SmartCraft ASA

Annual Report (ESEF) • Apr 10, 2025

SMARTCRAFT ASA 2024 ANNUAL REPORT SMARTCRAFT ASA 2024 2 Contents 3. This is SmartCraft 4. Key figures 5. 7. Statement of the Board of Directors Letter from the CEO 12. Board of Directors report on Corporate Governance 19. 63.24. Notes Consolidated Financial Statements Financial statements - SmartCraft ASA ANNUAL REPORT 3 This is SmartCraft o Leading Nordic provider of Software-as-a-Service (SaaS) to small and medium enterprises (SME) construction companies o Our passion is to simplify business for construction companies o More than 270 employees service 13 400 customers and more than 130 000 users o Our Software-as-a-Service (SaaS) give overview and insight to increase revenue and margin o Attractive business model with high earnings visibility, low risk and strong cash flow o High quality of earnings with 94 percent recurring revenue and low churn o Targeting 15-20% organic revenue growth in the medium-term with increasing adjusted EBITDA margin due to the scalability of the business FULL YEAR 2024: o Revenue 511 million, a growth of 27 percent o Churn 9 percent o Adjusted EBITDA NOK 190 million, a growth of 14 percent o Adjusted EBITDA margin of 37 percent o Net profit NOK 114 million, a growth of 6 percent o NOK 179 million net cash from operating activities, a growth of 31 percent ARR development per quarter (end of period, MNOK) Adjusted EBITDA margin development per quarter (end of period, MNOK) Adjusted EBITDA margin Adjusted EBITDA - capex margin Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 40.8 % 41.8 % 43.5 % 41.9 % 39.3 % 40.9 % 38.5 % 36.0 % 34.2 % 32.0 % 31.1 % 32.7 % 33.8 % 31.4 % 33.1 % 29.2 % 25.3 % 24.2 % 0.0 % 20.0 % 40.0 % 60.0 % Q4 2 022 Q1 2 023 Q2 2 023 Q3 2 023 Q4 2 023 Q1 2 024 Q2 2 024 Q3 2 024 Q4 2 024 318.3 347.0 357.5 367.1 386.6 401.5 461.3 474.4 482.0 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Acqusition of Coredination Acqusition of Locka and Clixifix 2024 4 Key figures Amounts in NOK (millions) * adjusted for HomeRun earnout recognized over P&L ARR Revenue Adjusted EBITDA Operational cash flow R&D capex Customers 2020 205 196 81 98 12 ~8 500 41% 2021 267 271 109 107 22 ~11 000 40% 2022 318 333 131 116 24 ~12 000 39% 2023 387 402 167 153 37 ~12 500 42% 2024 482 511 190 179 49 ~13 400 37% ANNUAL REPORT 5 Letter from CEO For almost 30 years SmartCraft has operated with a mission to make life easier and business more profitable for construction companies. Today, we are a leading provider of Software as a Service solutions to electricians, plumbers, carpenters and all other small and medium sized operators in the construction industry in the Nordics and in the UK. Growth has been tremendous throughout our history, and since we became a public company, listed on Oslo Børs close to four years ago, the annual growth rate (CAGR) has been 27 percent. Nevertheless, the potential is enormous. The construction industry is still one of the least digitalized industries. Many companies still use pen and paper or simple spreadsheets instead of specialized systems, so the outlook for massive future growth both from new and existing customers is very much intact. The growth was significant also when looking at 2024 separately, with a revenue growth of 27 percent (YoY) to NOK 511 million. Our annual recurring revenue (ARR) of NOK 482 million at the end of the year was 25 percent higher than one year earlier. Organic growth in ARR and revenue was 8 percent. The organic growth rates are lower than our target for the medium term, as they are heavily affected by the soft macroeconomic conditions that have hit the construction industry throughout the whole year. The continued market uncertainty has resulted in delayed purchasing decisions among our potential customers and more downgrades and increased churn driven by bankruptcies among existing customers. Additionally, the price increases we implemented in the fourth quarter are also more moderate than one year earlier. Our underlying profitability is solid, although the margin picture in 2024 was below our ambitions. The adjusted EBITDA-capex was NOK 141 million in 2024, representing a margin of 28 percent, down from 32 percent in 2023. Our cost control remains tight, and the margin decline is a result of dilution by the two recent acquisitions of Locka and Clixifix in the second quarter and increased capex related to the development of our disruptive solution for electricians, SmartCraft Spark, which launched its basic version late 2024, and with full version to be launched in 2025. Adjusted for these factors, the EBITDA-capex margin was 32 percent. We continue to generate strong cash flow as a large portion of our revenue is pre-paid. In 2024 our operational cash flow was NOK 179 million, up from 136 million in the same period in 2023. Our top priority entering 2025 is to navigate in the most challenging market conditions for our customers in decades, with new build activities at a very low level. For SmartCraft, it is important to balance long-term growth initiatives with short- term optimization. And although we are always mindful of the short-term profitability, strategic choices for long-term growth take priority. First of all, we continue to push hard for conversion of one-off revenues to recurring revenue in our 2024 6 acquired businesses. This has a negative effect on revenue and EBITDA in the short-term but will undoubtedly create value longer-term. As an example, Locka produced negative EBITDA in the fourth quarter, but saw a very solid ARR development of 9% QoQ (~42% annualized). Secondly, we continue to work very efficiently on new-sales, with positive results. Excluding the acquisitions in 2024, the gross number of new customers was 24 percent higher in 2024 than in 2023. Bygglet, the biggest solution in the group, measured by revenue, reached an all-time high of new-sales revenue in the fourth quarter. We also keep very close attention to our operating expenses and investments. In the second half of 2024, capex increased YoY as a result of our decision to develop SmartCraft Spark. SmartCraft Spark is one example of the synergy initiatives we will increasingly push through. With an increasingly joint tech stack, we reduce complexity in development, unite our sales and marketing resources and make it easier to price optimize and upsell to existing customers. This way we will gradually be able to realize synergies to a much larger extent. Wrapping up, I’d like to reiterate that there are still way too many craftsmen lacking proper digital tools to optimize their business performance and free up time. Therein lies our mission. We are enthusiastic about the opportunities and potential we see in this underpenetrated market. Our solid business model and strong financial position puts us in pole position to continue to invest for future growth. The timing of a macroeconomic recovery remains uncertain, but forecasts for the construction industry indicates that a pick-up might start materializing in the second half of 2025. Sweden already leads the way following a string of interest rate cuts. The Finnish market, which has been hit hard by the downturn, seems to have leveled out and is starting to show green shoots. In Norway, the interest rate is still high and there are no immediate signs of recovery. When the pickup eventually comes, we expect customer churn to decrease, customers to start upscaling their use of our tools, and organic growth to return to a higher level. Hence, we are well positioned to deliver on our medium-term financial targets of 15-20 percent organic growth with increasing margins. ANNUAL REPORT 7 Statement of the Board of Directors ACTIVITIES The SmartCraft Group provides software solutions for the construction industry in Norway, Sweden, Finland and the UK. The parent company is SmartCraft ASA with head office in Hønefoss, Norway. In addition to the parent company the Group comprises 5 companies in Norway, 8 companies in Sweden, 1 company in Finland and 1 company in the UK. SmartCraft ASA owns 80% of the shares in the LTIP-structure where management and key employees holds the remaining 20%. Together, SmartCraft ASA and the LTIP-structure owns 100% (~99/~1 split) of the shares in SmartCraft Software AS, which owns 100% of the shares in the subsidiaries. SmartCraft ASA is a public limited company listed on the Oslo Stock Exchange “Oslo Børs”. The Group has an active M&A strategy and has acquired complementary solutions the last years. In 2024 the Group acquired the Locka solution in Sweden and entered the United Kingdom through the acquisition of the Clixifix solution. STRATEGY AND OBJECTIVES The overall mission for the Group is to simplify business for craftsmen. To accomplish this SmartCraft has gathered several of the leading providers of digital solutions to the construction business ranging from 3D visualisation, quality and risk management, project and procurement management, and aftermarket defect management. This way the company can provide out-of-the-box best-of-breed solutions that exactly fit its customers’ needs and ease the digital transformation of one of the least digitized industries. The Group has a strategy to ensure sustained profitable growth and to capitalize on the market leading position in the underpenetrated Nordic and European market. A strong industry focus, a leading SaaS solution and an efficient sales organization ensure great sales execution with low customer touch. SmartCraft also recognizes sustainability as a strategic area, and focuses to an increasing degree on identifying areas for improvement and areas where the company can make an impact. SmartCraft will continue this work and set sustainability targets that enables the company to measure progress and contribution. SmartCraft strongly believes in a robust business model based on a high share of recurring revenue and good cost control. Although the macroeconomic conditions currently are challenging and bankruptcies increase our churn, SmartCraft has a strong financial position and the fact that the company generates a strong operational cash flow and is self-funded puts it in a great position to create further shareholder value. The market for digital solutions for the construction industry is highly fragmented, and SmartCraft has taken a strong position as a consolidator. SmartCraft is actively searching for potential acquisitions, focusing on complementary technologies, new geographies and customer bases. In 2024, the Group has successfully acquired the Locka solution in Sweden, and through the acquisition of Clixifix the Group entered the UK market increasing its total applicable market (TAM) significantly. SmartCraft will continue to execute on its M&A strategy in the years to come. 2024 8 The Group has many opportunities to upsell on its base of more than 13 400 customers and 130 000 users and will continue to explore these in the short and medium term. SmartCraft is looking to integrate and synergize its solutions where it makes sense. However, the company takes a pragmatic approach and does not want to jeopardize the uniqueness, flow and functionalities in the solutions at any cost, but will capitalize on areas where it benefits customers. In 2024, the Group has invested in resources to speed up the development of the groundbreaking SmartCraft Spark solution, combining the features of all our other solutions addressing electricians into a new and disruptive solution for this trade. And, with SmartCraft Core as the engine, the features of SmartCraft Spark can be efficiently reused to create disruptive solutions for other trades. GROUP FINANCIAL STATEMENTS The consolidated financial statement for 2024 for the SmartCraft Group is prepared in accordance with the IFRS Accounting Standards as endorsed by the European Union (EU) and Norwegian authorities and effective as of December 31st, 2024. These financial statements also provide disclosures as specified under the Norwegian Accounting Act (Regnskapsloven). In the Board’s opinion, the financial statements provide an accurate view of the company’s financial position at the end of the fiscal year. In 2024 the Group has a revenue of TNOK 510 763 (TNOK 401 654 in 2023), a growth of 27 percent and an organic growth of 8 percent. The current macroeconomic climate has affected the company’s growth through increasing churn and downgrades, and is well below the ambitions, but with a strong customer base with high recurring revenue the Group is expecting higher organic growth when the market turns. The SmartCraft Group has high profitability and is guiding on increasing margin in the medium term. However, in 2024 a decline in the adjusted EBITDA- R&D capex margin to 28 percent (32 percent in 2023) was observed, driven by dilution from the less profitable acquired solutions, and the strategic investments in development. Total depreciation and amortization of tangible and intangible assets in 2024 is TNOK 53 538 (TNOK 36 204 in 2023), where TNOK 25 206 (TNOK 15 894 in 2023) is amortization of intangible assets related to M&A. Operating profit is TNOK 130 992 (TNOK 129 517 in 2023). Profit before tax is TNOK 132 447 in 2024 (TNOK 136 268 in 2023). The decrease in profit before tax is mainly due to the increased cost level in acquired solutions, increased depreciations, and changes in foreign exchange currency as the Group is exposed to fluctuations in NOK compared to SEK, EUR and GBP through its operations in multiple countries. Net cash provided from operational activities was TNOK 179 016 in 2024 (TNOK 136 297 in 2023), a growth of 31 percent. The increase in net cash provided from operational activities in 2024 is due to increased profit but is also positively impacted by the earn-out payment in 2023. Net cash outflows from investing activities were TNOK 204 278 in 2024 (TNOK 62 914 in 2023). This is primarily connected to the acquisitions of Locka (April 2024) and Clixifix (May 2024), together with capitalized development costs of a total of TNOK 48 664 (TNOK 37 472 in 2023). Net cash outflows from financing activities are mainly affected by the acquisition of treasury shares, and repayment of lease liabilities. The total cash outflow related to purchase of treasury shares in 2024 were TNOK 40 865 (TNOK 53 508 in 2023). In total the net cash outflows by financing activities were TNOK 59 170 in 2024 (TNOK 64 686 in 2023). In the Board’s opinion the Group’s liquidity is solid and the Group has sufficient funds to settle all obligations when due. As of December 31st, 2024, the Group had cash and cash equivalents of TNOK 125 656 (TNOK 206 024 as of December 31st, 2023). ANNUAL REPORT 9 Shareholder’s equity was TNOK 939 046 as of December 31st, 2024 (TNOK 843 675 as of December 31st, 2023) with an equity ratio of 73 percent (77 percent as of December 31st, 2023). The retained equity increased due to the profit in 2024. During 2024 the Group has continued to acquire treasury shares in SmartCraft ASA as part of buy-back programs managed by Carnegie. The difference between par value of the shares and the purchase price gives a total reduction in retained equity of TNOK 40 851 during 2024. As part of establishing the LTIP there is also recognized a non-controlling interest in the Group. The booked value of the non-controlling interest is TNOK 9 486 as of December 31st, 2024 (TNOK 4 631 as of December 31st, 2023). The LTIP is structured as a geared instrument with a corresponding risk for the participants. As of December 31st, 2024, changes compared to last year are due to changes in participants in the LTIP during 2024 by establishing a second investment company. SMARTCRAFT ASA FINANCIAL STATEMENT The financial statement for 2024 for SmartCraft ASA is prepared in accordance with the Norwegian Generally Accepted Accounting Principles. In the Board’s opinion, the financial statements provide an accurate view of the company’s financial position at the end of the fiscal year. SmartCraft ASA had a total revenue of TNOK 22 397 in 2024 (TNOK 14 289 in 2023), and operating profit of TNOK -13 161 in 2024 (TNOK -9 120 in 2023). As of December 31st, 2024, the company has a total equity of TNOK 593 019 with an equity ratio of 88 percent. In the Board’s opinion the company’s liquidity is satisfactory and the company has sufficient funds to settle all obligations when due. RISK MANAGEMENT AND INTERNAL CONTROL The Group is subject to various types of risks relating to operations and finance. The Group’s risk management system shall ensure a systematic and uniform approach to identify, evaluate and mitigate risks, and describe processes and internal control actions. Operational risks The Group’s operations involve development and maintenance of software solutions sold to a third party. Trends within the software industry can affect the overall level of demand for IT services and accordingly influence the Group’s sales. Further, the ability to attract and retain sufficient competent personnel to secure the Group’s future development of existing and new solutions is crucial to the Group’s operations. The Group’s Chief Technical Officer oversees the technical resources within the Group and assesses any measures if needed. A significant part of the Group’s growth is through acquisitions. The inability to secure an acquisition in line with the Group’s product portfolio, technology and culture could result in negative effects in operational focus and financial performance. A thorough and tested M&A and onboarding process has historically limited any negative effects of acquisitions. Volatile, negative, or uncertain economic or political conditions may have a negative effect on the Group’s operations and financial performance. Such events may result in a loss of revenue as customers stop buying the solution, or increased costs if the Group needs to change to a more expensive business operation to keep the services running. The recent years’ events and inflationary pressure have increased the Group’s churn and customer downgrades, as bankruptcies increase and many customers experience reduced activity. The operational risks are considered moderate given the uncertainty of the situation. The Group’s customers are all in the same industry which exposes the Group to an industry specific risk. Changes in the macro environment may 2024 10 affect the industry, and the Group, negatively. The construction industry has seen macroeconomic challenges in the last years, resulting in fewer new build projects. The Group focus on small and medium enterprises (SMEs) which have the renovation segment as their primary target market. The renovation segment is bigger than the new build part of the industry and has proven to be less volatile, growing steadily over the last years and is expected to do so for the coming years. Additionally, most of our customers are electricians and plumbers that are experiencing high demand due to energy efficiency initiatives of existing buildings. The risk is considered moderate. Financial risks As the Group operates internationally it is exposed to other currencies than NOK (functional currency). However, there is a natural hedge on the currency exchange risk as all operating entities have material costs and revenue in their functional currency, and the Group has both assets and liabilities in foreign currency. Still, the Group sees an increase in the number of suppliers linking their prices to a currency other than local currency, and the currency risk is considered moderate. The active M&A strategy may be a significant contributor to the Group’s growth. As the Group’s profitability and financial position may fluctuate, as well as the tech sector specifically and general financial market changes, there is a risk of the Group not being able to obtain funding on favorable terms. In this event, the use of a larger portion of the Group’s cash will reduce the Group’s funds available for operations or future business opportunities. The risk is considered low/moderate. The Group’s financial position as of December 31st, 2024, leaves the Group with positive direct exposure to the increased interest rates across the operating countries as the Group is in a net cash position with no external loan facilities. Credit risk is considered low/moderate as the Group invoice most of its services upfront and can block access to non-paying customers, although there is a reminder period where the Group runs the risk of loss. Additionally, the Group’s customers are operating in the same industry, exposing the Group to general market/industry risk. On historical basis the market risk is considered low/ moderate. The Group has ample cash to support operations and cover its current liabilities. WORKING ENVIRONMENT, EQUAL OPPORTUNITIES AND DISCRIMINATION The SmartCraft Group has 271 employees as of December 31st, 2024. There has been no reported work-related injuries or accidents in 2024. Absence due to sickness was 4.6%. Society is increasingly expectating companies to be transparent about their corporate actions, diversity and equal employment opportunities. The Group is, by its Code of Conduct, committed to build a highly skilled workforce and ensuring that recruitment processes actively foster equal opportunities and diversity. The company prohibits discrimination in any form, whether based on political views, sexual orientation, disability, union membership, or age. As of December 31st, 2024, there are 5 men and 3 women in manager positions including the Group executive suite. SmartCraft ASA SmartCraft ASA has 4 employees as of December 31st, 2024. There has been no reported work- related injuries or accidents in 2024. There was no absence due to sickness. The company’s human resource policy is based on equal rights for all, and there is no difference in treatment on any basis in terms of salary or recruitment. The Board of Directors is comprised of 4 men and 3 women. The Transparency Act was implemented from July 1st, 2022, and the SmartCraft Group is according to the Act required to carry out due diligence assessments according to OECD’s guidelines. The Group published an annual report in accordance with the Transparency Act at smartcraft.com in June 2024. ANNUAL REPORT 11 The Group’s corporate social responsibilities are included in the separate sustainability report. EXTERNAL ENVIRONMENT The Group does not pollute the external environment beyond what ensues from normal office operations. The Board of Directors and employees are traveling as a part of daily operations. The Group encourages the use of environmentally friendly transport, and if possible, video conferences, to reduce the effects on the environment. See the separate sustainability report. INSURANCE FOR BOARD MEMBERS AND EXECUTIVE OFFICERS The Company has directors’ and officers’ liability insurance. The insurance covers the Board of Directors as well as the executive officers of the company from legal personal liability for financial damage caused by the performance of their duties. CORPORATE GOVERNANCE Good corporate governance is essential to ensure that the Group protects the long-term interest of the stakeholders. The Group’s corporate governance principles is compliant with the Norwegian Accounting Act and the Norwegian Code of Practice for Corporate Governance. The Group’s corporate governance practices are subject to annual reviews and discussion by the Board of Directors. The Group’s corporate governance policy is available at smartcraft.com/ investor-relations/corporate-governance. The code is based on the “comply or explain” principle and deviations, if any, is explained under the relevant topic in the report on Corporate Governance for 2024 which is included in this Annual Report. GOING CONCERN ASSUMPTION In accordance with the Norwegian accounting act, the Board confirms that the accounts have been prepared in conformity with the going concern assumption and this assumption is valid. SUBSEQUENT EVENTS No material corporate or financial events have taken place after December 31st, 2024. There has been no material change in any of the current markets or solutions after December 31st, 2024. April 9th, 2025 Board of Directors and CEO, SmartCraft ASA Bernt Ulstein Board member Eva Hemb Board member Gustav Line CEO Isabella Alveberg Board member Carl Ivarsson Board member Gunnar Haglund Chairman of the Board Mette Kamsvåg Deputy Chairperson of the Board Allan Engström Board member 2024 12 Board of Directors report on Corporate Governance REPORTING ON CORPORATE GOVERNANCE The Group’s corporate governance policy is compliant with the Norwegian Accounting Act and the Norwegian Code of Practice for Corporate Governance (NUES). The Group’s corporate governance practices are subject to annual reviews and discussion by the Board of Directors. The Group’s corporate governance policy is available at smartcraft.com/investor-relations/ corporate-governance. The code is based on the “comply or explain” principle and deviations, if any, is explained under the relevant topic in the report. The Group believes that good corporate governance involves transparent and trustful cooperation between all parties involved with the Group and its business. This includes the Company’s shareholders, Board of Directors and Executive Management team, employees, customers, suppliers, and other business partners, as well as public authorities and society at large. The Board of Directors and Executive Management shall contribute to achieve the following core objectives when honoring the Company’s corporate governance policy: o Transparency. Communication with the Company’s shareholders, stakeholders and other interest group’s shall be based on transparency and openness on issues relevant for the evaluation of the development and position of the Company. o Independence. The relationship between the Board of Directors, Executive Management and shareholders shall be based on independence principles. Independence shall ensure that all decisions are made on an unbiased and neutral basis. o Equal treatment. A fundamental objective for good corporate governance is equal treatment and equal rights for all of the Company’s shareholders. o Control and management. Sound control and corporate governance mechanisms shall contribute to predictability and reduce the level of risk for the Company’s shareholders, stakeholders, and other interest group’s. BUSINESS OBJECTIVE The Company’s business objective, as set out in the Company’s articles of association, reads as follows: “The Company’s objects is industry, trade and investments in shares and other assets in other companies and enterprises as well as all other activities related to this.” The Board of Directors has defined objectives, strategies, and risk profiles for the Company’s business activities as an effort to create value for its shareholders in a sustainable manner. These objectives, strategies and risk profiles are evaluated annually. EQUITY AND DIVIDENDS The Board of Directors is responsible for ensuring that the Group is adequately capitalized relative to the risk and scope of operations and that the capital requirements set forth in laws and regulations are met. The Group’s consolidated equity was TNOK 939 046 on December 31st, 2024, representing an equity ratio of 73 percent. The Board monitors the capital situation and takes actions necessary to ensure that the equity or liquidity is adequate. The Company shall, at all times, have a clear and predictable dividend policy. The company believes that it will serve its shareholders best by investing for the long term and growing and developing the business. ANNUAL REPORT 13 The company’s dividend policy is that the company does not expect to pay any dividend in the short to medium term as the company intends to use its profit for both organic and inorganic growth initiatives as well as product and technology innovation. The company will in the future continuously evaluate its capital allocation and will prioritize organic growth investments and acquisitions over dividends if the company expects that this will generate an attractive return on capital. At the Annual General Meeting on May 2nd, 2024, the Board was granted the following authorities: o Authorization to increase the share capital in one or more rounds by up to NOK 171 522,305. The authorization covers contribution in kind and the right to incur specific obligations on behalf of the Company and includes mergers. There have not been issued any new shares under this authorization. The authorization is valid until the Company’s Annual General Meeting in 2025, but not longer than June 30th, 2025. o Authorization to increase the share capital in one or more rounds by up to NOK 17 152,23. The authorization covers settlement of the Group’s long/term investment program (LTIP). There have not been issued any new shares under this authorization. The authorization is valid until the Company’s Annual General Meeting in 2026, but not longer than June 30th, 2026. o Authorization to acquire own shares with a total nominal value up to NOK 85 761,15 which is equivalent to 5 percent of the current share capital. The maximum purchase price is NOK 50 and minimum NOK 1. As of December 31st, 2024, the authorization has been used to purchase 1 198 083 shares for a total of TNOK 35 067. The authorization is valid until the Company’s Annual General Meeting in 2025, but not longer than June 30th, 2025. EQUAL TREATMENT OF SHAREHOLDERS All shareholders shall be treated on an equal basis unless there is a just and factual cause for treating them differently. Each share in the Company carries one vote, and all shares carry equal rights, including the right to participate in general meetings and the right to dividends. Where the Board of Directors resolves to issue new shares and deviate from existing shareholders’ pre-emptive rights pursuant to an authorization granted to the Board of Directors, the stock exchange announcement issued in connection with the share issue shall also include a justification for the deviation. The Company’s transactions in treasury shares shall be carried out through Oslo Stock Exchange’ trading platform at the prevailing trading price or by making a public offer to all shareholders. All transactions in treasury shares shall be publicly disclosed in a stock exchange announcement. There was a total of 117 transaction in treasury shares in 2024 which was carried out by Carnegie on behalf of the Company. Transactions between the Company and its shareholders, a shareholder’s parent company, members of the Board of Directors, executive management or closely associated persons to any such party, that are deemed material under the Norwegian Public Limited Liability Companies Act, are subject to approval by the general meeting. Furthermore, the Board of Directors is required to arrange for an independent auditor’s valuation of the transaction. When restructuring the Group companies there was performed several transfers of shares internally. The transactions were not subject to approval by the general meeting as it was defined as an intercompany transaction. FREELY TRANSFERABLE SHARES The shares of the Company are listed on the Oslo Stock Exchange and are freely transferable and there are no limitations on any party’s ability to own or vote for the shares in the Company. 2024 14 Deviation from the Code of Practice: Sellers of the shares in Clixifix Ltd. has entered into a lock-up agreement for shares purchased as part of the settlement. The lock-up period is valid until May 2nd, 2025. GENERAL MEETINGS The General Meeting is the Company’s highest authority, and open to all shareholders. The Company encourages shareholders to participate and exercise their rights. The 2024 Annual General Meeting was held digitally on May 2nd, 2024, with 85,19 percent of the Company’s shares represented. The Board, auditor, or shareholders representing at least 5 percent of the shares can call for Extraordinary General Meetings when deemed necessary. The notice of the General Meeting and supporting documents are made available on the Company’s website no later than 3 weeks prior to the date of the meeting. Shareholders may request the documents by mail. Efforts are made to ensure that proposed resolutions and supporting information are sufficiently detailed and comprehensive to allow the shareholders to form a view on all matters to be considered at the meeting. The notice includes information about shareholders’ rights. The notice period, right to attend and agenda proposals are regulated in the Articles of Association. The deadline for shareholders to notify the Company if they wish to participate at the General Meeting shall be set as close to the date of the general meeting as practically possible, but at the earliest two business days before the General Meeting. Shareholders who are unable to attend the general meeting shall be given the opportunity to be represented by proxy and to vote by proxy. The Board of Directors shall in this respect, with regards to the notice of the general meeting: o provide information on the procedure for attending by proxy; o nominate a person who will be available to vote on behalf of non-attending shareholders as their proxy (normally being the chair of the Board of Directors); and o prepare a proxy form, which shall, to the extent possible, be set up so that it is possible to vote separately on each individual matter on the agenda and each candidate nominated for election. Deviation from the Code of Practice: The Code recommends separate voting for candidates to the Board. However, the Board must be in accordance with applicable legislation regarding gender representation and qualifications for committee assignments. The nomination committee’s proposal is given with respect to such legislation. Should a situation arise where the composition of the Board might conflict with applicable legislation, the situation and consequences of electing a board contrary to legislation should be discussed at the General Meeting and shareholders should base their votes on the views discussed. NOMINATION COMMITTEE The Nomination Committee is governed by the Articles of Association section 10. The nomination committee does not include any executive personnel or any member of the company’s Board of Directors. All members of the Nomination committee are independent of the Board of Directors and Group Management. The members of the Nomination Committee are elected at the General Meeting for a period of two year. Mr. Arild Bødal (chair) and Ms. Helen Fasth Gilstedt were elected at the General Meeting on April 28th, 2023, and Ms. Ingeborg Aavatsmark was elected at the General Meeting on May 2nd, 2024. The General Meeting stipulates the rules of procedure for the Nomination Committee and determines the Committees’ remuneration. The Nomination Committee gives its recommendation to the General Meeting on election of and compensation to members of the Board of ANNUAL REPORT 15 Directors, in addition to election of members of the Nomination Committee. Each proposal is justified on an individual basis. All shareholders are entitled to nominate candidates to the Board of Directors, and information on how to propose candidates can be found on the company’s website. COMPOSITION AND INDEPENDENCE OF THE BOARD OF DIRECTORS In accordance with the articles of association section 7, the company’s Board of Directors shall consist of three to nine members. On December 31st, 2024, the Board of Directors consisted of seven members (see table below), of which three were female. The directors can be elected by the General Meeting for a term no longer than two years and may be re-elected. The company’s website provides information to illustrate the expertise of the members of the Board of Directors. The Board of Directors considers its composition to be diverse and represent required competencies including financial and industrial experience. Board members are encouraged to own shares in the company. An overview of board members’ share ownership in the Company is available in note 25 to the consolidated financial statements. Name Role Independent Served since Term expires Meeting participation Gunnar Haglund Chairperson Yes 15.03.2017 AGM 2025 9 of 9 Mette Kamsvåg Deputy chairperson Yes 02.05.2024 AGM 2026 5 of 6 Bernt Ulstein Board member Yes 15.03.2017 AGM 2025 9 of 9 Maria Danell Board member Yes 21.04.2021 02.05.2024 3 of 3 Carl Ivarsson Board member No 14.02.2017 AGM 2025 9 of 9 Marianne Bergmann Røren Board member Yes 21.04.2021 02.05.2024 0 of 3 Allan Engström Board Member No 14.02.2017 AGM 2025 9 of 9 Isabella Alveberg Board Member Yes 28.04.2023 AGM 2025 8 of 9 Eva Hemb Board Member Yes 02.05.2024 AGM 2026 6 of 6 Mr. Ivarsson and Mr. Engström represents Valedo Partners III AB which holds 39.6% of the shares in SmartCraft ASA. All board members are independent of Group management and material business contacts. WORK OF THE BOARD OF DIRECTORS The objectives, responsibilities and functions of the Board of Directors and the CEO shall be in compliance with rules and standards applicable to the Group, which are described in the Company’s “Instructions for the board of directors of SmartCraft ASA”. The Board has the ultimate responsibility for the management of the Company and the Group and for supervising Group Management. The Board of Directors shall annually evaluate its performance and expertise for the previous year. This evaluation shall include the composition of the Board of Directors and the manner in which its members function, individually and as a group, in relation to the objectives set out for its work. The report shall be made available to the nomination committee. The Board has established two committees, an Audit Committee, and a Remuneration Committee. Audit Committee Pursuant to section 6-41 of the Norwegian Public Limited Liability Companies Act, Rule Book II and recommendations set out in the Code, the Company is obliged to establish an audit committee. The Committee members are appointed by and among the Board of Directors. Per December 31st, 2024, the audit committee 2024 16 members were Mr. Gunnar Haglund (chair), Mrs. Eva Hemb and Mr. Carl Ivarsson, all considered independent of Group Management. The Audit Committee held 7 meetings in 2024. Remuneration Committee The remuneration committee shall provide the Board of Directors with a guideline and recommendation for the salary and other remuneration for executive management, which shall be made in accordance with section 6-16a of the Norwegian Public Limited Liability Companies Act. The members of the remuneration committee are elected by and among the members of the Board of Directors for a term of up to two years. Per December 31st, 2024, the remuneration committee members were Mr. Gunnar Haglund (chair), Mr. Allan Engström and Mr. Bernt Ulstein, all independent of the Group Management. For 2024, the Committee met 2 times. RISK MANAGEMENT AND INTERNAL CONTROL The Group’s risk management system shall ensure that the Group has a systematic and uniform approach to risk management. The system defines responsibilities, processes, tools and documentation, including considerations related to integrating stakeholders in relation to the Company’s value creation. Group Management sets the context in which risks are managed and supervises the risk management process. Risk assessments are presented to the Audit Committee and the Board of Directors. The Board performs a review of risks in connection with the approval of the annual budget. Group Management regularly updates the Board of Directors including operational reviews, HSE (Health, Safety and Environment) measures, financial status and key performance indicators. Prior to each Board meeting, the CEO and CFO prepares a report to the Board of Directors, which includes this information in addition to any items requested by Board members and items requiring action by the Board of Directors. Because the Group operates internationally, it is required to comply with numerous national and international laws and regulations. All business activities and processes must be conducted in accordance with laws, and regulations. The quarterly and yearly reporting process and significant accounting and reporting issues are discussed with the Audit Committee in the presence of the external auditor. REMUNERATION OF THE BOARD OF DIRECTORS The members of the Board of Directors receive remuneration in accordance with their individual roles. The remuneration is not linked to Company performance and members are not granted share options. Remuneration for each member of the Board of Directors is detailed in note 11 to the consolidated financial statements. Members of the Board of Directors and/or companies with which they are associated should not take on specific assignments for the Company in addition to their appointment as a member of the Board of Directors, but if they do, this shall be disclosed to the full Board. The remuneration for such additional duties will be approved by the Board of Directors. There were no such assignments in 2024. REMUNERATION OF EXECUTIVE MANAGEMENT The policy for remuneration of executive management of the Group was last updated in April 2023 and presented at the Annual General Meeting in 2023. The remuneration policy must be approved by the Annual General Meeting upon any material changes and at minimum every four years. The Board determines remuneration of the Chief Executive Officer while remuneration of Group Management is determined according to guidelines. The Board’s statement regarding compensation of leading employees, required by accounting act §7-31b, is published on smartcraft. com. ANNUAL REPORT 17 INFORMATION AND COMMUNICATION The Company treats its investors equally. Timely information is published simultaneously to all investors in accordance with applicable legislation and regulation to provide the best possible basis for evaluation of Company performance. All information is provided in English. Interim reports are published on a quarterly basis, in line with Oslo Stock Exchange’s recommendations. Interim reports include presentations to provide an overview of operational and financial developments, market outlook, and the Company’s prospects. The presentations are open to the public and made available through a webcast. The Chief Executive Officer and the Chief Financial Officer are normally present at the quarterly presentations. Furthermore, the Company keeps an ongoing dialogue with its investors and makes presentations to analysts and investors through various conferences and events. TAKEOVERS The Board of Directors have established the main principles for its actions in the event of a takeover offer. In a takeover process, the Board of Directors, and the Executive Management each have independent responsibilities to ensure that the Company’s shareholders are treated equally and that there are no unnecessary interruptions to the Company’s business activities. The Board of Directors has a particular responsibility to ensure that the shareholders are given sufficient information and time to assess the offer. The Company has no written guidelines for procedures to be followed in the event of a takeover offer. The Board is open to initiatives that are commercially and financially attractive for the shareholders. The Board will assess potential offers in accordance with applicable legislation and Code of Practice requirements in due course. STATUTORY AUDITOR The Company’s external auditor, Ernst & Young AS, is appointed by the General Meeting and is independent from the Company. The auditor shall participate in meeting(s) of the Board of Directors where any of the following topics is on the agenda: the annual accounts, accounting principles, assessment of any important accounting estimates and other matters of importance where there has been disagreement between the auditor and the Company’s executive management and/or the audit committee. The auditor shall at least once a year present to the Board of Directors or the audit committee a review of the Company’s internal control procedures, including identification of weaknesses and proposals for improvement. The audit committee shall hold a meeting with the auditor at least once a year in which no representative of the executive management can be present. To strengthen the Board of Directors’ work on financial reporting and internal control, the auditor shall provide a report to the audit committee on the main features of the audit in respect to the previous financial year, and especially mention any material weaknesses identified in the internal control relating to the financial reporting process. Remuneration to the auditor is approved by the General Meeting and the Board of Directors shall specify the executive management’s right to use the auditor for other purposes than auditing. For remuneration to the auditor see note 21 to the consolidate financial statements. 2024 18 Statement of compliance The Board of Directors and the Chief Executive Officer (CEO) have today considered and approved the report from the Board of Directors and CEO, the financial statements for the Group and for the parent company SmartCraft ASA (the Company) for the year ending December 31st, 2024. The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards as adopted by the EU and additional disclosure requirements as stated in the Norwegian Accounting Act that are applicable at December 31st, 2024. The financial statements for the Company have been prepared in accordance with the Norwegian Accounting Act and Generally Accepted Accounting Principles in Norway that are applicable at December 31st, 2024. The report from the Board of Directors and CEO for the Group and the Company has been prepared in accordance with the Norwegian Accounting Act and the Norwegian Accounting Standard no. 16 applicable at December 31st, 2024. We confirm that, to the best of our knowledge: o the financial statements for the period from January 1st to December 31st, 2024, for the Group and the Company have been prepared in accordance with applicable accounting standards o the financial statements give a true and fair view of the Company’s and the Group’s consolidated assets, liabilities, financial position and results of operations o the Board of Directors’ report provides a true and fair view of the development and performance of the business and the position of the Company and the Group, together with a description of the key risks and uncertainty factors that the company is facing April 9th, 2025 Board of Directors and CEO, SmartCraft ASA Bernt Ulstein Board member Eva Hemb Board member Gustav Line CEO Isabella Alveberg Board member Carl Ivarsson Board member Gunnar Haglund Chairman of the Board Mette Kamsvåg Deputy Chairperson of the Board Allan Engström Board member ANNUAL REPORT 19 Consolidated Financial Statements Amounts in NOK (thousands) Note 2024 2023 Revenue from customers 8 510 763 401 654 Total operating revenue 510 763 401 654 Purchase of goods and services 43 551 32 681 Payroll and related expences 10, 11 198 804 145 637 Other operating expenses 21 83 879 57 616 Depreciation and amortization 13, 23, 24 52 465 36 204 Total operating expenses 378 699 272 138 Operating profit (loss) before financial items and tax 132 064 129 517 Financial income 22 21 158 29 520 Financial expenses 22 (19 703) (22 768) Financial income (expense), net 1 455 6 752 Profit (loss) before tax 133 519 136 268 Tax expense 20 27 560 28 640 Profit (loss) 105 959 107 628 Attributable to: Shareholders in SmartCraft ASA 26 105 959 107 628 Non-controlling interests - - Other comprehensive income Items that will be reclassified to profit or loss: Currency translation differences, net of tax 16 957 24 685 Other comprehensive income (loss) for the period net of tax 16 957 24 685 Total comprehensive income 122 916 132 313 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Amounts in NOK (thousands) Note 2024 2023 Profit for the year 105 959 107 628 Profit for the year attributable to non-controlling interests - - Profit for the year attributable to equity holders of SmartCraft ASA 105 959 107 628 Average numbers of common shares 167 907 976 169 575 195 Earning per share and diluted earnings per share NOK 26 0,63 0,63 2024 20 CONSOLIDATED STATEMENT OF FINANCIAL POSITION Amounts in NOK (thousands) ASSETS Note 31.12.2024 31.12.2023 Goodwill 6, 12 662 299 547 580 Intangible assets 13 376 806 246 079 Right to use assets 24 35 411 24 656 Tangible Assets 23 4 855 3 001 Total non-current assets 1 079 372 821 316 Other current assets 7, 16 10 476 8 112 Accounts Receivable 7, 15 67 611 64 612 Cash and cash equivalents 7, 17 125 655 206 024 Total current assets 203 742 278 748 Total assets 1 283 114 1 100 063 EQUITY AND LIABILITIES Share capital 25 1 715 1 715 Own shares (45) (31) Share premium 605 893 605 893 Retained earnings 280 193 214 846 Other components of equity 33 578 16 621 Non-controlling interests 25 9 486 4 631 Total equity 930 821 843 675 Non-current lease liabilities 17, 24 23 281 14 764 Deferred tax liabilities 20 62 672 36 580 Total non-current liabilities 85 953 51 344 Current portion of deferred revenue 8 149 839 106 029 Current portion of lease liabilities 17, 24 12 886 10 360 Accounts payable 7, 18 11 760 8 628 Taxes payable 7, 20 15 700 22 402 Other current liabilities 7, 19, 28 76 155 57 626 Total current liabilities 266 340 205 044 Total liabilities 352 293 256 388 Total equity and liabilities 1 283 114 1 100 063 ANNUAL REPORT 21 April 9th, 2025 Board of Directors and CEO, SmartCraft ASA Bernt Ulstein Board member Eva Hemb Board member Gustav Line CEO Isabella Alveberg Board member Carl Ivarsson Board member Gunnar Haglund Chairman of the Board Mette Kamsvåg Deputy Chairperson of the Board Allan Engström Board member 2024 22 CONSOLIDATED CASH FLOW STATEMENT Amounts in NOK (thousands) Note 2024 2023 Operating activities Profit before tax 133 519 136 268 Paid taxes 20 (41 251) (24 058) Net financial income (1 989) (6 752) Gains/losses sold assets 13, 23, 24 75 (82) Depreciation and amortization 13, 23, 24 52 465 36 204 Payments related to acqusitions 7, 19 - (16 861) Interest recevied 22 4 781 3 724 Net cash provided from operating activities before net working capital changes 147 600 128 443 Working capital adjustments: Changes in accounts receivable 7 160 (33 619) Changes in deferred revenue 24 441 35 284 Changes in accounts payable 229 744 Changes in all other working capital items (415) 5 445 Net cash provided from operating activities 179 015 136 297 Investing activities Investments in tangible and intangible assets 13, 23 (3 558) (1 474) Payments for acqusitions 6, 19 (152 056) (23 968) Payments for software development costs 13 (48 664) (37 472) Foreign currency effect - - Net cash used in investing activities (204 278) (62 914) Financing activities Cash proceeds from capital increases 25 4 720 - Downpayment on loan facilities 17 (7 954) - Interest payments 22 (2 792) (1 214) Repayments of lease liabilities 17 (12 278) (9 964) Payments of treasury shares 25 (40 865) (53 508) Net cash provided by (used in) financing activities (59 170) (64 686) Net increase (decrease) in cash and cash equivalents (84 432) 8 696 Cash and cash equivalents at the beginning of year 206 024 191 587 Foreign currency effects 4 063 5 740 Cash and cash equivalents at end of year 17 125 655 206 024 ANNUAL REPORT 23 Amounts in NOK (thousands) Share capital Treasury shares Share premium Retained earnings Currency translation reserve Non- controlling interest Total equity Total equity 31.12.2022 1 715 (5) 605 893 161 149 (8 063) 4 881 765 570 Profit / (-) loss for the period - - - 107 628 - - 107 628 Other comprehensive income - - - - 24 685 - 24 685 Changes in non-controlling interests - - - - - (250) (250) Purchase of treasury shares - (26) - (53 482) - - (53 508) Other changes - - - (449) - - (449) Total equity 31.12.2023 1 715 (31) 605 893 214 846 16 621 4 631 843 675 Profit / (-) loss for the period - - - 105 959 - - 105 959 Other comprehensive income - - - - 16 957 - 16 957 Changes in non-controlling interests - - - - - 4 855 4 855 Purchase of treasury shares - (14) - (40 851) - - (40 865) Other changes - - - 239 - - 239 Total equity 31.12.2024 1 715 (45) 605 893 280 193 33 578 9 486 930 821 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 2024 24 Notes NOTE 1 REPORTING ENTITY The reporting entity reflected in these financial statements is comprised of SmartCraft ASA and the consolidated subsidiaries that make up the SmartCraft Group. The parent company SmartCraft ASA is a Norwegian entity and headquarters is located Strandgata 3, 3513 Hønefoss, Norway. The Group operates with offices in Norway, Sweden, Finland and United Kingdom. SmartCraft ASA is a software company with a portfolio of related software brands. Currently, Bygglet, Cordel, Congrid, EL-VIS, HomeRun, Kvalitetskontroll, El-verdi, Elinn, Coredination, Locka and Clixifix are all brands in the Group’s portfolio. The Group operates in the Nordic region and the UK and provides SaaS and subscription software solutions for construction- and craftsmen companies, with market leading positions. NOTE 2 BASIS OF PREPARATION The consolidated financial statements of SmartCraft ASA and its subsidiaries are prepared in accordance with IFRS Accounting Standards as endorsed by the European Union (EU) and Norwegian authorities and effective as of December 31st, 2024. These financial statements also provide disclosures as specified under the Norwegian Accounting Act (Regnskapsloven). The financial statements are prepared on a historical cost basis, except for certain assets, liabilities, and financial instruments, which are measured at fair value. Preparation of financial statements including note disclosures requires management to make estimates and assumptions that affect amounts reported. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities. Actual results may differ from these estimates. Slight rounding differences may occur between the financial statements and the note disclosures. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, or if the revision affects both current and future periods. Judgments made by management in the application of IFRS which have a significant effect on the consolidated financial statements and estimates, with a significant risk of material adjustment in the next year, are discussed in note 4. NOTE 3 MATERIAL ACCOUNTING POLICIES This following description of material accounting principles applies to the SmartCraft Group’s 2024 financial reporting, including all comparative figures. The relevant accounting policies for selected financial statement line items are described in detail in the specific notes in this set of financial statements. Changes in accounting policies and new pronouncements are discussed at the end of this section. 3.1 Basis of consolidation The consolidated financial statements include SmartCraft ASA and subsidiaries, in which SmartCraft ASA is exposed, or has the rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the investee. Power is normally achieved through ownership, directly or indirectly, of more than 50% of the voting power. Subsidiaries are included from the date control commences until the date control ceases. There were three acquisitions completed during 2023-2024. Coredination AB where control was commenced as of July 1st 2023, Locka Group AB as of 1st April 2024 and Clixifix Limited as of 1st May 2024. ANNUAL REPORT 25 Intercompany transactions and intercompany balances, including internal profits and unrealized gains and losses, are eliminated. Business combinations The acquiree’s identifiable assets, liabilities and contingent liabilities are recognized separately at the acquisition date at their fair value irrespective of any non-controlling interest, and goodwill recognized to the extent the consideration exceeds identified net assets. Goodwill Goodwill is recognized as a part of business combinations. Goodwill is initially measured either as the excess of the consideration over the SmartCraft Group’s interest or the fair value of 100 percent of the acquiree in excess of the acquiree’s identifiable net assets (full goodwill). Goodwill is not amortized, but is tested for impairment annually, and more frequently if indicators of possible impairment are observed. Goodwill is allocated to the cash generating units or groups of cash generating units expected to benefit from the synergies of the combination and that are monitored for internal management purposes. Foreign currency translation The Group presents its financial statements in the Norwegian krone (NOK). This is also the parent company’s functional currency. Each subsidiary has local currency of their market as the functional currency. For consolidation purposes, the balance sheet figures for subsidiaries with a different functional currency have been translated at the rate applicable at the balance sheet date. The income statement has been translated at the average rate for the reported period. Exchange rate differences are recognized in equity. Changes in exchange rate are recognized in the statement of comprehensive income as they occur during the period. When investments in foreign subsidiaries are sold the accumulated exchange rate differences relating to the subsidiary are recognized in the income statement. 3.2 Intangible assets Intangible assets acquired individually or as a group are recognized at cost when acquired. Intangible assets acquired in a business combination are recognized at fair value separately from goodwill when they arise from contractual or legal rights or can be separated from the acquired entity and sold or transferred. Internally generated intangible assets are recognized when the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably. Development costs are capitalized as intangible assets at cost in accordance with IAS 38 Intangible Assets when the recognition criteria are met. Research expenditures are expensed as incurred. Intangible assets with indefinite useful life are tested for impairment yearly. For intangible assets with definite useful life, SmartCraft reviews the residual value and useful life of its assets, with any estimate changes accounted for prospectively over the remaining useful life of the asset. Internally generated development: Expenses relating to research activities are recognized as they occur. Expenses relating to development activities are capitalized to the extent that the product or process is technically and commercially viable and the Group has sufficient resources to complete the development work. Expenses that are capitalized include the costs of materials, direct wage costs and a share of the directly attributable common expenses. Capitalized development costs are recognized at their cost minus accumulated amortization and impairment losses. Cost of building new features and functionality together with significant and pervasive improvements of the core platform, provided that the significant and pervasive improvements of parts or main components of the core platform will generate probable future economic benefits, are capitalized as development costs and amortized on a straight-line basis over the estimated economic lifetime. 2024 26 To the extent developers perform updates that are required to maintain the products functionalities, the costs are expensed. Customer relationship: Customer relationships are recognized as a part of business combinations and measured initially as the net present value of the lifetime revenue from existing customers less cost to fulfill the contractual obligations. Customer relationships are depreciated on a straight-line basis over the expected lifetime of the relationship. Software: Software is recognized both as a part of business combinations and by internal development. Acquired software in a business combination is measured at fair value. The fair value measurement is if possible based on observable market date, if such date is not available, fair value is estimated as the expected cost to develop a similar software and internally developed software is capitalized in accordance with the measurement criteria in IAS 38 and amortized on a straight-line basis over the estimated economic lifetime. Brand names: Brand names that contribute to future economic benefits are recognized separately from Goodwill as a part of business combinations. Brand names are measured using the royalty method, the management evaluates whether to have indefinite or definite useful lifetime and tested annually for impairment. 3.3 Revenue from contracts with customers At contract inception, SmartCraft identifies the promised licenses and services within the contract and determines which of those are separate performance obligations. SmartCraft performance obligations within the contracts are described below. The timing of the transfer is determined based on when the customer obtains control of the delivered licenses or services. SmartCraft usually does not pay sales commission to its partners on sales to customers. On the few occasions it has been paid sales commissions SmartCraft has applied the practical expedient for costs to obtain a contracts to immediately expense sales commissions because the amortization period of the asset otherwise would have used is one year or less. SmartCraft generates revenue from five main sources and subcategories in total. Subscriptions Revenue from software subscriptions (right to access) are recognized on a straight-line basis over time, as the customer simultaneously receives and consumes the benefits of the services. Subscription contracts are invoiced in advance, up to and mainly on a 12month interval. Integrated services and bundled services Revenue from the transactional use of integrated or bundled 3rd party services are recognized at a point in time, on the time of the services being rendered and invoiced subsequently at the end of the month. Expert services Revenue from the sale of support, consultancy, system set-up and other advisory services are recognized at a point in time, on the time of the services being rendered and invoiced subsequently at the end of the month. Expert services included in the SaaS and software subscriptions is not recognized as independent revenues. 3.4 Leasing Identifying a lease At the inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group as a lessee For contracts that constitute, or contain a lease, the Group separates lease components if it ANNUAL REPORT 27 benefits from the use of each underlying asset either on its own or together with other resources that are readily available, and the underlying asset is neither highly dependent on, nor highly interrelated with, the other underlying assets in the contract. The Group then accounts for each lease component within the contract as a lease separately from non-lease components of the contract. Recognition of leases and exemptions At the lease commencement date, the Group recognizes a lease liability and corresponding right- of-use asset for all lease agreements in which it is the lessee, except for the following exemptions applied: o Short-term leases (defined as 12 months or less) o Low value assets (defined as less than NOK 50 000) For these leases, the Group recognizes the lease payments as other operating expenses in the statement of profit or loss when they incur. Lease liabilities The lease liability is recognized at the commencement date of the lease. The Group measures the lease liability at the present value of the lease payments for the right to use the underlying asset during the lease term that are not paid at the commencement date. The lease term represents the non-cancellable period of the lease, together with periods covered by an option either to extend or to terminate the lease when the Group is reasonably certain to exercise this option. The lease payments included in the measurement compromise of: o Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable. o Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date. o Amount expected to be payable by the Group under residual value guarantees. o The exercise price of a purchase option, if the Group is reasonably certain to exercise that option. o Payments of penalties for terminating the lease, if the lease term reflects the Group exercising an option to terminate the lease. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect adjustments in lease payments due to an adjustment in an index or rate. The Group does not include variable lease payments dependent upon an index or a rate, in the lease liability. Instead, the Group recognizes these variable lease expenses in the statement of profit or loss. SmartCraft presents its lease liabilities as separate line items in the statement of financial position and has initially applied weighted average incremental borrowing rate in the range of 2.75 % to 9.98 % when recognizing the lease liability. Right-of-use assets The Group measures the right-of-use asset at cost, less any accumulated depreciation and impairment losses, adjusted for any remeasurement of lease liabilities. The cost of the right-of-use asset comprise: o The amount of the initial measurement of the lease liability recognized. o Any lease payments made at or before the commencement date, less any incentives received. o Any initial direct costs incurred by the Group. An estimate of the costs to be incurred by the Group in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories. 2024 28 SmartCraft applies the depreciation requirements in IAS 16 Property, Plant and Equipment in depreciating the right-of-use asset, except that the right-of-use asset is depreciated from the commencement date to the earlier of the lease term and the remaining useful life of the right-of- use asset. The Group applies IAS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to account for any impairment loss identified. 3.5 Financial instruments Financial assets Financial assets represent a contractual right by the SmartCraft Group to receive cash or another financial asset in the future. Financial assets include cash and cash equivalents, accounts receivable and withheld cash receivable. On initial recognition, a financial asset is measured at fair value, and classified for subsequent measurement at amortized cost; at fair value through other comprehensive income (FVOCI) or at fair value through profit or loss (FVTPL). Classification depends on the business model and, for some instruments, the entity’s choice. Financial assets are derecognized when the rights to receive cash from the asset have expired or when SmartCraft has transferred the asset. Financial liabilities Financial liabilities represent a contractual obligation by the SmartCraft Group to deliver cash in the future and are classified as either current or non-current. Financial liabilities include the long-term loan, contingent liabilities, accounts payable and other financial liabilities. Financial liabilities are initially recognized at fair value, including transaction costs directly attributable to the transaction, and are subsequently measured at amortized cost. Financial liabilities are derecognized when the obligation is discharged through payment or when SmartCraft is legally released from the primary responsibility for the liability. 3.6 Measurement of fair value SmartCraft measures certain assets and liabilities at fair value for the purposes of recognition or disclosure. Non-recurring fair value measurement is used for transactions, such as business combinations, contingent consideration and other non-routine transactions. SmartCraft does not have any recurring fair value measurement as the group does not have any derivative financial instruments, equity investments or other similar financial assets or liabilities that are measured at fair value. 3.7 Employee benefit expense Payments to employees, such as wages, salaries, social security contributions, paid annual leave and bonus agreements are accrued in the period in which the associated services are rendered by the employee. All Group companies have defined contribution pension plans. The Group has no other obligations after payment of the pension premium has been made. The pension premiums are charged to expenses as they are incurred. The company has established a pension scheme as required by Norwegian law for employees in the Norwegian entities. 3.8 Current and deferred income tax The income tax expense consists of tax payable and changes to deferred tax. Deferred tax liability/ tax assets are calculated on all taxable temporary differences, except for goodwill for which amortization is not deductible for tax purposes. Deferred tax assets are recognized when it is probable that the company will have sufficient profit for tax purposes to utilize the tax asset. SmartCraft recognizes formerly unrecognized deferred tax assets to the extent that it has become probable that the Group can utilize the deferred tax asset. Similarly, the company reduces its deferred tax assets to the extent that it can no longer utilize these. Deferred tax liabilities and deferred tax assets are measured based on the expected future tax rates applicable to the companies in the Group where temporary differences have arisen. Deferred tax ANNUAL REPORT 29 liabilities and deferred tax assets are recognized at their nominal value and are classified as non- current liabilities or non-current assets in the balance sheet. The tax payable and deferred taxes are recognized directly in equity to the extent they relate to equity transactions. 3.9 Provisions Provisions are recognized when, and only when, the Group has a valid liability (legal or estimated) because of events that have taken place and it can be proven probable (more probable than not) that a financial settlement will take place, as a result of a liability, and that the size of the amount can be measured reliably. 3.10 Changes in accounting policies and new pronouncements There are no changes in accounting principles compared to previous years. The Group has applied all relevant IFRS standards that were in effect for 2024. None of the issued, not yet effective, accounting standards or amendments to such standards are expected to have significant effects for the SmartCraft Group’s financial reporting. 3.11 Equity Treasury shares are shares in SmartCraft ASA controlled by the Group. When there are transactions with treasury shares the nominal value of the shares are booked as treasury shares. Differences between nominal value of the shares and the acquisition cost/selling price of the shares are booked towards other components of equity. NOTE 4 SIGNIFICANT ESTIMATES AND JUDGEMENTS The application of accounting policies requires that management makes estimates and judgements in determining certain revenues, expenses, assets and liabilities. The following areas involve a significant degree of judgement and complexity, and may result in significant variation in amounts: o Identification and initial measurement of intangible assets acquired in a business combination – see note 6 o Impairment of goodwill - see note 12 o Capitalization of internally generated intangible assets - see note 13 2024 30 NOTE 5 FINANCIAL RISK DISCLOSURES Credit risk Credit risk for the Group consists of balances of accounts receivable in addition to cash deposits held at several banks that have a long history and credible reputations. Management believes customer risk is low/moderate as customers generally need to pay upfront in order to receive services. As the Group has a very diverse customer base and limited customer acquisition cost as well as no material customer exposures, credit checks of new and existing customers are not deemed necessary. If existing customers are not paying for subscriptions the Group can block access to their systems, although the Group is at risk for loss in the period between due date and blocking access. Exposure to default risk on individual customers is low as the Group has a large number of customers. However, most customers are related to the same industry and this exposes the Group to the industry specific risk. For additional information regarding loss and loss allowance, see note 15. Liquidity risk The Group needs to maintain enough liquidity in order to pay running operating costs. Non- current lease liabilities and non-current financial liabilities have a maturity of up to 7 years, and all other financial liabilities (current lease liabilities and accounts payable) are due within 12 months. The SmartCraft Group has ample cash to support operations and liabilities. The SmartCraft Group has no investments in equity securities and does not use financial derivatives. For information regarding future payments of liability, see note 28. Capital management Management believes that SmartCraft is in a growth phase with the intention of increasing market share and expand into new markets. Management will undertake M&A where it sees market growth opportunities. The Group intends to fund M&A and internal growth through current cash balances, equity, and external capital from bonds, banks and similar lenders. The Group prepares an annual detailed liquidity budget to ensure sufficient liquidity throughout the year. The Group policy is to keep its cash in a checking account. The banks where SmartCraft keeps excess liquidity are well established and reputable with a long history of holding deposits without defaults. Interest risk The Group has no financial liabilities to lenders which bear an interest as of 31.12.2024. See notes 7, 22 and 28 for more information. The group has no hedging of interest risk. Foreign exchange risk As of December 31st 2024 the Group has financial liabilities of foreign currency of TNOK 49 595, and financial assets in foreign currency in total of TNOK 147 609. Net amount in foreign currency translates to a financial asset of TNOK 98 014, and the exposure of foreign currency risk is considered low. Amount Effect on EBT Effect on EBT Amounts in NOK (thousands)31.12.2024+ 5%- 5%Foreign exchange risk sensitivityFinancial assets in foreign currency 147 609 7 380 (7 380)Financial liabilities in foreign currency (50 280) (2 514) 2 514 Total for SmartCraft Group 97 329 4 866 (4 866) ANNUAL REPORT 31 Revenue Effect on revenue EBITDA Effect on EBITDA Amounts in NOK (thousands)2024+/- 5%2024+/- 5%Foreign exchange risk sensitivitySmartCraft Group consolidated 510 763 +/- 16 338 184 530 +/- 6 692Revenue Effect on revenue EBITDA Effect on EBITDA Amounts in NOK (thousands)2023+/- 5%2023+/- 5%Foreign exchange risk sensitivitySmartCraft Group consolidated 401 654 +/- 11 698 165 721 +/- 5 724 NOTE 6 BUSINESS COMBINATIONS Significant judgment in accounting for business combinations In a business combination, consideration, assets and liabilities are recognized at estimated fair value, and any excess purchase price included in goodwill. In the businesses SmartCraft operates, fair values of individual assets and liabilities are normally not readily observable in active markets. Estimation of fair values requires the use of valuation models for acquired assets and liabilities as well as ownership interests. Such valuations are subject to numerous assumptions and are thus uncertain. The quality of fair value estimates may impact periodic depreciation and amortization of fixed assets, and assessment of possible impairment of assets and/or goodwill in future periods. The specific significant judgements for SmartCraft during 2024 include the identification and fair value of the acquired intangible assets in Locka Group AB and Clixifix Limited. These are all discussed below in the specific relevant section. During 2024 the Group has recognized acquisition related costs as other operating expenses in the profit and loss of at total of TNOK 5 458. Acquisitions in 2024 In 2024 SmartCraft Sweden AB has acquired 100% of the share capital and the voting rights of Locka Group AB and its subsidiaries Locka Software AB and Locka Service AB. The Locka solution is a 3D visualization with customer interaction and after- sales service for the construction industry. The acquisition was financed by cash transfer. Net profit for Locka Group in included in the consolidated financial statements from April 1st 2024. For the year 2024 the companies’ contributions to the SmartCraft Group amounted to TNOK 32 979 in revenue, an EBITDA of TNOK 1 936 and EBT of TNOK 250. The Group earns revenue in NOK, SEK, EUR and GBP. All operating entities have all material costs and revenue in their functional currency. This works as a natural hedge on the currency exchange risk and as such the management considers the foreign exchange risk exposure for the group to be the low/moderate. The calculated effect on revenue and EBITDA is based on a change of 5% in the currency rate for SEK, EUR and GBP towards NOK. Amount Effect on EBT Effect on EBT Amounts in NOK (thousands)31.12.2023+ 5%- 5%Foreign exchange risk sensitivityFinancial assets in foreign currency 226 695 11 335 (11 335)Financial liabilities in foreign currency (34 812) (1 741) 1 741 Total for SmartCraft Group 191 882 9 594 (9 594) 2024 32 If the companies had been included from January 1st, the SmartCraft Group had ended the year with TNOK 519 985 (+9 222) in revenues, an EBITDA of TNOK 185 260 (+730) and EBT of TNOK 131 319 (-1 523). Significant judgement related to the identification of the acquired intangible assets and their valuation The Goodwill arising on the transaction are related to anticipated profitability of the operations and anticipated synergies with the existing SmartCraft Purchase consideration: Amounts in NOK (thousands)Cash paid 8 841 Total purchase consideration 8 841 The assets and liabilities recognized as a result of the acquisition are as follows:Amounts in NOK (thousands) Fair value as of acquisition dateCash (947)Trade receivables 3 419 Office machinery and equipment 85 Right-of-use assets 541 Other receivables 809 Brand 2 309 Technology 16 043 Customer relationships 9 740 Total assets 31 999 Trade creditors 2 501 Lease liabilities 541 Public duties payable 2 964 Other short-term liabilities 9 299 Other long-term liabilites 7 954 Deferred tax liability 11 082 Total Liabilites 34 342 Net identifiable assets (2 343)Goodwill 11 183 Total consideration for the shares 8 841 Locka Group AB solutions. The Goodwill is not tax deductible. The management places a significant value on the technology and estimates its value based on the cost incurred related to the development of the technology at the time of acquisition. The brand is established in Sweden and registered for use in Europe. The brands value is based on existing customers and customer loyalty and the potential revenue growth for the brand. In 2024 SmartCraft Software AS acquired 100% of the share capital and voting rights of Clixifix Limited. The Clixifix solution is an end-to-end SaaS for managing defects, complaints and repairs for constructor companies and property owners. The acquisition of Clixifix also expands the SmartCraft Group into the UK market. This acquisition was financed by cash transfer and transfer of treasury shares. Net profit from Clixifix Limited in included in the consolidated financial statements from May 1st 2024. For the year 2024 the company’s contribution to the SmartCraft Group amounted to TNOK 29 ANNUAL REPORT 33 085 in revenues, an EBITDA of TNOK 8 616 and EBT of TNOK 1 754. If the company had been included from January 1st, the SmartCraft Group had ended the year with TNOK 523 871 (+13 018) in revenues, an EBITDA of TNOK 188 669 (+4 139) and EBT of TNOK 133 546 (+704). Significant judgement related to the identification of the acquired intangible assets and their valuation The Goodwill arising on the transaction are related to anticipated profitability of the operations and anticipated synergies with the existing SmartCraft solutions. The Goodwill is not tax deductible. The management places a significant value on the technology and estimates its value based on the cost incurred related to the development of the technology at the time of acquisition. The brand is established in the UK and registered for use in Europe. The brands value is based on existing customers and customer loyalty and the potential revenue growth for the brand. Purchase consideration: Amounts in NOK (thousands)Cash paid 145 619 Transfer of treasury shares 4 413 Total purchase consideration 150 032 The assets and liabilities recognized as a result of the acquisition are as follows:Amounts in NOK (thousands) Fair value as of acquisition dateCash 7 270 Trade receivables 4 966 Office machinery and equipment 468 Other receivables 2 708 Brand 15 869 Technology 38 980 Customer relationships 32 526 Total assets 102 787 Trade creditors 648 Lease liabilities 4 335 Public duties payable 13 392 Other short-term liabilities 626 Deferred tax liability 25 379 Total Liabilites 44 379 Net identifiable assets 58 408 Goodwill 91 624 Total consideration for the shares 150 032 Of which cash 145 619 Of which equity 4 413 Clixifix Ltd. 2024 34 TNOK 406 990 (+5 335) in revenues, an EBITDA of TNOK 165 863 (+143) and EBT of TNOK 136 400 (+131). Significant judgement related to the identification of the acquired intangible assets and their valuation The Goodwill arising on the transaction are related to anticipated profitability of the operations and anticipated synergies with the existing SmartCraft solutions. The Goodwill is not tax deductible. The management places a significant value on the technology and estimates its value based on the cost incurred related to the development of the technology at the time of acquisition. The brand is established in Sweden and registered for use in Europe. The brands value is based on existing customers and customer loyalty and the potential revenue growth for the brand. Purchase consideration: Amounts in NOK (thousands)Cash paid 25 325 Total purchase consideration 25 325 The assets and liabilities recognized as a result of the acquisition are as follows:Amounts in NOK (thousands) Fair value as of acquisition dateCash 1 559 Trade receivables 1 534 Office machinery and equipment 34 Right-of-use assets 1 185 Other receivables 27 Brand 2 043 Technology 10 908 Customer relationships 3 007 Total assets 20 297 Trade creditors 55 Lease liabilities 1 097 Public duties payable 615 Other short-term liabilities 1 430 Deferred tax liability 3 314 Total Liabilites 6 512 Net identifiable assets 13 786 Goodwill 11 539 Total consideration for the shares 25 325 Acquisitions in 2023 In 2023 SmartCraft Sweden AB has acquired 100% of the share capital and voting rights of Coredination AB with the solution Coredination that provides a digital project tool for workforce management, machine rental and fleet management. Coredination further complements the SmartCraft solutions by adding important functionality to the SmartCraft portfolio. This acquisition was financed by cash transfer. Net profit for Coredination AB is included in the consolidated financial statements from July 1st, 2023. For the year 2023 the companies’ contribution to the SmartCraft Group amounted to TNOK 6 119 in revenues, an EBITDA of TNOK 2 455 and EBT of TNOK 1 590. If the companies had been included from January 1st, the SmartCraft Group had ended the year with Coredination AB ANNUAL REPORT 35 NOTE 7 FINANCIAL ASSETS AND FINANCIAL LIABILITIES Amounts in NOK (thousands) Category 31.12.2024 31.12.2023Financial assetsCurrent financial assets FAAC 1 078 1 393 Accounts Receivable FAAC 67 611 64 612 Accrued revenue FAAC 804 395 Cash and cash equivalents FAAC 125 655 206 024 Total financial assets 195 149 272 423 Financial liabilitiesVAT and other public taxes FLAC 37 637 28 374 Accrued operating cost FLAC 33 565 25 213 Accounts payable FLAC 11 760 8 628 Current financial liabilities FLAC - 39 Earn-outs related to aqcustions FVTPL 4 413 4 000 Total financial liabilities 87 374 66 253 FAAC - Financial Assets at Amortized Costs FLAC - Financial Liabilities at Amortized Costs FVTPL - Fair Value Through P&L 2024 36 NOTE 8 REVENUE FROM CUSTOMERS Disaggregation of revenue from contracts with customers Amounts in NOK (thousands) 2024 2023Revenue from contracts with customers 510 763 401 654 At a point in time revenue recognition 2024 2023Integrated services and bundled services 20 826 20 051 Expert services 29 090 7 361 Other revenue 22 677 18 032 Total at a point in time revenue recognition 72 593 45 444 Over time revenue recognition 2024 2023SaaS (software as a service) 427 733 340 277 Software subscriptions 10 438 15 933 Total over time revenue recognition 438 170 356 211 Deferred revenue Amounts in NOK (thousands) 31.12.2024 31.12.2023Opening balance 106 029 69 936 Revenue recognized in this period that was included in the deferred revenue (106 029) (69 936)balance at the beginning of the periodAquired through business combinations 17 705 25 Additions in the period 132 134 106 004 Deferred revenue in balance sheet 149 839 106 029 There are not identified any performance obligations related to contracts with costumers that has an original expected duration more than one year. Accrued revenue Amounts in NOK (thousands) 31.12.2024 31.12.2023Opening balance 395 416 Revenue recognized previous period that was accrued in the beginning of the (395) (416)periodAquired through business combinations - - Revenue recognized in this period that is accrued in the end of the period 804 395 Deferred revenue in balance sheet 804 395 The contract assets are costs incurred on specific customer contracts which has been used to satisfy performance obligations and are recoverable. There are not identified any contract assets that will not be recovered during the next year. ANNUAL REPORT 37 NOTE 9 SEGMENT INFORMATION The Group regularly reports detailed profit/loss statements with emphasis on operating revenue and EBITDA in functional operating segments to the Board of Directors. While the Group uses both measures to analyze performance, the Group’s strategy of profitable growth means that EBITDA is the prevailing measure of performance. Operating segments are reported in the consolidated financial statements by the emphasized measures as is presented to the Board of Directors. The operating units through 2024 have been countries as a focus area is to expand the solutions across borders. This also aligns with the organizational structure that have been settled with Country Managements and the reporting structure. Revenue Amounts in NOK (thousands) 2024 2023Norway 184 008 167 684 Sweden 247 387 183 234 Finland 50 283 50 736 UK 29 085 -Total revenue 510 763 401 654 EBT Amounts in NOK (thousands) 2024 2023Norway 55 083 52 121 Sweden 93 867 86 088 Finland 4 266 9 668 UK 1 754 -Group/eliminations (21 451) (11 609) Total EBT 133 519 136 268 Non/current assets Amounts in NOK (thousands) 2024 2023Norway 373 933 384 397 Sweden 327 753 284 151 Finland 164 975 152 208 UK 184 939 -Group/eliminations 27 772 559 Total non-current assets 1 079 372 821 316 2024 38 NOTE 10 PAYROLL AND RELATED EXPENSES Amounts in NOK (thousands) 2024 2023Salaries 171 020 128 621 Social security costs 34 618 24 590 Governmental tax relief (SkatteFUNN) (252) (511)Other personnel related costs 15 955 11 228 Pension expense defined contribution plans 14 745 11 192 Total payroll and related expenses 236 086 175 119 Less capitalized personnel costs 37 282 29 482 Total payroll and related expenses recognized in the P&L 198 804 145 637 Average number of FTEs 247 189 NOTE 11 MANAGEMENT AND BOARD OF DIRECTORS REMUNERATION Payments to Management and Board of Directors 2024Pension Other Total Amounts in NOK (thousands) Salary Bonusbenefitremunerationremuneration1Gustav Line, CEO 2 752 560 90 11 3 413 2Kjartan Bø, CFO 1 877 - 88 11 1 976 Christian Saleki, CTO 1 538 41 340 90 2 008 Katja Widlund, CMO 1 294 85 265 74 1 719 3Gunnar Haglund, Chairman of the Board - - - 416 416 9Mette Kamsvåg, Deputy Chairperson of the Board - - - - -4Carl Ivarsson, Board member - - - - - 5Allan Engström, Board member - - - - - 6Marianne Røren, Board member - - - 224 224 7Maria Danell, Board member - - - 182 182 8Bernt Ulstein, Board member - - - 192 192 Isabella Alvberg , Board member - - - 182 182 9Eva Hemb - - - - -Total 7 461 686 783 1 382 10 312 1. If the company terminates the employment, Mr. Line is entitled to 6 months’ salary after a 6-month termination period. 2. If the company terminates the employment, Mr. Bø is entitled to 3 months’ salary after a 3-month termination period. 3. Mr. Haglund also serves as Chairman of the Audit Committee and Remuneration Committee. 4. Mr. Ivarsson represents Valedo Partners III AB on the Board of Directors. Mr. Ivarsson receives salary from Valedo and has refrained from remuneration as a member of the Board. Mr. Ivarsson also serves as a member of the Audit Committee. 5. Mr. Engström represents Valedo Partners III AB on the Board of Directors. Mr. Engström receives salary from Valedo and has refrained from remuneration as a member of the Board. Mr. Engström also serves as a member of the Remuneration Committee. 6. Ms. Røren also served as a member of the Audit Committee until the Annual General Meeting in 2024. 7. Ms. Danell served as a member of the Board of Directors until the Annual General Meeting in 2024. 8. Mr. Ulstein also serves as a member of the Remuneration committee. 9. Ms. Kamsvåg and Ms. Hemb has served as a member of the Board of Directors from the Annual General Meeting in 2024. ANNUAL REPORT 39 The Group senior executive management consists of the Chief Officer Suite. The Group has not given any loans or security deposits to the CEO, the Chairman of the Board or their related parties for either 2023 or 2024. A bonus program exists for the senior executive management of SmartCraft. A limit is set for the amount of bonus that can be achieved. The size of the bonus payment is dependent on actual group performance compared to a set of predefined targets. The bonus for the CEO is decided on by the Board of Directors. The Group has issued a separate report for remuneration of Group senior executive management in accordance with The Public Limited Liability Companies Act § 6-16b. The report is available at the Groups website smartcraft.com/ investor-relations/ For shares owned by the management and Board of Directors see note 25. 2023Pension Other Total Amounts in NOK (thousands) Salary Bonusbenefitremunerationremuneration1Gustav Line, CEO 2 530 879 85 10 3 504 2Kjartan Bø, CFO 1 685 167 83 10 1 945 Christian Saleki, CTO 1 340 50 287 97 1 774 Katja Widlund, CMO 1 206 75 189 87 1 557 3Gunnar Haglund, Chairman of the Board - - - 400 400 4Carl Ivarsson, Board member - - - - - 5Allan Engström, Board member - - - - - 6Christina Skogster Stange, Board member - - - 175 175 7Marianne Røren, Board member - - - 215 215 Maria Danell, Board member - - - 175 175 8Bernt Ulstein, Board member - - - 185 185 9Isabella Alvberg , Board member - - - - - Total 6 761 1 171 644 1 354 9 930 1. If the company terminates the employment, Mr. Line is entitled to 6 months’ salary after a 6-month termination period. 2. If the company terminates the employment, Mr. Bø is entitled to 3 months’ salary after a 3-month termination period. 3. Mr. Haglund also serves as Chairman of the Audit Committee and Remuneration Committee. 4. Mr. Ivarsson represents Valedo Partners III AB on the Board of Directors. Mr. Ivarsson receives salary from Valedo and has refrained from remuneration as a member of the Board. Mr. Ivarsson also serves as a member of the Audit Committee. 5. Mr. Engström represents Valedo Partners III AB on the Board of Directors. Mr. Engström receives salary from Valedo and has refrained from remuneration as a member of the Board. Mr. Engström also serves as a member of the Remuneration Committee. 6. Ms. Stange served as a member of the Board of Directors until the Annual General Meeting in 2023. 7. Ms. Røren also serves as a member of the Audit Committee. 8. Mr. Ulstein also serves as a member of the Remuneration committee. 9. Ms. Alvberg has served as a member of the Board of Directors from the Annual General Meeting in 2023. 2024 40 Goodwill Amounts in NOK (thousands) 2024 2023Acquisition cost 01.01 547 580 517 302 Additions 105 910 11 539 Currency translation 8 809 18 739 Acquisition cost 31.12 662 299 547 580 Impairment 01.01 - - Impairment - - Accumulated impairment 31.12 - - Net value 31.12 662 299 547 580 Goodwill is recognized as a part of business combinations. Goodwill is initially measured either as the excess of the consideration over the SmartCraft Group’s interest or the fair value of 100% of the acquiree in excess of the acquiree’s identifiable net assets (full goodwill). Goodwill is not amortized, but is tested for impairment annually, and more frequently if indicators of possible impairment are observed, in accordance with IAS 36 Impairment of Assets. Goodwill is NOTE 12 GOODWILL AND IMPAIRMENT TESTING OF GOODWILL allocated to the cash generating units or groups of cash generating units expected to benefit from the synergies of the combination and that are monitored for internal management purposes. The SmartCraft Group has goodwill in connection with the acquisitions of Cordel Norge AS in 2017, the Bygglet Group in 2018, the EL-Info Group in 2019, Congrid Oy in 2020, Homerunbynet Oy and Kvalitetskontroll AS in 2021, Elverdi Norge AS and Inprog AS in 2022, Coredination AB in 2023 and Locka Group AB and Clixifix Limited in 2024. The goodwill is related to know-how and other non-identified assets from the acquisitions of shares in the acquired companies. Impairment testing of the goodwill is carried out at the end of the year for the respective cash generating units to which the goodwill relates to. Recoverable amount, which is determined based on the higher of the value in use or fair value, is derived from an assessment of the expected future cash flows before tax for the next five years, discounted at an appropriate discount rate before tax that takes into account the maturity and risk. Recoverable amount will therefore demonstrate what the value of the asset is expected to contribute. The estimated recoverable amount exceeds the carrying amount with a significant headroom for all Cash Generating Units (CGU). No impairment losses are recognized during 2024. In connection with the impairment testing of goodwill, sensitivity analysis has been carried out. The sensitivity analysis has tested changes in WACC, revenue growth rates, net working capital and EBITDA margins. Goodwill per CGU Amounts in NOK (thousands) 2024 2023The SmartCraft Sweden Group 187 258 172 619 The SmartCraft Finland Group 111 570 105 872 The SmartCraft Norway Group 269 082 269 082 The SmartCraft UK Group 94 388 - Total 662 299 547 573 Estimates relating to the impairment test are as follows: ANNUAL REPORT 41 Estimated change in impairment Amounts in NOK (thousands) The SmartCraft UK GroupKey assumptions for 2024Pre-tax discount rate +1 pp - Revenue growth rate -5 pp - EBITDA-margin -10 pp 3 630 Budget and forecast period The basis for the projection of the future cash flows estimated is based on the financial budget of one year approved by the Board of Directors. The budget in combination with the forecasts represent the management’s best estimate of the range of economic conditions that will exist over the useful life of the asset. The remaining four years of the forecast period are estimated based on budget and projected performance. After the five-year period the growth rate is based on the risk-free rate in the applicable market. Growth rate Growth rate is represented by five-year CAGR, which is defined as the average annual gross profit growth rate over a five-year projected cash flow period. Average rates of growth in operating revenue are based on the management’s expectations of future conditions in the markets in which the business operates, and historical growth rate for the CGUs. The projected cash flow also includes a growth assumption of 2% in the terminal value. The 5-year Compound Annual Growth Rate (CAGR) is the rate of return that is required for an investment to grow from its beginning balance to its ending balance five years later. The calculation assumes that profits are reinvested at the end of each period. When testing for impairment the Group has used a 5-year CAGR in the range between 13.6% and 18.0% to project the cash flows beyond the period covered by the most recent budgets. When testing for impairment in 2023 the applied 5-year CAGR were between 16.5% and 17.3%. EBITDA margin EBITDA margins are based on the margins achieved historically, adjusted for expected future developments in market conditions. WACC Future cash flows are discounted to present value using a discount rate based on a calculation of a weighted average cost of capital (WACC). The pre-tax WACC for each CGU is calculated on basis of a risk-free rate and a risk premium, adjusted by a beta for the software market. Adjustments for country specific risks are applied where necessary. The discount rates applied to the cash flow projections range between 12.1% and 17.8%. When testing for impairment in 2023 the WACC ranged from 15.1% to 17.8%. WACC per CGU 2024 2023The SmartCraft Sweden Group 15.6 % 15.1 %The SmartCraft Finland Group 16.5 % 16.4 %The SmartCraft Norway Group 17.8 % 17.8 %The SmartCraft UK Group 12.1 % - Sensitivity As of December 31st 2024, the Group’s value in use for each CGU was significantly higher than the carrying amount of tested goodwill in the CGUs Norway, Sweden and Finland. A sensitivity analysis has been performed in order to determine if a reasonable change in key assumptions would cause the carrying amount to exceed the recoverable amount. The sensitivity analysis shows little headroom for the CGU UK. As UK is a new geography and CGU in 2024, after the acquisition of Clixifix, the carrying amount is expected to be close to the recoverable amount and thus the sensitivity analysis is not raising a concern. 2024 42 NOTE 13 INTANGIBLE ASSETS SmartCraft has capitalized expenses related to new research and development activities that are technically and commercially viable for the business according to IAS 38. Activities related to maintenance of existing software have not been capitalized but is recognized in the income statement. Total additions in 2024 is TNOK 48 664 that is reduced by TNOK 2 311 due to government grants. Amortization came to TNOK 40 138 in 2023. TNOK 54 114 has been recognized as development cost in the income statement (TNOK 31 311 in 2023). The directly attributable development cost that is capitalized as a part of the products include the software development employee costs and an appropriate portion of the relevant overhead costs. The costs of product development cost not fulfilling the criteria of capitalization are expensed over the income statement. Amortization of capitalized development projects are included in other operating expenses in the table below. Customer relationships Customer relationships is related to the purchase of the Bygglet Group in 2018, the EL-Info Group in 2019, Congrid Oy in 2020, Homerunbynet Oy and Kvalitetskontroll AS in 2021, Elverdi Norge AS and Inprog AS in 2022, Coredination AB in 2023 and Locka and Clixifix in 2024. The customer relationships are depreciated on a straight-line basis over 10-20 years as the history indicates at least 10 to 20-year average lifetime of customers. The SmartCraft Group has a significant number of recurring subscriptions. Software Software is related to the purchase of the Bygglet Group in 2018, the EL-Info Group in 2019, Congrid Oy in 2020, Homerunbynet Oy and Kvalitetskontroll AS in 2021, Elverdi Norge AS and Inprog AS in 2022, Coredination AB in 2023 and Locka and Clixifix in 2024 where the group acquired the Bygglet, EL-VIS, Congrid, Homerun, Kvalitetskontroll, El-verdi, Elinn, Coredination, Locka and Clixifix software. Software is depreciated on a straight-line basis over 10 years as the management expects economic benefits from the software over such period of time before the software are replaced or substituted by continuous improvements. Individual significant assets are: o Cordel: The original Cordel software has no allocated value as an asset. The Cordel SaaS solution consists of several modules, but the framework is included as capitalized development with a book value of 11 859 pr 31.12.2024 and remaining life of 8 years. o Bygglet: Bygglet is a true-SaaS born in the cloud solution with accessibility on multiple platforms, book value 31.12.2023 is TNOK 8 250 and remaining useful life of 4 years. o EL-VIS: The EL-VIS software is a modular solution offering mission critical services in the electricians’ daily operations, book value 31.12.2024 is TNOK 6 340 and remaining useful life of 4 years. o Congrid: The Congrid solution is a cloud-based tool for complete project management in construction companies, book value 31.12.2024 is TNOK 9 523 and remaining useful life of 6 years. o Kvalitetskontroll: The Kvalitetskontroll solution is a cloud-based project management solution and quality assurance platform for construction companies, book value 31.12.2024 is TNOK 12 493 and remaining useful life of 6 years. o El-verdi: The El-verdi solution is a digital sales tool for electricians, book value 31.12.2024 is TNOK 3 419. Due new investments in internal R&D the solution will be full out amortized during 2025. o ELinn: The ELinn solution is a cloud-based solution for electricians to make offers and handle project management, book value 31.12.2024 is TNOK 5 889 and remaining useful life of 2 years. Further information can be found in note 6 for acquired intangible assets. ANNUAL REPORT 43 Internally generated development Internally under generated Customer Amounts in NOK (thousands)constructiondevelopmentrelationships Software Brand TotalBalance SmartCraft 01.01.2024 30 927 75 268 107 111 90 466 18 581 322 353 Additions - - - - - - Additions from business - - 43 498 56 613 18 717 118 827 combinationsCapitalized employee benefit and 13 840 34 823 - - - 48 664 other expensesDisposals - - - - - - Reclassification (3 713) 3 713 - - - - Other changes (2 311) - - - - (2 311) Foreign currency translation effect 127 1 343 2 649 1 693 350 6 162 Acquired cost 31.12.2024 38 871 115 147 153 259 148 772 37 647 493 696 Balance SmartCraft 01.01.2024 - 15 476 29 791 29 879 1 128 76 274 Amortization of the year - 12 943 14 552 10 332 301 38 129 Accumulated amortization disposals - - - - - - Foreign currency translation effect - 834 1 021 571 61 2 487 Accumulated amortization - 29 254 45 365 40 782 1 490 116 890 31.12.2024Carrying value 31.12.2024 38 871 85 893 107 894 107 990 36 158 376 806 Estimated lifetime 5-10 years 10-20 years 10 years 3 years/indefiniteAmortization schedule Straight line Straight line Straight Straight lineline * Other changes comprises of government grants related to SkatteFUNN. 2024 44 Spesification of expensed research and development costsAmounts in NOK (thousands)Wages and personell costs 46 079 25 287 Consultancy 8 035 6 024 Total expenses 54 114 31 311 Internally generated development Internally under generated Customer Amounts in NOK (thousands)constructiondevelopmentrelationships Software Brand TotalBalance SmartCraft 01.01.2023 27 910 40 207 90 997 84 214 15 894 259 222 Additions - - - - - - Additions from business - - 10 908 3 007 2 043 15 958 combinationsCapitalized employee benefit and 26 688 10 785 - - - 37 472 other expensesDisposals - - - - - - Reclassification (22 806) 22 806 - - - - Other changes (980) - - - - (980) Foreign currency translation effect 116 1 470 5 206 3 245 644 10 681 Acquired cost 31.12.2023 30 927 75 268 107 111 90 466 18 581 322 353 Balance SmartCraft 01.01.2023 - 6 475 21 692 20 124 991 49 283 Amortization of the year - 8 700 7 107 8 882 43 24 732 Accumulated amortization - - - - - - disposalsForeign currency translation effect - 301 993 872 94 2 259 Accumulated amortization - 15 476 29 791 29 879 1 128 76 274 31.12.2023Carrying value 31.12.2023 30 927 59 791 77 321 60 587 17 453 246 079 Estimated lifetime 5-10 years 10-20 years 10 years 3 years/indefiniteAmortization schedule Straight line Straight line Straight Straight lineline * Other changes comprises of government grants related to SkatteFUNN. ANNUAL REPORT 45 NOTE 14 GOVERNMENT GRANTS Amounts in NOK (thousands) 2024 2023Government grant booked as reduction in payroll expences 258 511 Government grant booked as reduction of the carrying value of the asset 2 311 980 Total government grants 2 569 1 491 The 2024 government grant has not been received and is included in the Group’s receivables. NOTE 15 ACCOUNTS RECEIVABLE Amounts in NOK (thousands) 31.12.2024 31.12.2023Accounts receivable 69 084 65 490 Loss allowance 1 473 878 Total 67 611 64 612 Accounts receivables are initially recognized at transaction price, subsequently accounted for at amortized cost and are reviewed for impairment on an ongoing basis. Individual significant accounts are assessed for impairment taking into consideration indicators of financial difficulty and management assessment. The remaining receivables are impaired based on an Estimated Credit Loss-model (ECL). The SmartCraft Group’s business model for accounts receivable is to hold the receivables to collect the contractual cash flows. Distribution by currency Amounts in NOK (thousands) 31.12.2024 31.12.2023Accounts receivable NOK 20 376 31 773 Accounts receivable SEK 38 039 26 126 Accounts receivable EUR 6 248 7 589 Accounts receivable GBP 4 421 -Total 69 084 65 490 2024 46 Loss and loss allowances The Group has minor losses historically, which also is expected going forward. The Group tests for loss allowance by reviewing historical losses against each interval of aging receivables. As of December 31st 2024, the Group has estimated TNOK 1 473 in loss allowance based on the ECL-model. Amounts in NOK (thousands) 31.12.2024 31.12.2023Opening balance 01.01. 878 1 000 Foreign currency translation effect 12 63 Acquired in business combinations 28 - Net allowance / (reversal) 554 (186)Closing balance 31.12. 1 473 878 Realised losses 2 964 786 NOTE 16 OTHER CURRENT ASSETS Other current assets Amounts in NOK (thousands) 31.12.2024 31.12.2023Prepaid expenses 7 752 5 640 Accrued revenue 804 395 Inventory 167 175 Other accruals 1 752 1 902 Total Other current asset 10 476 8 112 Other current accruals consist primarily of accrued revenue, tax claim and prepayments to employees. NOTE 17 CASH AND CASH EQUIVALENTS For the purpose of the consolidated statement of cash flow, cash and cash equivalents comprise the following on December 31st: Amounts in NOK (thousands) 31.12.2024 31.12.2023Cash at banks and on hand 122 764 203 111 Restricted cash balances 2 892 2 913 Total cash and cash equivalents 125 655 206 024 The Group has restricted cash related to employees’ tax withholding account. The restricted cash can only be deposited to the Norwegian tax authorities. ANNUAL REPORT 47 Changes in liabilities arising from financing activities Amounts in NOK (thousands) 31.12.2024 31.12.2023Balance at the beginning of the period 25 162 14 604 Cash changesPrincipal payment to lender/lessor (11 615) (9 964)Interest payment to lender/lessor (1 815) (776)Non-cash changesBuisniess combinations 555 1 185 Inital recognition 17 218 4 530 Change in liability - 39 Changes in accrued interest 1 825 778 Lease modifications 4 525 13 491 Foreign currency translation effect 310 501 Balance at the end of the period 36 166 25 163 NOTE 18 ACCOUNTS PAYABLE Amounts in NOK (thousands) 31.12.2024 31.12.2023Accounts payable 11 760 8 628 Total 11 760 8 628 All accounts payable to suppliers are due within 12 months. NOTE 19 OTHER CURRENT LIABILITIES Amounts in NOK (thousands) 31.12.2024 31.12.2023Payroll related liabilities 32 004 25 809 VAT 21 727 16 176 Accrued operating expenses 7 106 4 492 Earn-out for acqusitions - 4 000 Liabilities related to acqusitions 4 413 -Pre-payments from customers 4 583 3 769 Accrued payroll and bonuses 3 081 2 656 Other 3 241 725 Total Other current liabilities 76 155 57 626 *Pre-payments from customers are payments made from customers to register credits that later can be converted into transaction-based services or special reports. The prepayments are converted to revenue when the service is acquired. If the customers don’t utilize the credits they are entitled to a payback of the outstanding amount. The liability for the earn-out for acquisitions pr 31.12.2023 was related to Inprog AS and has been paid in full in 2024. The liability related to acquisitions pr 31.12.2024 is related to payment to sellers of Clixifix. The liability is to be settled by transfer of shares in SmartCraft ASA. 2024 48 NOTE 20 TAXES Calculation of deferred tax/deferred tax benefit Amounts in NOK (thousands) 2024 2023Differences evaluated to be offset:Intangible assets arising from business combinations 251 598 154 781 Property, plant and equipment 543 (1 403)Non-current receivables 5 072 5 046 Liabilities - - Tax losses carry -forward (78) (58)Other differences 26 991 17 190 Total 284 126 175 555 Deferred tax assets (-) (847) - Deferred tax (+) 63 519 36 580 Deferred tax (-) / tax assets (+) in balance sheet of 31.12.Tax assets (-)/ deferred tax (+) Norwegian companies 8 786 10 012 Tax assets (-)/ deferred tax (+) foreign companies 53 886 26 568 Total tax assets (-) / deferred tax (+) 62 672 36 580 Amounts in NOK (thousands) 2024 2023Total tax expense for the periodTaxes payable on this years profit 36 091 31 630 Adjusted allocated tax from last year 278 409 Change in deferred tax for Norwegian companies (1 225) (1 349)Change in deferred tax for foreign companies (7 584) (2 049)Total 27 560 28 641 Tax rate 22% 22%Taxes payable for the yearProfit before tax 133 518 136 268 Permanent differences (2 000) (2 955)Change in temporary differences 25 585 16 776 Utilisation of previously unrecognised tax losses - - Basis for taxes payable 157 103 150 089 Basis for income tax expense, changes in deferred tax and tax payable ANNUAL REPORT 49 Amounts in NOK (thousands) 2024 2023Specification of taxes payableTaxes payable on this years profit 34 365 31 865 Advance tax payment, foreign companies (16 950) (8 034)Tax reduction by SkatteFunn grant (2 568) (1 491)Tax obligation related to merger or acquisition 854 63 Carried forward tax compensation - - Total taxes payable 15 700 22 402Amounts in NOK (thousands) 2024 2023Reconciling the tax costEarnings before tax 133 518 136 268 Calculated tax at 22 % 29 374 29 979 Tax result permanent differences and tax rate difference (2 106) (1 910)Use of previously unrecognised loss carried 1 968 (351)forward (-) / Increase in valuation allowanceAdjusted allocated tax from last year (1 676) 922 Tax expense 27 560 28 640 Deferred tax assets are recognized when the Group can document future taxable profits to utilize the tax asset per company. The deferred tax asset is recognized for the amount corresponding to the expected taxable profit based on the convincing evidence. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that convincing evidence no longer exists for the utilization. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that convincing evidence exists supporting that taxable profits will allow the deferred tax asset to be recovered. The actual outcome of future tax costs may deviate from these estimates. 2024 50 NOTE 21 OTHER OPERATING EXPENSES Amounts in NOK (thousands) 2024 2023Miscellaneous office expenses 7 152 3 505 Office premises 5 401 4 930 Fixtures and fittings 5 869 4 238 External services 22 577 17 459 Travel and vehicle expenses 4 742 3 436 Marketing 19 957 14 937 Loss on receivables 3 595 828 Transaction costs on acquisitions 5 458 221 Other 9 128 8 061 Total 83 879 57 616 Audit fees The Group has the following audit related fees, provided by our elected auditor, included in the legal and audit fees in the table above (all figures excl. VAT). The table below shows the remuneration to the group auditors in 2024 and 2023. Amounts in NOK (thousands) 2024 2023Statutory audit 2 476 1 723 Other audit related services 276 - Total 2 752 1 723 ANNUAL REPORT 51 NOTE 22 FINANCIAL ITEMS Financial items Amounts in NOK (thousands) 2024 2023Interest income 4 781 3 544 Exchange rate gains 15 799 25 795 Other financial income 578 180 Financial income 21 158 29 520 Interest expense 981 388 Interest expense on lease liabilties 1 815 776 Exchange rate losses 16 787 21 554 Other financial expense 120 51 Financial expense 19 703 22 768 Net financial items 1 455 6 752 NOTE 23 TANGIBLE ASSETS Tangible assets consisting of office equipment and vehicles are recognized at acquisition cost. The carrying value is comprised of the historical cost less accumulated depreciation and accumulated impairment losses (if any). Depreciation expenses are measured on a straight-line basis over the estimated useful life of the asset, commencing when the asset is ready for its intended use. At each financial year-end SmartCraft reviews the residual value and useful life of its assets, with any estimate changes accounted for prospectively over the remaining useful life of the asset. 2024 52 Amounts in NOK (thousands) Vehicles Office equipment TotalBalance SmartCraft 01.01.2024 1 122 11 457 12 578 Additions - 3 558 3 193 Acquisitions of a subidiary - 570 570 Disposals - (170) (170)Foreign currency translation effect - (238) 127 Acquried cost 31.12.2024 1 122 15 177 16 298 Accumulated depreciation and impairmentBalance SmartCraft 01.01.2024 560 9 018 9 578 Depreciation of the year 207 1 688 1 895 Impairment of the year - - - Accumulated depreciation disposals - (130) (130)Foreing currency translation effect - 101 101 Accumulated depreciation and impairments 31.12.2024 767 10 676 11 443 Carrying value 31.12.2024 354 4 501 4 855 Amounts in NOK (thousands) Vehicles Office equipment TotalBalance SmartCraft 01.01.2023 1 122 9 676 10 797 Additions - 1 474 1 474 Acquisitions of a subidiary - 34 34 Disposals - - - Foreign currency translation effect - 273 273 Acquried cost 31.12.2023 1 122 11 457 12 578 Accumulated depreciation and impairmentBalance SmartCraft 01.01.2023 353 7 131 7 483 Depreciation of the year 207 1 691 1 898 Impairment of the year - - - Accumulated depreciation disposals - - - Foreing currency translation effect - 196 196 Accumulated depreciation and impairments 31.12.2023 560 9 018 9 578 Carrying value 31.12.2023 562 2 439 3 001 NOTE 24 LEASING Office buildings consist of leased assets (right- of-use assets). The Group has contracts divided into the category’s office buildings, vehicles and machinery. Short-term and low-value leases are excluded from the lease accounting. When measuring leases, SmartCraft includes fixed lease payments for extension periods reasonably certain to be used. As a practical expedient, non- lease components are not separated from lease contracts, and not recognized but expensed in the period when the lease expense is incurred. Judgement is applied in assessing whether renewal options are reasonably certain to be utilized. ANNUAL REPORT 53 Office buildings Vehicles Machinery (Right-of-use (Right-of-use (Right-of-use Amounts in NOK (thousands)assets)assets)assets) TotalBalance SmartCraft 01.01.2024 49 587 8 540 645 58 772 Additions and adjustments 11 963 1 808 - 13 770 Acquisitions of a subidiary 555 - - 555 Disposals (581) (2 330) (645) (3 556)Foreign currency translation effect 670 128 - 798 Acquried cost 31.12.2024 62 194 8 146 - 70 340 Accumulated depreciation and impairmentBalance SmartCraft 01.01.2024 28 450 5 022 645 34 117 Depreciation of the year 10 495 1 961 - 12 457 Impairment of the year - - - - Accumulated depreciation disposals (10 453) (1 151) (645) (12 249)Foreign currency translation effect 508 97 - 605 Accumulated depreciation and impairments 31.12.2024 29 000 5 929 (0) 34 929 Carrying value 31.12.2024 33 194 2 217 0 35 411 Balance SmartCraft 01.01.2023 32 931 4 863 645 38 439 Additions and adjustments 15 772 3 340 - 19 112 Acquisitions of a subidiary 571 613 - 1 185 Disposals (619) (282) - (901)Foreign currency translation effect 932 6 (0) 938 Acquried cost 31.12.2023 49 587 8 540 645 58 772 Accumulated depreciation and impairmentBalance SmartCraft 01.01.2023 20 401 3 242 645 24 288 Depreciation of the year 7 629 1 945 - 9 574 Impairment of the year - - - - Accumulated depreciation disposals (236) (110) - (345)Foreign currency translation effect 655 (55) - 600 Accumulated depreciation and impairments 31.12.2023 28 450 5 022 645 34 117 Carrying value 31.12.2023 21 137 3 519 0 24 656 Depreciation expenses are measured on a straight-line basis over the contract period of the asset, commencing when the asset is ready for its intended use. 2024 54 Lease liabilities Amounts in NOK (thousands) 31.12.2024 31.12.2023Current lease liabilities 12 886 10 360 Non-current lease liabilites 23 281 14 764 Balance at the beginning of the period 25 124 14 604 Cash changesPayment to lessor (12 278) (9 964)Non-cash changesInitial recognition 17 218 4 530 Buisness combinations 555 1 185 Accrued interest 1 825 778 Lease modifications 4 525 13 491 Foreign currency translation effect (802) 501 Balance at the end of the period 36 167 25 124 Total undiscounted lease liabilities Amounts in NOK (thousands) Maturity analysis Total 2024Less than 1 year 13 286 13 286 1-2-years 12 032 12 032 2-3 years 7 054 7 054 3-4 years 6 930 6 930 4-5 years 2 035 2 035 More than 5 years - - Total undiscounted lease liability 41 336 41 336 The SmartCraft Group has some leases that are not accounted for as right-of-use assets and lease liabilities at the balance sheet date because they are exempted as low-value or short-term Expenses related to the right of use assets and lease liabilites recongized in the P&L 2024 2023Total lease expenses related to short-term or low value leases 774 972 Depreciation 12 457 9 574 Interest on lease liabilites 1 825 778 Total expenses from leases recognized in the P&L 15 056 11 324 The Group has not included any extension options in recognizing right-of-use assets and lease liabilities, based on the high level of uncertainty regarding future needs. leases. The amount of the future minimum lease payments due under these leases is considered to not be material. ANNUAL REPORT 55 NOTE 25 SUBSIDIARIES AND SHAREHOLDERS The consolidated Group financial statements include the financial statements of SmartCraft ASA and the subsidiaries listed in the following table: Voting Functional Ownershiprights Acquired LocationcurrencySMCRT MGMT 1 AS 81% 81% 2022 Hønefoss, Norway NOKSMCRT MGMT 2 AS 80% 80% 2024 Hønefoss, Norway NOKSmartCraft Software AS 99,7 % 99,7 % 2022 Hønefoss, Norway NOKSmartCraft Tech AS (indirect) 100% 100% 2024 Hønefoss, Norway NOKSmartCraft Tech Sweden AB (indirect) 100% 100% 2024 Gothenburg, Sweden SEKSmartCraft Norway AS (indirect) 100% 100% 2021 Hønefoss, Norway NOKSmartCraft Sweden AB (indirect) 100% 100% 2018 Gothenburg, Sweden SEKBygglet AB (indirect) 100% 100% 2018 Gothenburg, Sweden SEKEl-Info i Växjö AB (indirect) 100% 100% 2019 Växjö, Sweden SEKCoredination AB (indirect) 100% 100% 2023 Stockholm, Sweden SEKLocka Group AB (indirect) 100% 100% 2024 Trollhättan, Sweden SEKLocka Software AB (indirect) 100% 100% 2024 Trollhättan, Sweden SEKLocka Service AB (indirect) 100% 100% 2024 Örebro, Sweden SEKCongrid Oy (indirect) 100% 100% 2020 Helsinki, Finland EURClixifix Limited (indirect) 100% 100% 2024 Houghton Le Spring, UK GBP When establishing the LTIP invited personnel signed up for 20% of the shares in SMCRT MGMT 1 AS. Changes in ownership for SMCRT MGMT 1 AS is due to exit of management investors. The LTIP has been extended further in 2024 and invited personnel signed up for 20% of the shares in SMCRT MGMT 2 AS for a total of TNOK 4 720. Changes in non-controlling interests is due to changes in participants in the LTIP during 2024 and the establishment of SMCRT MGMT 2 AS. All subsidiaries follow the same financial calendar as the Group with year-end on December 31st. As of December 31st 2024, SmartCraft ASA had a share capital of NOK 1 715 223 distributed in 171 522 305 common shares, each with a nominal value of NOK 0,01. Each share grants 1 voting right. As part of the acquisition of Clixifix Limited SmartCraft ASA has committed to transfer 177 353 of its treasury shares as a part of the settlement. 2024 56 SmartCraft ASA shareholders as of December 31st, 2024 Number of Percent of Shareholderscommon sharesshareholdingValedo Partners III AB 67 903 692 39,6 %State Street Bank and Trust Comp 21 454 787 12,5 %Bernt Ulstein (via B. Ulstein AS) 10 741 975 6,3 %Jefferies LLC 7 783 342 4,5 %1SmartCraft ASA (Treasury shares) 4 506 204 2,6 %HSBC Bank Plc 4 078 648 2,4 %Société Générale 3 439 481 2,0 %Svenska Handelsbanken AB 2 843 168 1,7 %J.P. Morgan SE 2 211 887 1,3 %Interactive Brokers LLC 2 206 598 1,3 %BNP Paribas 2 377 564 1,4 %Mustad Industrier AS 2 100 000 1,2 %Gustav Line (via Line Invest AS) 1 278 025 0,7 %Gunnar Haglund, Chairperson of the Board (via Skarvhaugen Förvaltning AB) 1 004 800 0,6 %Mette Kamsvåg, Deputy Chairperson of the Board 16 500 0,0 %Isabella Alveberg, Board member 575 0,0 %Kjartan Bø, CFO (via KBI AS) 250 000 0,1 %Christian Saleki, CTO 18 149 0,0 %Katja Widlund, CMO 70 809 0,0 %Other (< 1%) 37 236 101 21,7 %Total 171 522 305 100.0 % 1. There were performed transactions 27.12.2024 and 30.12.2024 where SmartCraft ASA purchased additionally 3 351 and 755 treasury shares. Due to holidays these transactions were not registered in VPS pr 31.12.2024. ANNUAL REPORT 57 SmartCraft ASA shareholders as of December 31st, 2023 Number of Percent of Shareholderscommon sharesshareholdingValedo Partners III AB 67 903 692 39,6 %State Street Bank and Trust Comp 25 103 311 14,6 %Bernt Ulstein (via B. Ulstein AS) 11 306 975 6,6 %HSBC Bank Plc 4 264 661 2,5 %Svenska Handelsbanken AB 3 082 918 1,8 %1SmartCraft ASA (Treasury shares) 3 053 862 1,8 %The Northern Trust Comp, London Br 2 760 410 1,6 %Swedbank AB 2 654 120 1,5 %BNP Paribas 2 377 564 1,4 %Skandinaviska Enskilda Banken AB 2 344 420 1,4 %State Street Bank and Trust Comp 2 336 700 1,4 %BNP Paribas 2 335 165 1,4 %J.P. Morgan SE 2 211 887 1,3 %Gustav Line (via Line Invest AS) 2 078 025 1,2 %CACEIS Bank 2 066 831 1,2 %State Street Bank and Trust Comp 2 060 271 1,2 %Mustad Industrier AS 1 900 000 1,1 %Gunnar Haglund, Chairperson of the Board (via Skarvhaugen Förvaltning AB) 1 004 800 0,6 %Marianne Bergman Røren, Board member 5 617 0,0 %Maria Danell, Board member 5 617 0,0 %Isabella Alveberg, Board member 575 0,0 %Kjartan Bø, CFO (via KBI AS) 298 000 0,2 %Christian Saleki, CTO 18 149 0,0 %Katja Widlund, CMO 70 809 0,0 %Other (< 1%) 30 277 926 17,7 %Total 171 522 305 100.0 % 1. There were performed transactions 28.12.2023 and 29.12.2023 where SmartCraft ASA purchased additionally 7 423 and 14 964 treasury shares. Due to holidays these transactions were not registered in VPS pr 31.12.2023. 2024 58 NOTE 26 EARNINGS PER SHARE The calculation of earnings per share is based on the profit of the year attributable to the shareholders of the parent company and a weighted average number of shares outstanding during the year ending 31st December. Treasury shares purchased during the period is excluded in the calculation of weighted average number of shares from the date the shares are purchased. Amounts in NOK (thousands) 2024 2023Profit for the year 105 959 107 628 Profit for the year attributable to non-controlling interests - - Profit for the year attributable to equity holders of SmartCraft ASA 105 959 107 628 Average numbers of common shares 167 907 976 169 575 195 Earnings per share and diluted earnings per share NOK 0,63 0,63 Treasury shares Total outstanding Ytd average 2024acquired sharesoutstanding sharesShares outstanding 01.01.2024 3 076 249 168 446 056 461 496 January 25 284 168 420 772 13 842 929 February 121 422 168 299 350 34 124 763 March - 168 299 350 - April 89 272 168 210 078 10 138 948 May 145 764 168 064 314 12 437 609 June 281 627 167 782 687 13 337 381 July 89 105 167 693 582 14 245 698 August 1 084 167 692 498 43 646 001 September - 167 692 498 - October - 167 692 498 - November 310 425 167 382 073 12 393 430 December 370 078 167 011 995 13 279 722 Shares outstanding 31.12 4 510 310 167 011 995 167 907 976 SmartCraft ASA has during 2024 bought 1 434 061 treasury shares at total of TNOK 40 906. In 2023 SmartCraft bought 2 625 248 treasury shares at total of TNOK 53 508 as part of a share buy-back program. The buy-back program was originally authorized by the Extraordinary General Meeting held November 2nd 2022 and re-authorized by the Annual General Meeting held 2nd April 2024. The program is managed by Carnegie AS. As of December 31st 2024, the SmartCraft Group has no share options, share incentive schemes or employee share purchase programs. ANNUAL REPORT 59 Treasury shares Total outstanding Ytd average 2023acquired sharesoutstanding sharesOutstanding 01.01.2023 451 001 171 071 304 468 689 January 181 932 170 889 372 14 052 480 February 308 406 170 580 966 13 097 738 March 317 364 170 263 602 14 475 943 April 103 325 170 160 277 14 457 058 May 340 678 169 819 599 13 969 068 June 353 348 169 466 251 14 875 986 July 388 840 169 077 411 13 445 339 August 159 231 168 918 180 14 352 398 September 114 446 168 803 734 14 340 746 October 115 240 168 688 494 13 869 878 November 126 784 168 561 710 13 858 821 December 115 654 168 446 056 14 311 051 Shares outstanding 31.12 3 076 249 168 446 056 169 575 195 2024 60 NOTE 27 RELATED PARTIES The sales to and purchases from related parties are made at arm’s length prices. Outstanding balances at the year-end are unsecured, interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. There are no such transactions in 2024 and 2023. All transactions are at arm’s length market prices. NOTE 28 CURRENT AND NON-CURRENT FINANCIAL LIABILITIES NOTE 29 SUBSEQUENT EVENTS There have been no significant subsequent events that could affect the Group financial statements as of 31st December 2024. Current financial liabilities Amounts in NOK (thousands) 31.12.2024 31.12.2023Current portion of loan facilities - - Accrued interest - - Current portion of lease liabilities 12 886 10 360 Other current financial liabilities - 39 Total current financial liabilities at 31.12 12 886 10 399 Non-current financial liabilities Amounts in NOK (thousands) Lease liabilities Financial liabilities Total 2024Less than 1 year 13 286 - 13 286 1-2-years 12 032 - 12 032 2-3 years 7 054 - 7 054 3-4 years 6 930 - 6 930 4-5 years 2 035 - 2 035 More than 5 years - - - Total undiscounted financial liabilities at 31.12 41 336 - 41 336 Covenants There are no financial liabilities related to external loans as of December 31st 2024. The Group has no covenants regarding its financial liabilities. Collateral The Groups had no collateral related to the financial liabilities as of December 31st 2024. ANNUAL REPORT 61 Alternative Performance Measures (APMs) The following terms are used by the Group in definitions of APMs: o EBITDA: Is defined as operating income before depreciation of tangible and intangible non-current assets. o Adjusted EBITDA: Is defined as EBITDA adjusted for special operating items that distorts comparison, such as acquisition related expenses, listing preparation costs and other items which are special in nature compared to ordinary operational income or expenses. o Adjusted EBITDA margin (%): Is defined as Adjusted EBITDA divided by sales, expressed as a percentage. o Adjusted EBITDA – Capex margin (%): Is defined as Adjusted EBITDA – R&D capex divided by sales, expressed as a percentage. o Annual Recurring Revenue (“ARR”): Is defined as a 12 month subscription value of the Group’s customer base at the end of the reporting period. The ARR metric only includes fixed price subscriptions. o Recurring Revenue (%): Is defined as subscription revenue generated over the historical period divided by sales for the same period, expressed as a percentage. Recurring Revenue includes both fixed price and transaction-based subscription revenues. o Average Revenue Per Customer (“ARPC”): Is defined as the annualized monthly total operating revenue divided by the number of customers at the end of the month. o Churn Rate (%): Is a measure of loss of ARR on a rolling 12-month basis, expressed as a percentage of average monthly ingoing ARR for the same 12-month period. 2024 62 Amounts in NOK (thousands) Note 2024 2023 Revenue from customers 8 510 763 401 654 Total operating revenue 510 763 401 654 Amounts in NOK (thousands) Note 2024 2023 EBITDA 184 530 165 721 Adjustments of special items 5 458 1 525 Adjusted EBITDA 189 987 167 245 EBITDA-margin 36.1 % 41.3 % Adjusted EBITDA-margin 37.2 % 41.6 % Amounts in NOK (thousands) Note 2024 2023 Adjusted EBITDA 189 987 167 245 Capitalized development expenses 48 664 37 472 Adjusted EBITDA - CAPEX margin 27.7 % 32.3 % 2024 2023 Annual Recurring Revenue (ARR) (EoP) TNOK 481 958 386 641 Recurring revenue 93.5 % 96.9 % Average Revenue per Customer (ARPC) NOK 38 848 32 452 Churn rate (R12m) 9.2 % 7.2 % ANNUAL REPORT 63 Financial statements - SmartCraft ASA INCOME STATEMENT Operating income and operating expenses Amounts in NOK (thousands) Note 2024 2023 Other revenue 2 13 983 14 289 Total income 13 983 14 289 Cost of sold goods 73 - Employee benefits expense 3 17 022 15 719 Depreciation and amortisation expenses 4 58 50 Other expenses 3, 5 9 991 7 640 Total expenses 27 144 23 409 Operating profit (13 161) (9 120) Financial income and expenses Income from subsidiaries 28 829 1 911 Interest income from group companies 12 405 6 818 Other interest income 6 4 550 3 237 Other financial income 6 10 660 25 108 Interest expense to group companies 12 359 5 332 Other interest expenses 6 6 278 Other financial expenses 6 7 148 20 961 Net financial items 36 930 10 503 Net profit before tax 23 770 1 383 Income tax expense 7 514 290 Net profit / loss 8 23 256 1 093 Distributed profit / loss Other equity 23 256 1 093 Total distributed 23 256 1 093 2024 64 BALANCE SHEET Assets Amounts in NOK (thousands) Note 2024 2023 Non-current assets Trademark and other intangible assets 353 399 Total intangible assets 4 353 399 Equipment and other movables 4 43 12 Total property, plant and equipment 4 43 12 Non-current financial assets Investments in subsidiaries 9 524 337 508 119 Total non-current financial assets 524 337 508 119 Total non-current assets 524 732 508 531 Current assets Debtors Other short-term receivables 1 040 371 Receivables from group companies 10 63 658 128 100 Total receivables 64 698 128 471 Cash and cash equivalents 11 88 431 178 616 Total current assets 153 128 307 087 Total assets 677 860 815 618 ANNUAL REPORT 65 Equity and liabilities Amounts in NOK (thousands) Note 2024 2023 Equity Contributed equity Share capital 12 1 715 1 715 Treasury stock 12, 13 (45) (31) Share premium reserve 605 893 605 893 Total contributed equity 607 563 607 577 Retained earnings Other equity (8 681) 8 910 Total retained earnings (8 681) 8 910 Total equity 8 598 882 616 487 Liabilities Deferred tax 7 1 627 1 113 Total provisions 1 627 1 113 Current liabilities Trade payables 2 914 324 Tax payable 7 - 247 Public duties payable 534 512 Liabilities to group companies 10 70 289 194 125 Other current liabilities 14 3 614 2 810 Total current liabilities 77 351 198 018 Total liabilities 78 978 199 131 Total equity and liabilities 677 860 815 618 2024 66 April 9th, 2025 Board of Directors and CEO, SmartCraft ASA Bernt Ulstein Board member Eva Hemb Board member Gustav Line CEO Isabella Alveberg Board member Carl Ivarsson Board member Gunnar Haglund Chairman of the Board Mette Kamsvåg Deputy Chairperson of the Board Allan Engström Board member ANNUAL REPORT 67 INDIRECT CASH FLOW Amounts in NOK (thousands) Note 2024 2023 Cash flows from operating activities Profit/loss before tax 23 770 27 903 Paid taxes 248 (1 146) Gained sale of shares 5 (21 312) (131) Ordinary depreciation 58 50 Change in accounts payable 2 590 92 Change in other accrual items 157 (985) Net cash flows from operating activities 5 015 6 053 Cash flows from investment activities Investments in tangible assets (42) - Proceeds from sale of shares 23 973 331 Investments in shares and participations in other companies (18 879) (533) Net cash flows from investment activities 5 053 (202) Cash flows from financing activities Group contributions - 24 166 Change in intercompany debt 64 448 (39 647) Change in cashpool account (123 836) 186 244 Payment of threasure shares 13 (40 865) (53 508) Net cash flows from financing activities (100 254) 117 255 Net change in cash and cash equivalents (90 186) 111 000 Cash and cash equivalents at the start of the period 178 616 67 617 Cash and cash equivalents at the end of the period 11 88 431 178 616 2024 68 ACCOUNTING PRINCIPLES The annual accounts have been prepared in conformity with the provisions of the Norwegian Accounting Act and good accounting practice. Use of estimates In the preparation of the annual accounts estimates and assumptions have been made that have affected the profit and loss account and the valuation of assets and liabilities, and uncertain assets and liabilities on the balance sheet date in accordance with generally accepted accounting practice. Areas which to a large extent contain such subjective evaluations, a high degree of complexity, or areas where the assumptions and estimates are material for the annual accounts, are described in the notes. Revenues Services are posted as income as they are delivered. The company provides management services for the other companies in the SmartCraft Group. Tax The tax charge in the profit and loss account consists of tax payable for the period and the change in deferred tax. Deferred tax is calculated at the tax rate at 22 % on the basis of tax-reducing and tax-increasing temporary differences that exist between accounting and tax values, and the tax loss carried forward at the end of the accounting year. Tax-increasing and tax-reducing temporary differences that reverse or may reverse in the same period are set off and entered net. The net deferred tax receivable is entered on the balance sheet to the extent that it is likely that it can be utilised. Classification and valuation of fixed assets Fixed assets consist of assets intended for long- term ownership and use. Fixed assets are valued at acquisition cost less depreciation and write-downs. Long-term liabilities are entered on the balance sheet at the nominal amount at the time of the transaction. Plant and equipment is capitalised and appreciated over the economic lifetime of the asset. Significant items of plant and equipment that consist of several material components with different lifetimes are broken down in order to establish different depreciation periods for the different components. Direct maintenance of plant and equipment is expensed on an ongoing basis under operating costs, while additions or improvements are added to the asset’s cost price and depreciated in line with the asset. Plant and equipment is written down to the recoverable amount in the event of a fall in value that is not expected to be temporary. The recoverable amount is the higher of the net sales value and the value in use. Value in use is the present value of future cash flows related to the asset. The write-down is reversed when the basis for the write-down is no longer present. Classification and valuation of current assets Current assets and short-term liabilities consist normally of items that fall due for payment within one year of the balance sheet date, as well as items related to the stock cycle. Current assets are valued at the lower of acquisition cost and fair value. Short-term liabilities are entered on the balance sheet at the nominal amount at the time of the transaction. Subsidiaries and associated companies Subsidiaries and associated companies are valued using the cost method in the company accounts. The investment is valued at acquisition cost for the shares unless a write-down has been necessary. A write-down to fair value is made when a fall in value is due to reasons that cannot be expected to be temporary and such write-down must be considered as necessary in accordance with good accounting practice. Write-downs are reversed when the basis for the write-down is no longer present. Dividends, group contributions and other distributions from subsidiaries are posted to ANNUAL REPORT 69 income in the same year as provided for in the distributor’s accounts. To the extent that dividends/ group contributions exceed the share of profits earned after the date of acquisition, the excess amounts represents a repayment of invested capital, and distributions are deducted from the investment’s value in the balance sheet of the parent company. Receivables Receivables from customers and other receivables are entered at par value after deducting a provision for expected losses. The provision for losses is made on the basis of an individual assessment of the respective receivables. In addition an unspecified provision is made to cover expected losses on claims in respect of customer receivables. Cash flow statement The cash flow statement has been prepared using the indirect method. Cash and cash equivalents consist of cash, bank deposits and other short- term, liquid investments. 2024 70 NOTE 1 FINANCIAL MARKET RISK SmartCraft ASA have a limited activity other than management of group companies. Credit risk The company has a credit risk related to receivables from group companies. The risk of a counterpart not having the financial capacity to fulfil its obligations is considered to be low. Historically, there have been no losses on intercompany receivables. Currency risk The company’s currency exposure is related to intercompany balances being booked in the local currency of the counterpart. As of December 31st, 2024 SmartCraft ASA has financial assets of TEUR 5 855, TSEK 551, TGBP 14 and TUSD 232. The exposure of foreign currency is concidered low. NOTE 2 OTHER REVENUE Amounts in NOK (thousands) 2024 2023 By business area Management services 13 983 14 289 Total 13 983 14 289 Geographic breakdown Norway 13 983 14 178 Sweden - 53 Finland - 58 Total 13 983 14 289 NOTE 3 SALARY COSTS AND BENEFITS, REMUNERATION TO THE CHIEF EXECUTIVE, BOARD AND AUDITOR Salary cost Amounts in NOK (thousands) 2024 2023 Salaries 8 986 7 795 Employment tax 1 419 1 486 Pension costs 309 285 Other benefits 6 443 6 153 Total 17 156 15 719 In 2024 the company employed 4 full time employees. Pension liabilities The company is liable to maintain an occupational pension scheme under the Mandatory Occupational Pensions Act. The company’s pension schemes are defined contribution schemes and satisfy the requirements of this Act. ANNUAL REPORT 71 Remuneration to leading personnel Amounts in NOK (thousands) Chief Executive Officer Board Salaries 2 752 - Pension costs 90 - Other remuneration 571 1 196 Total 3 413 1 196 If the company terminates the employment the CEO is entitled to 6 monts’ salary after a 6 month termination period. There are no loans or collateral granted the CEO or members of the Board. SmartCraft ASA has prepared a report for remuneration to leading personnel in accordance with the Accounting Act § 7-31b. Auditor Remuneration to the elected auditor for 2024 amount to TNOK 1 260 ex. vat. where TNOK 156 is related to audit related services. NOTE 4 INTANGIBLE AND TANGIBLE ASSETS Amounts in NOK (thousands) Fixtures and office equipment Trademark and other intangible assets Total Purchase cost as of 01.01.24 17 464 481 Inflow purchased fixed assets 42 - 42 Acquisition cost 31.12.2024 59 464 522 Accumulated depreciations 31.12.24 16 112 128 Book value 31.12.2024 43 352 395 This year’s ordinary depreciation 11 47 58 Economic lifetime 5 years 10 years Decreciation plan Linear Linear NOTE 5 INDIVIDUAL TRANSACTIONS In 2024 the group expanded the long term investment program and established SMCRT MGMT 2 AS. As part of the establishment of SMCRT MGMT 2 AS 13 342 521 shares in SmartCraft Software AS were sold from SmartCraft ASA to SMCRT MGMT 2 AS. 2024 72 NOTE 6 ITEMS THAT ARE AGGREGATED IN THE ACCOUNTS Financial income Amounts in NOK 2024 2023 Interest income CashPool 4 550 3 237 Agio 10 660 25 108 Total financial income 15 210 28 344 Financial costs Amounts in NOK 2024 2023 Interest costs from companies in the same group - - Interest and provisions for CashPool 6 213 Other interest expenses - 65 Disagio 7 148 20 961 Total financial costs 7 154 21 239 ANNUAL REPORT 73 NOTE 7 TAX This year’s tax expense Amounts in NOK (thousands) 2024 2023 Entered tax on ordinary profit/loss: Payable tax - 247 Changes in deferred tax 514 43 Tax expense on ordinary profit/loss 514 290 Taxable income: Ordinary result before tax 23 770 1 383 Permanent differences (28 948) (1 843) Changes in temporary differences (2 338) (197) Received intra-group contribution 7 516 1 780 Taxable income . 1 123 Payable tax in the balance: Payable tax on this year's result (1 654) (145) Payable tax on received Group contribution 1 654 392 Total payable tax in the balance - 247 Calculation of effective tax rate Profit before tax 23 770 1 383 Calculated tax on profit before tax 5 229 304 Tax effect of permanent differences (4 715) (14) Total 514 290 Effective tax rate 2.2% 21.0% The tax effect of temporary differences that has formed the basis for deferred tax and deferred tax advantages, specified on type of temporary differences Amounts in NOK (thousands) 2024 2023 Difference Tangible assets 13 12 (1) Long-term receivables and liabilities in foreign currency 7 383 5 046 (2 337) Total 7 396 5 058 (2 338) Basis for deferred tax 7396 5 058 (2 338) Deferred tax (22%) 1 627 1 113 (514) 2024 74 NOTE 8 EQUITY Share capital Own shares Share premium Other equity captial Total equity capital Pr. 31.12.2023 1 715 (31) 605 893 8 914 616 491 Purchase of own shares - (14) - (40 851) (40 865) Result of the year - - - 23 256 23 256 Pr. 31.12.2024 1 715 (45) 605 893 (8 681) 598 882 NOTE 9 SUBSIDIARIES, ASSOCIATED COMPANIES ETC. Amounts in NOK (thousands) Subsidiary Office Acquisition registered Ownership interest Book value Share of equity Share of result SmartCraft Software AS Hønefoss, NOR 2022 99 % 485 783 505 347 - SMCRT MGMT 1 AS Hønefoss, NOR 2022 82 % 19 675 19 877 3 SMCRT MGMT 2 AS Hønefoss, NOR 2024 80 % 18 879 18 833 (6) Total 524 337 NOTE 10 INTERCOMPANY ITEMS BETWEEN COMPANIES IN THE SAME GROUP ETC. Customer receivables Other receivables Amounts in NOK (thousands) 2024 2023 2024 2023 SmartCraft Software AS 3 509 - 7 516 (988) SmartCraft Norway AS 943 - - 95 518 SmartCraft Sweden AB 12 - - 26 813 SmartCraft Finland Oy 49 - 51 252 46 681 Clixifix Ltd 37 - - - Bygglet AB 60 - - (378) EL-Info i Växsjö AB 48 - - (51 603) Coredination AB 10 - - - Locka Software AB 16 - - - Locka Service AB 5 - - - SmartCraft MGMT 1 AS - - 135 128 SmartCraft MGMT 2 AS - - 64 - Cordel Norge AS - - - 2 607 Kvalitetskontroll AS - - - 7 531 Inprog AS - - - 1 790 Total 4 690 - 58 968 128 100 Investments in subsidiaries are recognised according to the cost method in the company’s financial statements. ANNUAL REPORT 75 NOTE 11 BANK DEPOSITS Funds standing on the tax deduction account (restricted funds) are TNOK 334. SmartCraft ASA is the owner of the Cash Pool organized together with: o SmartCraft Norway AS o SmartCraft Software AS o SmartCraft Tech AS o SmartCraft Tech Sweden AB o SmartCraft Sweden AB o Bygglet AB o EL-Info AB o Coredination AB o Locka Group AB o Locka Software AB o Locka Service AB o SmartCraft Finland Oy Debt to suppliers Other liabilities Amounts in NOK (thousands) 2024 2023 2024 2023 SmartCraft Norway AS 24 - 3 372 (25 851) SmartCraft Sweden AB 676 - (22 005) (3 780) Bygglet AB 57 - 158 404 101 992 SmartCraft Software AS - - (124 028) 8 296 SmartCraft Finland Oy - - (11 974) (16 862) EL-Info i Växsjö AB - - 78 814 32 026 Coredination AB - - 2 249 - Locka Software AB - - (17 673) - Locka Service AB - - 4 580 - Locka Group AB - - (1 511) - SmartCraft Tech AS - - 30 - SmartCraft Tech Sweden AB - - 31 - Cordel Norge AS - - - 73 631 Kvalitetskontroll AS - - - 23 160 Inprog AS - - - 1 513 Total 757 - 70 289 194 125 Other liabilities are balances related to the global cash pool. 2024 76 NOTE 12 SHAREHOLDERS Share capital in SmartCraft ASA pr. December 31st 2024 consists of: Total Nominal value Share capital Common shares 171 522 305 0.01 1 715 Total 171 522 305 1 715 Shareholders The largest shareholders as of December 31st 2024 were: Shareholders Number of common shares Percent of shareholding Valedo Partners III AB 67 903 692 39.6 % State Street Bank and Trust Comp 21 454 787 12.5 % B. Ulstein AS (Bernt Ulstein, Board member) 10 741 975 6.3 % Jefferies LLC 7 783 342 4.5 % SmartCraft ASA (treasury shares) 4 506 204 2.6 % HSBC Bank Plc 4 078 648 2.4 % Société Générale 3 439 481 2.0 % Svenska Handelsbanken AB 2 843 168 1.7 % BNP Parabis 2 377 564 1.4 % J.P. Morgan SE 2 211 887 1.3 % Interactive Brokers LLC 2 206 598 1.3 % Mustad Industrier AS 2 100 000 1.2 % Shares owned by Board members and leading personnel Gustav Line, CEO (via Line Invest AS) 1 278 025 0.7 % Gunnar Haglund, Chairperson of the Board (via Skarvhagen Förvaltning AB) 1 004 800 0.6 % Kjartan Bø, CFO (via KBI AS) 250 000 0.1 % Katja Widlund, CMO 70 809 0.0 % Christian Saleki, CTO 18 149 0.0 % Mette Kamsvåg, Deputy Chairperson of the Board 16 500 0.0 % Isabella Alveberg, Board member 575 0.0 % Total Other 37 236 101 21.7 % Total 171 522 305 100.0 % SmartCraft ASA is the parent company in the SmartCraft Group and prepares consolidated accounts which can be handed out at the company’s offices in Strandgata 3, 3513 Hønefoss. ANNUAL REPORT 77 NOTE 13 TREASURY SHARES During 2024 the company acquired 1 434 061 shares in the market at TNOK 40 865. The purchase of shares are in accordance of the share buy-back program authorized by the Annual General Meeting held May 2nd 2024. The buy-back program is managed by Carnegie AS. Development in the company’s purchase of treasury shares Development in the company's own shares Number of shares Par value per share Total amount Amount of share capital Holding as at 1.1.2024 3 076 249 0.01 31 0.3 % Acquisition of own shares 1 434 061 0.01 14 1.5 % Disposal of own shares - - (5) - Holding as at 31.12.2024 4 510 310 0.01 45 1.8 % NOTE 14 PROVISIONS FOR LIABILITIES Short-term provisions Accrued cost Total Balance 01.01.2024 2 810 2 810 Provisions 3 614 3 614 Provisions utilized (2 810) (2 810) Balance 31.12.2024 3 614 3 614 There are no contingent liabilites as of 31.12.2024. 2024 78 ANNUAL REPORT 79 2024 80 ANNUAL REPORT 81 2024 82 5493008ELCGPWZHWUX472024-01-012024-12-315493008ELCGPWZHWUX472023-01-012023-12-315493008ELCGPWZHWUX472024-12-315493008ELCGPWZHWUX472023-12-315493008ELCGPWZHWUX472022-12-315493008ELCGPWZHWUX472022-12-31ifrs-full:IssuedCapitalMember5493008ELCGPWZHWUX472023-01-012023-12-31ifrs-full:IssuedCapitalMember5493008ELCGPWZHWUX472023-12-31ifrs-full:IssuedCapitalMember5493008ELCGPWZHWUX472022-12-31ifrs-full:TreasurySharesMember5493008ELCGPWZHWUX472023-01-012023-12-31ifrs-full:TreasurySharesMember5493008ELCGPWZHWUX472023-12-31ifrs-full:TreasurySharesMember5493008ELCGPWZHWUX472022-12-31ifrs-full:SharePremiumMember5493008ELCGPWZHWUX472023-01-012023-12-31ifrs-full:SharePremiumMember5493008ELCGPWZHWUX472023-12-31ifrs-full:SharePremiumMember5493008ELCGPWZHWUX472022-12-31ifrs-full:RetainedEarningsMember5493008ELCGPWZHWUX472023-01-012023-12-31ifrs-full:RetainedEarningsMember5493008ELCGPWZHWUX472023-12-31ifrs-full:RetainedEarningsMember5493008ELCGPWZHWUX472022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493008ELCGPWZHWUX472023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493008ELCGPWZHWUX472023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493008ELCGPWZHWUX472022-12-31ifrs-full:NoncontrollingInterestsMember5493008ELCGPWZHWUX472023-01-012023-12-31ifrs-full:NoncontrollingInterestsMember5493008ELCGPWZHWUX472023-12-31ifrs-full:NoncontrollingInterestsMember5493008ELCGPWZHWUX472024-01-012024-12-31ifrs-full:IssuedCapitalMember5493008ELCGPWZHWUX472024-12-31ifrs-full:IssuedCapitalMember5493008ELCGPWZHWUX472024-01-012024-12-31ifrs-full:TreasurySharesMember5493008ELCGPWZHWUX472024-12-31ifrs-full:TreasurySharesMember5493008ELCGPWZHWUX472024-01-012024-12-31ifrs-full:SharePremiumMember5493008ELCGPWZHWUX472024-12-31ifrs-full:SharePremiumMember5493008ELCGPWZHWUX472024-01-012024-12-31ifrs-full:RetainedEarningsMember5493008ELCGPWZHWUX472024-12-31ifrs-full:RetainedEarningsMember5493008ELCGPWZHWUX472024-01-012024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493008ELCGPWZHWUX472024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493008ELCGPWZHWUX472024-01-012024-12-31ifrs-full:NoncontrollingInterestsMember5493008ELCGPWZHWUX472024-12-31ifrs-full:NoncontrollingInterestsMemberiso4217:NOKxbrli:sharesiso4217:NOKxbrli:shares