4,70%.

Right-of-use assets

The Group's right-of-use assets are identified as office rentals and rental of company cars in Sweden.

Right-of-use assets, NOK'000	Company cars	Offices Sweden	Offices Norway	Total
Acquisition cost 1 January 2022	8,343	12,308	51,867	72,518
Addition of right-of-use assets	4,940	0	14,196	19,136
Disposal of right-of-use assets	(3,539)	0	(640)	(4,179)
Currency exchange differences	(217)	(291)	0	(507)
Acquisition cost 31 December 2022	9,527	12,017	65,423	86,968
Accumulated depreciation 1 January 2022	1,516	2,347	6,107	9,971
Accumulated depreciation on disposals	(1,502)	0	0	(1,502)
Impairment	0	0	1,785	1,785
Depreciation for the period	1,468	1,855	8,331	11,654
Accumulated depreciation 31 December 2022	1,482	4,202	16,223	21,908
Carrying amount of right-of-use assets 31 December 2022	8,045	7,815	49,199	65,060
Acquisition cost 1 January 2021	5,290	10,467	35,053	50,810

Addition of right-of-use assets	5,260	4,677	28,864	38,801
Disposals of right-of-use assets	-1,894	-2,229	-12,050	-16,173
Currency exchange differences	-313	-607	0	-920
Acquisition cost 31 December 2021	8,343	12,308	51,867	72,518
Accumulated depreciation 1 January 2021	2,167	3,012	10,825	16,003
Accumulated depreciation on disposals	-1,917	-2,229	-11,768	-15,913
Depreciation for the period	1,267	1,563	7,050	9,882
Accumulated depreciation 31 December 2021	1,516	2,346	6,107	9,971
Carrying amount of right-of-use assets 31 December 2021	6,826	9,961	45,758	62,548

Lower of remaining lease term or economic life		1-3 years Amortisati	1-5 years Amortisati
Depreciation method	Amortisati on	on	on
Expenses in the period related to practical expedients and variable payments: NOK'000			Total
Short-term lease expenses			267
Low-value assets lease expenses			107
Variable lease expenses in the period (not included in the lease liabilities)			3,207
Total lease expenses in the period related to practical expedients and variable payments			3,581

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including insubstance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate.

Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

The Group's lease liabilities are included in Interest-bearing loans and borrowings.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and

do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low value assets are recognised as expenses on a straight-line basis over the lease term.

Lease liabilities

Undiscounted lease liabilities and maturity of cash outflows

	Company	Offices	Offices
NOK '000	cars	Sweden	Norway	Total
Less than 1 year	1,860	2,549	11,288	15,697
1-2 years	2,957	2,586	11,222	16,765
2-3 years	2,129	2,257	10,216	14,602
3-4 years	711	928	10,246	11,885
4-5 years		342	5,776	6,118
More than 5 years			10,752	10,752
Total undiscounted lease liabilities at 31 December 2022	7,657	8,662	59,500	75,819

The future cash outflows to which the Group is potentially exposed that are not reflected in the measurement of lease liabilities, includes:

Extension options		Total
Kongsgata 52-54, Stavanger	Option until 31.08.2029	5.264
Thormøhlensgate 47, Bergen	Option until 31.12.2031	13,551
Total extension options		13,556

The first contract has termination clauses, with penalties, which are reflected in the measurement of the lease liabilities if options are not exercised.

A new contract was signed in Trondheim, Kongens gate 16, January 2 2023. The contract also replaced the current contract in Trondheim, with an expected net cash flow of 23,4 MNOK during the contract period.

		Company	Offices	Offices
Summary of the lease liabilities in the financial statements	Statement of:	cars	Sweden	Norway	Total
Total lease liabilities 1 January 2021	Financial position	5,764	9,962	45,811	61,537
New leases liabilities recognised in the year	Financial position	2,344	0	14,196	16,540
Cash payments for lease liabilities	Cash flows	(1,468)	(1,682)	(8,331)	(11,481)
Currency exchange differences	FInancial position	(217)	(291)		(508)
Total lease liabilities 31 December 2021	Financial position	6,423	7,989	51,676	66,087
Current lease liabilities	Financial position	1,552	2,203	9,399	13,154
Non-current lease liabilities	Financial position	4,871	5,786	42,277	52,933
Cash outflows for the principal portion of the lease liabilities	Cash flows	(1,641)	(1,682)	(8,331)	(11,654)
Cash outflows prepayment of lease liabilities	Cash flows	174			174
	Cash flows/profit or
Cash outflows Interest expense portion of the lease liabilities	loss	(208)	(356)	(1,803)	(2,367)

Total cash outflows for leases recognised as leases	Cash flows	(1,675)	(2,038)	(10,134)	(13,847)
Cash outflows recognised related to practical expedients and
variable payments					(3,581)
Total cash outflows for leases					(17,428)

The right-of-use-assets are recognised at the estimated net present value of the leasing liabilities as calculated at the date of initial recognition or cost according to contract.

Contracts with options for extensions that would, with reasonable certainty be exercised, are estimated at net present value including the optional rental period.

Contracts with penalties if options for extensions not are exercised and where the certainty for exercising the options is assessed as not reasonable, the estimated or actual penalty amounts are provided for and treated as a part of the rental cost of the contracts decomposed in depreciation, instalment and interest.

In addition to the lease liabilities presented above, the Group is committed to pay variable lease payments for its office leases related to future inflation/index adjustments in Norway and Sweden which is not included in the initial recognition of lease liabilities. When the inflation/index adjustment is known, the present value of the change to the future lease payments is added to the lease liability and right-of-use asset.

Sensitivity of assumptions to the estimates

The estimates of the value of right-to-use assets and leasing liabilities relies on the applied interest rates and the duration and nature of the contracts. All contracts have a duration of maximum 5 years with options for extensions with one exception, a contract with 10 years duration. If extensions are viewed as reasonably probable, the extension period is embedded in the calculation of the estimate. Changes in interest rates are regarded to have the most significant impact on the estimates either impacting the incremental borrowing rate applied on office rentals estimates or the leasing amount of the company cars. A sensitivity analysis of possible effects of changes to interest rates are given in the tables below:

Effect on incremental borrowing rates

A test on sensitivity on interest assumptions has been performed by varying NIBOR by +/- 200 basis points (BPS) compared to applied NIBOR 3 months of 2,45% on the Group's incremental borrowing rate applied estimating value on office rentals.

Changes in interest rate
Office rentals ('000 NOK)		Applied +200 BPS -200 BPS
Applied NIBOR 3 month December 31st	2.45%	4.45%	0.45%
Estimated value December 31st 2022	57,014	54,287	61,026
Deviation from applied estimate: Amount		2,727	(4,012)
Deviation from applied estimate: per cent		4.8%	(7.0%)

A similar test on interest assumptions has been performed by varying the implicit rate on company car leasing contracts by adjusting the implicit interest rate by +/- 200 BPS.

Changes in leasing amount
Company cars ('000 NOK)			Applied +200 BPS - 200 BPS
Average implicit rate December 31st	3.80%	5.80%	1.80%
Estimated value December 31st 2022	8,045	7,658	8,480
Deviation from applied estimate: Amount		(387)	435
Deviation from applied estimate: per cent		(4.8%)	5.4%

Note 25 Contingencies and legal claims

The Group has not been involved in any legal or financial disputes in 2022, where an adverse outcome is considered more likely than remote.

Note 26 Distribution made and proposed

NOK'000	2022	2021
Cash dividends on ordinary shares declared and paid:
Final dividends	46,489	43,052
Dividends per share	1.70	1.60
Proposed dividends on ordinary shares:
Proposed dividends	46,990	46,489
Dividends per share	1.70	1.70

Note 27 Events after the balance sheet date

Since 31 December 2022 and until the date of these financial statements, the board of directors is not aware of any matter or circumstance not otherwise dealt with in this report that has significantly or may significantly affect the operations of the consolidated entity.

WEBSTEP | ANNUAL REPORT 2022

Financial statements – Parent company

Statement of comprehensive income

NOK 000's	Note	2022	2021
Sales Revenues	5	150	150
Total revenues		150	150
Salaries and personnel expenses	3, 4, 13	(18,839)	(15,354)
Depreciation	6	(46)	(28)
Other operating expenses	3	(6,868)	(5,627)
Total operating expenses		(25,753)	(21,008)
Operating profit (loss)		(25,603)	(20,858)
Finance income and expense
Finance income from group companies		59,097	61,083
Interest income from group companies	8	272	601
Other interest income		595	98
Other finance income		7	5
Interest expense from group companies	8	(3,576)	(932)
Other interest expenses		(1,966)	(1,743)
Net financial items		54,428	59,112
Profit before tax		28,825	38,254
Income tax expense	11	(6,371)	(8,427)
Profit for the year		22,454	29,827
Total comprehensive income for the year		22,454	29,827
Attributable to:
Dividends		(46,990)	(46,489)
Change in retained earnings		24,535	16,662
Total		(22,454)	(29,827)

Statement of financial position

NOK 000's	Note	2022	2021
Non-current assets
Deferred tax assets	11	581	392
Total intangible assets		581	392
Property, plant and equipment	6	62	87
Total fixed assets		62	87
Investments in subsidiaries	7, 10	432,119	432,119
Loans to group companies	8	5,465	2,935
Other non-current receivables		0	0
Total non-current assets		438,228	435,533
Trade receivables	8	324	150
Other receivables	8	59,741	63,522
Cash and short-term deposits	2, 10	42,060	31,116
Total current assets		102,125	94,788
Total assets		540,353	530,321
Share capital	12, 13	27,628	27,322
Treasury shares	13	(30)	(54)
Share premium		179,192	172,779
Total paid-in equity		206,791	200,047
Retained earnings		66,682	87,611
Total retained earnings		66,682	87,611
Total equity		273,472	287,658
Deferred tax	11	0	0
Total non-current liabilities		0	0
Trade and other payables	8	434	225
Tax payable	11	6,560	8,820
Social Taxes and VAT	2	444	532
Dividend		46,990	46,489
Other short-term debt	9	7,262	4,431
Current debt to group companies	8	205,190	182,166
Total current liabilities		266,881	242,664
Total liabilities		266,881	242,664
Total equity and liabilities		540,353	530,321

Kjetil Bakke Eriksen Siw Ødegaard Toril Nag Chair of the Board Board member Board member

Trond Klethagen Johannessen Trygve Christian Moe Save Asmervik Board member Board member Chief Executive Officer

Webstep ASA Oslo, 12 April 2023

Statement of change in equity

NOK 000's	Issued capital	Treasury shares	Share premium	Retained earnings	Total earned equity	Non-control ling interests	Total equity
At 1 January 2022	27,322	(54)	172,778	87,611	287,658	0	287,658
Profit for the period	0	0	0	22,454	22,454	0	22,454
Other comprehensive income/(loss)	0	0	0	0	0	0	0
Total comprehensive income for the period	0	0	0	22,454	22,454	0	22,454
Sale of treasury shares	0	24	432	0	456	0	456
Share incentive program	0	0	0	3,606	3,606	0	3,606
Shares issued	306	0	5,982	0	6,288	0	6,288
Dividends provided for the period	0	0	0	(46,990)	(46,990)	0	(46,990)
At 31 December 2022	27,628	(30)	179,192	66,682	273,472	0	273,473

Statement of cash flow

NOK 000's	Note	2022	2021
Operating activities
Profit/ (loss) before tax		28,825	38,254
Adjustments for:
Income tax expense		(8,820)	(4,691)
Depreciation of property, plant and equipment		46	28
Net change in trade receivables		0	0
Net change in other receivables		279	253
Net change in trade creditors		209	77
Net change in social taxes and VAT		(88)	(680)
Net change in other liabilities		2,831	(3,616)
Net change in intercompany balances		0	(99)
Net cash flow from operating activities		23,282	29,527
Investing activities
Purchase of property and equipment		(21)	(65)
Investment in subsidiary		0	0
Net cash flow from financing activities		(21)	(65)
Financing activities
Proceeds from borrowings		0	0
Repayment of borrowings		0	0
Change in bank overdraft	8	0	0
Change in intercompany balances	8	23,822	8,062
Net proceeds from equity		6,288	10,999
Sales of treasury shares/employment incentive plan		4,062	2,995
Payment of dividends		(46,489)	(43,052)
Net cash flow from financing activities		(12,317)	(20,996)
Net increase/(decrease) in cash and cash equivalents		10,944	8,465
Cash and cash equivalents at 1 January		31,116	22,651
Cash and cash equivalents at 31 December		42,060	31,116

A NOK 110 million Revolving Credit Facility ("RCF") with SpareBank 1 SR-Bank ASA was entered into by the Company as a part of the IPO process in 2017. At balance date NOK 0 million of the RCF was utilised, leaving NOK 110 million unutilised.

Notes to the financial statements – Parent company

Note 1 General information

The Company and the Group

Webstep ASA, the parent company (the Company) of the Webstep Group (the Group) is a limited liability company incorporated and domiciled in Norway, with its head office Rebel, Universitetsgata 2, 0164 Oslo, Norway. The annual report for Webstep ASA (the Company) is prepared according to the Norwegian Accounting Act 1998 § 3-9 and Regulations on simplified IFRS as enacted by the Ministry of Finance on 21 January 2008. In all material aspects, Norwegian Simplified IFRS requires that the IFRS recognition and measurement criteria (as adopted by the European Union) are complied with, but disclosure and presentation requirements (the notes) follow the Norwegian Accounting Act and Norwegian Generally Accepted Accounting Standards. Simplified IFRS The Company has adopted the following simplified IFRS recognition and measurement criteria: Dividend and group contribution is accounted for in accordance with the Norwegian Accounting Act, deviating from IAS 10, IAS 12 and IAS 13.

Management's assessment of accounting principles

The management has used estimates and assumptions that have impacted assets, liabilities, income, expenses and information about potential obligations, particularly relating to depreciation of property, plant and equipment, assessment of goodwill and acquisitions. Future events may cause changes in estimates. Estimates and the underlying assumptions are continuously assessed. Changes in accounting estimates are recognised in the accounting period these changes occur. If the changes also apply to future periods, the impact will be distributed over the current and future periods.

Subsidiaries and investments in associates

Subsidiaries and investments in associates are valued by the cost method in the parent company accounts. The investment is valued as the cost of acquiring shares in the subsidiary, providing that write down is not required. Write down to fair value will be carried out if the reduction in value is caused by circumstances which may not be regarded as incidental and deemed necessary by generally accepted accounting principles. Write downs are reversed when the cause of the initial write down is no longer present. Dividends and other distributions are recognised in the same year as appropriated in the subsidiary accounts. Dividends from other companies are recognised when the shareholders' rights to receive dividend has been determined by the General Meeting. If dividends exceed withheld profits after acquisition, the exceeding amount represents reimbursement of invested capital, and the distribution will be subtracted from the value of the acquisition in the balance sheet. Group contributions received from subsidiaries are recognised if it exceeds withheld profits after acquisition. Group contribution is recognised at gross value before tax at the time of recognition. Reimbursement of invested capital will reduce the value of the acquisition in the balance sheet. Group contribution will then

be recognised at net value after tax. Group contribution to subsidiaries increases the value of the investment. Group contribution paid is recognised at net value net after tax.

Sales revenues from contracts

Revenues from services are recognised at the time of execution. The Company has no significant contract balances other than intercompany.

Balance sheet classification

Current assets and current debt comprise assets and debt due within one year. Other entries are classified as fixed assets and/or long-term creditors. Current assets are valued at the lower of acquisition cost and fair value. Short term creditors are recognised at nominal value. Fixed assets are valued at the cost of acquisition, in the case of non-incidental reduction in value the asset will be written down to the fair value amount. Fixed assets with limited lifetime are depreciated. Long term debt is recognised at historical nominal value.

Trade and other receivables

Trade receivables and other current receivables are recorded in the balance sheet at nominal value less provisions for doubtful debts. Provisions for doubtful debts are calculated based on individual assessments. In addition, for the remainder of accounts receivables outstanding balances, a general provision is carried out based on expected loss.

Leasing

IFRS 16 supersedes IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to recognise most leases on the balance sheet. No contracts, fulfilling the requirements of contracts in IFRS 16, have been identified in the Company as a lessee.

Foreign currency translation

Foreign currency transactions are translated using the year end exchange rates.

Property, plant and equipment

Property, plant and equipment is capitalised and depreciated over the estimated useful economic life of the asset. Direct maintenance costs are expensed as incurred, whereas improvements and upgrading are assigned to the acquisition cost and depreciated along with the asset. If the carrying value of a non-current asset exceeds the estimated recoverable amount, the asset is written down to the recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value.

Provisions

A provision is recognised in the balance sheet when the Group has a legal or constructive obligation because of a past event, and it is probable that an outflow of resources will be required

to settle the obligation, and a reliable estimate of the amount can be made. If the effect is material, the provision is determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Intangible assets

Intangible assets acquired separately are measured at initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred. The useful lives of intangible assets are assessed as either finite or indefinite Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the method are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.

Pensions

The Company has a Defined Contribution Pension plan. Annual premium is recognised on a continuous basis and classified as payroll costs.

Government grants

For contributions received accounted for as government grants related to income under IAS 20, the accounting policy of the Group is to recognize such grants when there is reasonable assurance that the conditions attaching to the grant will be complied with and that the grants will be received. The grants are recognized as income unless directly related to specific items of expense.

Income tax

Tax expenses in the profit and loss account comprise both tax payable for the accounting period and changes in deferred tax. Deferred tax is calculated at 22 per cent based on existing temporary differences between accounting profit and taxable profit together with tax deductible deficits at the year end. Temporary differences both positive and negative, are balanced out within the same period. Deferred tax assets are recorded in the balance sheet to the extent it is more likely than not that the tax assets will be utilised. To the extent that group contribution is not registered in the profit and loss, the tax effect of group contribution is posted directly against the investment in the balance.

Cash flow statement

The cash flow statement is presented using the indirect method. Cash and cash equivalents include cash, bank

deposits and other short term, highly liquid placement with original maturities of three months or less.

Equity

Financial instruments are classified as debt or equity in accordance with the underlying financial reality. Interest, dividend and profit or loss related to a financial instrument classified as debt, will be presented as cost or income. Dividend payments to holders of financial instruments classified as equity will be booked against equity. Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or 's cancellation of the Company's own equity instruments. Transaction costs related to an equity transaction will be booked against equity, net of taxes.

Share-based payments

Employees, including senior executives of the Company, receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions). Employees in the Norwegian companies of the Group have been granted shares at discounted prices, within the limit for such grants according to Norwegian tax legislation (equity-settled transactions).

Equity-settled transactions

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. The cost is recognised in employee benefits expense, together with a corresponding increase in equity, over the period in which the service and the performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share. The discounts granted to employees in the Norwegian entities are recognised as a cost in salaries and personnel cost in the profit and loss statement.

Note 2 - Bank deposits

Webstep ASA has restricted cash of TNOK 581 to cover taxes withheld.

Note 3 – Salaries, remuneration and audit fees

NOK '000

Salaries and personnel expenses	2022	2021
Salaries	16,441	11,758
Social security cost	1,610	2,699
Pensions	391	318
Other benefits and refunds	398	578
Total salaries and personal expenses	18,839	15,354

Number of employees, average FTEs 6.5 6

		Total
		Variable		remunerati
Remuneration to executive management NOK'000	Base salary	pay	Other*	on	Pension
Total remuneration to executive management 2022	6,589	911	735	8,235	216
Total remuneration to executive management 2021	8,481	952	339	9,772	266

*Other consists of e.g. health insurance plans, car allowance, telephone/mobile communication and share-options (NOK 0.4 million in 2022)

**Due to reduction of executive management effective from 2023 the Company had severance pay of NOK 1.2 million in the financial year 2022.

The table above is exclusive severance pay.

	2022	2021
Remuneration to board members and nomination committee	Compensation	Compensation
Chairman of the board - Kjetil Bakke Eriksen (from 28 April 2022)	373	247
Board member - Trond Klethagen Johannessen (Chairman until 27 April 2022)	327	410
Board member - Siw Ødegaard	276	288
Board member - Trygve Christian Moe	287	257
Board member - Toril Nag	258	233
Nomination committee - Bjørn Ivar Danielsen (board member until 5 May 2021)	30	19
Nomination committee - Petter Tusvik	18	17
Nomination committee - Trude Sleire (until 28 April 2021)		6
Nomination committee - John Morten Bjerkan (until 28 April 2021)		9
Total remuneration to board members and nomination committee	1,569	1,487

Board remuneration

Compensation to board members is not performance-related. Compensation to the Board is determined by the Annual General Meeting, and the accrued cost for 2022 and 2021 is based on the decision made by the Annual General Meetings. The compensation is paid in arrears.

Determination of remuneration to executive management

The Company's executive management comprises the Chief Executive Officer (CEO), the Chief Financial Officer (CFO), Director Business Development, Regional Managers, Directors Communication and marketing and Group Advisor. Remuneration to executive management is mainly fixed salary as well as performance based bonus. CEO and CFOs bonus is decided by the remuneration committee and regional managers bonus is calculated by pre-determined KPIs, in line with the Remuneration Policy.

The CEO and the CFO were entitled to bonuses for 2021 which were accrued for in the consolidated statement of comprehensive income for 2021 and paid in Q1 2022. The CEO received a bonus of NOK 0.7 million. The CFO received a bonus of NOK 0.15 million. The executive management is entitled to participate in the Long-term incentive programme as described in note 22.

Bonuses for 2022 were accrued for in the consolidated statement of comprehensive income for 2022 and paid in Q1 2023. The CEO was paid a bonus of NOK 0.42 million

The accrued bonuses are included in the table above.

Main principles for the determination of remuneration for the executive management of Webstep ASA

The board of directors has established a remuneration committee. Chairman of the board Kjetil Bakke Eriksen serves as chair of the committee. Toril Nag and Trond K. Johannessen serve as members. The remuneration committee functions as an advisory body to the board of directors, with the purpose of ensuring a thorough and independent preparation of matters regarding remuneration to the Company's executive management.

The main principle for the Company's remuneration policy is that the executive management shall be offered competitive terms when their total remuneration package is taken into account. Such packages may consist of elements such as base-salary, bonus, share and option schemes, benefits in kind and pension arrangements. The Company shall seek to offer a remuneration level that is considered competitive and on market terms, compared to the level offered by its peers, and which seeks to satisfy the Company's need to recruit and keep highly qualified personnel in the executive management.

The current guidelines have been prepared in accordance with the provisions of section 6-16a of the Norwegian Public Limited Companies Act, approved 28 April 2022 at the Annual General Meeting.

The executive management receives base salary which constitutes approximately 70-80% of the total remuneration package. The executive management is offered contributions in kind such as coverage of phone and phone expenses, private broadband, company health services, insurances, car allowance and coverage of travel expenses.

The executive management participates in the Company's defined contribution pension scheme in accordance with mandatory law. The company's CEO receives a fixed car allowance at NOK 15,000 per month.

The executive management may be offered performance-based bonuses in addition to their fixed remuneration. Such performance-based bonus shall be agreed on an individual basis if applicable. The criteria for any performance-based bonus shall be determined by the board of directors and shall be linked to measurable factors, such as the achievement of pre-determined KPIs. The Company's CEO and CFO performance-based profit may constitute up to 40% and 35% respectively, and shall be determined by the board of directors.

The executive management may be offered Company shares and options to shares as a part of the total remuneration package.

The executive management, and other managers as decided by the board of directors, are included in Websteps Long-term incentive program approved at the Annual General Meeting 2019. The program is further described in note 13.

The other Group companies shall follow the main principles for remuneration of executives as described herein and guidelines for determination of salary and other remuneration to executive personnel in Webstep.

Audit fees:	2022	2021
Statutory audit fees	262	359
Audit-related services	150	0
Non-audit related services	0	0
Other services recognised on equity	0	0
Total fees*	412	359

Note 4 – Pension costs

The Group has an occupational pension scheme in accordance with the Act on Required Occupational Pensions. The Company has defined contribution plans for all of its employees, governed by the employment laws. The pension premium charge was TNOK 391 in 2022.

Note 5 – Revenue by segment

NOK '000	2022	2021
Per business area
Managerial services	150	150
Other	0	0
Total	150	150
Geographical distribution / Segment distribution
Sweden	150	150
Norway	0	0
Total	150	150

Services for NOK 150 thousand was charged Webstep AB in 2022.

Note 6 – Fixed assets

	Equipment, fixtures and
NOK'000	furniture	Total
Cost 1. January	206	206
Additions	21	21
Cost at 31. December	227	227
Depreciation and impairment 31. December	(165)	(165)
Net book value 31. December	62	62
Depreciation charge for the year	46	46
Useful life	3 - 5 year

Note 7 - Subsidiaries, associated companies etc

Depreciation method Straight line

NOK '000

Company	Acquired	Office	Ownership	Profit and loss 2022	Equity at 31.12	Net book value at 31.12
Webstep AS*	10-05-2011 Oslo		100 %	59,097	105,288	359,025
Webstep AB**		19-11-2012 Stockholm	100 %	4,661	17,355	73,094
Total				63,758	122,643	432,119

*According to NGAAP

**According to GAAP

Note 8 – Intercompany receivables and payables

NOK '000	2022	2021
Intercompany receivables
Receivable group contribution Webstep AS	59,097	61,083
Other receivables Webstep AS and AB	5,911	4,721
Receivable Webstep AB	150	150
Total intercompany receivables	65,157	65,955
Intercompany payables
Trade payables Webstep AS	0	0
Payables cash pool Webstep AS	205,190	182,166
Other payables Webstep AS	0	0
Total intercompany payables	205,190	182,166

The Company has received a group contribution of NOK 59.1 million from Webstep AS in 2022. The group contribution is recognised as a receivable at 31 December 2022.

Interest income of NOK 271 thousand is recognised as a receivable from Webstep AS in 2022.

Webstep ASA has not purchased any goods or services from related parties in 2022 of material amount.

As the ultimate owner of the cash pool is Webstep ASA, the net position of the cash pool is reflected in the balance sheet of the Company, and any deposits generated by the Norwegian subsidiary are classified as liabilities to Group companies. Cash on the group account is recognised as cash in Webstep ASA and is offset by a group receivable/payable depending on the individual balances on the individual bank account comprising the cash pool. The impact on the Statement of Cash Flows of the change is that "Change in bank overdraft" and "Change in intercompany balances" in the chapter "Financing activities" are netted to reflect the underlying legal and economic reality of the cash pool.

Services for NOK 150 thousand is charged Webstep AB in 2022. Interest cost of NOK 3,6 million is charged on the cash pool agreement to Webstep AS in 2022.

Note 9 – Other current payables

NOK '000	2022	2021
Other current payables
Accrued interest cost	0	0
Provision salaries and holiday pay	6,845	1,985
Other accruals	418	2,446
Total	7,262	4,431

Note 10 – Pledges and guarantees

NOK '000	2022	2021
Pledged liabilities
Non-current debt to credit institutions	0	0
Revolving credit facility SR-Bank	0	0

The revolving credit facility is part of the Group's cash pooling system with a credit limit of NOK 110 million. Net drawn on the group facility at 31 December 2022 was NOK 0 million.

The Company has no loans with payments due past 5 years.

Booked value of assets pledged as security:

NOK'000	2022	2021
Shares in Webstep AS	359,025	359,025
Fixed assets	62	87
Receivables	65,207	66,457
Bank deposits	580	744
Total pledged assets	424,874	426,313

Note 11 - Taxes

NOK '000	2022	2021
Current year tax base:
Accounting profit before tax	28,825	38,254
Permanent differences	133	52
Share issuance cost recognised on equity	0	0
Group contribution recognised as income, taxable	(59,097)	(61,083)
Change in temporary differences	860	1,785
Tax base before group contribution	(29,278)	(20,992)
Received group contribution including tax	59,097	61,083
Tax base for the year	29,819	40,091
Tax payable (22%)	6,560	8,820
Tax payable in the balance sheet Income tax expenses for the year	6,560	8,820
Tax payable	6,560	8,757
Tax unprovided for previous periods	0	63
Changes in deferred tax	(189)	(393)
Total income tax expenses for the year	6,371	8,427
Temporary differences
Fixed assets including goodwill	(10)	8
Provisions, not yet taxable	(2,630)	(1,788)
Net temporary differences at 31.12	(2,640)	(1,780)
Deferred tax assets/deferred tax (22%)	(581)	(392)
Effective tax rate
Expected income tax	6,342	8,416
Permanent differences (22%)	29	11
Effect of change in tax rate and other	0	0
Income tax expense	6,371	8,427
Effective tax rate *	22%	22%

* Income tax expense in relation to income before tax

Note 12 – Share capital and shareholders

NOK '000

Share capital:	Number of shares	Face value	Net book value
Ordinary shares	27,628,498	NOK 1	27,628
Shareholder name	Shares	Ownership	Voting rights
Embro Eiendom AS	8,312,727	30.09%	30.12%
J.P. Morgan SE	1,970,890	7.13%	7.14%
SALT VALUE AS	1,430,121	5.18%	5.18%
VERDIPAPIRFONDET DNB SMB	1,139,284	4.12%	4.13%
JAKOB HATTELAND HOLDING AS	1,000,000	3.62%	3.62%
PROTECTOR FORSIKRING ASA	1,000,000	3.62%	3.62%
J.P. Morgan SE	900,000	3.26%	3.26%
HOLMEN SPESIALFOND	861,524	3.12%	3.12%
VERDIPAPIRFONDET NORDEA NORGE VERD	664,317	2.40%	2.41%
Danske Invest Norge Vekst	542,000	1.96%	1.96%
HVALER INVEST AS	500,000	1.81%	1.81%
Goldman Sachs International	416,571	1.51%	1.51%
HAUSTA INVESTOR AS	400,000	1.45%	1.45%
INTERTRADE SHIPPING AS	400,000	1.45%	1.45%
Danske Bank A/S	320,000	1.16%	1.16%
ESPEDAL & CO AS	308,980	1.12%	1.12%
IVAR LØGE AS	250,000	0.90%	0.91%
Pictet & Cie (Europe) S.A.	232,675	0.84%	0.84%
VERDIPAPIRFONDET NORDEA AVKASTNING	230,383	0.83%	0.83%
EUROVEST AS	230,000	0.83%	0.83%
Other shareholders	6,489,043	23.49%	23.51%
Total number of shares excluding treasury shares	27,598,515	99.89%	100.00%
Treasury shares as of 31 December 2022	29,983	0.11%
Total shares outstanding	27,628,498	100.00%

	Shares	Ownership	Voting rights
Kjetil Bakke Eriksen (Suelo AS)	26,925	0.10%	0.10%
Trond K. Johannessen	63,000	0.23%	0.23%
Trygve Christian Moe (Birkeland & Salvesen AS)	23,925	0.09%	0.09%
Siw Ødegaard (Kvinnesiden AS)	13,025	0.05%	0.05%
Toril Nag	3,570	0.01%	0.01%
Save Asmervik	13,293	0.05%	0.05%
Jacob Cardell (Nominee)	20,020	0.07%	0.07%
Terje Orvedal (Illari AS)	9,143	0.03%	0.03%
Joar Krohn (Kronoko Holding AS and privately held)	99,320	0.36%	0.36%
Dagfinn Haslebrekk	7,618	0.03%	0.03%
Arnt Roger Aasen (Aravi AS and privately held)	26,032	0.09%	0.09%
Otto Backer Solberg	18,627	0.07%	0.07%
Rolf Helle (Xerxes AS and privately held)	41,247	0.15%	0.15%
Erlend Nævdal	845	0.00%	0.00%
Anders Høibakk	7,615	0.03%	0.03%
Arne Sværen-Bryne	5,637	0.02%	0.02%

Shareholding by board members, management and their related parties as of 31 December 2022

Trygve Christian Moe is employed by Embron Group AS, which is owned by J.C. Broch AS.

Webstep ASA holds 29,983 treasury shares. These shares have no voting rights nor dividend rights.

Note 13 - Share based payments

Share based payment programmes

Employee share purchase programme ("ESPP")

An employee share purchase programme was implemented in November 2018, and similar programmes have been carried out yearly since 2018.

In December 2021 each of the employees in the Norwegian entities, including executive management, were invited to acquire shares with a market price of NOK 30,000 with a 25 per cent discount. 281 employees participated in the program, and costs of NOK 2.1 million were included in salaries and personnel expenses for the Group whereof 6 employees in the Company acquired 5,070 shares with an expense charged to the Company of NOK 45 thousand.The share capital was increased 21 december 2021 to issue new shares related to the ESPP.

Long-term incentive programme ("LTI")

Under the Long-term incentive programme, share options of the parent are granted to senior executives of the Group. The exercise price of the share options is equal to the market price of the underlying shares on the date of grant. The share options vest if the senior executive remains employed during the vesting period.

The fair value of the share options is estimated at the grant date using the Black-Scholes option pricing model, taking into account the terms and conditions on which the share options were granted.

140,690 options were granted to senior executives of the Company 18 November 2019, whereof 23,442 were terminated during 2022.

The rest of the options has vested in the following tranches:

• 35,173 options vested 18 November 2020
• 35,173 options vested 18 November 2021
• 46,902 options vested 18 November 2022

156,000 options were granted to senior executives of the Company 24 November 2020, whereof 39,000 were terminated during 2022.

The options and will vest or have vested, in the following tranches:

• 39,000 options vested 24 November 2021
• 26,000 options vested 24 November 2022
• 52,000 options vest 24 November 2023

98,000 options were granted 10 February 2021, the options will vest in the following tranches:

• 24,500 options vested 10 February 2022
• 24,500 options vest 10 February 2023
• 49,000 options vest 10 February 2024

200,000 options were granted 25 November 2021 and will vest in the following tranches:

• 37,500 options vested 25 November 2022
• 37,500 options vest 25 November 2023
• 75,000 options vest 25 November 2024

25,000 options were granted 21 February 2022. the options will vest in the following tranches:

• 6,250 options vest 21 February 2023
• 6,250 options vest 21 February 2024
• 12,500 options vest 21 February 2025

Exercise price

• Exercise price for options granted 18 November 2019 is NOK 18.20
• Exercise price for options granted 24 November 2020 is NOK 19.43
• Exercise price for options granted 10 February 2021 is NOK 20.12
• Exercise price for options granted 25 November 2021 is NOK 34.94
• Exercise price for options granted 21 February 2022 is NOK 34.94

The potential dilution through the LTIP in total accounts for 424,501 shares. 163,151 of the vested shares for the Group have been exercised, whereof 36,442 of the vested shares in the Company has been exercised.

The share options can be exercised up to five years after the grant date. Therefore, the contractual term of each option granted is five years. In the event the Company is not capable of delivering shares following an exercise of options, the Company shall fulfil its obligations through a cash-out.

(Amounts in NOK 1000)	2022	2021
Expense arising from equity-settled share-based payment transactions related to
the LTIP	300	1,068
Social security tax provisions	244	434
Granted instruments:	Option	Option
Quantity	25,000	298,000
Contractual life*	5	5
Strike price*	36.64	34.78
Share price*	33.00	35.34
Expected lifetime*	3.25	3.25
Expected volatility*	34.98%	35.48%
Risk-free interest rate*	1.88%	1.33%
Dividend yield	0	0
Model used		Black-Scholes Black-Scholes

Fair value per instrument* 7.54 9.55

*Weighted average parameters at grant of instrument

The expected life of the share options is according to IFRS-2, shorter than the time from grant until expiry. Due to the taxation of options and "non-transferability", earlier exercise is expected . These are current expectations and are not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility for the company and peers over a period similar to the expected life of the options is indicative of future trends, which may not necessarily be the actual outcome.

Expenses

The expenses recognised for equity settled share-based payment transactions under the programs during the year are presented in the table below:

NOK '000	2022	2021
Expenses related to the Saving Shares Plan (SPP)
Expenses related to the Employee Share Purchase Programme (ESPP)	45	45
Expenses related to the Long-term Incentive Programme (LIP)	300	1,068
Total share based payment expenses in the period	345	1,113
Social security tax expense for the period	241	-429
Social security tax accrual for the period	435	5

Number of discounted shares sold through the Employee Share Purchase Programme (ESPP)	5,070	6,564
Discounted share price	26.6 NOK/share 18.3 NOK/share
Weighted average fair value of each discounted share sold through the ESPP	8.88	4.6

Movements during the year (LTI programme)

The following table illustrate the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year:

Long-term incentive programme	2022	2022	2021	2021
	Number of instruments	Weighted Average Strike Price	Number of instruments	Weighted Average Strike Price
Outstanding at 1 January	594,690		296,690
Granted	25,000	34.94	298,000	27.04
Exercised	36,442		0
Released	0		0
Adjusted	0		0
Performance Adjusted	0		0
Cancelled	0		0
Terminated	112,442	26.07	0
Expired	0		0
Outstanding at 31
December	470,806		594,690
Vested at 31 December	207,806		109,344
The weighted average remaining contractual life		4.5 years		4.5 years

The range of exercise prices for options outstanding

		Total share
Number of share options	Title	options	Granted 2022	Granted 2021
Save Asmervik	CEO	296,884	0	198,000
Liv Annike Kverneland	CFO, until 31 August 2022	-	0	50,000
Arnt Roger Aasen	Director MarCom	74,461	0	25,000
Otto Backer Solberg	Director Communication	74,461	0	25,000
Erlend Nævdal	Director Business Development	25,000	25,000	0

The options were granted on the 18th of November 2019, 24 November 2020, 10 February 2021, 26 May 2021, 25 November 2021 and 21 February 2022. A total of 207,806 shares to key employees have vested in 2022. 36,442 of the vested shares have been exercised in 2022.

Annual statement on corporate governance

Webstep considers good corporate governance to be a prerequisite for value creation and trustworthiness, and for access to capital. The board of directors of Webstep has established a set of governance principles in order to ensure a clear division of roles between the board of directors, the executive management and the shareholders. The principles are based on the Norwegian Code of Practice for Corporate Governance.

Webstep ASA ("Webstep" or the "Company" and together with its subsidiaries the "Group") is a publicly listed company and is subject to annual corporate governance reporting requirements under section 3-3b of the Norwegian Accounting Act and the Norwegian Code of Practice for Corporate Governance, cf. section 4.5 of the continuing obligations for issuers of shares pursuant to Oslo Rule Book II – Issuer Rules. The Accounting Act may be found (in Norwegian) at www.lovdata.no. The Norwegian Code of Practice for Corporate Governance, which was last revised on 14 October 2021, may be found at www.nues.no .

The annual statement on corporate governance for 2022 follows below. The statement was approved by the board of directors on 12 April 2023.

1. Implementation and reporting on corporate governance

The board of directors is committed to contribute to a good and trust-based relationship between Webstep and its shareholders, the capital market, and other stakeholders.

The Company's overall principles for corporate governance were approved by the board of directors in 2017 as part of the preparations for the listing of the Company's shares on the Oslo Stock Exchange. The principles were revised in 2019 to reflect the changes in the revised version of The Norwegian Code of Practice for Corporate Governance and in 2021 to reflect the implementation of the Market Abuse Regulation (MAR) in Norway. The development of, and improvements in, the Company's corporate governance principles are ongoing and important processes that the board of directors intends to focus on.

The Company reports in accordance with the Norwegian Code of Practice for Corporate Governance (the code) issued by the Norwegian Corporate Governance Board, latest edition of 14 October 2021.

The board of directors' annual statement on how Webstep has implemented the code is set out below. The presentation covers each section of the code, and deviations from the code, if any, are specified under the relevant section.

2. Business

The Company's business objective is stated in the Company's articles of association section 3 and reads as follows: "The company's objective is to own companies that offer services and products within the area of information technology, as well as conducting business associated therewith." Webstep's articles of association are available on the Company's website.

The board of directors has defined objectives, strategies and risk profiles for the Company's business activities, such that the Company creates value for its shareholders in a sustainable manner. These objectives, strategies and risk profiles are evaluated annually.

The Company has established guidelines and principles which are used to integrate considerations to human rights, employee rights and social matters, the external environment and anti-corruption efforts in its business strategies, its day-to-day operations and in relation to its stakeholders.

3. Equity and dividends

Equity

As of 31 December 2022, the Group had a consolidated equity of NOK 393.4 million, which corresponds to an equity ratio of 57.9 per cent. Consolidated equity adjusted for proposed dividends, will be NOK 346.5 million. Webstep ASA had an equity of NOK 273.5 million, corresponding to an equity ratio of 50.6 per cent. Neither the Company, nor the Group has any long-term liabilities except leasing liabilities related to office space. The Company and the Group have sufficient levels of working capital. Further, the Company has a Revolving Credit Facility (RCF) of NOK 110 million and the Swedish subsidiary, Webstep AB, has a RCF of SEK 5 million. Both facilities were unutilized at year end. The board of directors considers that the Group has a capital structure that is appropriate to its objectives, strategy and risk profile.

Board authorizations

The annual general meeting on 28 April 2022 granted the board of directors an authorization to increase the share capital by up to NOK 5,480,022 to be used to give the board of directors financial flexibility in connection with financing further growth, to issue shares as consideration in connection with acquisition of other companies, businesses or assets or to finance such acquisitions. The authorization is valid until the annual general meeting in 2023, but no longer than 30 June 2023, and includes share capital increases with share contribution in other assets than cash etc. and in connection with mergers. The preferential rights of the existing shareholder to subscribe for new shares pursuant to Section 10-4 of the Norwegian Public Limited Companies Act (the "Companies Act") may be deviated from with respect to the mentioned authorization.

The annual general meeting on 28 April 2022 further granted the board of directors an authorization to acquire own shares with a maximum aggregate value of NOK 2,740,011. Repurchase of own shares, followed by termination of such shares, could be an important tool for optimising the Company's capital structure. Further, such authorization will also give the Company the opportunity to use its own shares in a potential share incentive scheme and as consideration, partly or in whole, in connection with acquisition of businesses. The highest amount that may be paid per share is NOK 100 and the lowest amount is NOK 1. Acquisition and sale of shares may be carried out in the form the board of directors deems appropriate, however, not by subscription of own shares. The authorization is valid until the annual general meeting in 2023, but no longer than 30 June 2023.

The board of directors are also granted an authorization from the extraordinary general meeting 23 November 2021 to increase the share capital in connection with the long-term incentive program and share savings program for the management and the board of directors (see section 12). The authorization may be used to increase the Company's share capital in connection with the group's at any time applicable option programmes, share purchase programmes and any other incentive programs for members of the executive management and other leaders, other employees and board members. The authorization is up to NOK 2,696,700 and it is valid until the annual general meeting in 2023, but no longer than to and including 27 April 2023. The authorization for two years is a deviation from the code which recommends a maximum duration until next year's annual general meeting. A two-year authorization corresponds better with the vesting schedule of the options which is the reason why the board decided to deviate from the code. The authorization comprises share capital increases against contribution in kind and the right to incur specific obligations on behalf of the Company, cf. section 10-2 of the Norwegian Public Limited Companies Act. The preferential rights of the existing shareholder to subscribe for new shares pursuant to Section 10-4 of the Norwegian Public Limited Companies Act (the "Companies Act") may be deviated from with respect to the mentioned authorization.

Dividend

The Company's ambition is to distribute at least 75 per cent of the Group's consolidated net profit. When deciding the annual dividend level, the board of directors will take into consideration expected cash flow, capital expenditure plans, financing requirements and appropriate financial flexibility. For the fiscal year 2022, the board of directors has proposed a dividend payment of NOK 1.70 per share, representing 210 per cent of the annual net profit for the Company, and 122 per cent of the consolidated net profit for the Group.

The board of directors has not been granted any authorization to approve the distribution of dividends.

4. Equal treatment of shareholders and transactions with close associates

Webstep ASA has one share class, and all shares have equal rights in the Company. Webstep's Corporate Governance Policy states that all shareholders shall be treated on an equal basis, unless there is just cause for treating them differently.

Share issues without pre-emption rights for existing shareholders

In the event of an increase in share capital through issuance of new shares, a decision to deviate from existing shareholders' pre-emptive rights to subscribe for shares shall be justified. Where the board of directors resolves to issue shares and deviate from the pre-emptive rights of existing shareholders pursuant to an authorization granted to the board of directors by the general meeting, the justification will be publicly disclosed in a stock exchange announcement issued in connection with the share issuance.

Transactions in treasury shares

Any transactions carried out by the Company of treasury shares shall be carried out on the Oslo Stock Exchange, and in any case at the prevailing stock exchange prices. In the event that there is limited liquidity in the Company's shares, the Company will consider other ways to ensure equal treatment of shareholders. Any transactions by the Company of treasury shares are subject to notification requirements and shall be publicly disclosed in a stock exchange announcement.

5. Freely negotiable shares

The Company does not limit any party's ability to own, trade or vote for shares in the Company. The articles of association do not impose any restriction on the negotiability of the shares.

6. General meetings

The Company's annual general meeting will take place on 4 May 2023. The Company's financial calendar is published via Oslo Stock Exchange and in the investor relations section of the Company's website. Minutes from the general meetings are published as soon as practicable via the stock exchange's reporting system (www.newsweb.no, ticker WSTEP) and in the investor relations section of the Company's website.

Notice, registration and participation

The board of directors shall ensure that the Company's shareholders can participate at the Company's general meetings.

The board of directors shall ensure that the notice to the general meeting and any supporting documents, including the recommendation by the nomination committee, as well as information on the resolutions to be considered at the general meeting are made available on the Company's website no later than 21 days prior to the date of the general meeting. The

resolutions and any supporting documentation shall be sufficiently detailed, comprehensive and specific allowing shareholders to understand and form a view on all matters to be considered at the general meeting. Deadlines for shareholders to give notice of their attendance at the general meeting shall be set as close to the date of the general meeting as possible. Pursuant to the Company's articles of association, the time limit may not expire earlier than three days before the meeting. Documents relating to matters to be dealt with by the general meeting, including documents which by law shall be included in or attached to the notice of the general meeting, do not need to be sent to the shareholders if such documents have been made available on the Company's website. A shareholder may nevertheless request that documents relating to matters to be dealt with at the general meeting, are sent to him/her.

The board of directors shall ensure that the shareholders are able to vote separately on each individual matter, including on each candidate nominated for election to Webstep's board of directors and other corporate bodies.

The board of directors shall ensure that the members of the board of directors, the chairman of the nomination committee and, if deemed necessary, the Company's auditor are present at the annual general meeting. At the annual general meeting 28 April 2022, four members of the board of directors and the chairman of the nomination committee were not present, which is a deviation to the Code.

Participation without attendance

The Public Companies Act allows the board of directors to choose whether to hold a general meeting as a physical meeting or as an electronic meeting. If a general meeting is held as a physical meeting, there are several methods for shareholders to attend and vote at the meeting without being present in person. Shareholders who are unable to attend the general meeting in person shall be given the opportunity to vote. The board of directors shall ensure that the Company designs the form for the appointment of a proxy to make voting on each individual matter possible and should nominate a person who can act as a proxy for shareholders. Furthermore, the form provided by the Company for shareholders to appoint a proxy should be drawn up so that separate voting instructions can be given for each matter to be considered by the meeting and each of the candidates nominated for election. Additionally, it should be made clear by instructions on the form how the proxy should vote in the absence of specific voting instructions on one or more matters and in the event of changes to proposed resolutions and new resolutions.

Shareholders have the right to attend by electronic means unless the board of directors finds that there is sufficient cause for it to refuse to allow this.

Chairperson of the meeting

The code stipulates that the board of directors should ensure that the general meeting is able to elect an independent chairperson. It is for the board of directors to propose how this can be achieved, however it is for the general meeting to determine who will chair the meeting. The Company deviated from the requirement to have an independent chairperson at the annual general meeting in 2022, as the general meeting elected the chairman of the board of directors to chair the meeting.

7. Nomination committee

The Company's articles of association § 8 provides for a nomination committee composed of two to three members. The current nomination committee comprises Bjørn-Ivar Danielsen (chair, elected at the annual general meeting 28 April 2021) and Petter Tusvik (elected 24 April 2018, re-elected 7 May 2020 and 28 April 2022).

The instructions for the nomination committee were adopted by the general meeting on 14 September 2017.

Responsibilities

The nomination committee shall recommend:

(i) Candidates for the election of members, including the chairman, to (a) the board of directors and (b) the nomination committee, respectively; and

(ii) Remuneration of the members of (a) the board of directors and (b) the nomination committee, respectively.

No directors or members of executive management are represented on the nomination committee. The current nomination committee is independent of the board of directors. None of the two members are members of the board of directors.

The chief executive officer and other members of the executive management should not be elected as members of the nomination committee. The board of directors is committed to ensure that the composition of the nomination committee should be such that the interests of shareholders in general are represented. The Company's guidelines for the nomination committee include rules for rotation of the members.

The objectives, responsibilities and functions of the nomination committee shall be in compliance with rules and standards applicable to the Group and which are described in the Company's "Instructions for the nomination committee". The general meeting shall adopt the guidelines for the nomination committee. The Company shall provide information regarding the composition of the nomination committee, the members of the nomination committee and

deadlines for submitting proposals to the nomination committee.

Tasks

The nomination committee's tasks are set out in the articles of association and include: to nominate new board members to the general meeting, propose remuneration to the board members at the general meeting, propose remuneration to the members of the nomination committee, and nominate new members of the nomination committee to the general meeting.

The nomination committee shall justify why it is proposing each candidate separately.

The remuneration of the committee is determined by the general meeting. The general meeting may issue further guidelines for the nomination committee's work.

Pursuant to the Code, the composition of the nomination committee must take account of the interests of shareholders in general.

The nomination committee has published guidelines available on the Company's website for how shareholders may submit proposals to the nomination committee for candidates for election to the board of directors and other appointments. These guidelines include information regarding deadlines for proposals and other relevant information.

8. Board of directors, composition and independence

The articles of association state that the board of directors shall consist of between three and ten members and are elected to a two year-term unless otherwise decided by the general meeting. The board of directors currently consists of five shareholder-elected directors and three employee-elected observers. The term of office will expire at the annual general meeting 2024 for all five directors.

The Company's corporate governance documents state that when considering members to the board of directors, emphasis should be placed on the joint composition of the board of directors with respect to expertise, capacity and diversity appropriate to attend to the Company's goals, main challenges and the common interests of all shareholders. Details on background, experience and independence of directors are presented on the Company's website. The Group and the majority of the employees have agreed that the employees shall have the right to appoint three observers to the board of directors of the Company instead of having a corporate assembly.

Four out of five shareholder-elected directors are independent of the Company's executive management, significant commercial partners or substantial shareholders. The board of directors does not include any members from the executive management of the Company.

Eleven board meetings were held in 2022. Each board member's attendance at board meetings is recorded by the Company.

Members of the board of directors are encouraged to own shares in the Company. However, caution should be taken not to let this encourage a short-term approach which is not in the best interests of the Company and its shareholders over the longer term.

9. The work of the board of directors

The board of directors has overall responsibility for managing the Group and for supervising the chief executive officer and the Group's activities.

The board of directors establishes annual plans for its work, with particular emphasis on objectives, strategy and implementation. The board of directors has issued instructions for its own work as well as for the executive management with particular emphasis on clear internal allocation of responsibilities and duties.

The principal tasks of the board include determining the Company's strategy and monitoring how it is implemented. The work of the board also includes control functions needed to ensure acceptable management of the Company's assets.

The board appoints the Company's chief executive officer. Instructions which describe the rules of procedure for the board's work and its consideration of matters have been adopted by the board together with an instruction of the duties and obligations of the chief executive officer towards the board. The division of responsibility between the board and the chief executive officer is specified in greater detail in the instructions. The chief executive officer is responsible for the Company's executive management. Responsibility for ensuring that the board conducts its work in an efficient and correct manner rests with the chair of the board.

The board establishes an annual plan for its meetings and evaluates its work and expertise once a year. The annual plan specifies topics for board meetings, including reviewing and following up the Company's goals and strategy, budgets, reporting of financial information, the notice for the general meeting with associated documentation, and the board's meeting with the auditor.

The board of directors has established an audit committee amongst its members and adopted instructions for the work of the audit committee. Throughout 2022 and currently the committee comprised Siw Ødegaard as the leader and Trygve C. Moe as member. Siw Ødegaard is independent of the Company. Trygve C. Moe is employed by the Company's largest shareholder. As long as at least 50 per cent of the committee's members are independent, the Company considers this to be compliant with the independence requirement in the code.

Pursuant to section 6-43 of the Companies Act, the audit committee shall:

• inform the board of the results of the statutory audit and explain how the audit contributed to accounting reporting with integrity and the audit committee's role in that process,
• prepare the board's follow-up of the financial reporting process and make recommendations or proposals to ensure its integrity,
• monitor the systems for internal control and risk management;
• have regular contact with the Company's auditor regarding the audit of the annual accounts; and
• review and monitor the independence of the Company's auditor, including in particular the extent to which services other than auditing provided by the auditor or the audit firm represent a threat to the independence of the auditor.

The Company has established a remuneration committee that consists of three members from the board of directors. The members of the remuneration committee are and shall be independent of the Company's executive management. The members of the remuneration committee are appointed by the board of directors for a period of two years, or until they resign their position as a member of the board of directors. The committee currently consists of Kjetil Bakke Eriksen as the leader and Toril Nag and Trond K. Johannessen as members.

The remuneration committee is a preparatory and advisory committee for the board that shall prepare matters for the board's consideration and decisions regarding the remuneration of, and other matters pertaining to the Company's management. The recommendations of the remuneration committee shall cover all aspects of remuneration to the management, including but not limited to salaries, allowances, bonuses, options and benefits-in-kind.

The board of directors has adopted separate instructions for the remuneration committee setting out further details on the duties, composition and procedures of the committee.

The board of directors evaluates its own work and that of the chief executive and reports its findings to the nomination committee.

In order to ensure a more independent consideration of matters of a material character in which the chairman of the board is, or has been, personally involved, the board's consideration of such matters will be chaired by another member of the board.

According to the code, the instructions of the Board of Directors should state how the board of directors and executive management shall handle agreements with related parties, including whether an independent valuation must be obtained.

Members of the board and executive personnel shall make the Company aware of any material interests that they may have in items to be considered by the board of directors.

10. Risk management and internal control

The board of directors is responsible for ensuring that the Company has sound and appropriate internal control systems and systems for risk management, and that these systems are proportionate to and reflect the extent and nature of the Company's activities. Having effective internal control systems and systems for risk management in place may prevent the Group from situations that can damage its reputation or financial standing.

Furthermore, effective and proper internal control and risk management are important factors when building and maintaining trust, to reach the Company's objectives, and ultimately create value. Having in place an effective internal control system means that the Company is better suited to manage commercial risk, operational risk, the risk of breaching legislation and regulations as well as other forms of risk that may be material to the Company. As such, there is a correlation between the Company's internal control systems and effective risk management. The internal control systems shall also address the organisation and execution of the Company's financial reporting, as well as cover the Company's corporate values, ethical guidelines and principles of corporate social responsibility. The internal control systems shall also encompass the Company's guidelines for how it integrates considerations related to stakeholders into its creation of value.

Webstep shall comply with all laws and regulations that apply to the Group's business activities. The Company has in place processes and routines for internal control over financial reporting and risk management.

Through its business activities, Webstep manages various risks and uncertainties of operational, market and financial character, such as risk of disagreements and legal disputes with its customers related to possible cost of delays or project errors that is always present in the consultancy business.

The Company identifies and manages risks on an ongoing basis. The main risk factors and how they are managed is described in the board of directors' report.

The organisation comprises a relatively large number of employees and projects. The Group's management model is based on an appropriate delegation of authority, clearly defined market and operating parameters, in addition to effective internal control.

Overall goals and strategies are established and further developed through a periodic update of the Company's strategy. Risk management is in place with clear routines for handling operational and project risks. Furthermore, processes are established to identify, evaluate and report risk in a systematic manner for the Group's activities.

Financial risk is managed in accordance with the Company's financial strategy, which is described under the section "Financial risk and risk management" in the board of directors' report.

The board is responsible for seeing to that the Group's organisation, financial reporting and asset management are subject to satisfactory controls. Overall policies, governing processes and routines have been established for day-to-day management. The board periodically reviews the Company's governing documents. The board reviews annually the most important risk areas and the internal controls established to mitigate these risks.

Reporting

Pursuant to the corporate governance policy, the board of directors shall annually review the Company's most important areas of risk exposure and the internal control arrangement in place for such areas. The review shall pay attention to any material shortcomings or weaknesses in the Company's internal control and how risks are being managed. In the annual report, the board of directors shall describe the main features of the Company's internal control and risk management systems as they are connected to the Company's financial reporting. This shall cover the control environment in the Company, risk assessment, control activities and information, communication and follow-up. The board of directors is obligated to ensure that it is updated on the Company's financial situation and shall continually evaluate whether the Company's equity and liquidity are adequate in relation to the risk from the Company's activities and take immediate action if the Company's equity or liquidity at any time is shown to be inadequate. The Company's management shall focus on frequent and relevant reporting of both operational and financial matters to the board of directors, where the purpose is to ensure that the board of directors has sufficient information for decision-making and is able to respond quickly to changing conditions. Board meetings shall be held frequently, and management reports shall be provided to the board as a minimum on a monthly basis. Financial performance shall be reported on quarterly basis.

The administration prepares periodic reports on business and operational developments to the board, which are discussed at the board meetings. These reports are based on management's reviews of the various parts of the business and include status of key performance indicators, update of market development, operational issues, financial results and highlights of organisational issues.

Financial position and results are followed up in monthly accounting reports, compared to the previous year, budgets and forecasts. Reporting also includes non-financial key performance indicators related to each business area.

The interim reports and annual financial statements are reviewed by the audit committee ahead of the discussions in the board meeting. Financial risk management and internal control are also addressed by the board's audit committee. The latter reviews the external auditor's findings and assessments after the interim and annual financial audits. Significant issues in the auditor's report, if any, are reviewed by the board of directors.

The Company has not established a separate internal audit function, but the board of directors is considering the need for such function on an ongoing basis.

11. Remuneration of the board of directors

The remuneration to the board of directors is described in note 7 to the financial statements. The Company considers that the remuneration reflects the board of director's responsibility, expertise, time commitment and the complexity of the Company's activities.

Directors' fees are determined by the general meeting on the basis of recommendations from the nomination committee. These fees have been based on the board's responsibility, expertise and the complexity of the business, and have not been related to results. The directors have not been awarded share options.

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.

An overview of shares owned by the directors and their close associates is included in note 16 to the consolidated financial statements.

12. Remuneration of executive personnel

The Company's guidelines for determining remuneration to the chief executive officer and other executive management should at all times support prevailing strategy and values in the Company.

The Company's guidelines for the remuneration of executive management are described in note 7 to the consolidated financial statements. This note and the Company's remuneration report provides further details about remuneration in 2022 for the executive management. The guidelines are presented annually to the annual general meeting and include the main principles for the Company's remuneration policy. The guidelines also help to ensure convergence of the financial interests of the shareholders and the executive management.

The guidelines specify the main principles for the Company's remuneration policy for the executive management and aim to ensure that the interests of shareholders and executive management coincide.

The current guidelines have been prepared in accordance with the provisions of section 6-16a of the Norwegian Public Limited Companies Act, approved 28 April 2021 at the Annual General Meeting.

In 2019 a long-term incentive program for the Company's executive management was approved by the annual general meeting and implemented in November 2019. The program consists of share options which will be granted on an annual basis over the three years. The program continued in 2022 and is further described in note 13 to the financial statements.

13. Information and communication

The Company has established an overall communications policy, which states that the communication activities shall be characterised by transparency, honesty, consistency and right timing.

Furthermore, the Company has an IR policy, which states that all communication with the financial community shall be on an equal treatment basis and in compliance with applicable laws and regulation. Webstep shall continually provide its shareholders, the Oslo Stock Exchange and the securities market and financial market in general with timely and precise information about Webstep and its operations.

The CEO and CFO are responsible for the main dialogue with the investor community, hereunder the Company's shareholders.

Information to the stock market is published in the form of annual and interim reports, stock exchange announcements and investor presentations. All information considered to be relevant and significant for valuing the Company's shares will be distributed and published in English via Oslo Stock Exchange disclosure system, www.newsweb.no, and via the Company's website https://investor.webstep.com.

Webstep has implemented a system ensuring that all information distributed to the Company's shareholders will be published on the Company's web site at the same time as it is sent to shareholders.

The Company publishes a financial calendar with an overview of dates for important events, such as the annual general meeting, interim financial reports, public presentations and payment of dividends, if applicable. The information is available in English.

Unless there are applicable exemptions, and these are invoked, Webstep shall promptly disclose all inside information (as defined by the Norwegian Securities Trading Act). In any event, Webstep will provide information about certain events, e.g. proposals and resolutions by the board of directors and the general meeting concerning dividends, mergers/demergers or changes to the share capital, the issuing of subscription rights, convertible loans and all agreements of major importance that are entered into by Webstep and related parties.

In the Company's Corporate Governance Policy, separate guidelines have been drawn up for handling of inside information. The Company also has in place a policy regarding the members of the board of directors who are entitled to publicly speak on behalf of the Company on various subjects.

In addition to the board of directors' dialogue with the Company's shareholders at the general meetings, the board of directors should make suitable arrangements for shareholders to communicate with the Company at other times. This will enable the board of directors to develop an understanding of the matters regarding the Company that are of a particular concern or interest to its shareholders. Communications with the shareholders should always be in compliance with the provisions of applicable laws and regulations and in accordance with the principle of equal treatment of the Company's shareholders. Shareholders can get in contact with the Company through the IR contact information which is made available on the Company's website. Further, shareholders can subscribe to e-mail alerts to receive news from the Company when made public.

14. Takeovers

The board has established main principles for responding to possible takeover bids.

In the event of a take-over bid being made for the Company, the board will follow the overriding principle of equal treatment for all shareholders and will seek to ensure that the Company's business activities are not disrupted unnecessarily. The board will strive to ensure that shareholders are given sufficient information and time to form a view of the offer.

The board will not seek to prevent any take-over bid unless it believes that the interests of the Company and the shareholders justify such actions. The board will not exercise mandates or pass any resolutions with the intention of obstructing any take-over bid unless this is approved by the general meeting following the announcement of the bid.

If a take-over bid is made, the board will issue a statement in accordance with statutory requirements and the recommendations in the code.

In the event of a take-over bid, the board will obtain a valuation from an independent expert.

Any transaction that is in effect a disposal of the Company's activities will be submitted to the general meeting for its approval.

15. Auditor

The board of directors ensures that the Company's auditor, EY, submits the main features of the plan for the audit of the Company to the audit committee annually.

During the financial year 2022, the Company's auditor has:

• Presented the main features of the audit work.
• Attended the board meeting where the annual report for the previous accounting year was considered, reviewed possible significant changes in accounting principles, assessed significant accounting estimates, and considered all cases where possible disagreements arose between auditor and executive management.
• Conducted a review together with the board of the Company's internal control procedures and systems, including the identification of weaknesses and proposals for improvements.
• Held a meeting with the board without the presence of the executive management.
• Confirmed that the requirements for the auditor's independence were fulfilled and provided an overview of services other than auditing which have been rendered to the Company.

The board has not established guidelines for the Company's use of the auditor for substantial assignments other than ordinary auditing services.

The board reports annually to the annual general meeting on the auditor's overall fees, broken down between audit work and other services. The annual general meeting approves the auditor's fees for the parent company.

Statement by the Board of directors and CEO

We confirm to the best of our knowledge that:

The consolidated financial statements for 2022 have been prepared in accordance with IFRS as adopted by the EU, as well as additional information requirements in accordance with the Norwegian Accounting Act, and that the financial statements for the parent company for 2022 have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting practice in Norway, and that the information presented in the financial statements gives a true and fair view of the Company's and the Group's assets, liabilities, financial position and results for the period viewed in their entirety, and that the Board of Directors' report gives a true and fair view of the development, performance and financial position of the Company and the Group, and includes a description of the material risks that the Board of Directors, at the time of this report, deem might have a significant impact on the financial performance of the Group.

Kjetil Bakke Eriksen Siw Ødegaard Toril Nag Chair of the Board Board member Board member

Trond Klethagen Johannessen Trygve Christian Moe Save Asmervik Board member Board member Chief Executive Officer

Webstep ASA Oslo, 12 April 2023

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Appendix Alternative performance measure

Webstep discloses alternative performance measures as a supplement to the financial statements prepared in accordance with IFRS. Webstep believes that the alternative performance measures provide useful supplemental information to management, investors, equity analysts and other stakeholders. These measures are commonly used and are meant to provide an enhanced insight into the financial development of Webstep's business operations and to improve comparability between periods.

• EBITDA is short for Earnings before Interest and other financial items, Taxes, Depreciation and Amortisation and is a term commonly used by equity analysts and investors.
• EBIT is short for Earnings before Interest and other financial items and Taxes and is a term commonly used by equity analysts and investors.
• EBIT per employee is Earnings before Interest and other financial items and Taxes and is a term commonly used by the equity analysts and investors.
• NIBD is short for Net Interest Bearing Debt and is defined as interest bearing debt minus unrestricted cash and cash equivalents.
• Group equity ratio is defined as the total consolidated equity of the Group divided by total assets. The covenant requires a Group equity ratio of minimum 0.3.
• NIBD/EBITDA is calculated as Net Interest Bearing Debt divided by Earnings before Interest and other financial items, Taxes, Depreciation and Amortisation (EBITDA). The ratio is one of the debt covenants of the Company and it is based on the rolling twelve months EBITDA. If the Company has more cash than debt, the ratio can be negative. The covenant requires a Group NIBD/EBITDA ratio of maximum 3.

Group departments

Webstep has 9 regional offices in major cities in Norway and Sweden. Webstep believes in the power of local business and the decentralised model is based on strong local presence. The regional offices provide expertise and capacity to local clients, while leveraging the full organisational capacity.

Oslo

Rebel, Universitetsgata 2 NO-0164 Oslo Tel:+47 400 03 325

Bergen

Thormøhlensgate 47 NO-5006 Bergen Tel:+47 400 03 325

Stavanger

Verksgata 1A, NO-4013 Stavanger Tel:+47 400 03 325

Trondheim Kongens gate 16 NO-7011 Trondheim Tel:+47 400 03 325

Sørlandet Skippergata 19 NO-4611 Kristiansand S Tel:+47 400 03 325

Haugalandet Kvaløygata 3, NO-5537 Haugesund Tel:+47 400 03 325

Stockholm Kungsgatan 57 A 111 22 Stockholm Tel +46 (8) 21 40 70

Malmö

Skomakaregatan 4 211 34 Malmö Tel +46 (8) 21 40 70

Uppsala Suttungs Gränd 2 753 19 Uppsala Tel +46 (8) 21 40 70

WEBSTEP ASA

Visitor address: Rebel Universitetsgata 2 NO-0164 OSLO

E: ir@webstep.com T: +47 906 30 276

Postal address: c/o Rebel Universitetsgata 2 NO-0164 OSLO

webstep.com