Carasent : Annual Report 2023

ANNUAL REPORT

2023

CARASENT

ANNUAL

REPORT

2023

CARASENT

ANNUAL REPORT

2023

ANNUAL REPORT

2023

TABLE OF CONTENTS

Letter to our shareholders	3
Director´s Report	4
Responsibility Statement	12
Report on Corporate Governance	13
Consolidated Financial Statements 2023	18
Carasent ASA Financial Statements 2023	58
Auditor´s Report	73

LETTER TO OUR SHAREHOLDERS

2023 was a very intense year for the Carasent group, where we implemented a number of comprehensive changes with the goal of setting the group on a clear path towards profitable growth. Carasent had, from a very strong base, grown too quickly and taken on too many projects, which created a need for cost savings, prioritizations, and to focus on the customer.

The first thing we implemented was a savings program of just over 40 MNOK annually concerning employees and consultants. This went hand in hand with a simplified structure of the organization for increased efficiency and quality, which means that despite a lower cost base, we have a large capacity to continue developing our products. At the same time, we set up an internal leadership structure with clear accountability for results with clear goals for growth and profitability. By creating this clarity, it becomes much easier for everyone in the organization to see and take their responsibility.

Furthermore, we previously ran too many concurrent projects. Where we, above all, had two international projects; Webdoc Norway and Webdoc X. Both aimed at new markets, and we are too small to take on two such projects at the same time. We, therefore, prioritized the one with the greatest potential in relation to risk and focused on Webdoc X. This is because it targets a significantly larger market, with lower competition and a more modern platform. To further increase the probability of success, we narrowed down Webdoc X to Germany. It's important to develop towards a clearly defined customer otherwise there's a great risk of building a system that isn't the best for anyone.

To increase growth, we have invested in development projects in close collaboration with our customers and where we increase our total addressable market (TAM). Most important of these is operations planning for Webdoc, which increases the potential market in Sweden and adds long-awaited functionality in an area with limited competition. We have also invested in a new sales and marketing organization and renewed the communication of our products.

These changes we add to the solid base that we have in our existing products with minimal churn and a culture of working closely with our customers. This gives us a strong foundation for 2024 when we shall increase growth while having a lower cost base than before.

DANIEL ÖHMAN

CEO

CARASENT

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HIGHLIGHTS

2023

ABOUT CARASENT ASA

Carasent delivers cloud based EHR solutions, with Webdoc as the leading platform, and a broad ecosystem of platform services, including solutions for patient communication and business intelligence.

Since 2020 five acquisitions have been completed, adding new products to our portfolio, including the EHR solutions Metodika, Ad Curis and Ad Opus, the business intelligence software Medrave and occupational care platform HPI. This provides customers with a full service offering within our systems.

Carasent offers mission-critical solutions like Electronic Health Records (EHR), Medical Clinic Management Software, patient engagement solutions, and business intelligence tools across various health and care sectors. In a world where efficiency and sustainability are

paramount, Carasent ASA is at the forefront of providing solutions that alleviate the burden on the health and care systems.

Our ecosystem of solutions makes Carasent unique. Carasent is a one-stop shop for clinics and can cover all needs. We believe in innovation that offers a new kind of accessibility and availability for patients and practices.

Carasent is on a very exciting journey within the e-health sector, and our ambition is to continue to expand our business both organically and through acquisitions.

Our growth strategy is built on expanding our business through three main dimensions: new products and services, new customer segments and new geographic areas.

April

Carasent concluded that a larger and more attractive market can be reached with less investment by developing Webdoc for new segments in Sweden instead of continuing development of Webdoc for Norway. We continue to have a strong position in Norway through Ad Curis, Ad Opus, Medrave and Metodika.

May

Carasent completed a cost savings program in Q2 with savings of around NOK 40 million on a yearly basis.

September

November

Carasent and Volvat Medisinske Senter entered into an agreement to implement the EHR system Metodika EPM. Annual revenue from the contract is estimated to 7-9 MNOK. It is expected that the first centres will start using Metodika EPM by the second half of 2024.

Capital markets day hosted for shareholders, analysts and potential investors.

Updated financial targets targeting average annual organic revenue growth above 15% during 2024 to 2026. Carasent also targets improved profitability, with reported EBITDA margin reaching 25% by 2026 and a reported EBITDA - capex margin to reach 15% by 2026.

Cash dividend of NOK 133 million distributed in Q4.

DEVELOPMENT 2023

2023 has been another transformative year for Carasent. An extensive strategic review process was completed during the spring which resulted in a revised strategic direction for the group. We concluded that a larger and more attractive market can be reached with less investment by developing Webdoc for new segments in Sweden instead of continuing development of Webdoc for Norway. At the same time the company concluded that operating costs were too high resulting in a cost reduction program with yearly savings of NOK 40 million, primarily by reducing the number of consultants and full-time employees. We simplified the organization through a more decentralized organizational structure with a key focus on financial performance and the business development. Carasent has set the foundation for future scalable growth through a more manageable cost structure and less complexity.

We reiterate our market view. The market development, seen from a fundamental perspective - that is, the need for a growing healthcare sector and need for new value-creating and effective digital solutions - is very strong. The background to this is the underlying non-cyclical trends, with a growing aging population and an increasing demand for healthcare.

Following a review of the Company's capital structure, the Board has decided to reduce the Company's significant net cash position by returning NOK 250 million to shareholders. The Board's view is that following this reduction in net cash position the Company still has a strong balance sheet allowing for an expansive agenda. The Distribution was effected by way of a share buyback and an additional cash distribution.

On 28 September Carasent resolved to buy 7,295,747 shares at price per share of NOK 16.00 after the end of a reverse book building process. As such, the total share repurchase amounting to 116,731,952 NOK, was settled on 3 October.

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PERFORMANCE AND FINANCIAL SUMMARY

ANNUAL REPORT

2023

We continued to grow rapidly during 2023. We are addressing a growing market and our revenue streams are very sticky with limited churn. For 2023 the revenue ended at NOK 244.0 (195.3) million representing a revenue growth of 25%. Organic revenue growth year-over-year (YoY) amounted to 12% and organic recurring revenue growth YoY was 13%. The remaining growth was driven by the 2022 acquisitions of Confrere and HPI and currency effects.

Our customers continue to grow and demand more services. We are also investing into product development and sales & marketing to enable a continued strong inflow of new customers, driving long term organic growth.

Carasent's market position remains robust with industry-leading solutions addressing non-cyclical and growing markets.

NOK million, consolidated figures	FY 2023	FY 2022	FY 2021	FY 2020
Revenue	244.0	195.3	137.1	70.6
Reported EBITDA	13.3	32.7	33.0	16.1
Adjusted EBITDA1	21.3	46.3	45.5	23.3
Adjusted EBITDA margin1	9%	24%	33%	33%
Net Operating Income (EBIT)	-77.5	-1.4	9.6	3.4
Adjusted EBIT1	-20.7	18.9	26.1	14.3
Adj. EBIT margin1	-9%	10%	19%	20%
1: See - Alternative Performance Measures

Cash flow from operating activities was NOK -4.5 (33.6) million in 2023. Cash flow from investing activities was NOK -55.5(-209.5) million.

Cash flow from financing activities was NOK -263.3(-10.2) million, including shareholder distributions of NOK 250 million. Net change in cash in the period was NOK -323.4(-186.5) million, ending the year with NOK 373.9 million in cash.

Carasent ASA is the parent company and contains mainly corporate functions. Revenues are sale of Group services to other Group companies. Expenses are mainly consultancy fees and employee compensation.

For 2023, Carasent ASA recorded revenues of NOK 28.3 million and net income of NOK 20.9 million.

INVESTMENTS

INVESTMENTS IN TANGIBLE AND INTANGIBLE ASSETS

The investment in tangible and intangible assets, including the asset acquisition of Confrere in 2022, increased to NOK 69.2 million. Capitalized development totaled NOK 65.5 (79.3) million, of which NOK 33.6 million was related to new initiatives and the remaining NOK 31.9 million was related to expansion of our existing markets.

of years, a considerable part of the Company's R&D capacity has been invested in adopting Webdoc for the Norwegian market. The strategic review process executed during 2023 concluded that Webdoc's total addressable market ("TAM") in Sweden is roughly 800 MSEK with current functionality. By investing further development into additional functionality for Webdoc in the Swedish market, the TAM increases further by 500 MSEK to 1.3 BSEK. Looking at the Norwegian market, the necessary development of Webdoc would require at least 3 years, unlocking a market potential of 350 MSEK. Therefore, it was decided to discontinue the development of Webdoc for Norway, and refocus the development efforts on Webdoc Sweden.

DISTRIBUTION TO SHAREHOLDERS

Following a review of the Company's capital structure, the Board has decided to reduce the Company's significant net cash position by returning NOK 250 million to shareholders. The Board's view is that following this reduction in net cash position the Company still has a strong balance sheet allowing for an expansive agenda. The Distribution was effected by way of a share buyback and an additional cash distribution.

On 28 September Carasent resolved to buy 7,295,747 shares at price per share of NOK 16.00 after the end of a reverse book building process. As such, the total share repurchase amounting to 116,731,952 NOK, was settled on 3 October.

Adjusted EBITDA ended at NOK 21.3 (46.3) million. Adjusted EBITDA was adjusted for non-recurring expenses of NOK 8.0 million in 2023, out of which NOK

4.4 million were restructuring costs related to the cost savings program, and the remaining 3.6 million related to M&A costs (1.2 million), share based payments (0.8 million) and the strategy process (1.6 million).

Reported EBITDA amounted to NOK 13.3 (32.7) million.

Adjusted EBIT ended at NOK -20.7 (18.9) million. Adjusted EBIT is adjusted for non-recurring expenses, derecognition of intangible assets of NOK 40 million and non-cash amortization of NOK 9.0 million. Net Operating Income (EBIT) ended at -77.5(-1.4).

Carasent concluded that running costs were too high and completed a savings program in Q2 with yearly savings

of NOK 40 million. The majority of the savings had full effect from Q3. The cost savings were primarily related to capital expenditures not affecting EBITDA margins. We are continuing to invest into future growth and our operations are in most areas scaled to manage larger volumes.

The majority of the business is gradually improving and delivering strong results. Three products that account for only 16% of total revenues have had a significant adverse impact on revenue growth and margins for the group during 2023. Ad Opus and HPI have reduced costs significantly during the year and has new products that is receiving promising signs from the market. Confrere has been sold after the end of the year as it doesn't fit into our ecosystem concept, and standalone video solutions face fierce competition.

Capitalized development costs related to existing markets included development of existing and upcoming products in our existing markets, including e-referral and surgery functionality for Webdoc in Sweden. The investment into new initiatives is related to our new platform for the German market, Webdoc X. This initiative currently requires significant investments in product development and does not yet generate any material revenues.

DISCONTINUING WEBDOC NORWAY

We concluded that a larger and more attractive market can be reached with less investment by developing Webdoc for new segments in Sweden instead of continuing development of Webdoc for Norway. Therefore, intangible assets of NOK 40 million was derecognized in Q2 2023.

Carasent, through its leading product Webdoc, holds a strong position in the Swedish market. In the last couple

An Extraordinary General Meeting on 14 November approved a cash dividend of NOK 133 million bringing the total distribution, across the share repurchase and the extraordinary cash distribution, up to NOK 250 million.

CHANGES IN BOARD AND

MANAGEMENT

In April, the Nomination Committee of Carasent ASA proposed that alternate Board Member Tomas Meerits was elected as new Board Member at the Annual General Meeting on 3 May, 2023. The new Board Member replaced Terje Rogne.

In November 2023, Staffan Hanstorp decided to step down from the Board of Directors after being part of the Board since 2021.

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FINANCIAL TARGETS

In November, Carasent updated its financial targets for long-term revenue growth and profitability. The updated targets was presented in detail at the Capital Markets Day held on 7 November 2023.

Carasent is targeting average annual organic revenue growth above 15% during 2024 to 2026. We are also targeting improved profitability, with reported EBITDA margin reaching 25% by 2026 and a reported EBITDA - capex margin to reach 15% by 2026. The financial targets are intended for a long-term perspective, and there will be variations between quarters.

Carasent is entering an exciting new phase building upon our leading market positions and unique offering. We are currently investing heavily into product development that will drive long-term revenue growth. We aim to grow our revenues considerably faster than our costs during the next few years, leading to increasing margins.

BOARD OF DIRECTORS

Mr. Niemi was appointed Chairman of the Board of Carasent ASA in 2022. Petri Niemi brings extensive experience from the software industry and is currently Chairman of Admicom and LeadDesk, two fast growing and publicly listed SaaS (Software as a Service) companies. Petri was previously a Senior Partner and Head of Technology Investments at CapMan, a private equity firm, and has completed six successful IPOs. Mr. Niemi has a strong track record of value creation in fast growing technology companies through both organic growth and M&A. Petri holds an MSc. in Physics from Helsinki University of Technology

Ms. Skoog was appointed Director of Carasent ASA in 2022. Camilla Skoog has more than 25 years of experience from the software industry with several executive positions across product development and sales. She was previously working as Chief Sales Officer

at Fortnox with responsibility for go-to-market initiatives across the Group. Previous roles include Head of Business Development at Fortnox and product owner at IST. She was also a member of the Group Management Team and Head of business unit Byrån, Fortnox's offering to accounting firms and their clients.

Ms. Sundling was appointed Director of Carasent ASA in 2022. Ulrika Cederskog Sundling has more than 25 years of experience from large corporations and smaller, fast-growing businesses over the last decades. She was at McKinsey & Co in London 1994-2002, in executive roles

at Ericsson for 11 years, and as Deputy CEO at Business Sweden 2016-2019.Current assignment as Chief Growth Officer at Varnish Software, and member of the boards of Carmenta AB and Invest in Norrbotten AB.

Mr. Meerits was appointed Director of Carasent ASA in 2023. Tomas Meerits is a Managing Director at Vitruvian Partners, a leading international growth investor. Tomas joined Vitruvian in 2017 and focuses on public minority investments.

Prior to Vitruvian, Tomas started his career with Cevian Capital, a leading European active investment firm applying private equity strategies to the public markets. After Cevian, he was with private equity firm Triton Partners, where he focused on investment opportunities in the public markets in the Nordic and DACH regions.

Most recently, he founded an investment fund ("Avalon") at Lancelot Asset Management which was focused on active investments in the Nordic public markets.

The Company has obtained a market standard Directors and Officers liability insurance covering the potential liability for the members of the Board and Management related to their roles and responsibilities on behalf of the Company.

ORGANIZATION, WORKING ENVIRONMENT, AND EQUAL OPPORTUNITIES

The Carasent Group have a stimulating and positive work environment with a highly qualified and motivated staff. End of 2023 the Company had 165 employees. No accidents have occurred during 2023. There were no significant absences due to illness in 2023.

The total absence due to sickness was 2.7% relative to the total workhours in the company during the year.

Employment decisions at Carasent are based on merit, qualifications, and abilities. Carasent is an equal opportunity employer, and does not discriminate based on race, religion, color, sex, age, national origin, citizenship, marital status, disability, veteran's status, sexual orientation, or any other characteristic protected by law. This policy applies to all decisions regarding terms, conditions, and privileges of employment.

As of 31 December, 2023, the members of the senior management team consisted of three males and two females while the Board of Directors consisted of two males and two females. The Company's operations do not

pollute the environment.

CORPORATE SOCIAL RESPONSIBILITY

Companies, as well as the society as a whole, are increasingly aware of their obligation to act responsibly in social matters like human rights, employee rights, environmental concerns and anti-corruption. The Board of Directors and Management of Carasent fully support these initiatives.

Being a software company, the overall impact on the environment is considered low. Computers and servers are vital working tools, which requires electric power. The Company has limited use and production of paper as the vast majority of our work is performed and stored electronically. To reduce travel, the employees are encouraged to arrange meetings via Teams, Zoom or similar platforms. Air travels are restricted as much as possible.

The Company is operating in rented, modern and safe office environments with limited exposure to environmental hazards. The biggest threat is considered to be lack of electricity and clean water. The Company has not considered it required to take our own specific actions to mitigate this risk.

Carasent is committed to ensure that both basic human rights and employee rights are respected and fully complied with. In its operations, Carasent strives to ensure that all employees, consultants, contractors and customers adhere to basic human rights. Further, Carasent acknowledges and complies with employee rights and other applicable social issues in all its dealings as an employer.

The Carasent group's internal guidelines and policies concerning environmental issues are covered by various internal documents. Based on the nature of our services and operations, we have not seen a need to develop more detailed internal documents. However, this issue is under constant review, and we are prepared to take further actions if deemed required.

Carasent has identified a couple of environmental, social and governance (ESG) potential risks associated with its business. These include cybersecurity risks, data privacy risks, environmental risks, and supply chain risks.

ENVIRONMENTAL RISKS:

• Energy consumption and carbon emissions associated with data centres and cloud computing services. Risk to our business as data centers

consume electricity, leading to increased demands on local power grids and potentially contributing to energy shortages or strain on existing infrastructure.

• Waste generation from electronic equipment and software development processes. Manufacturing and disposal of these devices require energy and raw materials, improper disposal practices could also be a risk.

SOCIAL RISKS:

• Data privacy and security risks associated with handling sensitive healthcare information.
• Ethical concerns regarding the use of patient data for research and development purposes.
• Risks related to the use of AI and machine learning algorithms that may perpetuate biases or discriminate against certain groups of people.

GOVERNANCE RISKS:

• Compliance with regulations and standards related to privacy, cybersecurity, and software development.
• Risk of legal and regulatory action related to software errors or data breaches.
• Board diversity and composition, including the need for directors with relevant healthcare industry expertise.

Our ESG approach is guided by our commitment to creating long-term value for our stakeholders while operating in an ethical and sustainable manner.

Corruption represents a potential problem for developing fair trade. Due to the nature of our company's business and geographic presence, corruption is not regarded as a real threat to its operation.

Our company has taken various steps to ensure that we operate in compliance with all applicable laws and regulations, protect patient data, promote diversity and inclusion, minimize our environmental impact and support human rights.

All employees are encouraged to act and live in an environmentally friendly way. Our company strives to use environmentally friendly solutions in all of our operations, and we encourage our employees, suppliers and customers to do the same.

The Group has a total of 165 employees as per December, 2023. Further details about the business are provided above.

The Norwegian Transparency Act ("Åpenhetsloven") requires companies to conduct due diligence assessments

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and prepare a report documenting the assessments annually. The due diligence assessments analyzes the risk of adverse impacts on human rights or decent working conditions in own operations, the supply chain and other business relationships. The assessments was carried out in accordance with the OECD Guidelines for Multinational Enterprises.

A report documenting the Company's due diligence assessments in connection with the Transparency Act was made available on the Company's webpage June 2023. This report can be found on our «Investor relations»

page under «Other reports and presentations».

ALLOCATION OF THE RESULT

The Board recommends the following allocation of the net result of Carasent ASA.

(Amounts in NOK 1 000)	2023
Transferred to retained earnings	20 853
Allocated	20 853

FINANCIAL RISKS

A significant part of the Group's activities are in Sweden related to SEK, while financial statements are presented in NOK. Please see footnote 23 for further details on financial risk, including market-, credit- and liquidity risk.

GOING CONCERN

According to the Norwegian Accounting Act, the Board confirms that the requirements for going concern are present, and the accounts are presented under this assumption. Financial forecasts for 2024 and the Group's equity and liquidity position provides the basis for this assessment.

OSLO, NORWAY 21 MARCH 2024

PETRI NIEMI	TOMAS MEERITS	CAMILLA SKOOG
CHAIRMAN OF THE BOARD	BOARD MEMBER	BOARD MEMBER

DANIEL ÖHMAN	ULRIKA CEDERSKOG SUNDLING
CEO	BOARD MEMBER

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RESPONSIBILITY STATEMENT

We confirm, to the best of our knowledge that the financial statements for the Company and the Group for the period 1 January to 31 December 2023 have been prepared in accordance with current applicable accounting standards and give a true and fair view of the assets, liabilities, financial position and profit or loss of the entity and the group taken as a whole. We also confirm that the Board of Directors report includes a true and fair review of the development and performance of the business and the position of the entity and the group, together with a description of the principal risks and uncertainties facing the entity and the group.

OSLO, NORWAY 21 MARCH 2024

PETRI NIEMI	TOMAS MEERITS	CAMILLA SKOOG
CHAIRMAN OF THE BOARD	BOARD MEMBER	BOARD MEMBER

DANIEL ÖHMAN	ULRIKA CEDERSKOG SUNDLING
CEO	BOARD MEMBER

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REPORT ON CORPORATE GOVERNANCE 2023

1. IMPLEMENTATION AND REPORTING ON CORPORATE GOVERNANCE

Carasent Corporate Governance policy is intended to ensure appropriate division of roles and responsibilities between the shareholders, the Board of Directors, and the Executive Management. Carasent emphasizes the importance

of adhering to corporate governance principles consistent with the principles set out in the Norwegian Code of Practice for Corporate Governance as amended 14 October, 2021, and include the equitable and equal treatment of all shareholders; the importance of having independent and qualified people in the Company's governing bodies; ensuring that all financial accounts are audited by qualified, independent auditors; and that information provided by the Company provides a timely and accurate representation of the underlying business activities and results.

The Corporate Governance report is included by reference in the Directors' Report as part of the Company's Annual Report.

2. BUSINESS

The Company's business objective, as defined in the Articles of Association, is to develop, market, and rent out information technology-based solutions and related services to businesses of all sizes.

The Board is responsible for developing goals, strategies and risk profile, as well as securing shareholder values and social responsibility guidelines. While creating shareholder value is a vital objective, the Company is fully committed to ensure that the business operations in all aspects are performed in a sustainable manner. This also means that we in our daily life as well in all our dealings, will strive to reduce our footprint and limit the negative impact on the environment. The focus on sustainability is an integrated part of our business strategy and serves as guideline when developing the business. Many aspects of our core service offering reduces negative impact on the environment, like less need for travel and paper documentation, and increases the quality of healthcare to the patients.

The Company is committed to ensure that we in all our business activities and value creation comply with recognized principles for sustainable development, human rights, social responsibility and ethical behavior, including anti-bribery regulations. Further, we are committed to ensure equal treatment of all our employees independent of race, sex, sexual orientation, mental or physical handicaps or other similar differentiators.

The Board will review the Company's goals, strategies and risk profile annually. The Annual Report includes the Company's objectives and business strategy.

3. EQUITY AND DIVIDENDS

The Company has per 31 December, 2023 a registered share capital of NOK 96,336,609 and 72,324,781 issued shares.

The Extraordinary Shareholder Meeting on 14 November, 2023 resolved to decrease the share capital with 9,717,935.004 from NOK 106,054,543.296 to NOK 96,336,608.292 by deleting 7,295,747 shares owned by the company. The share capital reduction was registered with the Enterprise Register after the balance sheet date.

The Company believes it has sufficient capital to meet its existing objectives, strategy, and risk profile. The Board will aim to achieve the Company's overall objective to increase shareholder value through increased share price and, when appropriate, through dividends in accordance with a transparent dividend policy.

While the focus is on organic growth, the Company will also pursue acquisitions of other companies both within the current business market, but also stay open for other business and geographic markets.

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At the Annual Shareholder Meeting on 3 May, 2023 the Board was granted the authority to increase the Company's share capital by issuance of new shares with a total amount of NOK 10,605,425 through one or several placements. The Board was also granted authority to buy own shares with a maximum number of shares with an aggregate par value of NOK 10,605,425. The authorities are valid until next Annual Shareholder Meeting.

The Board has no other current authorities granted by the Shareholder Meeting related to equity or dividends.

4. EQUAL TREATMENT OF SHAREHOLDERS

The Company has only one class of shares and each share entitles the holder to one vote at the General Meetings. All transactions in the Company's shares will be carried out through the Oslo Stock Exchange or at prevailing Stock Exchange prices.

Shareholders pre-emptive rights will only be waived when this is appropriate and considered to be in the best interest of the Company and its shareholders. The Company will in such situations explain the justification for waiving the preemptive rights in the stock exchange announcement in connection with the increase in share capital.

The Board is committed to treat all shareholders equally.

5. SHARES AND NEGOTIABILITY

During 2022 the Company made one new acquisition, HPI Health Profile Institute AB ("HPI"). Part of the consideration was paid in new shares in Carasent ASA. There were no new acquisitions in 2023.

The Share Purchase Agreements between Carasent ASA and the Sellers of HPI includes a lock-up for all the Sellers and the consideration shares totaling 122,375 shares will not be tradeable until 30 June, 2024.

All other shares in the Company are freely tradable, and there are no restrictions to the shares' negotiability in the Company's Articles of Association.

6. SHAREHOLDERS' MEETINGS

The Company encourages shareholders to participate in shareholders' meetings. Calling notices with agenda, proposed resolutions, and attendance notice are sent to all shareholders no later than 21 days prior to the meeting. There is no formal deadline for the shareholders to confirm attendance to the shareholder meetings. All shareholders have the right to vote through proxies at shareholder meetings.

A proxy form is distributed to all shareholders together with the Calling Notice where each agenda item is listed separately. The proxy form will include information about the procedure for shareholders to be represented through a proxy, including the named person that is available as representative for the shareholders under the proxy. To the extent possible, Board members, the Company's auditor, and members of the Nomination Committee will be present. The Board will ensure that the shareholder meetings will be chaired by an independent chairman.

The shareholder meeting will either be arranged as a physical or electronic meeting. All shareholders has the right to participate electronically, also in physical meetings, unless the Board for specific reasons to refuse such attendance.

All information relating to General Meetings, including proxy form, are posted on the Company's Website (www. carasent.com) as early as possible in advance of a General Meeting and no later than 21 days prior to the meeting. Election of nominated candidates for the Board will be made separately for each candidate.

7. NOMINATION COMMITTEE

The Nomination Committee is described in the Company's Articles of Association and consists of two members. The members of the current Nomination Committee were elected for a 2-year term at the ordinary Shareholder meeting on April 28, 2022. The members of the Nomination Committee are independent of the Board and endeavor to represent the shareholder's joint interests.

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The Nomination Committee's main task is to evaluate and comply with the rules described in Chapter 8 below, the composition and independence of the Board. The Nomination Committee will conclude individual discussions with each Board member and the CEO at least on an annual basis. All recommendations from the Nomination Committee will be justified in writing and associated information will be provided to shareholders at least 21 days prior to the relevant Shareholder meeting.

The Company's General Meeting has approved guidelines for the duties of the Nomination Committee, last revised in the Annual Shareholder Meeting on 28 April, 2022.

Contact information related to the Company's Nomination Committee is provided on the Company's Investor Relations web page.

8. BOARD OF DIRECTORS; COMPOSITION AND INDEPENDENCE

The composition of the Board is designed to ensure that Board members represent the common interest of all shareholders, and represent required and useful expertise in various fields. The composition of the Board ensures independence from main shareholders and that the Board can operate independently of any special interests. The Nomination Committee during 2022 performed a detailed assessment of the Board, including interviews with current Board members.

In May, 2023 alternate Board Member Tomas Meerits was elected as new Board Member, replacing Terje Rogne.

In November, 2023, Staffan Hanstorp stepped down as Board Member.

The Board Member Tomas Meerits is related to Vitruvian Partners who controls directly and indirectly 11 987 332 shares representing 16.57% of total number of shares.

None of the Board members are related to or dependent upon members of the executive management. Neither the Chief Executive Officer nor any other executive personnel are a member of the Board of Directors.

The Chairman of the Board and the other Board members are elected at the General Meeting and the term of all elected Board members is two years, with possibilities for re-election. The Company's Annual Report provides information on each of the Board members, including qualifications and relevant experience.

Members of the Board are encouraged to hold shares in the Company.

9. THE WORK OF THE BOARD OF DIRECTORS

The Board has approved an updated Board Mandate which provides details for the Board's work, including a description of roles and responsibilities for both the Chairman, Board Directors and the CEO, the Board Meetings, reporting, confidentiality and documentation.

The Board Mandate also includes provisions for agreements with close associates in order to ensure that any such agreement is entered into on arm's length principle and no unjustified value is transferred from the Company. Any transactions between the Company and shareholders, members of the Board, members of the Executive Management, or close associates of any such party will only be completed if all conditions in the Public Companies Act and the Board Mandate are fulfilled. It is further stated that if found relevant to secure a fair valuation, a valuation from an independent third party, not being the Company's auditor, will be obtained.

Any agreement with a close associate will be handled and reviewed by at least two Board members with no personal interest in the agreement. Members of the Board and Executive Management are obliged to report if they have a material, direct or indirect, interest in any transaction entered into by the Company. There are currently no such agreements with close associates in place.

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The Board meets regularly both in closed sessions and in face-to-face meetings with the CEO and CFO as the Board deems fit. The Company's auditor will also participate in all relevant Board meetings. All Board members have participated in all Board meeting, with a few exceptions due to unforeseen and valid reasons for absence. The Board members have broad and relevant, diversified competence which include both financial, operational and healthcare business knowledge. For Board member's independence, see Chapter 8 for further details.

The Board has established an Audit Committee with two Board members and the Company's General Counsel as secretary. In addition, the CFO and the Company's auditor participates in the meetings. The Audit Committee has a mandate approved by the Board. The mandate is revised annually during Q3. The Board is considering to establish a Remuneration Committee, but has so far not seen the need as the entire Board has discussed compensation issues related to executive management. The Company has established clearly defined roles, responsibilities and tasks for the Board and management. Further, the Board produces an annual plan detailing its role in developing the Company's strategy as well as the specific objectives for each year. The Board evaluates its work and its competence on an annual basis.

10. RISK MANAGEMENT AND INTERNAL CONTROL

The Board is responsible for ensuring that management establishes and maintains adequate internal control over financial reporting. The Group has grown substantially in 2022 and 2023 which has increased both the awareness and competence related to risk management and internal control. Carasent's internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting, and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

Carasent internal control over financial reporting includes those policies and procedures that:

1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect Carasent's transactions and dispositions of assets;
2. provide reasonable assurance that transactions are recorded, as necessary, to permit preparation of financial statements in accordance with IFRS, and that Carasent's receipts and expenditures are being made only in accordance with authorizations of Carasent's Board and Executive Management; and
3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Carasent's assets that could have a material effect on the financial statements.

There are inherent limitations in the effectiveness of any internal control over financial reporting, including the possibility of human error and the circumvention or overriding of controls. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of the changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. The internal reporting will also include reporting in line with the Company's ethical guidelines and the guidelines for corporate social responsibility.

The Group has clear guidelines for reporting, routines related to financial reporting, implementation of new companies, accounting principles, roles and responsibilities which help to ensure reliable financial reporting. This is available to employees in the Group at all times.

The Group has a defined M&A strategy which together with the daily business include focus and monitoring of various business and operational opportunities. The Group strive to secure that all business dealings are performed in compliance with applicable laws and internal guidelines. Further, that our operations are safe, cost-effective and goal- oriented based on reliable financial handling and reporting.

Carasent's Board believes Carasent's system of internal control provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

ANNUAL REPORT

2023

11. REMUNERATION OF THE BOARD OF DIRECTORS

Compensation for Board members is resolved by the shareholders in the General Meeting based on a written proposal from the Nomination Committee and reflects the responsibility, competence, time commitment, and the complexity of the Company's business.

The Annual Report includes information on all remuneration paid to the Board members, and any remuneration in addition to the normal Director's fee is detailed.

12. REMUNERATION OF EXECUTIVE PERSONNEL

It is an overall objective that the total compensation to the executive management is structured in a way that aligns there interest with the interest of the shareholders. Performance-related compensation is limited. The compensation structure promotes the Company's strategy, long-term interest as well the Company's financial sustainability.

The shareholders have in a General Meeting on 27 October, 2021 approved a policy for salary and other remuneration to senior management. The policy is developed in accordance with the Norwegian Public Limited Liability Companies Act § 6-16a

The Board will to this effect annual issue a report to the General Meeting in accordance with the Norwegian Public Limited Liability Companies Act §6-16b

13. INFORMATION AND COMMUNICATIONS

The Board of Carasent has established guidelines for the Company's reporting of financial and other information to ensure that all shareholders, and the investor market as a whole, are treated equally. Further, the Company has internal guidelines covering market communication through OSE releases. In addition, all financial information is available on Carasent's Website at www.carasent.com

14. TAKE-OVERS

In the event of a take-over bid, the Board will ensure that all shareholders are treated equally and given sufficient information and time to form a view of the offer. The Board would normally not seek to prevent, hinder, or obstruct take-over bids. Further, the Board will, in relevant situations, ensure compliance with the provisions in Chapter 14 of Corporate Governance Guidelines.

15. AUDITOR

The auditor participates in Board meetings that deal with annual accounts. In addition, separate meetings are arranged between the Board of Directors and the auditor when required, and at least once a year where neither the CEO nor other employees are present. The specified remuneration to the auditor is presented for resolution at the Annual meeting. The Company's Audit Committee (see Chapter 9 for further details) has established a policy for approval of non-audit work from the auditor.

Carasent Corporate Governance policy is intended to ensure appropriate division of roles and responsibilities between the shareholders, the Board of Directors, and the Executive Management. Carasent emphasizes the importance

of adhering to corporate governance principles consistent with the principles set out in the Norwegian Code of Practice for Corporate Governance as amended 4 October, 2021, and include the equitable and equal treatment of all shareholders; the importance of having independent and qualified people in the Company's governing bodies; ensuring that all financial accounts are audited by qualified, independent auditors; and that information provided by the Company provides a timely and accurate representation of the underlying business activities and results.

The Corporate Governance report is included by reference in the Directors' Report as part of the Company's Annual Report.

CARASENT

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CARASENT

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ANNUAL REPORT

2023

CONSOLIDATED FINANCIAL STATEMENTS 2023

CONSOLIDATED FINANCIAL STATEMENTS CONSISTS OF

Statement of Income	19
Statement of Comprehensive Income	20
Statement of Financial Position	21
Statement of Cash Flows	23
Statement of Change in Equity	24

OVERVIEW OF NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - General information	25
Note 2 - General Accounting Principles	25
Note 3 - Business Combination	27
Note 4 - Revenue	32
Note 5 - Cost of Sales	34
Note 6 - Employee Compensation and Benefits	34
Note 7 - Other Operational and Administrative Costs	35
Note 8 - Financial Income and Expenses	36
Note 9 - Income Tax	36
Note 10 - Earnings per Share	38
Note 11 - Goodwill and impairment testing	39
Note 12 - Intangible Assets	41
Note 13 - Tangible Assets	43
Note 14 - Customer Receivables	44
Note 15 - Cash and Cash equivalents	45
Note 16 - Leases	45
Note 17 - Fair Value Measurement	48
Note 18 - Share Based Payments	48
Note 19 - Warrants	49
Note 20 - Equity	51
Note 21 - Shareholders of the Group	52
Note 22 - Transaction with Related Parties	53
Note 23 - Financial Risk Management	54
Note 24 - Climate Related Matters	57
Note 25 - Events after the Balance Sheet Date	57
Note 26 - New and Amended Standards and Interpretations	57

ANNUAL REPORT

2023

CONSOLIDATED STATEMENT OF INCOME

		12 Months Ended
		December 31, 2023	December 31, 2022
(Amounts in NOK 1 000)	Note
Revenue	4	243 984		195 260
Operating Revenues		243 984		195 260
Cost of Sales	5	46 216		33 840
Gross Profit		197 767		161 420
Operating Expenses
Employee Compensation and Benefits	6	132 120		82 739
Other Operational and Administrative Expenses	7	52 307		45 961
Depreciation and Amortization	12,16	50 895		34 081
Derecognition intangible assets	12	39 968		-
Total Operating Expenses		275 289		162 782
Net Operating Income/(Loss)		(77 522)		(1 361)
Net Financial Items
Net Interest (Income)/Expenses	8	(15 301)		1 274
Other Financial (Income)/Expenses	19	(12 144)		(36 509)
Net Financial Items		(27 445)		(35 235)
Net Income/(Loss) Before Income Taxes		(50 077)		33 874
Income Tax Expense/(Income)	9	(3 632)		2 704
Net Income/(Loss)		(46 445)		31 170
Attributable to Equity Holders of the Parent		(46 445)		31 170
Earnings Per Share:
Basic earnings per share	10	(0.60)		0.39
Diluted earnings per share		(0.60)		0.39

CARASENT

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CARASENT

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