Subsidiaries

Subsidiaries are all entities over which the Group has control. Control exists when the investor is exposed or

has rights to variable returns from its investment in the company and when it has the ability to influence the

return through its power over the company. To determine the level of control, the potential voting rights that

can be exercised or converted must be considered. Subsidiaries are fully consolidated from the date on

which control is transferred to the group. They are deconsolidated from the date that control ceases.

Associated companies

Associated companies are entities where the company and/or the Group has significant influence, but not

control over financial and operational management. Significant influence is assumed to exist when the Group

has between 20 per cent to 50 per cent of the voting rights in a company. The consolidated financial state-

ments include the Group's share of the profits/losses from associated companies are accounted for using the

equity method, from the date significant influence was achieved until it ceases.

Foreign currency translation

Functional and presentation currency Items included in the financial statements of each of the group

’

s entities

are measured using the currency of the primary economic environment in which the entity operates

(‘

the

functional currency

’).

All amounts disclosed in the consolidated financial statements have been rounded off

to the nearest thousand CAD units unless otherwise stated. From the date of incorporation, the functional

currency of the parent company has been determined to be Norwegian kroner (NOK) due to its ties to Aren-

dals Fossekompani ASA and predominantly NOK financing. With effect from 1 January 2022, the parent com-

pany changed its functional currency from NOK to CAD to reflect the Group

’

s current financing, underlying

operations and reduced ties to AFK.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the

dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transac-

tions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year

end exchange rates, are generally recognized in profit or loss. They are deferred in equity if they relate to

qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net in-

vestment in a foreign operation. Foreign exchange gains and losses that relate to borrowings are presented

in the statement of profit or loss, within finance costs. All other foreign exchange gains and losses are pre-

sented in the statement of profit or loss on a net basis within other gains/(losses).

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange

rates at the date when the fair value was determined. Translation differences on assets and liabilities carried

at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-

monetary assets and liabilities such as equities held at fair value through profit or loss are recognized in profit

or loss as part of the fair value gain or loss, and translation differences on non-monetary assets such as equi-

ties classified as at fair value through other comprehensive income are recognized in other comprehensive

income.

Group companies

The results and financial position of foreign operations that have a functional currency different from the

presentation currency are translated into the presentation currency as follows:

•

assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that

balance sheet

•

income and expenses for each statement of profit or loss and statement of comprehensive income are

translated at average exchange rates, and

•

all resulting exchange differences are recognized in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities,

and of borrowings and other financial instruments designated as hedges of such investments, are recognized

in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net

investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the

gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are

treated as assets and liabilities of the foreign operation and translated at the closing rate.

set

’

s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are

grouped at the lowest levels for which there are separately identifiable cash inflows which are largely inde-

pendent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial as-

sets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at

the end of each reporting period.

Financial assets are derecognized when the contractual rights to the cash flows from an asset expire, or when

the Group has transferred the contractual rights in a transaction where the risk and return of ownership of

the financial asset have substantively been transferred.

Financial assets classified as held for trading

A financial instrument is classified at fair value through profit or loss if it is held for trading. The instrument is

measured at fair value and the changes in fair value are recognized in the income statement.

Note 6

Other operating expenses

Amounts in CAD 1000

2022

2021

Maintenance equipment & buildings

831

750

Marketing, travel and representation costs

1,616

1,039

Consultants and professional fees

5,717

3,841

IT costs

1,482

2,036

Manufacturing overhead costs

1,189

734

Total operating expenses

10,835

8,401

Amounts in CAD 1000

2022

2021

Statutory audit

374

254

Other assurance services

261

60

Tax advisory

30

16

Other non-audit services

22

-

Total remuneration to auditor

687

330