REC Silicon ASA

Other work-related rights

Adequate wages

Child labor

Forced labor

Processes to remediate negative impacts and channels for value chain workers to raise concerns

S2-3

Taking action on material impacts on value chain workers

S2-4

Targets related to managing material IROs

S2-5

S3 Affected communities

Communities’ economic, social and cultural rights

Interests and views of stakeholders

SBM-2

Material IROs and their interaction with strategy and business model

SBM-3

Policies related to affected communities

S3-1

Processes for engaging with affected communities about impacts

S3-2

Processes to remediate negative impacts and channels for affected communities to raise concerns

S3-3

Taking action on material impacts on affected communities

S3-4

Targets related to manage material IROs

S3-5

G1 Business conduct

Corporate culture

Protection of whistleblowers

The role of the Board of Directors

GOV-1

67

Business conduct policies and corporate culture

G1-1

Protection of whistleblowers

Political engagement

Political influence and lobbying activities

G1-5

Management of relationships with suppliers

G1-2

Corruption and bribery

Prevention and detection of corruption and bribery, including training

Prevention and detection of corruption and bribery

G1-3

Incidents of corruption and bribery

G1-4

Consolidated financial statements 80

Entity Specific

Cyber Security

69

REC Silicon annual report 2024

40

Sustainability

Climate change

E1 - Climate change

Impact

Financial risk and opportunity

Sub-topics

Material

Upstream

Production

Downstream

Actual

Potential

Upstream

Production

Downstream

Timeframe

GHG emissions

Enabling the energy transition

Energy (mix and availability)

Sustainability-linked incentive schemes

The Company has not adopted incentive schemes that specifi- cally include sustainability-related performance. Please see the disclosure under Section 1 – General Disclosures, page 27 for additional details.

REC Silicon’s approach to climate change

The Company’s strategy and business model has been subject to significant change in recent years. This goes for both opera- tions, product mix and target markets.

For the operations, it has been important to reduce the energy intensity of the products in response to higher energy prices.

For the product mix, REC Silicon is now exiting polysilicon production, which is significantly more energy- and carbon intensive than the production of silane gas.

The Company is now focusing on silane gas and specialty gases, which is low in both energy and carbon intensity. Going forward, REC Silicon is targeting the solar PV industry, the EV battery industry and the semiconductor and electronics industries.

REC Silicon does not have a separate climate transition plan, but the issue of climate change mitigation is implicitly embedded into the corporate strategy.

Material climate-related IROs

These were assessed during the DMA in the context of the entire value chain. The three main impacts are:

1. Greenhouse gas emissions

The value chains for solar energy and the semiconductor industries contribute to about 0.6 gigatons of GHG emissions per year according to research, which represent close to 2% of global industrial manufacturing emissions. This is set to rise going forward due to rapid deployment of solar PV panels, growth in the electric mobility markets and rising demand for semiconductors.

2. Energy use

All parts of the value chains are highly energy-intensive, and the sourcing of energy in the value chains is only partly from renewable sources.

3. Enabling the energy transition

A positive impact through providing low-carbon inputs to key value chains driving the energy transition.

Level of positive impact/impact of financial opportunity

High

Medium

Low

Level of negative impact/Impact of financial risk

High

Medium

Low

Time frame

Sort term

Medium term

Long term

REC Silicon annual report 2024

41

Sustainability

The material risks and opportunities are closely related to this:

1. Energy pricing, availability and sourcing

In 2024, REC Silicon consumed about 480 GWh of electricity. With the announced shut-down of operations in Moses Lake, this is set to be significantly reduced in the medium term. However, if the revised strategy is successfully implemented, growth will resume in the coming years and energy consump- tion will rebound. There is a growing competition for energy where REC Silicon’s facilities are located, particularly for renewable power, coming from growth in data-centers and energy-transition industries in general. This could impact costs and growth in the long-term, although the energy requirements for the current production capacity are secured through agreements with the local utilities.

2. Green transition growth

The success of REC Silicon’s current strategy depends on continued growth in industries and markets that are driven by the energy transition, such as solar PV panels, electric mobility, as well as digitalisation trends.

With the Company’s strategy being focused on energy transition trends, there are more transition opportunities than there are transition risks for REC Silicon. Physical climate risks for the Company’s operations are low, while certain aspects of the upstream and downstream value chains could be at risk in the long term.

The process to identify the IROs was based on inputs from clients, investors, authorities, employees and suppliers, as well as from the management based on the existing strategy. The assessment of the impacts for materiality was based on available information from the Company’s own operations and research into the up- and downstream value chain emission and energy characteristics. The assessment of financial risks and oppor- tunities was generally based on how the triggers for such risks and opportunities could impact the Company’s 2024 long-range business plan.

Policies related to climate change

REC Silicon has a Code of Conduct and Sustainability Policy that forms the overriding framework for the management of climate-related impacts, risks and opportunities.

The Code sets goals and commitments for:

Increasing the use of renewable energy in the production processes

Sourcing of raw materials from suppliers using low-carbon production methods

Seeking ways to reduce the use of fossil fuels and energy consumption at all levels of the operations

The objective of The Code is to minimize the impact of the Company’s operations on the climate and the environment in general, including any impact on the local communities where the Company operates. The Code also represents an overall

framework for making the Company future-fit to manage risks related to climate and the environment, as well as capture opportunities for growth. The Code applies to all the Company’s operations.

Much of REC Silicon’s strategy follows the ambitions of the Inflation Reduction Act, the CHIPS Act and the Bipartisan Infrastructure Law, aiming to take advantage of the incentives that are built into these two initiatives. These include funding arrangements for the development of energy transition products and technologies and incentives to establish low-carbon and US-based value chains within the energy transition.

Actions and resources

The primary objective of the revised strategy is to exploit oppor- tunities through targeting energy transition industries in markets where REC Silicon has significant market position. The key actions are:

1. Butte reconfiguration

The production of the energy-intensive electronic grade polysilicon was discontinued in 2024. Some of the freed-up silane gas capacity will target existing markets for silane gas, while the remainder will be used to provide monosilane to the EV battery industry in line with recent offtake contracts with leading, next generation EV battery producers. In parallel, capacity for specialty gases like DCS, MCS and Di Silane has been increased.

REC Silicon annual report 2024

42

Sustainability

2. Moses Lake reconfiguration

Having been mothballed since 2019, the facility was restarted in 2023 to produce solar grade polysilicon. Despite securing a ten-year offtake contract for all polysilicon volumes, the restart was unsuccessful as the facility could not produce the required levels of purity by the customer. At the end of 2024, a decision was therefore made to shut down the facility once again. The 24,000-ton monosilane capacity will instead be kept ready for growth in the EV battery industry and be restarted once there is sufficient market demand.

The purpose of these actions is to target markets where REC Silicon has a distinct competitive edge and strong existing market positions. Further details on this can be found in the Company Description in the Annual Report ( page 7 ). These steps will also significantly reduce the carbon intensity of the product portfolio.

Targets

The company has two specific targets relating to climate change:

1. Reducing the Scope 1 and 2 carbon intensity per ton of product by 40% by 2027 (baseline 2021)

The target was based on the restart of the Moses Lake facility, which was intended to result in a high growth in overall polysil- icon production compared to previous years, but at a significant reduction in energy-use per ton produced.

The decision to shut down polysilicon production at Moses Lake will reduce both energy-use and volumes produced and thus have a positive effect on the performance against the target.

The positive performance relative to the target in 2024 was due to the shutdown of polysilicon production at Butte, which was completed in mid-2024. At the same time, the ramp-up process at Moses Lake added more volumes of low-energy and low-emission production.

Going forward, there will be an additional positive effect from the shut-down of polysilicon production at Moses Lake, as well as from a gradual ramp-up of production of silane gases at Butte.

The target and performance are illustrated in the chart below.

2. Mapping upstream Scope 3 emissions to reduce value chain carbon intensity

REC Silicon has an intention to work directly with the major suppliers to calculate the carbon footprints of the products and/ or services delivered to the Company and use internal data where applicable and possible. The Company plans to adhere to the GHG Corporate Value Chain Accounting in calculating upstream Scope 3 emissions. In the context of the process to manage the substantial strategic re-direction of the company this work is likely to be somewhat deferred due to lack of adequate internal resources.

REC Silicon annual report 2024

43

Sustainability

Performance metrics

Energy

Unit

2022

2023

2024

Change

Fuel consumption from coal and coal products

MWh

0

Fuel consumption from crude oil and petroleum products

MWh

527

901

1,433

59%

Fuel consumption from natural gas

MWh

180,236

241,649

492,974

104%

Fuel consumption from other fossil sources

MWh

21

80

212

165%

Consumption of purchased or acquired electricity, heat, steam, or cooling from fossil sources

MWh

595,022

618,248

481,955

-22%

Total fossil energy consumption

MWh

775,806

860,878

976,573

13%

Percentage of fossil sources in total energy consumption

%

100%

Total energy consumption from nuclear sources

MWh

0

Share of energy consumption from nuclear sources

%

0%

Fuel consumption from renewable sources

MWh

0

Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources

MWh

0

Consumption of self-generated non-fuel renewable energy

MWh

0

Total renewable energy consumption

MWh

0

Percentage of renewable sources in total energy consumption

%

0%

Total energy consumption

MWh

775,806

860,878

976,573

13%

Non-renewable energy production

MWh

0

Renewable energy production

MWh

0

Energy intensity from activities in high climate impact sectors

MWh/USDm

5,249

6,101

6,941

Energy intensity in own operations

MWh/Mt

179

205

134

Total energy consumption from activities in high climate impact sectors

MWh

775,806

860,878

976,573

Net revenue from activities in high climate impact sectors

USDm

148

141

Net revenue from activities other than in high climate impact sectors

USDm

0

REC Silicon annual report 2024

44

Sustainability

GHG emissions

Unit

2022

2023

2024

Change

Scope 1 GHG Emissions

Gross Scope 1 GHG emissions

tCO 2 e

32,799

49,100

100,073

104%

Share of Scope 1 GHG emissions from regulated emission trading schemes

%

0%

Scope 2 GHG Emissions

Gross location-based Scope 2 emissions

tCO 2 e

162,960

178,144

138,872

-22%

Gross market-based Scope 2 emissions

tCO 2 e

167,311

177,952

138,722

-22%

Significant Scope 3 Emissions

Fuel and energy-related activities (not included in Scope 1 and 2)

tCO 2 e

14,990

17,343

21,602

25%

Waste generated in operations

tCO 2 e

75

90

169

88%

Total Scope 3 Emissions

tCO 2 e

15,065

17,433

21,771

25%

Total GHG emissions (Location Based)

tCO 2 e

210,824

244,678

260,717

7%

Total GHG emissions (Market Based)

tCO 2 e

215,175

244,485

260,566

7%

GHG emission intensity

Net revenue

USDm

147.8

141.1

140.7

0%

GHG emissions intensity - location based, Scope 1+2+3

tCO 2 e/USDm

1,426

1,734

1,853

7%

GHG emissions intensity - market based, Scope 1+2+3

tCO 2 e/USDm

1,456

1,733

1,852

7%

Metric tons produced

Mt

4,343

4,196

7,272

73%

GHG emissions intensity - location based, Scope 1 + 2

tCO 2 e/Mt

45.1

54.2

32.9

-39%

GHG emissions intensity - market based, Scope 1 + 2

tCO 2 e/Mt

46.1

54.1

32.8

-39%

REC Silicon annual report 2024

45

Sustainability

Production numbers

Unit

2021

2022

2023

Change

Polysilicon production

Mt

1,453

1,187

5,454

359%

Net Silane gases production

Mt

2,890

3,009

1,818

-40%

Total production

Mt

4,343

4,196

7,272

73%

Climate-related targets

Unit

2024

Target

Target Year

24 vs Target

Carbon Intensity per ton of product (Scope 1 + 2, Market Based)

tCO 2 e/Mt

46.1

25.4

2027

181%

Upstream Scope 3 emissions mapped

Percentage

0%

75%

2027

n.m.

Total production

Mt

4,343

4,196

7,272

73%

REC Silicon annual report 2024

46

Sustainability

Pollution

E2 - Pollution

Impact

Financial risk and opportunity

Sub-topics

Material

Upstream

Production

Downstream

Actual

Potential

Upstream

Production

Downstream

Timeframe

Pollution of air, water and soil

Accidental spills, releases or discharges

REC Silicon’s approach to pollution

The production of silane gas results in air emissions of SO x , NO x , CO, VOCs and particular matter. The operations also require significant amounts of water and results in a water discharge that contain various substances.

REC Silicon uses a variety of measures to keep emissions at a minimum in its operations, such as scrubbers to capture air pollutants, and filters to reduce water emissions. Emissions and water discharges are subject to strict, state-wide permits.

Moreover, REC Silicon’s production processes are subject to the risk of accidents, which could release potentially hazardous substances into the environment and represent harm to both employees and people in the local communities.

The issue of pollution is therefore two-fold;

i) to stay within existing permits, and;

ii) to avoid accidental spills, releases or discharges.

In the context of double materiality, pollution has been assessed primarily in the context of the Company’s own operations, since value chain data have to date been difficult to obtain.

Emissions to air, water and soil is an actual impact that is gener- ally within the limits set by the authorities and the cost of staying within the permits is moderate. It is therefore not considered to be material. On the other hand, accidental spills, releases or discharges are potential impacts that could have significant negative consequences for people and the environment and therefore considered a material impact. The financial conse- quences in the form of fines, penalties or damages to affected

parties, as well as reputational loss, could be substantial. Hence, accidental spills, releases or discharges are considered finan- cially material.

Policies related to pollution

REC Silicon’s overarching pollution ambition is to have zero permit breaches and zero accidental spills, releases and discharges.

This is outlined in the Code of Conduct and Sustainability Policy. The Code specifies an obligation to operate within environmental permits as specified by national and/or local regulations and to use third party certifications to document the performance. Several requirements for the management of emissions, as well as hazardous materials are in the Code. There is a strict

Level of positive impact/impact of financial opportunity

High

Medium

Low

Level of negative impact/Impact of financial risk

High

Medium

Low

Time frame

Sort term

Medium term

Long term

REC Silicon annual report 2024

47

Sustainability

obligation to employ measures to avoid accidents and manage safety hazards.

REC Silicon enforces the obligations of the Code through a Pollution Prevention Plan and a Process Safety Management Plan.

REC Silicon holds company-wide multisite certifications for two management standards, ISO 9001 (Quality Management) and ISO 14001 (Environmental Management).

REC Silicon is subject to statewide legislation in Montana (Montana Department of Environmental Quality) and Washington State (Department of Ecology) for air emission permits, water permits and stormwater management permits.

Adequate policies and procedures regarding pollution, process safety and accident prevention are also normally part of any qualification process with existing or prospective clients of the Company.

Actions and resources

As part of the ongoing pollution control, REC silicon uses scrub- bers to capture air pollution from its production processes. Solid waste recovered from the scrubbers is disposed of as non-hazardous waste. The emissions to air in Moses Lake are measured by a 3 rd party and reported to the state authorities at least annually. The emissions to air at Butte are tracked by facility staff and reported to the State authorities on an annual basis. The emissions to air of non-GHG gases are reported in the performance metrics section.

Actions and resources related to water discharges are described in Chapter 4 – Water, please refer to page 51 .

Targets related to pollution

REC Silicon targets zero breaches of environmental permits relating to water discharges or air pollution. In recent years there have been a few cases each year of breaches. The breaches have generally been for technical reasons, and none have been material, resulting in penalties or fines.

REC Silicon has maintained a track record of zero spills and zero leakages for several years, in line with its target.

To date, there have been no initiatives to develop further pollution-related targets other than staying within the environ- mental permits.

Actions

Facility

Pollution aspect

Mitigation hierarchy

Impact

Pollution Prevention Plan

All

All pollution

Control

Avoiding unwanted pollution

Process Safety Management Plan

All

Accidental spills, releases or discharges

Control

Avoiding accident-related pollution

Air scrubbers

All

Air pollution

Reduce

Keeping air emissions within permits

Water discharge filters

All

Water effluents

Reduce

Reduction or elimination of contamination potential

REC Silicon annual report 2024

48

Sustainability

Performance metrics

ESRS E2 - Pollution

Unit

2022

2023

2024

Change

Emissions to air by pollutant

SO x sulphur dioxide emissions

Mt

0.4

32.4

7129%

NO x nitrogen oxides emissions

Mt

50.8

100.3

50.4

-50%

CO carbon mono x ide emissions

Mt

30.4

39.3

34.9

-11%

Volatile organic compounds (VOC)

Mt

2.1

1.92

7.50

290%

Particulate matter

Mt

13.6

57.3

27.6

-52%

Coarse particulate matter (PM10)

Mt

5.2

4.7

23.0

392%

Fine particulate matter (PM2.5)

Mt

2.9

2.7

18.8

605%

Other

Mt

4.6

4.4

-4%

REC Silicon annual report 2024

49

Sustainability

Water and marine resources

E3 - Water and Marine Resources

Impact

Financial risk and opportunity

Sub-topics

Material

Upstream

Production

Downstream

Actual

Potential

Upstream

Production

Downstream

Timeframe

Pollution of air, water and soil

Accidental spills, releases or discharges

REC Silicon’s approach to pollution

Water is essential in the production processes and primarily used for cooling purposes in the production units. Most of the water consumption is surface water withdrawn from freshwater. About 60% of the water withdrawal is discharged back to surface water, which is filtered to remove effluents and to ensure that the water quality is within permit levels. The wastewater discharges are subject to regular, third-party inspections. The solid waste from the water filters is collected and disposed of as non-hazardous waste.

The Company’s value chain is water-intensive, more so in the downstream part due to high water use associated with the production of wafers and microchips, as well as in the cleaning of solar PV panels.

In the context of double materiality, water has been assessed both in the context of the Company’s own operations and in the downstream value chain.

Water discharge is an actual impact that is generally within the limits set by the authorities and the cost of staying within the permits is moderate. It is therefore not considered to be material in the context of the Company’s operations. Water consumption from REC Silicon’s own operations is considered to have a medium impact since the company does not operate any facili- ties in areas of high water-stress.

Water consumption in the downstream value chain is considered to have a high impact due to the water-intensive operations in wafer and microchips manufacturing, as well as in the produc- tion of solar panels. Globally, a meaningful part of these value chains is in areas of water stress or areas that are subject to

periods of drought with corresponding restrictions on water use. There is some financial risk in the long-term attached to water consumption, particularly for the semiconductor industry and leading credit-rating agencies have now started to regard water availability as a key credit risk for such companies.

Policies related to water

The Code of Conduct and Sustainability Policy recognises that REC Silicon’s operations result in water emissions and includes an obligation to operate within environmental permits and to use third party certifications to document performance.

Following the Double Materiality Assessment, the Code has been amended to include specific requirements related to:

Level of positive impact/impact of financial opportunity

High

Medium

Low

Level of negative impact/Impact of financial risk

High

Medium

Low

Time frame

Sort term

Medium term

Long term

REC Silicon annual report 2024

50

Sustainability

Managing water consumption to minimise stress on local water resources

Manage wastewater discharges to reduce effluents and avoid contamination of soil and water

Ensure the safe treatment and disposal of all forms of waste, including solid waste from water treatment solutions.

REC Silicon is subject to statewide legislation in Montana (Montana Department of Environmental Quality) and Washington State (Department of Ecology) for water permits and storm management permits.

Actions and resources

Wastewater from the Butte facility is treated to enhance solids removal and ensure that the effluents are in compliance with

permit limits designed to protect the beneficial uses of the receiving surface waters. This discharge is subject to monthly whole effluent toxicity (WET) testing by a 3 rd party, which is reportable to the state authorities. Any solid waste recovered from the wastewater treatment process is disposed of as non-hazardous waste.

The Butte facility maintains five stormwater basins designed to manage stormwater from non-process areas surrounding the facility. These basins are subject to the same environmental permit regime to protect the beneficial uses of the receiving surface water.

Wastewater from the Moses Lake facility is discharged to sepa- rate on-site containment basins for evaporation. Remaining solid waste is recovered and disposed of. The facility is a zero-dis- charge site.

Water discharges at Butte has been reduced because of the shut-down of polysilicon production at the facility. However, this also results in imbalances in the existing wastewater system, which is being addressed. The first part is to use a once-through cooling concept to maintain water temperature for cooling purposes, which also allows for a significant reduction in chem- ical additives. The second part is planned for 2025 and involves possible aluminate addition to provide a source of sodium, while reducing calcium, chloride and heavy metals.

Targets related to water

REC Silicon maintains a target to always stay within the prevailing water permits. With regards to actual water consumption or discharges there are no hard targets at the time being and the strategic redirection of the Company will likely delay the process to potentially establish such targets.

Actions

Facility

Pollution aspect

Mitigation hierarchy

Impact

Water discharge filters

All

Water effluents

Reduce

Reduction or elimination of contamination potential

Stormwater basin

Butte

Water effluents

Control

Prevent flooding

Evaporation basin

Moses Lake

Water effluents

Reduce

Reduction or elimination of contamination to soil

Solid waste recovery

All

Water effluents

Reduce

Reduction or elimination of contamination to soil

Once-through cooling

Butte

Water effluents

Reduce

Reduce chemical additives in wastewater

Aluminate addition

Butte

Water effluents

Reduce

Reducing chemical additives and heavy metals in wastewater

REC Silicon annual report 2024

51

Sustainability

Performance metrics

ESRS E3 - Water and Marine Resources

Unit

2022

2023

2024

Change

Water

Surface water withdrawn from freshwater

Mill m 3

2.4

2.2

-8%

Produced water withdrawn from freshwater

Mill m 3

0.1

0.2

85%

Total water withdrawal

Mill m 3

2.5

2.4

-4%

Water discharge to surface water

Mill m 3

1.5

1.4

-5%

Water discharge to groundwater

Mill m 3

0.0

Water discharge to third-party water

Mill m 3

0.0

Total water discharge

Mill m 3

1.5

1.4

-5%

Total water consumption

Mill m 3

1.0

-3%

Total water recycled and reused

Mill m 3

n.a.

Total water stored

Mill m 3

n.a.

Changes in water storage

Mill m 3

n.a.

Share of water from regions with High Water Baseline Stress

%

0

Share of water from regions with Extremely High Water Baseline Stress

%

0

Water discharge share of water withdrawal

%

59%

58%

Water consumption per produced unit

'000 m 3 /Mt

0.24

0.25

0.14

-44%

Waste water discharge per produced unit

'000 m 3 /Mt

0.34

0.35

0.19

-45%

REC Silicon annual report 2024

52

Sustainability

Waste management

E5 - Waste management

Impact

Financial risk and opportunity

Sub-topics

Material

Upstream

Production

Downstream

Actual

Potential

Upstream

Production

Downstream

Timeframe

Raw materials use

Waste

REC Silicon’s approach to resource use and waste management

Metallurgical grade silicon (MGS) is the key raw material used in operations and is mined from quartz, the second most prevalent material in the Earth’s crust. This material is not regarded as a critical raw material and not likely to be subject to any form of future supply restrictions.

The typical waste generated from the operations are solid waste types from air pollution scrubbers and wastewater discharge filters, both regarded as non-hazardous waste. The volume of hazardous waste has traditionally been only a fraction of the total waste volumes, but there was a substantial increase in 2024. In the past two years, the Moses Lake restart project has

resulted in an increase in waste volumes, both hazardous and non-hazardous, related to the activities, which is expected to be significantly reduced going forward as the polysilicon production at the facility is discontinued.

In the context of the DMA process neither raw materials use, nor waste (in general) were regarded as material impacts, and they are not expected to represent material financial risks going forward.

Policies related to waste management

The Code of Conduct and Sustainability Policy outlines an obli- gation to reduce waste of all types at the source or by practices

wherever possible and consider modifications, substitution, conservations, recycling and re-using of materials to reduce potential harm to the environment. The objective is to reduce the overall amount of waste and to increase the amount of recycled waste from its production. REC Silicon is subject to local state regulations for waste handling, including waste handling fees.

Actions and resources

There are currently no ongoing actions pertaining to waste volumes or waste management.

Level of positive impact/impact of financial opportunity

High

Medium

Low

Level of negative impact/Impact of financial risk

High

Medium

Low

Time frame

Sort term

Medium term

Long term

REC Silicon annual report 2024

53

Sustainability

Performance metrics

ESRS E3 - Resource use and Circular Economy

Unit

2022

2023

2024

Change

Waste

Hazardous waste generated

Mt

1.1

0.1

1,730.5

n.m.

Hazardous waste diverted from disposal

Mt

0.1

1.3

n.m.

Hazardous waste directed to disposal

Mt

1.0

0.0

1,729.2

n.m.

Non-hazardous waste generated

Mt

5,209

5,934

12,033

103%

Non-hazardous waste diverted from disposal

Mt

95

82

3,912

n.m.

- Non-hazardous waste diverted from disposal due to preparation for reuse

Mt

n.a.

- Non-hazardous waste diverted from disposal due to recycling

Mt

32

39

2,064

n.m.

- Non-hazardous waste diverted from disposal due to other recovery operations

Mt

63

42

1,847

n.m.

Non-hazardous waste directed to disposal

Mt

5,115

5,853

8,121

39%

Total waste generated

Mt

5,210

5,934

13,763

132%

Total waste diverted from disposal

Mt

95

82

3,913

n.m.

Total waste directed to disposal

Mt

5,116

5,853

9,850

68%

Non-recycled waste

Mt

5,179

5,813

7,786

34%

Recycled waste

Mt

32

39

2,064

n.m.

Percentage non-recycled waste

%

99%

98%

57%

-42%

Waste Intensity

Hazardous waste per produced unit

Mt

0.0

0.2

n.m.

Total waste per produced unit

Mt

1.2

1.4

1.9

34%

Ecological Impacts

Total number of permit breaches

#

6

3

6

100%

Number of serious incidents or environmental releases

#

0

1

n.m.

REC Silicon annual report 2024

54

Sustainability

Human Capital

S1 - Human Capital

Impact

Financial risk and opportunity

Sub-topics

Material

Upstream

Production

Downstream

Actual

Potential

Upstream

Production

Downstream

Timeframe

Injuries, fatalities and ill health

Employment

Working conditions

Equal treatment and opportunities

REC Silicon’s approach to human capital

The workforce at the end of 2024 consisted of the employees at REC Silicon’s two facilities and non-employee workers supplying labor through contractual relationships as defined by ESRS.

This section describes how REC Silicon preserves and develops its human capital to ensure that adequate and qualified personnel is available to meet its objectives.

Engagement with the workforce is regular and part of normal operations, primarily centred around health and safety, process safety and training. The DMA process facilitated a broader understanding of the interests and views of the employees.

The process included both direct interviews with employees, as well as a company-wide employee survey on sustainability matters. This provided valuable input and contextual information to the DMA process.

Investors and clients put significant emphasis on REC Silicon’s ability to maintain adequate product quality, where both personnel qualifications and certifications are important. Health and safety are essential, including everything that drives perfor- mance, such as process safety systems, reasonable working hours and safety training.

All human capital and workforce matters are highly regulated by laws and regulations in the US.

The stakeholder inputs were assessed to determine the most important matters, determining the scale of impacts, how wide- spread these are in the context of the workforce and how easy it is to provide remedy. The financial materiality was assessed through the lens of potential failure to preserve the human capital, which could restrict growth, negatively impact produc- tion processes and result in reputational loss.

While bottom-up impacts were assessed at a granular level, the material impacts have been grouped into four different cate- gories, with a corresponding financial risk and opportunity set attached:

Level of positive impact/impact of financial opportunity

High

Medium

Low

Level of negative impact/Impact of financial risk

High

Medium

Low

Time frame

Sort term

Medium term

Long term

REC Silicon annual report 2024

55

Sustainability

1. Injuries, fatalities and ill health

Due to the nature of its operations, which involves potential exposure to dangerous chemicals and gases, and is prone to accidents and injuries, this is always the number one priority for REC Silicon. Maintaining strong health and safety performance is also important to personnel attraction and retainment, as well as to process safety and quality, and thus client retention.

2. Employment

This includes job security, which has been an issue for the Company in recent years, first with the shut-down at Moses Lake in 2019, the shut-down of polysilicon production at Butte in 2024 and the recently announced shut-down of Moses Lake polysilicon production, all involving personnel redundancies. Moreover, compensation and pay are becoming increasingly important to retain human capital due to stronger competition for people on the back of the growing presence of industries related to the green transition and digitalisation in both Butte and Moses Lake. This could have material financial conse- quences in the medium- to long-term and personnel turnover became an issue during 2024.

3. Working environment

At Moses Lake, the FBR restart project resulted in excessive working hours for many employees and a lack of work-life balance. A meaningful part of the workforce regards the Company’s support for employee well-being and work-life

balance as average at best, according to the employee sustainability survey, indicating that these matters should perhaps be better adressed.

4. Diversity, equity and inclusion

REC Silicon maintains a workforce where women and ethnic minorities are underrepresented. There were some reports of harassment based on ethnic background and sexual orienta- tion in the employee sustainability survey.

In the remaining sections of this chapter, policies, engagement, actions and performance will be split into separate sections that generally fit with the four key IROs outlined above.

Health and safety

Policy foundations for health and safety

The Code of Conduct and Sustainability Policy has a section dedicated to health and safety. The Company puts safety first and follows the strategy that all accidents, injuries and occupa- tional illnesses are preventable. The target is always zero harm to employees, contractors, customers and members of the public.

To enforce the objectives of the Code, REC Silicon has a Health Management System (HMS) based on risk analysis, risk and hazard mitigation and right management, which is followed up with training.

The aspects covered by the HMS are:

Health-related aspects

Illness prevention

Risk management

Physical and mental well-being

The Company’s management system is ISO 9001 and ISO 14001 certified. The Occupational Safety and Health Act represents the main legislation.

Engagement on health and safety

REC Silicon has ongoing engagement on all health and safety matters. The company holds monthly safety meetings at both facilities to discuss procedures, incidents and training. There are quarterly roundtable meetings for safety and production. All procedures are reviewed and updated annually.

Health and safety management actions

Most actions are continuous efforts that deal with:

Design, engineering practices, administrative controls and safe work practices

Personal protective equipment

Educational materials and continuous safety training

Obligation for employees to report all safety concerns

REC Silicon annual report 2024

56

Sustainability

On-site emergency teams and off-site back up response teams

Safe job analysis and hazard recognition audits

Visible safety information in all facilities with updated logs visible to all employees

Workplace safety and health is communicated to all employees in the monthly safety meeting.

Training courses on health and safety are online and cover a wide range of health and safety matters, where all employees are obligated to take courses annually. Such matters include:

Safety awareness training

Protection training

Detection training

Danger management training

Hazardous waste training

There is also annual training on the Quality Policy, the Process Safety Management system, and on the Environmental Management System.

Performance metrics

The Company recorded a significant jump in injuries during 2024, both recordable injuries and lost-time injuries. During the year, both locations experienced some turbulence, in Moses Lake in relation to the efforts that went into the FBR ramp-up, and in Butte in relation to the shutdown of polysilicon production. At times, such turbulence deters focus from safely performing work.

Both production facilities had to put a strong emphasis on focused safety and to ensure that the employees were prior- itizing safety and ensuring that all job tasks were evaluated prior to starting the task. Daily line-out meetings continuously reminded employees to ensure safety and environmental stew- ardship were of the top focus areas each workday.

Health and safety metrics

Unit

2022

2023

2024

Change

Percentage of own workforce covered by health and safety management system

%

n.a.

100%

0%

Number of fatailities as a result of work-related injuries or ill health

#

0

- Own workforce

#

n.a.

- Other workers on undertaking's site

#

n.a.

Number of recordable work-related accidents for own workforce (TRI)

#

8

7

17

143%

Rate of recordable work-related accidents for own workforce (TRIF)

# / mn hrs

13.5

8.2

14.1

73%

Number of cases of recordable work-related ill health of employees

#

n.a.

0

n.m.

Number of days lost to work-related injuries, fatalites or ill health (LTI)

#

1

6

500%

Rate of days lost to work-related injuries (LTIF)

# / mn hrs

1.7

1.2

5.0

326%

Serious incidents (SI)

#

0

Serious incidents frequency (SIF)

# / mn hrs

0

Hours worked for own workforce

#

592,816

857,308

1,203,043

40%

Safe Job Analyses

#

281

1,250

897

-28%

Hazard Recognition Audits

#

349

503

383

-24%

REC Silicon annual report 2024

57

Sustainability

People strategy

Policy foundations

The Code of Conduct states REC Silicon’s support of internation- ally recognised human and labor rights standards as set out in:

The International Bill of Human Rights

The UN Guiding Principles on Business and Human Rights

The ten principles of the UN Global Compact

The ILO Declaration on Fundamental Principles and Rights and Work

The Company regards its people as the fundamental factor for its success and therefore:

Respect the freedom of association and collective bargaining, as defined by the National Labor Relations Act (NLRA)

Provide fair working conditions in accordance with all appli- cable legislation to our employees; and

Provide training to ensure the employees conduct business ethically, honestly and in compliance with all applicable laws and regulations

The objectives of the Code are enforced through the Company’s Health Management System, which deals with physical and mental well-being aspects, in addition to health and safety matters. Continuous efforts are provided through Employee Assistance Programs, Wellness Programs and flexible working arrangements.

The US legislative backdrop is substantial and reflected in:

Wages and Fair Labor Standards Act

First Amendment

National Labor Relations Act

Family and Medical Leave Act

Pregnant Workers Fairness Act

The ERISA Act

People engagement

REC Silicon holds town hall meetings twice a year in both Butte and Moses Lake, which is conducted by the CEO and serves as a platform to engage on general corporate matters.

Management meetings are also held twice a year in both Butte and Moses Lake to address topics at the managerial level.

The quarterly roundtable meetings discuss human resource matters, in addition to safety and production-related matters.

During the DMA process, the Company conducted an employee sustainability survey to ensure input on a broad range of sustain- ability matters. This survey received 121 responses, equal to a 25% overall response rate.

Whistleblower channel and grievance mechanisms

REC Silicon maintains a whistleblower reporting system which is open to all employees and business partners. It is a confidential system where reports can be made anonymously and managed by an independent system provider.

As part of a formal investigation process, all reports are submitted to a review manager for further dissemination to a relevant reviewer based on the nature of the report. Financial matters would be reported to the CFO and/or the Audit Committee, while operational matters will be reviewed by the relevant senior manager. The review includes interviews with persons involved with the matter.

Subject to the severity of any report or incident, there will be corrective action, which could include the termination of employ- ment for severe cases. Remedy to any affected party will be determined on a case-by-case basis.

During 2024, there were two whistleblower incidents, both from shareholders raising questions about conflicts of interest in connection with the process that led to the decision to shut down polysilicon production in Moses Lake. Both were processed through the appropriate channels and concluded as unfounded.

REC Silicon annual report 2024

58

Sustainability

Preserving human capital

REC Silicon is experiencing increased competition for its personnel due to general industry activity growth both in Moses Lake and Butte and is therefore attentive towards preserving its human capital.

2024 has been a challenging year for REC Silicon and its work- force for several reasons:

The restart of the FBR production at Moses Lake was an intensive effort that consumed substantial financial and human capital resources, resulting in significant overtime and stress on the organisation.

The decision to shut down polysilicon production at Butte resulted in layoffs and redundancies.

The recent decision to shut down polysilicon production at Moses Lake will result in more than 220 layoffs and redundan- cies that will be managed during 2025.

The employee turnover has shown a steady increase in the past two years, from 4.6% in 2022 to 23.8% in 2024.

To manage the FBR restart and ramp-up, the Company provided Employee Assistance Programs (EAP), which could be assessed by employees and their families via text therapy, digital support or self-guided sessions, or traditional therapies free of charge. The Company also sought to reduce individual workloads through hiring additional staff to evenly distribute workloads.

Adequate work-life balance has been managed by providing flex- ible working arrangements (4/10 schedule and 9/80 schedule) to offer more flexibility by condensing work hours into fewer days, so that employees have extended time off.

Through hybrid work options, employees have the option to work from home for up to 28 days per year, subject to their super- visors’ approval. Employees are covered by a mental health insurance and wellness programs are run through a volunteer committee of employees providing physical fitness activities for employees. The Company has also supported family-friendly activities. This will continue in 2025.

The Butte shutdown has been managed through a hiring freeze and support for internal transfers of people. An early retirement program was provided, as well as opportunities for temporary assignment. So far, the efforts have reduced the number of people to be laid off from 41 to 20. There have been 12 internal transfers and ten early retirements. The hiring freeze and the efforts to promote internal transfer of employees will continue in 2025. Three employees affected by the reduction in workforce at Moses Lake have accepted positions in Butte.

REC Silicon conducts a regular wage benchmarking process where the target is to maintain pay above industry average. This involves annual wage adjustments based on employee feedback on compensation and a new pay progression schedule for oper- ators and technicians based on performance rather than tenure.

The ambition for 2025 is to introduce a new job grade and compensation structure. This will imply a transparent, perfor- mance-based compensation structure that allows employees to understand their job level, their earnings potential and the factors influencing pay in 2025.

REC Silicon has an ambition to provide more training programs and improve regular skills assessments. During 2024, a LinkedIn Learning program was rolled out, with 30% of employees partic- ipating. This program provides a vast library of courses on topics like leadership, technology and soft skills.

Workforce characteristics

Non-employees in own workforce

In connection with the Moses Lake project, some non-em- ployees have been recruited from outside providers to assist in the project. The number of non-employees were reduced during the year. Please see the information on page 61 .

Collective bargaining coverage

REC Silicon does not maintain any collective bargaining agree- ments with its workforce. However, the Code states that the right to collective bargaining is supported by the Company.

REC Silicon annual report 2024

59

Sustainability

Composition of own workforce

The executive management consists of three males. The opera- tions management consists of eight, of which two are female and six are male.

The age distribution of the general workforce is outlined in the data table on page 62 .

Adequate wages and social protection

All employees are paid adequate wages, and the entire work- force is covered by social protection measures.

Percentage of workforce with disabilities

REC Silicon does not have the legal right to obtain information on the employees’ disabilities.

Work-life balance metrics

92% of the employees are entitled to take family-related leave and 3.8% of those took such leave during 2024.

Remuneration metrics

The female employees have an average salary equating to 95% of the average salary of male employees, unchanged from the prior year.

The total remuneration ratio between the Company’s highest paid individual and the median remuneration ratio is 11.7 times, unchanged from the prior year.

Human rights

Policy foundations

REC Silicon’s Code of Conduct is clear that the ambition is to:

Treat everyone who works for REC Silicon with fairness, respect, and dignity;

Provide a working environment free from any form of discrim- ination, abuse, harassment or intimidation by or towards our employees or others affected by our operations;

Commit to the elimination of discrimination based on gender, race, ethnical background, sexual orientation, age, political beliefs, marital status, or any other status;

Refuse all forms of child labor, human trafficking, modern slavery and compulsory or forced labor;

Respect employees’ rights to freedom of opinion and expres- sion, freedom of thought, conscience, and religion;

In addition to the relevant US legislation regarding general working conditions, the Equal Pay Act, the Disabilities Act, the Civil Rights Act and the Modern Slavery Act provide support for these ambitions.

Whistleblower channel and grievance mechanisms

Please refer to the information on page [x] for information on the whistleblower processes. During 2024, there were zero complaints regarding human rights breaches.

Protecting human rights

REC Silicon pays equal pay for equal work. The issue of equal pay is managed through conducting regular pay audits, including regular wage benchmarking and annual wage adjustments to ensure that the objective is met.

The objective to ensure a safe, responsible and compliant workplace culture is managed through regular training and awareness programs, the whistleblower reporting system and clear reporting and investigation procedures. These processes are continuous and will continue in 2025.

REC Sililcon provided training on diversity, equity and inclusion (DEI) in 2023 for Moses Lake. The plan is to conduct similar training for new managers and executives to ensure a good foundation for new workforce members with various back- grounds to create an inclusive workplace culture. Due to the significant changes to the Company in 2025, this is currently on hold.

Training has been offered to employees on how to use the whistleblower reporting system.

Incidents of human rights breaches

There were no incidents of human rights breaches recorded during 2024, in line with previous years.

REC Silicon annual report 2024

60

Sustainability

ESRS S1 - Own workforce

Unit

2022

2023

2024

Change

Characteristics of own workforce

Total number of permanent employees

#

360

495

466

-6%

- Female

#

54

77

74

-4%

- Male

#

306

419

392

-6%

Temporary employees

#

5

12

0

- Female

#

n.a.

6

0

- Male

#

n.a.

6

0

Non-guaranteed hours employees

#

0

- Female

#

n.a.

- Male

#

n.a.

Total new hires

#

99

186

81

-56%

Number of employee turnover (leavers)

#

n.a.

45

76

69%

Permanent employee turnover rate

%

4.6%

9.0%

15.8%

Total number of non-employees in own workforce

#

n.a.

22

15

-32%

- of which self employed people

#

n.a.

2

0

-100%

- of which provided by undertakings primarily engaged in employment activities

#

n.a.

20

15

-32%

Percentage of employees covered by collective bargaining agreements

%

n.a.

Number of employees (head count) at top management level

#

8

11

0%

- Female

%

20%

18%

- Male

%

80%

82%

REC Silicon annual report 2024

61

Sustainability

ESRS S1 - Own workforce

Unit

2022

2023

2024

Change

Employees - by age

< 30

#

30

65

74

14%

30-50

#

171

230

222

-3%

> 50

#

164

199

170

-15%

< 30

%

8%

13%

16%

30-50

%

46%

47%

48%

> 50

%

44%

40%

36%

Percentage of employees that are paid an adequate wage

%

n.a.

100%

Percentage of employees covered by social protection

%

n.a.

100%

Percentage of employees with disabilities

%

n.a.

Training and skills development

Percentage of employees that participated in regular performance and carreer development review

%

n.a.

0%

- Female

%

n.a.

- Male

%

n.a.

Average number of training hours per employee

#

19

98

31

-68%

- Female

#

n.a.

85

31

-64%

- Male

#

n.a.

101

32

-69%

Work-life balance

Percentage of employees entitled to take family-related leave

%

n.a.

92%

94%

2%

Percentage of entitled employees that took family-related leave

%

n.a.

3%

7%

163%

- Female

#

n.a.

1

11

1000%

- Male

#

n.a.

11

57

418%

REC Silicon annual report 2024

62

Sustainability

ESRS S1 - Own workforce

Unit

2022

2023

2024

Change

Remuneration metrics

Average annual pay female employees

USD '000

101.8

Average annual pay male employees

USD '000

95.2

Gender pay gap

%

90%

95%

93%

-2%

Remuneration for the highest paid individual

USD

n.a.

863,156

Median annual remuneration for all employees

USD

n.a.

101,084

Annual total remuneration ratio

%

n.a.

854%

Incidents, complaints and severe human rights impacts

Incidents of discrimination

#

0

0%

Number of complaints filed through channels for people in own workforce to raise concerns

#

n.a.

11

0%

Amount of material fines, penalties and compensation for damages as a result of human rights violations

USD '000

n.a.

0

0%

REC Silicon annual report 2024

63

Sustainability

Supply chain management

S2 - Supply chain management

Impact

Financial risk and opportunity

Sub-topics

Material

Upstream

Production

Downstream

Actual

Potential

Upstream

Production

Downstream

Timeframe

Health and safety

Human rights

Working conditions

REC Silicon’s approach to supply chain management

The Company followed up its 2023 human rights risk mapping by developing a separate Business Partner Code of Conduct and a process to secure commitments to the principles of the Code from a majority of the suppliers.

In connection with the DMA, a separate supplier sustainability survey was conducted among the top 50 suppliers to provide further insights into the spectrum of relevant sustainability matters and to provide suppliers with an opportunity to express their interests towards REC Silicon as a client. The survey recorded a 38% response rate.

The DMA identified human rights breaches as a potentially negative material impact across the Company’s value chain. The

risk mapping shows that the risk is medium, which is a sentiment echoed by both the own employees, as well as the suppliers. This topic of human rights breaches is also subject to several relevant laws and regulations, such as the Modern Slavery Act, the Civil Rights Act and more.

While health and safety, as well as general working conditions are relevant and important, the DMA process did not identify these as material.

Policy foundation

The Business Partner Code of Conduct (BPCoC) builds on the Code of Conduct and Sustainability Policy and the principles therein. The objectives are to ensure that the suppliers follow the same principles as REC Silicon, and that the Company maintains

adequate sourcing of critical materials and inputs. It is available online at www.recsilicon.c om .

The BPCoC has eight key focus areas:

Compliance with laws, rules and legal regulations

Good working conditions and human rights

Safety and health

Environmental and climate protection

Responsible sourcing

Rights of local communities

Supply chain due diligence

Grievance and complaints mechanism

The relevant legislative backdrop for REC Silicon includes the Modern Slavery Act and the Norwegian Transparency Act. There is also a proposed Washington State Supply Chains Act that may come into force in the future.

Level of positive impact/impact of financial opportunity

High

Medium

Low

Level of negative impact/Impact of financial risk

High

Medium

Low

Time frame

Sort term

Medium term

Long term

REC Silicon annual report 2024

64

Sustainability

REC Silicon has developed several procedures to enforce the objectives of the BPCoC, including a suppliers’ handbook, critical materials list, critical materials approval, risk assessment and business continuity plan.

Supply chain engagement

The objective for the engagement with the supply chain is to be an efficient, agile and reliable integration partner that fosters collaboration and enhances value for REC Silicon’s customers and stakeholders, supporting long-term sustainable growth.

The engagement has been running in connection with the process to get sign off on the BPCoC and follows a three-year plan. REC Silicon follows the OECD Guidelines for Multinational Enterprises in its supply chain due diligence. Hence, this process is moving forward into the “cease, prevent or mitigate impacts” stage, where further engagement will take place with the most critical suppliers.

Whistleblower channel

REC Silicon’s whistleblower channel is available to all Business Partners and their employees. Judging by the responses in the Supplier Sustainability Survey, the existence of this service may not be sufficiently disseminated across the suppliers. There were no whistleblower reports from the supply chain during 2024.

Supply chain actions and plans

The objective for 2024 was to secure commitments to, or acknowledgements of, the BPCoC from the 50 largest suppliers, which represent approximately 80% of the total vendor volume. This was completed during the year, with 80% of these suppliers signing off on the Code and the remaining 20% having demon- strated the existence of a Code of Conduct that follows the same principles.

The Supplier Sustainability Survey revealed that the five most important topics to the suppliers are:

Working conditions (including health and safety)

REC Silicon’s commitments to sustainability initiatives

Supply chain traceability and transparency

Prevention of corruption and bribery

Responsible sourcing of materials

A process to conduct a proper risk profiling of the top 15 critical suppliers will be targeted as part of an ambition to better under- stand the vulnerability of the supply chain.

Supply chain targets

REC Silicon has several targets for 2025 relating to supply chain management:

Include sustainability principles as requirements in purchase orders terms and conditions

80% of vendor volume to have completed annual self-assess- ments

Complete full risk profiling of the 15 most critical vendors

Review top 6 critical procedures related to supplier risk management

Complete audit of the top 5 suppliers

Implement a supply chain risk management tool

With the recent and ongoing restructuring of the Company, some of these processes may be put on hold due to lack of internal resources.

REC Silicon annual report 2024

65

Sustainability

Local communities

S3 - Local communities

Impact

Financial risk and opportunity

Sub-topics

Material

Upstream

Production

Downstream

Actual

Potential

Upstream

Production

Downstream

Timeframe

Pollution of air, water and soil

Accidental spills, releases and discharges

Dependence on local workforce and infrastructure

REC Silicon’s approach to local communities

The DMA process highlighted that a more structured approach to the local communities is required. The Company has had an important role as a large employer in the communities where it operates. The issue of job security was felt in 2019, when the decision was made to shut down polysilicon production in Moses Lake and in 2024 when polysilicon production was shut down in Butte. Conversely, the decision to re-open production in Moses Lake in 2023 created hundreds of jobs in the area, but with the recent decision to shut down polysilicon production at Moses Lake, there will be a new period of redundancies, which will affect the local community.

Both Moses Lake and Butte are attracting new business invest- ments, many relating to the technology and energy transition

industries. This is spurring increased competition for skilled personnel, a problem somewhat exacerbated by limited local availability, and is resulting in increased wage demands. Therefore, REC Silicon’s dependency on local human resources represents a growing risk.

Moreover, the growth in business in the areas puts pressure on available local infrastructure such as power supply and water resources. While REC Silicon is adequately supplied for its current capacities, there could be constraints longer term that could result in increased costs, or detrimental effects on growth.

REC Silicon is therefore aiming to cement its relationships with its local communities and provide support that can help these communities solve some of the problems that could impact the Company in the long run.

Policy foundation

The Code of Conduct and Sustainability Policy states that REC Silicon’s business and people should make a positive impact on society and that the Company is obligated to maintain close relations and constant dialogue with local communities. The Code has been expanded to include more precise commitments, including commitments for engagement and dialogue, the mini- misation of health, safety and environmental impacts and risks, as well as contribution by REC Silicon and its employees to the local communities in the form of voluntary work and other forms of engagement and support.

Full details of the Code can be found at www.recsilicon. com .

Level of positive impact/impact of financial opportunity

High

Medium

Low

Level of negative impact/Impact of financial risk

High

Medium

Low

Time frame

Sort term

Medium term

Long term

REC Silicon annual report 2024

66

Sustainability

Business Conduct

G1 - Business Conduct

Impact

Financial risk and opportunity

Sub-topics

Material

Upstream

Production

Downstream

Actual

Potential

Upstream

Production

Downstream

Timeframe

Corporate culture

Corruption and bribery

Supplier relationships

Political engagement

Cyber security

Governance structure

The governance structure in general, as well as that pertaining to sustainability, is outlined in the Corporate Governance section in this Annual Report (please see page 72 )

REC Silicon’s approach to business conduct

The stakeholder engagement in the DMA process resulted in very clear inputs on the materiality of business conduct-related topics. The concept of ethical business conduct is regarded as important to all stakeholder groups. This was highlighted

by both the employee and supplier sustainability surveys, engagement and qualification processes with clients, investor feedback, as well as dialogue with the local communities. Overall, the ethical business standards of REC Silicon received very positive feedback and may therefore represent some- what of a competitive advantage for the company. Corruption and bribery prevention and detection is clearly material to all stakeholder groups, as well. Supplier relationships have a firm place, although for slightly different reasons among stakeholder groups. For suppliers themselves, it is important to retain close and constructive relationships with clients, like REC Silicon. Employees, clients and investors regard these relationships as important to ensure that REC Silicon always has access to timely

and adequate supply of critical materials and components to ensure continuous and safe operations.

Political engagement is becoming more important to REC Silicon as the regulatory incentives in the US, such as the Inflation Reduction Act, the CHIPS Act and the Bipartisan Infrastructure Law, are the strongest drivers for the current strategy of the Company. Several stakeholder groups regard continued regu- latory support as important for the Company’s prospects. The somewhat uncertain outlook going into 2025 when it comes to US trade policies and the issues of tariffs, as well as federal energy transition initiatives, also makes political engagement important to the Company

Level of positive impact/impact of financial opportunity

High

Medium

Low

Level of negative impact/Impact of financial risk

High

Medium

Low

Time frame

Sort term

Medium term

Long term

REC Silicon annual report 2024

67

Sustainability

The entity-specific topic Cyber Security has been included in the Business Conduct section, based on both stakeholder inputs and the Company’s recent history of cyber-attacks.

Financial matters are more material than impacts for the busi- ness conduct matters. Typical financial risks that could emerge relate to reputational loss and loss of business relationships due to potential breaches of ethical business conduct principles or legislation, as well incidents of corruption and bribery and cyber security incidents. The financial risk related to supplier relation- ships could emerge from irregularities in production due to lack of materials and components. As explained above, the political and regulatory framework represent the backbone of the corpo- rate strategy and any changes to this could represent significant negative financial triggers.

Policy foundation

The Code of Conduct and Sustainability Policy prescribes clear guidelines for business conduct matters. REC Silicon supports the ten principles of the UN Global Compact and the OECD Guidelines for Multinational Enterprises and is subject to the US Foreign Corrupt Practices Act and the Federal Bribery Statute.

The Company has zero tolerance for any form of corruption, without exception and treats non-compliance as a serious viola- tion and a disciplinary matter.

REC Silicon sets high standards of integrity and believe that a sound business must be based on value-based management and clear guidelines on ethics and sustainability. The Company believes it creates value by supporting a competitive market, operating fairly and fighting illegal practices. All potential integ- rity concerns are investigated, and the Company will cooperate fully with relevant authorities if required. REC Silicon avoids conflicts of interest and practices related to the commission or participation in fraud.

The principles are enforced through the Risk Management System, which contribute to spread a culture of risk manage- ment and control that allows the Company to run its business in a healthy, correct, and responsible manner.

Corruption and bribery

Employees undertake annual training on anti-corruption and anti-bribery as part of the training on the Code of Conduct and Sustainability Policy.

REC Silicon does not maintain a particular system to prevent, detect and address allegations or incidents of corruption and bribery. Pursuant to the Code of Conduct, it is every employ- ee’s duty to report any violation of the principles of the Code of Conduct, and the whistleblower system exists for this purpose.

Partnerships and political engagement

REC Silicon political engagement efforts focus on various legis- lative means for policy changes to support market demand for the products of both REC Silicon and its customers. This involves pushing for industry standards that support demand, tax incen- tives to grow the industry, and trade rules to ensure a fair market for all players.

REC Silicon is currently part of three groups that are working on promoting US manufacturing:

1. SEMA Coalition (Solar Energy Manufacturing for America).

This group worked to get the IRA passed, which includes the 45X production tax credits that REC Silicon is set to receive for FBR solar grade polysilicon and silane for silicon anodes. With the decision to shut down solar grade polysilicon produc- tion at Moses Lake, it is expected that this engagement will be reduced.

2. BMTC (Battery Materials Technology Coalition).

This group helped pass the Bipartisan Infrastructure Law, that had USD 6 billion in support for battery manufacturing in the US, providing funding for current and prospective US clients. The group works on protecting trade, increasing US battery manufacturing, improving permitting to allow for responsible mining of critical minerals in the US.

REC Silicon annual report 2024

68

Sustainability

3. ULCSA (Ultra Low Carbon Solar Alliance)

This group works on expanding market awareness and deployment of ultra-low carbon solar. The group has worked to create the ECO Epeat label for ultra-low carbon solar production and inputs to enable certification of purchased materials. There is also work to require the US government to purchase ultra-low solar products.

REC Silicon has also had more sporadic alliances pertaining to specific trade matters, such as:

America Alliance for Solar Manufacturing Trade Committee , which is a seven-member group that filed a trade petition against four Southeast Asia countries for illegal trade practices by allowing Chinese headquartered companies to circumvent US trade regulations. The alliance represents the leading manufacturers working to build and re-shore the US solar industry.

Data protection and cyber security

REC implemented significant measures in 2024 to enhance its cybersecurity program, addressing the evolving landscape of cyber threats.

The Company has conducted a comprehensive review and enhancement of its cybersecurity policies, with the imple- mentation phase already underway and projected to continue throughout 2025.

Leveraging new technologies and methodologies, REC Silicon has ensured that these policies are not only implemented but also effectively enforced. This proactive approach ensures that the Company remains resilient against current and future cyber challenges, maintaining the integrity and security of its opera- tions and data.

An annual review of core security services has been performed, and REC is diligently working on incorporating the recommen- dations. Notably, the Company has prioritized advancements in remote access and authentication methods, with a particular emphasis on zero trust principles. These efforts are set to extend into 2025, ensuring robust and resilient cybersecurity defences.

By continuously improving its cybersecurity posture and employing innovative technologies, REC Silicon demonstrates a commitment to protecting its assets and stakeholders, ultimately contributing to the Company’s long-term sustainability and success.

REC Silicon annual report 2024

69

Sustainability

Appendix – Transparency Act Statement

REC Silicon Transparency Act Statement 2024

Introduction

General description of the Company’s structure and area of operations, please see the following:

Company description, pa ge 7

Material IROs and their interaction with strategy and business model, page 32

Descriptions of REC Silicon commitments to internationally recognized human and labor rights standards

People Strategy, pag e 58

REC Silicon’s approach to supply chain management, pag e 64

Governance and oversight

Sustainability governance, pag e 67

Policies

REC Silicon’s approach to supply chain management, pag e 64

Impacts and risks

REC Silicon’s approach to supply chain management, pag e 64

Actions and action plans

Supply chain actions and plans, pag e 65

REC Silicon annual report 2024

70

Sustainability

Board of Directors’ report on Corporate Governance

REC Silicon ASA (the “Company” or “REC Silicon”) and its subsidiaries (together “REC Silicon Group” or the “Group”), endorses the Norwegian Code of Practice for Corporate Governance (“Code of Practice”) issued by the Norwegian Corporate Governance Board, most recently revised on October 14, 2021.

1. Implementation and reporting on corporate governance

The Board of Directors of REC Silicon (“Board”) has prepared the following report that explains the Group’s corporate govern- ance practices and how it has complied with the Code of Practice in the preceding year. The application of the Code of Practice is based on the “comply or explain” principle and deviations from the code, if any, is explained under the relevant item. The Group’s corporate governance practices are subject to annual reviews and discussions by the Board.

REC Silicon Group deviated from the recommendations in the Code of Practice on two sections at year-end 2024. These deviations pertained to separate proxy voting for candidates to the Board (Section 6) and separate regulations for takeover bids (Section 14).

The following sections provides a discussion of the Company’s corporate governance in relation to each section of the Code of Practice.

2. Business

REC Silicon is a leading producer of silane-based high purity silicon materials that is shaping the future with advanced mate- rials. REC Silicon operates US based manufacturing facilities in Moses Lake Washington and Butte Montana.

The Company announced that it ceased production at its Moses Lake facility on December 30, 2024. REC Silicon also announced that the production of polysilicon was discontinued at the Moses Lake facility, while the equipment involved in production of silicon gases would be maintained in a safe and recoverable mode to allow for silane gas production to restart with reasonable notice to capitalize on future customer demand for silicon anode or other gases while minimizing near-term operational costs.

The December 30, 2024, announcement follows the Company’s decision to shut down polysilicon production at its Butte, Montana facility in February 2024. With the shutdown of the Moses Lake facility, REC Silicon completely discontinued the production of commercial volumes of polysilicon at both facilities.

REC Silicon annual report 2024

71

Corporate governance

Moving forward, REC Silicon will focus its business efforts on silicon gases as its core product where the Company has clear strength, market positioning, and product differentiation. The Company is prioritizing driving costs out of its silicon gas assets and optimizing production, with a goal to return to profitability.

Silane gas is used as a stand-alone product for use in semi- conductors, flat panel displays, solar panels and as material for silicon anode batteries. It is also processed into solar and electronic grade polysilicon and refined into specialty gases for advanced uses in the semiconductor and solar industries.

Growth trends within digitalization, renewable energy, and the energy storage transition have placed REC Silicon in a position to seize upon market opportunities for the Company’s signature silane gas-based operations.

Supported by key US legislative initiatives, the Company has positioned itself with low carbon products, in value chains targeting energy transition megatrends.

REC Silicon’s business corresponds with the purpose of the Company which is described in its Articles of Association § 3: “The Company’s purpose is development and sale of products and services related to renewable energy sources, and to perform other financial operations related to such. The Company may, through subscription of shares or in any other ways, including granting of loans, acquire interests in other companies with identical or similar purposes”.

The Board has defined clear strategies, business goals and a risk profile for the Company’s business activities, to create value for its shareholders in a sustainable manner considering finan- cial, social and environmental factors. This includes efficient and responsible utilization of resources to the benefit of all its stakeholders.

Sustainability is at the core of REC Silicon’s business model and the Company acknowledges its responsibilities toward the environment, society, and the local communities in which it operates. The Board carries the responsibility to secure accept- able sustainability performance and has implemented various policies providing business practice guidance and reporting procedures to ensure continuous improvement. An account of the Company’s sustainability performance is included in the Sustainability report in the annual report.

The Company’s strategies, business goals and risk profile are reviewed on an annual basis and presented in the annual report, quarterly reports, and at various investor meetings.

3. Equity and dividends

The Group’s consolidated equity was negative USD 378.1 million on December 31, 2024. The debt-to-equity ratio on December 31, 2024, was negative 1.5. The Board monitors the Group’s capital structure and takes actions necessary to ensure that it is appropriate for the current objectives, strategy, and risk profile. Reference is also made to the consolidated financial statements

note 3.3 regarding capital structure and financing and note 3.1 regarding financial risk and to the report of the Board.

The Company will need to have additional funding to support its operations throughout 2025. A key challenge arises as debt obligations begin to mature in January 2026, and the Company will not be able to generate sufficient cash from operations to meet these repayments. The company may face challenges in generating adequate operating cash flows in the subse- quent period. Significant doubt has been raised regarding the Company’s ability to secure sufficient funding to sustain its oper- ations for the next 12 months without the continued support of the major shareholder, Hanwha, or additional sources of capital. Additional information is included in the going concern section of the annual report.

Management and the Board of Directors believe that the Company will be successful in obtaining the capital necessary to meet obligations and believes that the financial goals for 2025 are achievable. Given the cash flow estimates outlined in this report and the fact that Hanwha, as the largest shareholder and the primary creditor, has guaranteed all bank loans and provided the shareholder loans, the Board and management of the Company further believe that continued operations are aligned with Hanwha’s best interest. The Board intends to monitor these condi- tions and is prepared to take appropriate action as necessary.

The Group’s ambition is to give its shareholders a high and stable return on their investment and to be competitive compared with alternative investment opportunities with comparable risk. To

REC Silicon annual report 2024

72

Corporate governance

support committed investments and productivity improvements, the Board’s view so far has been that retained earnings should be used within the Company. Accordingly, there has been no distribution of dividends to the shareholders since the Company was publicly listed in 2006, and no proposed dividend payments for the financial year 2024.

The Board will continue to assess the capital structure based on the goals, strategies, risk profile, and the financial situation of the Company.

At the Annual General Meeting on May 14, 2024 (the “AGM”), the Board was granted the following authorities:

Authority to increase the share capital with up to NOK 84,125,000 through one or several share capital increases. The authorization to acquire shares may be used for one or more of the following purposes:

in connection with investments, acquisitions, or other corpo- rate purposes

for use for incentive programs for employees

Authority to acquire treasury shares in the Company (up to a maximum of ten percent of the face value of the share capital). As of December 31, 2024, the authorization has not been used.

These authorities were restricted for defined purposes and each mandate was considered separately. They are valid until the AGM in 2025 or no later than 15 months from the date of the 2024 AGM.

For further information about the mandates given to the Board, reference is made to the minutes from the AGM, which are avail- able on the Company’s website ( www.recsilicon.c om ).

4. Equal treatment of shareholders and transactions with related parties

The Company seeks to conform to the principles for equal treat- ment of shareholders. In the event of a share capital increase based on authorization from the general meeting, where the pre-emptive rights of shareholders are set aside, grounds will be provided in the stock exchange notice in which the share capital increase is announced.

In the event of a share buy-back program, the Board will aim to ensure that all related transactions are carried out either through the trading system or at prevailing prices at Oslo Børs. The Board will consider Company and shareholders’ interests and aim to maintain transparency and equal treatment of all shareholders. In the event of limited liquidity in the Company’s shares, the Company shall consider other ways to ensure equal treatment of all shareholders. There were no transactions in own shares during 2024.

5. Freely negotiable shares

REC Silicon has one class of shares, and each share confers one voting right at the general meetings. The Company’s shares are listed on the Oslo Stock Exchange, where they are freely trans- ferable. There are no restrictions on owning, trading, or voting for shares in the Articles of Association.

6. General meetings

The Board shall ensure that as many of the Company’s share- holders as possible are able to exercise their voting rights at the Company’s general meetings, and that the general meeting is an effective forum for shareholders and the Board. Extraordinary general meetings (an “EGM”) can be called by the Board of Directors if deemed necessary or be requested by the Company’s auditor or shareholders representing at least 5% of the Company’s share capital.

Notification

The Board ensures that the resolutions and supporting infor- mation distributed are sufficiently detailed, comprehensive, and specific, allowing shareholders to form a view on all matters to be considered at the meeting. 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. The deadline for shareholders to give attendance

REC Silicon annual report 2024

73

Corporate governance

notice is set as close to the date of the meeting as possible, and minimum 5 days prior to the general meeting.

Shareholders may request that specific matters be considered by a general meeting by written notice to the Board within 7 days prior to the time limit for notice of the general meeting together with a proposal for resolution and reasons why the matter is proposed for consideration. If the notice has already been distributed, a new notice shall be distributed if the time limit for notice to the general meeting has not expired.

Participation and execution

The Chairman of the Board, the Board members, the auditor, and the members of the Nomination Committee are normally present at the general meeting. All Board members are encour- aged to attend the meeting.

The Chairman of the Board nominates an independent chair for election to lead the meeting.

The right to participate and vote at the general meeting may only be exercised by shareholders whose shareholdings are entered in the Norwegian Central Securities Depository (the “VPS”), on the fifth day prior to the general meeting, as stipulated by the Articles of Association in accordance with statutory law. Instead of participating at the general meeting, shareholders may vote in advance or grant a proxy, with or without voting instructions as further described in this notice.

The annual general meeting is held by the end of June every year in the municipality where the Company has its registered business address or in Oslo. If required, the Board may hold the annual general meeting digitally. The 2024 AGM was held digitally on May 14 th , with 43.77% of the Company’s shares represented.

Deviation from the Code of Practice

The Code of Practice recommends separate voting for candi- dates to the Board. However, it is not possible to vote separately on each candidate nominated to the Board because the composition of 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 appli- cable 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.

7. Nomination committee

The Nomination Committee is governed by the Articles of Association section 6. The 2023 AGM elected the following three members for the Nomination Committee for the period until the AGM in 2025: Mr. Junghey Chae (chair), Dr. Sungchoon Kang, and Dr. Jieun Lee.

The Nomination Committee does not include any executive personnel or any member of the Board. Mr. Junghey Chae is an employee of the Company’s main shareholders. The remaining members of the Nomination Committee are independent of the Board and the executive management of the Company (“Group Management”).

The general meeting stipulates the rules of procedure for the Nomination Committee and determines the Committees’ remu- neration.

The Nomination Committee gives its recommendation for the general meeting on election of and compensation to members of the Board, 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, and information on how to propose candidates can be found on the Company’s website.

8. Board of Directors: Composition and independence

Pursuant to the Articles of Association section 6, the Company’s Board shall consist of three to twelve members. On December 31, 2024, the Board consisted of five members (see table below), of which three were female and three were independent from the main shareholders. The directorsDirectors are elected by the general meeting for a term of one year and may be

REC Silicon annual report 2024

74

Corporate governance

re-elected. Information concerning the Company’s policies for equality and diversity with respect to gender and other matters for the Company’s governing bodies are described in the sustainability reporting in the financial statements.

The 2024 annual general meeting elected Tae Won Jun (Chair), Jooyong Chung (Deputy Chair), Renate Oberhoffer-Fritz, Paraskevi (Vivian) Bertseka and Robert Neuhauser as the Company’s Board for a period until the annual general meeting of 2025.

All members of the Board are considered independent of Group Management and the Company’s material business contacts.

The Company’s annual report and the website provides infor- mation to illustrate the expertise of the members of the Board. The Board considers its composition to be diverse and represent required competencies including financial and industrial expe- rience. Board members are encouraged to own shares in the

Company. An overview of Board members’ share ownership in the Company is available in note 16 to the consolidated financial statements.

9. Work of the Board of Directors

The Board has the ultimate responsibility for the management of the Company and the Group and for supervising Group Management.

The Board has adopted “Rules of procedures for the Board of Directors,” which regulates the Board’s responsibilities, duties, and administrative procedures as well as the tasks and duties of the Chief Executive Officer. The Board has also adopted a Chart of Authority regulating matters that are to be decided by the Board and matters that may be decided by Group Management. The Chart of Authority distinguishes between investment decisions, customer contracts, procurement contracts,

compensation, and finance and is reviewed on an annual basis. The Board holds at least one meeting per year with the auditor and without any members of Group Management or administra- tion present.

The Board has adopted guidelines to ensure it is informed of and how to handle potential transactions and matters to be considered by the Board, in which members of the Board, Group Management or close associates are involved. The Board must review and approve all transactions between the Group and Group Management or the Board.

The Board has established two committees: an Audit Committee and a Compensation Committee.

Audit Committee

The Company’s Audit Committee is governed by the Norwegian Public Limited Liability Companies Act and the Audit Committee Charter, which sets out the tasks and rules of procedure of the Committee.

The Audit Committee members are appointed by and among the Board. On December 31, 2024, the Audit Committee members were Ms. Jooyong Chung, Dr. Renate Oberhoffer-Fritz, and Ms. Paraskevi (Vivian) Bertseka. The Audit Committee held six meet- ings in 2024.

The Audit Committee supports the Board with the assessment and control of financial risk, financial reporting, sustainability

Overview of the Board on December 31, 2024

Name

Role

Considered independent of main share- holders

Independent of Group Management

Independent of material business contacts

Served since

Term expires

Participation Board meetings 2024

Tae Won Jun

Chair

No

Yes

No

21-Oct-2022

AGM 2025

14 of 16

Jooyong Chung

Deputy Chair

No

Yes

No

14-May-2024

AGM 2025

14 of 16

Dr. Renate Oberhoffer-Fritz

Board member

Yes

02-May-2022

AGM 2025

16 of 16

Paraskevi (Vivian) Bertseka

Board member

Yes

21-Oct-2022

AGM 2025

16 of 16

Robert Neuhauser

Board Member

Yes

14-May-2024

AGM 2025

13 of 16

REC Silicon annual report 2024

75

Corporate governance

reporting, auditing, control, and prepares discussions and reso- lutions for Board meetings. It has no decision-making authority. The Audit Committee reviews complaints regarding accounting, internal controls, and auditing matters. In addition, under the whistle-blower procedure, complaints from employees and other concerned parties are received and followed up by the Audit Committee.

The Audit Committee makes recommendations to the Board with respect to the Group auditor and the auditor’s fees, as assessing the auditor’s independence, including considering any non-au- dit-related services provided.

Compensation Committee

The Compensation Committee is governed by the Norwegian Public Limited Liability Companies Act and the Compensation Committee Charter, which sets out the tasks and procedures of the Committee. The Compensation Committee members are appointed by and among the Board of Directors. On December 31, 2024, the Compensation Committee members were Tae Won Jun and Robert Neuhauser, both independent of the Group Management. During 2024, the Compensation Committee met once.

The Compensation Committee supports the Board by preparing resolutions on the terms and conditions of employment for the Chief Executive Officer and the general principles and strategies for compensation of Group Management including bonus and share based compensation as well as other personnel matters.

10. Risk management and internal control

The Group’s risk management system shall ensure that the Group has a systematic and uniform approach to risk manage- ment. The system defines roles, responsibilities, processes and procedures, standards, 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. Group Management performs separate risk evaluations based on a top-down approach. Risk assessments are presented to the Audit Committee and the Board. The Board performs a review of risks in connection with the approval of the annual budget.

Group Management regularly updates the Board including operational reviews, HSE (Health, Safety and Environment) measures, financial highlights, and key performance indica- tors. Prior to each Board meeting, the Chief Executive Officer prepares a report to the Board, which includes this information in addition to any items requested by Board members and items requiring action by the Board. The Chief Executive Officer also has pre-meetings and informal discussions with the Board throughout the year.

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.

To strengthen internal control, the Group has established an Anticorruption Policy and procedures, provided training to employees and managers, and performed a fraud risk assess- ment. Whistleblower complaints and other internal control activities are presented to the Audit Committee according to the Audit Committee charter.

To ensure consistent financial reporting throughout the Group, financial information is reported through a computerized finan- cial reporting system utilizing a common chart of accounts and procedures designed to ensure the consistency of information reported. Subsidiaries accumulate transactional information, period end balances, and performance statistics through ERP systems designed to meet the business requirements of each operation. Quarterly and year-end reporting processes are expanded to meet various supplementary requirements.

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.

The Group’s financial risk management is described in the consolidated financial statements ( note 3 ). Reference is also made to the Board of Directors’ report that includes an analysis of the financial statements and the risk factors.

REC Silicon annual report 2024

76

Corporate governance

11. Remuneration of the Board of Directors

The members of the Board receive remuneration in accordance with their individual roles. Prior to May 12, 2020, Board members who participate in the Audit Committee or the Compensation Committee received additional compensation.

Board remuneration is not linked to Company performance and Board members are not granted share options.

Details on the remuneration of the Board are disclosed in the consolidated financial statements ( note 1 6 ).

Members of the Board and/or related 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, but if they do, this shall be disclosed to the full Board. The remuneration for such additional duties will be approved by the Board. There were no such assignments in 2024.

12. Remuneration of the Group Management

The guidelines for salary and other compensation to Group Management was presented at the AGM in May 2024. The policy was last updated in 2023 and was approved by the general meeting. 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 included in note 16 of the consolidated financial statements.

The remuneration of the Group Management consists of a basic salary, relevant additional benefits and membership in the Company’s pension and insurance schemes. The remuneration also includes performance bonuses for selected individuals based on an annual performance related compensation system. In addition, the Board has adopted an incentive program for retaining key personnel. The performance bonuses are linked to the Group’s financial performance and defined KPI’s over time and includes incentives related to performance the employees can influence.

Details on the remuneration of the Chief Executive Officer and other members of Group Management are disclosed in the consolidated financial statements ( note 1 6 ).

The Board extended the long-term incentive program for retaining key personnel, whereby employees’ entitlements are linked to the share price development of the Company’s shares. The share-based program was introduced in 2014 and includes a lock-up period for shares awarded and an absolute limit for the maximum gain in each calendar year, however, no shares were issued in 2024. Further details on the incentive program are disclosed in note 32 of the consolidated financial statements.

The 2024 AGM voted separately on the compensation to leading employees and the statement regarding long-term incentive plans.

13. Information and communication

The Company treats its investors equally. Timely information is published simultaneously to all investors in accordance with applicable legislation and regulation in order to provide the best possible basis for evaluation of Company performance. All infor- mation is provided in English.

The Board adopted an Investor Relations (“IR”) policy speci- fying, among other things, who is entitled to speak on behalf of the Company on various subjects and with guidelines for the Company’s contact with shareholders other than through general meetings.

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, the Chief Financial Officer and the IR Officer are normally present at the quarterly presentations. Furthermore, the Company keeps an ongoing dialogue with its investors and makes presentations

REC Silicon annual report 2024

77

Corporate governance

to analysts and investors through various conferences and events.

The Company observes a “Silent Period” extending from the last day of the quarter until operating results are released publicly. During this period, Group Management is not available for discussions with investors or analysts. The IR Officer is available on a limited basis to provide material previously released and to facilitate the collection and distribution of consensus forecasts. The Investor Relations function oversees coordinating the Company’s communications to the market and to existing and potential investors of the Company. The IR Officer is an inde- pendent contractor that reports to the Chief Financial Officer.

14. Take-overs

The Company has no defence mechanism to prevent take-over bids. 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.

Any transaction that effectively constitutes a disposal of a majority of the Company’s activities will be decided by the general meeting.

Deviation from the Code of Practice

The Board has not established separate guidelines in the event of a take-over bid as recommended by the Code of Practice. Take-over bids are usually specific, one-off, events which makes preparation of guidelines challenging. In the event of a take-over process, the Board will ensure that the Company’s shareholders are treated equally, and that the Company’s activities are not unnecessarily interrupted. The Board will further seek to comply with the relevant recommendations from the Code of Practice.

15. Auditor

The Company’s external auditor was KPMG until May 14, 2024, at which time Deloitte was appointed external auditor. Both KPMG and Deloitte are independent from the Company.

The auditor participates at Board meetings with respect to the Annual Financial Statements. The auditor comments on any material changes in the Company’s accounting principles, mate- rial estimates used to calculate accounting figures, and reports disagreements between the auditor and Group Management.

The auditor presents significant identified weaknesses and proposals for improvements of the internal control procedures annually to the Board with an annual confirmation that the auditor has satisfied the requirements for independence together with a summary of all services provided to the Group. The auditor meets with the Audit Committee and the Board at least once a year without the Chief Executive Officer or any other member of the Group Management present.

The auditor is also required to participate in meetings of the Audit Committee and present the main features of the audit plan to the Audit Committee.

Remuneration of the auditor is approved by the general meeting. The auditor provides a break-down between audit and non-audit services, and information is provided to the general meeting about non-audit services provided by the auditor. The Board has issued guidelines regarding Group Management’s use of the auditor for services other than the audit. These guidelines include a list of services that are preapproved for fees up to NOK 500,000 and requires audit committee approval for all other non-audit services or if fees are more than NOK 500,000. For more information about remuneration to the auditor, see note 22 to the consolidated financial statements.

The auditor participates at the AGM and presents the inde- pendent auditor’s report.

REC Silicon annual report 2024

78

Corporate governance

Statement of compliance 130

Parent company financial statements 131

Auditor’s report 147

Definition of alternative performance measures 153

Financial statements

REC Silicon annual report 2024

79

Financials

Consolidated financial statements

REC Silicon Group

Consolidated statement of financial position 81

Consolidated statement of income 82

Consolidated statement of comprehensive income 83

Consolidated statement of changes in equity 84

Details of consolidated comprehensive income 85

Consolidated statement of cash flows 86

Notes to the consolidated financial statements 87

Note 01 General information 87

Note 02 Summary of significant accounting policies 87

Note 03 Financial risk management 92

Note 04 Critical accounting judgments and key sources of estimation uncertainty 94

Note 05 Segment and revenue information 95

Note 06 Fixed assets 98

Note 07 Leases 99

Note 08 Impairments of cash-generating units 101

Note 09 Investments 103

Note 10 Related party transaction 104

Note 11 Discontinued operations 104

Note 12 Receivables and prepayments 106

Note 13 Inventories 107

Note 14 Cash and cash equivalents and restricted bank accounts 107

Note 15 Shareholder information 108

Note 16 Management and Board of Directors’ compensation, loans, shares, bonds 109

Note 17 Borrowings 112

Note 18 Income tax expense and deferred tax assets and liabilities 115

Note 19 Retirement benefit obligations and expenses 117

Note 20 Trade payables, provisions and other liabilities 119

Note 21 Government grants 120

Note 22 Other operating expenses 121

Note 23 Other income and expenses 121

Note 24 Employee benefits 122

Note 25 Financial income and expenses 122

Note 26 Earnings per share 123

Note 27 Dividends per share 123

Note 28 Research and development 124

Note 29 Commitments, guarantees, pledges 124

Note 30 Other information financial instruments 125

Note 31 Claims, disputes, contingent liabilities and contingent assets and risks 127

Note 32 Share-based compensation 128

Note 33 Events after the reporting period 129

REC Silicon annual report 2024

80

Financials

Financials | Consolidated financial statements

Consolidated statement of financial position

USD in million	Notes	2024	2023
ASSETS
Non-current assets
Intangible assets	6	0.0	0.8
Land and buildings	6	31.1	33.6
Machinery and production equipment	6	31.0	40.2
Other tangible assets	6	2.3	4.0
Assets under construction	6	20.3	180.9
Property, plant and equipment	6	84.7	258.7
Right of use assets	7	23.4	32.2
Other non-current receivables	12	0.2	0.4
Financial assets and prepayments	0.2	0.4
Total non-current assets	108.3	292.2
Current assets
Inventories	13	27.4	58.5
Trade and other receivables	12	16.2	21.9
Prepaid costs	12	9.4	8.7
Restricted bank accounts	14	0.6	0.6
Cash and cash equivalents	14	10.3	170.9
Total current assets	63.8	260.7
Total assets	172.1	552.9
USD in million	Notes	2024	2023
	EQUITY AND LIABILITIES
	Shareholders' equity	15
	Paid-in capital	3027.7	3027.7
	Other equity and retained earnings	-3405.7	-2951.3
	Total shareholders' equity	-378.1	76.4
	Non-current liabilities
Retirement benefit obligations	19	3.3	7.0
Non-current provision, interest calculation	20	26.3	23.8
Non-current financial liabilities, interest bearing	17	251.6	253.0
Non-current lease liabilities	7	56.1	62.4
Non-current prepayments	20	33.4	24.9
Other non-current liabilities, not interest bearing	32	0.0	0.7
	Total non-current liabilities	370.6	371.7
	Current liabilities
Trade payables and other liabilities	20	60.2	60.7
Provisions	20	8.2	0.0
Current financial liabilities, interest bearing	17	101.0	30.9
Current lease liabilities	7	9.0	7.5
Current prepayments	20	1.2	5.7
	Total current liabilities	179.6	104.8
		550.2	476.5
	Total equity and liabilities	172.1	552.9

Lysaker, March 24, 2025

Board of Directors

Document is signed electronically

Tae Won Jun

Chairman of the Board

Jooyong Chung

Deputy Chair

Vivian Bertseka

Member of the Board

Robert Neuhauser

Member of the Board

Dr. Renate Oberhoffer-Fritz

Member of the Board

William K. Levens

President and CEO

REC Silicon annual report 2024

81

Financials

Financials | Consolidated financial statements

Consolidated statement of income

USD in million	Notes	2024	2023
Revenues	5	140.8	140.8
Cost of materials	-20.7	-26.9
	Changes in inventories	-15.9	7.1
Employee benefit expenses	16 , 24 , 32	-43.6	-43.5
Other operating expenses	22	-77.8	-98.0
Other income and expenses	23	-0.7	4.7
EBITDA‌ 1	-17.9	-15.7
Depreciation	6	-8.7	-10.2
Amortization	6	0.0	0.0
Depreciation of right of use assets	7	-2.6	-2.6
Impairment	6 , 7 , 8	-49.7	-7.0
Total depreciation, amortization and impairment	-61.0	-19.8
EBIT ‌ 2	-78.9	-35.5
Financial income	25	3.1	3.4
Net financial expenses	9 , 25	-28.4	-20.1
Net currency gains/losses	25	0.1	12.7
Gain from sale of Yulin JV	25	0.0	135.5
Net financial items	-25.3	131.5
USD in million	Notes	2024	2023
	Profit/loss before tax from continuing operations	-104.2	95.9
Income tax expense/benefit from continuing operations	18	0.0	0.0
	Profit/loss from continuing operations	-104.2	95.9
Profit/loss from discontinued operations	11	-353.1	-65.4
	Profit/loss from total operations	-457.4	30.5
		Attributable to:
	Owners of REC Silicon ASA	-457.4	30.5
		Earnings per share
Earnings per share (In USD) from continuing operations - basic	26	-0.25	0.23
Earnings per share (In USD) from continuing operations - diluted	26	-0.25	0.23
		Earnings per share
Earnings per share (In USD) from total operations - basic	26	-1.09	0.07
Earnings per share (In USD) from total operations - diluted	26	-1.09	0.07

1 EBITDA - EBIT excluding depreciation, amortization and impairment.

2 EBIT - Profit/loss excluding income tax expense/benefit, net financial items.

REC Silicon annual report 2024

82

Financials

Financials | Consolidated financial statements

Consolidated statement of comprehensive income

USD in million	2024	2023
Profit/loss	-457.4	30.5
Other comprehensive income, net of tax:
Remeasurement of defined benefit plans	2.9	0.9
Currency translation effects	0.0	0.0
Sum items that will not be reclassified to profit or loss	2.9	0.9
Items that may be reclassified subsequently to profit or loss:
Currency translation differences	0.0	-15.4
Sum items that may be reclassified subsequently to profit or loss	0.0	-15.4
Total other comprehensive income	2.9	-14.5
Total comprehensive income	-454.4	16.0
Total comprehensive income attributable to:
Owners of REC Silicon ASA	-454.4	16.0

REC Silicon annual report 2024

83

Financials

Financials | Consolidated financial statements

Consolidated statement of changes in equity

				Attributable to equity holders of REC Silicon ASA
USD in million	Notes	Share capital	Share premium	Other paid-in capital	Total paid-in capital	Other equity	Comprehensive income	Total equity
Year 2023
On January 1, 2023		59.2	2,926.7	41.8	3,027.7	539.0	-3,506.3	60.4
Total comprehensive income		0.0	0.0	0.0	0.0	0.0	16.0	16.0
On December 31, 2023		59.2	2,926.7	41.8	3,027.7	539.0	-3,490.3	76.4
Year 2024
On January 1, 2024		59.2	2,926.7	41.8	3,027.7	539.0	-3,490.3	76.4
Total comprehensive income		0.0	0.0	0.0	0.0	0.0	-454.4	-454.4
On December 31, 2024		59.2	2,926.7	41.8	3,027.7	539.0	-3,944.8	-378.1

REC Silicon annual report 2024

84

Financials

Financials | Consolidated financial statements

Details of consolidated comprehensive income

USD in million	Translation differences that can be transferred to profit and loss	Acquisition	Retained earnings	Total
Year 2023
Accumulated on January 1, 2023	28.8	20.9	-3,556.0	-3,506.3
Profit/loss	0.0	0.0	30.5	30.5
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Remeasurement of defined benefit plans	0.0	0.0	0.9	0.9
Currency translation effects	0.0	0.0	0.0	0.0
Sum items that will not be reclassified to profit or loss	0.0	0.0	0.9	0.9
Items that may be reclassified to profit or loss:
Currency translation differences taken to equity	-15.4	0.0	0.0	-15.4
Sum items that may be reclassified to profit or loss	-15.4	0.0	0.0	-15.4
Total other comprehensive income for the period	-15.4	0.0	0.9	-14.5
Total comprehensive income for the period	-15.4	0.0	31.4	16.0
Accumulated on December 31, 2023	13.4	20.9	-3,524.6	-3,490.3
Year 2024
Accumulated at January 1, 2024	13.4	20.9	-3,524.6	-3,490.3
Profit/loss	0.0	0.0	-457.4	-457.4
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Remeasurement of defined benefit plans	0.0	0.0	2.9	2.9
Currency translation effects	0.0	0.0	0.0	0.0
Sum items that will not be reclassified to profit or loss	0.0	0.0	2.9	2.9
Items that may be reclassified to profit or loss:
Currency translation differences taken to equity	0.0	0.0	0.0	0.0
Sum items that may be reclassified to profit or loss	0.0	0.0	0.0	0.0
Total other comprehensive income for the period	0.0	0.0	2.9	2.9
Total comprehensive income for the period	0.0	0.0	-454.4	-454.4
Accumulated at December 31, 2024	13.4	20.9	-3,979.0	-3,944.8

REC Silicon annual report 2024

85

Financials

Financials | Consolidated financial statements

Consolidated statement of cash flows

USD in million	Notes	2024	2023
Cash flows from operating activities
	Profit/loss before tax‌ 1	-457.4	30.5
Depreciation, amortization and impairment	6 , 7 , 8	270.9	22.4
Proceeds from sale of Yulin JV	9	0.0	-136.1
Changes in receivables, prepayments from customers etc.	12	9.6	25.1
Changes in inventories	13	31.1	-20.3
Changes in payables, accrued and prepaid expenses	20	4.3	3.0
Changes in provisions	20	8.2	0.0
Changes in VAT and other public taxes and duties	20	1.3	1.3
Currency effects not cash flow or not related to operating activities	25	0.0	-12.3
	Other items	-0.1	0.2
Net cash flow from operating activities	-132.0	-86.0
Cash flows from investing activities
Proceeds from sale of Yulin JV	9	0.0	136.1
Proceeds/Payments finance receivables and restricted cash	14	0.1	0.2
Proceeds from sale of property, plant and equipment and intangible assets	6	1.6	0.7
Payments for property, plant and equipment and intangible assets	6	-91.3	-145.7
	Net cash flow from investing activities	-89.6	-8.7
USD in million	Notes	2024	2023
		Cash flows from financing activities
Payments of lease liabilities	7	-7.9	-3.9
Payments of borrowings and up-front/waiver loan fees	17	-31.2	-111.1
Proceeds from borrowings	17	100.0	280.0
	Net cash flow from financing activities	60.9	165.0
Effect on cash and cash equivalents of changes in foreign exchange rates	25	0.0	-4.6
	Net increase/decrease in cash and cash equivalents	-160.7	65.7
	Cash and cash equivalents at the beginning of the period	170.9	105.3
	Cash and cash equivalents at the end of the period	10.3	170.9
		1 Profit/loss before tax consists of
	Profit/loss before tax from continuing operations	-104.2	95.9
Profit/loss before tax from discontinued operations	11	-353.1	-65.4
	Profit/loss before tax from total operations	-457.4	30.5
		1 Profit/loss before tax from total operations includes
	Interest Paid	-30.3	-16.5
	Interest Received	3.1	3.6

REC Silicon annual report 2024

86

Financials

Financials | Consolidated financial statements

Notes to the consolidated financial statements

Note 01 General information

REC Silicon ASA was established in Norway on December 3, 1996. The Company is headquartered in Lysaker, Norway.

The Company is a public limited liability company incorporated and domi-ciled in Norway. The address of its registered office is Lysaker Torg 5, 3. etg, Lysaker, Norway.

Subsidiaries of the Company including ownership and voting rights are presented below.

Subsidiaries of REC Silicon ASA

Company	Ownership/voting right	Business office
REC Silicon AS	100%	Bærum
REC Silicon Inc	100%	Moses Lake, USA
REC Solar Grade Silicon LLC	100%	Moses Lake, USA
REC Advanced Silicon Materials LLC	100%	Butte, USA
REC Silicon Pte. Ltd.	100%	Singapore
REC Solar AS	100%	Bærum

These consolidated financial statements have been approved for issue by the Board of Directors on March 19, 2025 and are subject to approval by the Annual General Meeting scheduled for May 8, 2025.

Note 02 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these consol-idated financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

2.1 Basis of preparation and statement of compliance

The financial statements are presented in USD, rounded to the nearest tenth of million, unless otherwise stated. As a result of rounding adjustments, the figures in one or more rows or columns included in the financial statements and notes may not add up to the total of that row or column.

These consolidated financial statements have been prepared in accordance with IFRS® Accounting Standards as adopted by the EU, relevant inter-pretations, and the Norwegian Accounting Act. The consolidated financial statements have been prepared under the historical cost convention except for shareholdings at fair value through profit or loss.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. Actual outcomes may differ substantially. It also requires management to exercise judgment in applying the Group’s accounting policies. Areas involving a high degree of judgment or complexity, and areas where assumptions and estimates have a signifi-cant impact are disclosed in note 4.

2.2 Consolidation

(A) Subsidiaries

Subsidiaries are entities controlled by the Group. The Company controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Subsidiaries are consolidated from the date control is obtained until the date that control ceases.

All subsidiaries are owned 100 percent and there are no non-controlling interests.

Intercompany transactions, balances, and unrealized gains on transactions between group companies are eliminated.

(B) Joint ventures

A joint venture is an arrangement where two or more parties have joint control. Joint control exists only when decisions require the unanimous consent of the parties sharing control. Investments in joint ventures are accounted for by the equity method of accounting.

(C) Associates

Associates are entities over which the Group has significant influence but not control. Investments in associates are accounted for by the equity method of accounting.

REC Silicon annual report 2024

87

Financials

Financials | Consolidated financial statements

2.3 Segment reporting

REC Silicon produces silicon gas for the semiconductor industries at its manufacturing facility in Butte, Montana. The Company restarted production of polysilicon for the photovoltaic industry at its manufacturing facility in Moses Lake, Washington in the fourth quarter of 2023. The company discon-tinued polysilicon production at its Moses Lake facility as of December 30, 2024. The Company’s organization structure, management team, operating strategy, and performance measurement reporting support the determi-nation that these businesses represent separate distinguishable operating segments. Accordingly, there are two operating segments: Solar Materials (Moses Lake, Washington) and Semiconductor Materials (Butte, Montana). The operating segments include revenues less cost of manufacturing. Cost of manufacturing includes direct and indirect manufacturing costs and does not include general, administrative, and selling expenses. Other includes general, administrative, and selling expenses which support both operating segments in addition to administrative costs for the Company’s headquar-ters in Lysaker, Norway. Eliminations include the reversal of the impact of transactions between group members and affiliates. The results of the operating segments plus Other and Eliminations taken together reconcile to total EBITDA and EBIT for the Group.

Group Management is headed by the Chief Executive Officer (CEO), and the CEO makes decisions regarding the allocation of resources and perfor-mance assessment for all segments. Accordingly, the CEO is regarded as the Chief Operating Decision Maker (CODM).

An operating segment is a distinguishable component of the Group that is engaged in providing products that are subject to similar risks and returns and corresponds to management reporting.

2.4 Foreign currency translation

(A) 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”). The Group’s reporting currency continues to be USD. Accordingly, these consolidated financial statements are presented in USD.

(B) Transactions and balances

Transactions in foreign currencies are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are trans-lated at the exchange rates on the reporting date. Foreign exchange gains and losses resulting from the settlement, or the translation of monetary assets and liabilities are recognized in the statement of income, except when deferred in equity as qualifying hedges or as a part of a net investment.

(C) Group companies

The results and financial position of all the Group entities that have a func-tional currency different from the presentation currency are translated into the presentation currency as follows:

(i) Assets and liabilities for each statement of financial position presented are translated at the closing rate;

(ii) Income and expenses for each statement of income are translated at average exchange rates for the reporting period (based on monthly average rates); and

(iii) All resulting exchange differences from translation are recognized as a separate component of other comprehensive income (OCI).

On consolidation, exchange differences arising from the translation of the net investment in subsidiaries, including monetary items that are regarded as a

part of the net investment, are included in OCI. When a subsidiary is disposed of, exchange differences are recognized in the statement of income as part of the gain or loss on sale. On December 31, 2024, an intercompany loan from REC Silicon ASA to REC Silicon, Inc of USD 122.8 million was regarded as a part of the net investment. On December 31, 2023 this loan amount was USD 116.8 million.

2.5 Current/non-current

Assets and liabilities are classified as current when they are expected to be realized or settled within 12 months after the reporting date.

2.6 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depre-ciation and un-reversed impairment losses. Cost includes expenditures that are directly attributable to the acquisition, construction, or installation of the item. Borrowing costs incurred for the construction of qualifying assets are capitalized during the period required to complete and prepare the asset for its intended use. Costs are included in an asset’s carrying amount when it is probable that future economic benefits associated with the item will flow to the Group and costs can be measured reliably.

Depreciation is calculated using the straight-line method based on the costs of the assets less any residual value over their estimated useful lives.

2.7 Intangible assets

(A) Goodwill

On December 31, 2024 and 2023 the Group had no goodwill.

(B) Other intangible assets

Other intangible assets that have finite useful lives are carried at cost less accumulated amortization and un-reversed impairment. Amortization is calculated using the straight-line method on the costs of assets over their estimated useful lives from the date they are available for use. The Group has no intangible assets with indefinite useful lives.

REC Silicon annual report 2024

88

Financials

Financials | Consolidated financial statements

(C) Research and development

Research expenditures are recognized in expense as incurred. Development expenditures (relating to the design, construction and testing of a chosen alternative for new or improved materials, devices, products, processes, or systems) are capitalized when it is probable that the project will be successful considering its commercial and technological feasibility. Costs expensed in prior reporting periods are not later capitalized. Other development expenditures are recognized in expense as incurred.

2.8 Impairment of assets

Assets are reviewed for impairment whenever events or changes in circum-stances indicate that the carrying amounts may not be recoverable. An impairment loss is recognized in the statement of income for the amount by which the asset’s carrying amount exceeds its estimated recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. For the purpose of assessing impairment, assets are grouped at the lowest level for which cash inflows that are largely independent from the cash inflows associated with other assets can be identified (cash-generating units). Generally, any impairment is allocated to goodwill first, then proportionately to other non-current assets within a cash-generating unit. Assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

Impairment includes losses associated with assets determined to have no future economic benefits and assets that are replaced prior to the end of their useful lives.

2.9 Financial assets and liabilities

Financial assets are classified and subsequently measured at amortized cost, fair value through profit or loss, or fair value through other comprehen-sive income based on both the use of the assets within the entity’s business model and the nature of the cash flows. A financial asset is derecognized when expired or when the entity no longer has control of the cash flows related to the assets. Any rights or obligations retained in any transfer of

assets are booked separately as assets or liabilities. Financial liabilities are classified and subsequently measured at amortized cost, except for finan-cial liabilities (including derivatives) which are classified at fair value.

2.10 Accounting for derivative financial instruments and hedging activities

On December 31, 2024 and 2023 the Group had no derivatives.

2.11 Trade receivables

Trade receivables that do not have a significant financing component are recognized at transaction price and subsequently measured at amortized cost, less impairment. A provision for the impairment of trade receivables is recognized based upon lifetime expected credit losses (ECLs). The Group calculates ECLs based upon the Group’s historic credit loss expe-rience adjusted for forward-looking factors specific to the debtors and the economic environment. In addition, provisions are recorded for accounts which are greater than 60 days past due unless there is a clear indication that payment will be received. Balances are written off when collection efforts have been exhausted and the probability of recovery is unlikely.

2.12 Cash and cash equivalents

Cash and cash equivalents include cash on hand, demand deposits at banks, and money market funds with terms less than three months.

2.13 Paid-in equity capital

Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of any income tax, from the proceeds.

2.14 Borrowings

Borrowings are recognized initially at fair value. Borrowings that are not maintained at fair value through profit or loss are recognized net of trans-action costs and subsequently stated at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the statement of income over the period the borrowings are

outstanding using the effective interest method. Commitment fees for bank credit facilities are recognized as part of interest expenses as incurred.

A financial liability is removed from the statement of financial position when the obligation is discharged, cancelled, or expires. Substantial modifications to the terms of existing financial liabilities or an exchange of debt instru-ments with an existing lender at substantially different terms are treated as extinguishments of the original liability. The difference between the carrying amount of a financial liability and the consideration paid to extinguish the liability is recognized in profit or loss.

2.15 Inventories

Inventories are stated at the lower of cost or net realizable value (NRV).

Purchased inventories are stated at average cost less estimated obsoles-cence. Reserves for obsolescence include the write down of items no longer required (held for disposal) and the estimated decline in NRV caused by slow moving items.

The cost of finished goods and work in progress inventories are determined on a first in, first out basis and consists of raw materials, direct labour, other direct costs, and related indirect overheads. Costs associated with abnormal waste or unused normal operating capacity are not included in inventories. NRV is the estimated sales price less incremental costs to complete and sell the item. Net adjustments to reduce inventory to the lower of cost or NRV are recognized in inventory changes in the statement of income.

2.16 Income tax

Income tax expense (benefit) includes current and deferred tax. Income tax expense (benefit) is recognized in profit or loss except to the extent it relates to items recognized directly in equity or in other comprehensive income.

REC Silicon annual report 2024

89

Financials

Financials | Consolidated financial statements

Current tax is the estimated tax payable or receivable on the taxable income or loss for the year, and any adjustments to tax payable for previous years. Deferred tax includes the effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax also includes the carry forward of unused net operating losses and credits.

Current and deferred tax amounts are determined using rates and laws that have been enacted or substantially enacted at the reporting date or are expected to apply when temporary differences reverse. Net deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which deferred amounts can be utilized.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities, and the Group intends to settle its current tax assets and liabilities on a net basis.

Utilization of net operating losses and tax credit carry forwards are subject to certain limitations under Section 382 and 383 of the Internal Revenue Code of the United States in the event of a change in the Company’s ownership.

2.17 Provisions

Provisions for product warranties, onerous contracts, asset retirement obligations, restructuring costs, termination benefits, environmental resto-ration, and legal claims are recognized when: The Group has a present or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are discounted only when the effect is material and the distribution in time can be reliably estimated.

2.18 Share-based compensation

The Group grants synthetic share options to certain employees. The cost of these share-based options (settled in cash) is recalculated at each reporting date. using the Black Scholes option pricing model (see note 32).

2.19 Pension/post retirement obligations

A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognized in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets.

Re-measurements arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity via other compre-hensive income in the period in which they arise.

Gains or losses on the curtailment or settlement of a defined benefit plan are recognized when the curtailment or settlement occurs.

Obligations for contributions to defined contribution pension plans are recognized as an expense during the period incurred.

2.20 Revenue recognition

REC Silicon’s primary performance obligation is related to sale of goods in which the performance obligations are the delivery of an agreed volume of products within an agreed specification. REC Silicon has both short term and long-term contracts. Spot market sales, normally one month, cover delivery of an agreed volume at market price at the date the order is placed. The short-term contracts cover a period of a few months and up to one year, where the prices normally are fixed within a volume range. REC Silicon also has some long-term frame contracts that cover a period longer than one year. In these contracts the prices are normally negotiated on an annual basis.

Revenue is recognized when control of the goods is transferred to the customer at an amount that reflects the consideration to which REC Silicon expects to be entitled in exchange for those goods or services. Control is transferred to the buyer, according to the agreed delivery term for

each sale. Delivery terms are based on Incoterms specified within sales contracts. Generally, the main terms are “Ex Works” and “FCA”. REC Silicon can receive prepayments in advance of fulfilling contractual obligations for delivering goods. This prepaid revenue is recorded as a liability until such time that revenue is recognized.

The Group recognizes a provision for discounts and expected returns when a discount provisions or a right of return is specified in purchase contracts. The Group recognizes revenue from the sale of goods measured at the fair value of consideration received or receivable, which includes a provision of allowances for discounts and expected returns.

Goods are normally sold with standard warranties that the goods comply with the agreed-upon specifications. These standard warranties are accounted for using IAS 37 Provisions, Contingent Liabilities and Contingent Assets. REC Silicon does not have any other significant obligations for returns or refunds.

2.21 Leases

At the inception of a contract, the Group assesses whether a contract is, or contains a lease. A lease exists if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consider-ation. The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of the costs to dismantle and remove the underlying assets or to restore the underlying asset or the site on which it is located, less any lease incentives received.

Right-of-use assets are subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. In addition, right-of-use assets are periodically adjusted for impairment losses, if any, and for certain remeasurements of the associated lease liability.

REC Silicon annual report 2024

90

Financials

Financials | Consolidated financial statements

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily deter-mined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

Lease payments are amortized to interest expense and to reduce the associated lease liability based upon the present value calculation used at inception to determine the lease liability.

Leases of ’low-value’ assets and short-term leases (lease terms of 12 months or less) are recognized as expense in profit or loss when incurred.

2.22 Government grants

Government grants are recognized at their fair values when there is reasonable assurance that the grants will be received and that the Group will comply with attached conditions. Government grants related to assets are presented in the statement of financial position as a reduction to the carrying amount of the assets and reduce depreciation in the statement of income. Government grants relating to income are listed separately under other income.

Government grant assets are recognized for the unsettled portions of grants and are discounted if the effect of discounting is significant. Significant changes to estimates of timing of utilization or discount rates are recognized as a change in the grant asset and offset to production assets or expenses based on the classification at the inception of the grant (see note 21).

2.23 Statement of cash flows

The Group presents the statement of cash flows using the indirect method. Cash inflows and outflows are shown separately for investing and financing activities, while operating activities include both cash and non-cash line items. Interest received and paid are reported as a part of operating activ-ities, except borrowing costs capitalized as part of the construction of a non-current asset that are included in investing activities, and payment of up-front and loan fees that are reported as part of financing activities.

Operating activities include all cash flow effects from derivatives. Currency gains and losses are recognized in the statement of income. Amounts related to borrowing (financing activities), non-current financial assets and investments (investing activities) and unrealized gains or losses on cash and cash equivalents held at the end of the periods are reclassified in a separate line item under operating activities.

Financing activities include the repayment of prepayments received from customers on which interest is calculated.

2.24 Adoption of new and revised standards and interpretations

The Group, in practice, adopts new and amended standards and interpre-tations, issued by the IASB and approved by the EU, that are relevant to its operations as effective. New standards that were effective beginning January 1, 2024 did not have a material effect on the Group’s financial statement.

REC Silicon annual report 2024

91

Financials

Financials | Consolidated financial statements

Note 03 Financial risk management

3.1 Financial risk factors

The Group’s activities expose it to a variety of financial risks, including currency risk, interest-rate risk, liquidity risk, credit risk, and others.

The goals for the Group finance policy and the treasury operations are primarily to minimize the risk of financial distress, secure long-term funding, manage currency risk of expected future net cash flows, and manage interest rate risk. The Company’s finance policy sets the framework and limits for hedging activities in the Group. It defines risk management objec-tives, responsibilities, and operational requirements.

The disclosures that are required regarding financial risks below focus on the risks that arise from financial instruments and how they have been managed. Derivative financial instruments may be used to reduce risks from commercial transactions; the existence of derivative financial instruments exposes the Company to additional risks.

(A) Currency risk

The Company operates internationally and is exposed to currency risk. On December 31, 2024, the Group’s working capital is a combination of USD and NOK, equity is in NOK, and debt is in USD. Currency risk arises from transactions in currencies other than the Group’s reporting currency and cash denominated in NOK. Currency risk relates primarily to a portion of cash balances denominated in NOK.

Net cash flow is defined as the consolidated external cash flows of the Group. The Group’s policy provides the ability to hedge external net cash flows with a maximum time horizon of 24 months. The purpose is to reduce the currency risk of expected future net cash flows. The Company manages currency risk on an overall level.

On December 31, 2024, and 2023, the Group did not hold any derivative financial instruments related to mitigating currency risks.

(B) Credit risk

Credit risk is the risk of loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligation and is primarily related to trade receivables and guarantees provided for discontinued operations. The Group maintains policies to ensure that credit is extended to customers with appropriate liquidity and credit histories in combination with requiring guarantees when appropriate (see note30)

(C) Liquidity risk and going concern

Liquidity risk is measured by subtracting the Group’s liabilities from cash considering historic and anticipated operating results. Liquidity risk management requires maintaining sufficient available cash or access to capital markets to compensate for anticipated volatility in operating cash flows or to fund additional investments.

Liquidity risk is impacted by changes in market conditions, potential claims against the Company, and uncertainty associated with critical judgements used to arrive at accounting estimates. In addition, the Company’s access to capital markets may be impacted by overall market conditions (notes 4, 17, and 30).

Debt maturities in 2025 include USD 50 million for the Standard Chartered term loan, which needs to be rolled over, USD 1.8 million for the undiscounted Grant County Property Tax note and USD 16.4 million for undiscounted lease liabilities. On January 24, 2025, the Company announced a new credit agreement with Hanwha International. As part of the terms of the Credit Agreement, the Company and Hanwha International LLC

(HWI) agreed to roll up the existing loans, which mature on February 2, 2025, for USD 25 million and on February 4, 2025, for USD 25 million, respectively, into the terms of the Credit Agreement. On December 31, 2024, the Group does not have sufficient available cash to meet debt service and other antic-ipated operating cash flow requirements. Management acknowledges that additional sources of capital are required to meet obligations. The Company is actively negotiating securing additional financing aiming to close in the first half of 2025. Furthermore, the Company is looking to sell noncore assets during 2025. Management estimates future cash requirements can be met from the additional funding described below, along with cash flows generated by operations from the Semiconductor segment. (see notes 7,17, 29and 33to the consolidated financial statements).

Due to the shutdown of the polysilicon operations at the Moses Lake facility in December 2024, the polysilicon business has been classified as discon-tinued operations. Activities related to the removal of chemicals from the polysilicon production facilities and facility cleanup will continue until March 2025. Additionally, workforce restructuring activities will be completed by March 2025.

The cash flow generation in 2025 will be driven by sales from the Butte facility, with investment activities primarily focused on the maintenance of the Butte facility. Management believes that the financial goals for 2025 are achievable, and the primary focus is on 2025 as it will be necessary to stabilize the Company’s operations to actualize future financing and devel-opment opportunities in subsequent years.

On January 24, 2025, the Company announced that it had entered into a USD 40 million term loan (the “credit Agreement”) with Hanwha International LLC, supporting REC Silicon’s capital needs during the shutdown process

REC Silicon annual report 2024

92

Financials

Financials | Consolidated financial statements

at Moses Lake and the Company’s transition into a pure-play silicon gas provider. As part of this agreement, USD 25.6 million was drawn in January, with the remaining USD 14.4 million drawn in March.

As part of the terms of the Credit Agreement, the Company and Hanwha International LLC (HWI) agreed to roll up the existing loans, which mature on February 2, 2025, for USD 25 million and on February 4, 2025, for USD 25 million, respectively, into the terms of the Credit Agreement. The Company and HWI amended the existing loan documentation to reflect the roll-up into the Credit Agreement on February 5, 2025. The term loan matures in January 2026. Additionally, USD 50 million loan from Standard Chartered Bank, which matures in June 2025, needs to be rolled over, and USD 30 million prepayment received under the offtake agreement with Hanwha QCells Georgia Inc. is waived for repayment without interest until January 2026, with the due date subject to extension upon mutual agreement of the parties.

The Company will need additional funding to meet its debt obligations during the next 12 months, as debt obligations begin to mature in June 2025. Management acknowledges that the Company will not be able to generate sufficient cash flow from operations to support its operations for the next 12 months and meet these debt repayments. There is significant doubt around the Company’s ability to secure sufficient funding to sustain its operations and to meet debt repayment obligations for the next 12 months without the continued support of the major shareholder, Hanwha, or additional sources of capital.

This has resulted in material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern, which could have a substantial impact on its future operational capacity. However, management and the Board of Directors believe that the Company will be successful in obtaining the capital necessary to meet obligations and continue as a going concern.

Management acknowledges the importance of assumptions related to the going concern assessment and has carefully projected the outlook for 2025. Management believes that the financial goals for 2025 are achievable. Given the cash flow estimates outlined above and the fact that Hanwha, as the largest shareholder and the primary creditor, has guaranteed all bank loans and provided the shareholder loans, management and the Board believe that the Company’s continued operations are aligned with Hanwha’s best interest.

The Board considers the Company’s current liquidity position and the estimated results of operations sufficient to meet the operating cash flow requirements for remaining operations and to refinance the current bank loans for the upcoming years.

The Board of Directors confirms that the Financial Statements have been prepared under the assumption that the Company is a going concern, and that this assumption was realistic at the date of the accounts. The Board intends to monitor these conditions and is prepared to take appropriate action as necessary. Accordingly, these financial statements have been prepared under the assumption that the Company is a going concern.

(D) Interest rate risk

Changes in market interest rates affect the fair value of assets and liabilities or the variability in cash payments. The Group is exposed to interest rate risk through funding and cash management activities, both in REC Silicon ASA and REC Silicon Inc. Cash in bank accounts and liabilities have primarily carried variable interest rates.

Interest income and interest expense in the statement of income, as well as interest receipts and payments, are influenced by interest rate changes for financial instruments that carry variable interest rates. See note 30for interest rate sensitivity.

(E) Hedging of risk related to supply of raw material/commodities

When the Group is exposed to changes in the total costs from specific input factors it may hedge the associated risk. As of year-end 2024 no hedges were in place.

3.2 Fair value estimation

Fair value estimation is discussed in notes 9and 30.

3.3 Capital structure and financing

In determining the appropriate capital structure for the Group, various factors have been considered. These include risks associated with the Group’s business profile and the fact that the polysilicon production has high capital intensity.

The Group’s goal is to maintain sufficient capital to maintain current oper-ating cash flow requirements and to meet debt service obligations.

REC Silicon annual report 2024

93

Financials

Financials | Consolidated financial statements

Note 04 Critical accounting judgments and key sources of estimation uncertainty

4.1 Critical judgments in applying the Group’s accounting policies

Management’s judgments in applying the Group’s accounting policies which have the most significant effect on the financial statements are discussed below and in the relevant notes.

(A) Functional currencies

The Group’s presentation currency is USD. The functional currencies of REC Silicon AS and REC Solar AS are NOK. The functional currency of all other group companies is USD. The activities of the Group are primarily in the subsidiaries in the USA. Functional currency affects the reporting of currency gains and losses and exchange differences as well as hedging strategies and effects. Facts or circumstances may change in the future.

(B) Cash-generating units for impairment testing

The selection of cash generating units for impairment testing is a critical and difficult judgement. For impairment testing REC Silicon consisted of two cash generating units.

(C) Environmental liability

The Group’s operations are subject to environmental laws and regulations. These laws and regulations and their interpretations are subject to change. Changes may require investment and/or increased costs to meet more stringent standards or to take remedial actions related to past activities. The Company has reported a provision for asset retirement obligations (AROs) associated with the eventual cleanup and restoration of the Company’s manufacturing sites in the United States (note 20).

(D) Discontinued operations

As a result of shutting down operations in Moses Lake, the Solar Materials segment has been reported as discontinued operations as of December 30, 2024. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain amounts included in REC Group’s financial statements and related disclo-sures must be estimated, requiring management to make assumptions with respect to values or conditions which cannot be known with certainty at the time the financial statements are prepared. A critical accounting estimate is one which is both important to the portrayal of the company’s financial condition and results and requires management to make estimates about the effect of matters that are inherently uncertain. Management evaluates such estimates on an ongoing basis, based upon historical results and expe-rience utilizing trends and other methods considered reasonable.

4.2 Key sources of estimation uncertainty – critical accounting estimates

The preparation of financial statements in accordance with IFRS® Accounting Standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain amounts included in or affecting the Group’s financial statements and related disclosures must be estimated, requiring management to make assumptions with respect to values or conditions which cannot be known with certainty at the time the financial statements are prepared.

(A) Impairments and bad debt provisions

Changes in facts and in management’s evaluations and assumptions may give rise to further impairment losses, or reversals. The estimated recov-erable amounts of the Group’s assets are sensitive to small changes to key assumptions. The Company uses internal business plans that include estimates on raw material and energy prices, discount rates, and external market and industry analysis. There could be changes in environmental regulations impacting the company going forward, but no related legislation has been passed at the current time that is expected to impact the group. (notes 6, 7and 8).

Financial assets are also periodically reviewed for impairment. Provisions for losses on trade receivables have been made using a provision matrix based on the Group’s historical credit loss experience adjusted for forward-looking factors specific to the debtors and the economic environment. Actual losses may turn out significantly different from the evaluations made based on the knowledge and assumptions at the time of approving the accounts.

(B) Asset retirement obligations

The company has an obligation for eventual cleanup of its manufacturing operations in Moses Lake, Washington and Butte Montana. Changes in facts and in management’s evaluations and assumptions may give rise to changes in provisions for asset retirement obligations (AROs). Provisions may change due to changes in amounts or timing of estimated expenditures to restore production sites or changes in governmental regulations governing restoration requirements. The restoration of production sites is subject to significant uncertainty due to variability in restoration requirements that may be imposed by regulatory authorities as well as timing of the restoration. In addition, estimates of provisions are sensitive to changes in discount rates used to calculate provisions for AROs reported by the Group. (note20)

REC Silicon annual report 2024

94

Financials

Financials | Consolidated financial statements

Note 05 Segment and revenue information

Revenues from customers constituting more than ten percent of total revenues for year ended December 31, 2024

	Semiconductor materials	Solar materials	Other	REC Silicon
USD in million	%	%	%	%
Customer 1	44.9	31.9%	44.9	31.9%
Customer 2	33.3	23.7%	33.3	23.7%
Customer 3	18.2	12.9%	18.2	12.9%

Revenues from customers constituting more than ten percent of total revenues for year ended December 31, 2023

	Semiconductor materials	Solar materials	Other	REC Silicon
USD in million	%	%	%	%
Customer 1	32.8	23.4%	32.8	23.4%
Customer 2	27.6	19.6%	27.6	19.6%
Customer 3	17.9	12.7%	17.9	12.7%

Geographic distribution of revenues based on customer location for year ended December 31, 2024

			Semiconductor materials			Solar materials	Other	REC Silicon
USD in million		%		%		%		%
Denmark	44.9	31.9%	0.0	0.0%	0.0	0.0%	44.9	31.9%
USA	29.7	21.1%	0.0	0.0%	0.1	100.0%	29.8	21.1%
China	18.5	13.1%	0.0	0.0%	0.0	0.0%	18.5	13.1%
Korea	18.3	13.0%	0.0	0.0%	0.0	0.0%	18.3	13.0%
Taiwan	10.0	7.1%	0.0	0.0%	0.0	0.0%	10.0	7.1%
Japan	5.3	3.7%	0.0	0.0%	0.0	0.0%	5.3	3.7%
Singapore	3.4	2.5%	0.0	0.0%	0.0	0.0%	3.4	2.4%
Vietnam	2.6	1.9%	0.0	0.0%	0.0	0.0%	2.6	1.9%
France	2.3	1.7%	0.0	0.0%	0.0	0.0%	2.3	1.7%
Malaysia	2.0	1.5%	0.0	0.0%	0.0	0.0%	2.0	1.5%
Belgium	1.0	0.7%	0.0	0.0%	0.0	0.0%	1.0	0.7%
India	0.7	0.5%	0.0	0.0%	0.0	0.0%	0.7	0.5%
Other	0.7	0.5%	0.0	0.0%	0.0	0.0%	0.7	0.5%
Thailand	0.6	0.4%	0.0	0.0%	0.0	0.0%	0.6	0.4%
Ireland	0.3	0.2%	0.0	0.0%	0.0	0.0%	0.3	0.2%
Czech Republic	0.3	0.2%	0.0	0.0%	0.0	0.0%	0.3	0.2%
Total revenues	140.7	100.0%			0.1	100.0%	140.8	100.0%

REC Silicon annual report 2024

95

Financials

Financials | Consolidated financial statements

Geographic distribution of revenues based on customer location for year ended December 31, 2023

	Semiconductor materials		Solar materials			Other		REC Silicon
USD in million		%		%		%		%
Denmark	27.6	19.6%	0.0	0.0%	0.0	0.0%	27.6	19.6%
China	27.5	19.5%	0.0	0.0%	0.0	0.0%	27.5	19.5%
USA	18.0	12.8%	0.0	0.0%	0.2	100.0%	18.2	12.9%
Singapore	16.8	12.0%	0.0	0.0%	0.0	0.0%	16.8	11.9%
Korea	16.2	11.6%	0.0	0.0%	0.0	0.0%	16.2	11.5%
Taiwan	15.4	11.0%	0.0	0.0%	0.0	0.0%	15.4	11.0%
Japan	10.4	7.4%	0.0	0.0%	0.0	0.0%	10.4	7.4%
Other	6.1	4.3%	0.0	0.0%	0.0	0.0%	6.1	4.3%
Belgium	0.9	0.6%	0.0	0.0%	0.0	0.0%	0.9	0.6%
France	0.7	0.5%	0.0	0.0%	0.0	0.0%	0.7	0.5%
Czech Republic	0.6	0.4%	0.0	0.0%	0.0	0.0%	0.6	0.4%
Norway	0.1	0.1%	0.0	0.0%	0.0	0.0%	0.1	0.1%
Germany	0.1	0.1%	0.0	0.0%	0.0	0.0%	0.1	0.1%
Canada	0.1	0.1%	0.0	0.0%	0.0	0.0%	0.1	0.1%
Total revenues	140.6	100.0%			0.2	100.0%	140.8	100.0%

Customer location is based on the sales ship-to address. Customers may distribute the products to other countries.

Revenues by category for year ended December 31, 2024

	Semiconductor materials		Solar materials			Other		REC Silicon
USD in million		%		%		%		%
Silicon gas	81.1	57.6%	0.0	0.0%	0.0	0.0%	81.1	57.6%
Polysilicon	59.7	42.4%	0.0	0.0%	0.0	0.0%	59.7	42.4%
Other	0.0	0.0%	0.0	0.0%	0.1	100.0%	0.1	0.0%
Total revenues	140.7	100.0%	0.0	0.0%	0.1	100.0%	140.8	100.0%

Revenues by category for year ended December 31, 2023

	Semiconductor materials		Solar materials			Other		REC Silicon
USD in million		%		%		%		%
Silicon gas	86.6	61.6%	0.0	0.0%	0.0	0.0%	86.6	61.5%
Polysilicon	54.0	38.4%	0.0	0.0%	0.0	0.0%	54.1	38.4%
Other	0.0	0.0%	0.0	0.0%	0.2	100.0%	0.2	0.1%
Total revenues	140.6	100.0%	0.0	0.0%	0.2	100.0%	140.8	100.0%

The amounts for 2023 are re-presented for discontinued operations, see note11.

REC Silicon annual report 2024

96

Financials

Financials | Consolidated financial statements

The segment results in the tables below are the primary results used by the Chief Operating Decision Maker (CODM) to evaluate performance and allocate resources. EBITDA contribution includes all items that are included in EBITDA for the segments. The solar materials segment has been discontinued, however assets related to silane gas have potential future use and will be part of continuing segment going forward. For 2024 USD 49.8 million of impairment is for silane gas assets. The segment “Other” includes general, administrative, and selling expenses which support both operating segments in addition to administrative costs for the Company’s headquarters in Lysaker, Norway.

Segment information for the year ended December 31, 2024

USD in million	Semiconductor materials	Solarmaterials	Other	Total
Revenues	140.7	0.0	0.1	140.8
Cost of materials	-20.6	0.0	-0.1	-20.7
Change in inventories	-15.8	0.0	-0.1	-15.9
Employee benefit expense	-30.3	0.0	-13.3	-43.6
Other operating expenses	-60.6	0.0	-17.2	-77.8
Other income and expenses	-0.6	0.0	-0.1	-0.7
Total current costs	-127.8	0.0	-30.8	-158.7
EBITDA contribution	12.9	0.0	-30.8	-17.9
Depreciation of fixed Assets	-8.3	0.0	-0.4	-8.7
Amortization	0.0	0.0	0.0	0.0
Depreciation of leased Assets	-2.6	0.0	0.0	-2.6
Impairment	0.1	-49.8	0.0	-49.7
Total depreciation, amortization, and impairment	-10.8	-49.8	-0.5	-61.0
EBIT contribution	2.1	-49.8	-31.3	-78.9

Segment information for the year ended December 31, 2023

USD in million	Semiconductor materials	Solar materials	Other	Total
Revenues	140.6	0.0	0.2	140.8
Cost of materials	-26.8	0.0	-0.1	-26.9
Change in inventories	7.2	0.0	-0.1	7.1
Employee benefit expense	-30.1	0.0	-13.4	-43.5
Other operating expenses	-81.3	0.0	-16.7	-98.0
Other income and expenses	4.4	0.0	0.3	4.7
Total current costs	-126.6	0.0	-29.9	-156.5
EBITDA contribution	14.0	0.0	-29.7	-15.7
Depreciation of fixed Assets	-9.8	0.0	-0.5	-10.2
Amortization	0.0	0.0	0.0	0.0
Depreciation of leased Assets	-2.6	0.0	0.0	-2.6
Impairment	-7.0	0.0	0.0	-7.0
Total depreciation, amortization, and impairment	-19.3	0.0	-0.5	-19.8
EBIT contribution	-5.4	0.0	-30.2	-35.5

The amounts for 2023 are re-presented for discontinued operations, see note11.

Substantially all of the Group’s non-current assets are located in the United States.

The following table disaggregates revenues by category and reconciles to total revenues.

USD in million	2024	2023
Silicon gas	81.1	86.6
Polysilicon	59.7	54.1
Other	0.1	0.2
Total revenues	140.8	140.8

REC Silicon annual report 2024

97

Financials

Financials | Consolidated financial statements

Note 06 Fixed assets

Property, plant and equipment

USD in million	Land and buildings	Machinery and equipment	Other tangible fixed assets	Assets under construction	Total property, plant and equipment
Carrying value on January 1, 2024	33.6	40.2	4.0	180.9	258.7
Net additions‌1	-0.1	57.9	2.9	25.3	86.0
Disposals	0.0	-0.3	-0.7	0.0	-1.0
Depreciation and amortization	-2.0	-6.1	-0.6	0.0	-8.7
Depreciation and amortization - discontinued operations	-0.3	-10.7	-0.6	0.0	-11.7
Impairment	-0.1	-12.6	0.0	-29.6	-42.3
Impairment - discontinued operations‌2	-0.1	-37.3	-2.6	-156.3	-196.4
Carrying value on December 31, 2024	31.1	31.0	2.3	20.3	84.7
On December 31, 2024
Historical cost	104.5	1,674.3	63.8	73.8	1,916.4
Accumulated depreciation/amortization/impairment	-73.4	-1,643.2	-61.6	-53.5	-1,831.7
Carrying value on December 31, 2024	31.1	31.0	2.3	20.3	84.7
Carrying value on January 1, 2023	31.1	24.6	2.7	62.4	120.9
Net additions‌1	5.1	24.3	1.8	126.1	157.2
Disposals	-0.3	0.0	0.0	0.0	-0.4
Depreciation and amortization	-2.2	-7.4	-0.6	0.0	-10.2
Depreciation and amortization - discontinued operations	0.0	-0.7	0.0	0.0	-0.7
Impairment‌	0.0	-0.6	0.0	-7.5	-8.1
Impairment - discontinued operations	0.0	0.0	0.0	0.0	0.0
Carrying value on December 31, 2023	33.6	40.2	4.0	180.9	258.7
On December 31, 2023
Historical cost	145.4	2,179.7	72.1	230.0	2,627.2
Accumulated depreciation/amortization/impairment	-111.7	-2,139.5	-68.1	-49.1	-2,368.4
Carrying value on December 31, 2023	33.6	40.2	4.0	180.9	258.7

Specification of useful lives and depreciation

At year-end 2024, estimated useful lives by asset class were as follows:

•Land and Buildings 0-30 years (weighted average approximately 14.6 years)

•Machinery and equipment 0-20 years (weighted average approximately 13.7 years)

•Other tangible fixed assets (weighted average approximately 9.0 years)

With the Solar Materials Segment being discontinued the above useful lives relate to assets within the Semiconductor Materials Segment.

Assets under construction are not yet ready for their intended use or have not reached a condition capable of operating in the manner intended by management and depreciation has not started.

Reviews of estimated useful lives of property, plant, and equipment for 2024 and 2023 resulted in only minor changes.

1 Net additions include transfers from assets under construction.

2 Impairment for discontinued operations recorded in 2024 is related to the write down of assets in the solar materials segment because of the announced exit from the granular polysilicon business line. Impairment of discontinued operations for assets under construction is related to the Moses Lake restart project that remained in under construction as the facility had not reached a condition capable of operating in the manner intended by management.

REC Silicon annual report 2024

98

Financials

Financials | Consolidated financial statements

Intangible assets

USD in million	Assets under development	Other	Total intangible assets
Carrying value on January 1, 2024	0.5	0.3	0.8
Disposals	-0.5	-0.2	-0.8
Depreciation and amortization - discontinued operations	0.0	0.0	0.0
Carrying value on December 31, 2024	0.0	0.0	0.0
On December 31, 2024
Historical cost	0.0	45.1	45.1
Accumulated amortization/impairment	0.0	-45.1	-45.1
Carrying value on December 31, 2024	0.0	0.0	0.0
Carrying value on January 1, 2023	0.6	0.3	1.0
Internal Development	-0.1	0.0	-0.1
Amortization	0.0	0.0	0.0
Carrying value on December 31, 2023	0.5	0.3	0.8
On December 31, 2023
Historical cost	0.8	67.9	68.7
Accumulated amortization/impairment	-0.3	-67.6	-67.9
Carrying value on December 31, 2023	0.5	0.3	0.8

Intangible assets above have estimated useful lives, over which the assets are amortized on a straight-line basis. Intangible assets under development are not ready for their intended use, and consequently amortization has not started.

Disposed Intangible asset under develop were related to internally developed software. Historical cost intangible assets are the result of internally developed software that continues to be in use, but is fully amortized.

Reviews of estimated useful lives of intangible assets for 2024 and 2023 resulted no changes.

Note 07 Leases

Right of use Assets

USD in million	Land and buildings	Machinery	Gas plants	Other	Total
Balance at January 1, 2024	0.0	0.4	31.7	0.1	32.3
Depreciation	-0.2	-0.1	-2.2	-0.2	-2.6
Depreciation - discontinued operations	0.0	0.0	-1.7	0.0	-1.7
Additions	1.3	0.0	0.1	0.7	2.2
Modification of existing leases	0.1	0.0	0.7	0.0	0.8
Impairment	-1.2	-0.3	-5.3	-0.7	-7.5
Balance at December 31, 2024	0.0	0.0	23.4	0.0	23.4
Balance on January 1, 2023	0.0	0.5	29.9	0.0	30.4
Depreciation	-0.1	-0.1	-2.4	0.0	-2.6
Depreciation - discontinued operations	0.0	0.0	-0.8	0.0	-0.8
Additions	0.0	0.0	0.1	0.1	0.3
Adjustments	0.1	0.0	4.9	0.0	5.0
Balance on December 31, 2023	0.0	0.4	31.7	0.1	32.3

Adjustments during 2023 consist of USD 5.0 million related to contractual increases in lease payments tied to economic indices.

REC Silicon annual report 2024

99

Financials

Financials | Consolidated financial statements

Lease Liabilities

USD in million	2024	2023
Maturity analysis - contractual undiscounted cash flows
Less than 1 year	16.4	15.6
1 - 2 years	16.3	15.6
2 - 3 year	16.3	15.5
3 - 4 years	16.1	15.5
4 - 5 years	6.0	15.5
More than 5 years	25.1	30.4
Total undiscounted lease liabilities on December 31	96.3	108.2
Lease liabilities included in the statement of financial position on December 31	65.1	70.0
Current	9.0	7.5
Non-current	56.1	62.5

The Company includes rights to extend or terminate leases in the lease term when the Company intends to exercise a right to extend or terminate a lease. The Company is not a party to any lease that includes material rights to extend or terminate the term of a lease.

The weighted average incremental borrowing rate applied to lease liabilities is 13.2 percent on December 31, 2024 and December 31, 2023.

Leases recognized in profit or loss

USD in million	2024	2023
Interest	4.2	4.3
Interest - discontinued operations	4.2	4.2
Depreciation	2.6	2.6
Depreciation - discontinued operations	1.7	0.8
Impairment	7.5	0.0
Gain(-)/loss(+) due to terminations, purchases, impairments, and other changes	0.0	0.0
Expenses relating to short-term leases	0.6	0.6
Expenses relating to short-term leases - Discontinued	0.9	0.5

Right-of-use assets associated with contracts with a term less than 12 months at the time of initiation are expensed in accordance with the low-value assets and short-term lease exemptions.

In 2024, the Group made lease payments totalling USD 16.2 million, comprised of USD 7.9 million of lease liability payments and USD 8.3 million imputed interest. See note 25below.

In addition, payments of USD 1.5 million related to leases for low-value-assets and short-term durations which are exempt under IFRS 16 have been expensed in 2024. See notes 11and 22below.

REC Silicon annual report 2024

100

Financials

Financials | Consolidated financial statements

Note 08 Impairments of cash-generating units

REC Silicon routinely monitors assets for indications that the carrying values of assets are no longer recoverable. If impairment indicators exist, impairment tests will be carried out to determine whether the carrying value of affected assets can be justified. If estimates conclude that asset values are no longer recoverable, the assets are written down to the recoverable amount which is the greater of fair value less cost to sell and value in use (discounted cash flows).

Cash-generating units

REC Silicon consisted of two cash generating units on December 31, 2024 and 2023.

Management has performed an evaluation of the Company’s operations and determined that the Group consisted of two cash generating units (CGUs) based upon the Company’s operations and management structures. This determination included consideration for segment reporting which includes segments for Solar Materials and Semiconductor Materials which were determined by management to represent the smallest units for which cash flows can be reasonably determined. Net Costs associated with Other have been allocated to the individual CGUs based upon estimated activity, volume, and revenue factors.

Summary of impairment tests

REC Silicon’s management has continuously assessed impairment indica-tors, considering both factors related to the company and the markets in which it operates, as well as current transactions and events. Management has determined that the shutdown of the polysilicon facility in the Solar Materials CGU is a significant factor that might impact the value of the company or its ability to operate. Management has determined that the rising costs of raw materials and increased manufacturing expenses,

leading to a decline in profitability, combined with changes to the discount rate, are sufficient to indicate a potential change in the valuation of the long-lived assets of the Semiconductor Materials CGU.

Consequently, impairment testing for both the Solar Materials CGU and the Semiconductor materials CGU were conducted as of December 31, 2024.

The current carrying value of the Solar Materials CGU is -60.2 million USD as of December 31, 2024. The assets related to polysilicon were impaired to zero due to the recognition of a 100 percent impairment loss. As a result, the value of the related assets became lower than the amount of the associated liabilities, leading to a negative carrying value. Management considers this scenario appropriate for use in supporting the carrying value of the Solar Materials CGU and has performed impairment testing using this forecast.

The carrying value of the Semiconductor materials CGU was USD 88.0 million as of December 31, 2024. The analysis conducted estimates the net present value (NPV) of the Semiconductor Materials CGU, including the deduction of lease liabilities, to exceed the carrying value of the Semiconductor Materials CGU and no impairment is necessary. REC Silicon management believes that the assumptions in this analysis are reasonable and represent their best estimate of the results the Semiconductor Materials CGU will achieve for the periods presented.

Basis for the impairment tests

The calculation reflects the expected development in the cost of emission quotas based on the current regulatory framework. There could be changes in environmental regulations impacting the company going forward, but no related legislation has been passed at the current time that is expected to impact the group. The impairment assessment is based on the expectation

that any increase in cost due to new legislation will be covered by increased sales prices.

Recoverable amounts for each cash-generating unit subject to impairment testing are based on value in use. Value in use has been estimated using discounted cash flows over a 6-year period with the last year used as a basis for estimating terminal value.

Future cash flows are estimated based on the budget for the next year and the subsequent five forecast years. A terminal value is calculated from the estimated cash flows generated in the last forecast year. A growth rate of one percent has been used during the terminal period for both the 2024 and 2023 analysis. EBITDA less capital expenditures and changes in working capital have been used to estimate future cash flows.

Assets under construction for which investment has been committed are included with estimated expenditures to complete and estimated cash flows from their operations.

The carrying amounts of cash-generating units include tangible fixed assets, right of use assets, intangible assets, and net working capital only.

Discount rate

The discount rate used for this analysis was prepared by a 3rdparty subject matter expert. This discount rate was prepared on a basis consistent with its status as a standalone company with the majority of it cash flows generated in the US but with its stakeholders located in Norway. The methodology to arrive at this estimate has not changed from that used by the Company for prior periods.

REC Silicon annual report 2024

101

Financials

Financials | Consolidated financial statements

The discount rate used for this analysis is 13.1 percent. This rate was esti-mated using the entity’s after tax weighted average cost of capital (WACC) as a starting point. The study used to arrive at this estimate of WACC resulted in a range from 11.8 percent to 14.4 percent.

REC management believes that the discount rates are reasonable for use in this analysis.. The discount rates used on December 31, 2024 and 2023 are reflected in the table below:

Discount rates (%)

	2024		2023
	Post-tax	Pre-tax	Post-tax	Pre-tax
Solar Materials and Semiconductor Materials CGU	13.1	15.0	12.7	13.9

Key assumptions and sensitivities

Key assumptions for the solar materials segment include no future sales. REC Silicon will incur maintenance costs to maintain the Moses Lake silane facilities in a state that would allow for the restart of silane production. However, there are currently no legally binding sales contracts or approved binding investment plans.

Key assumptions for the semiconductor materials segment include increased sales in the US due to new semiconductor fab capacity being brought online.

The tables below present the estimated change in impairment for each CGU due to an isolated change in the key assumption for all years. Spending includes variable manufacturing costs, fixed manufacturing costs, selling general and administrative expenses, and capital expenditures in total. The estimates are based on the assumptions used in the December 31, 2024 impairment analysis.

Sensitivities for 2024

Solar Materials CGU USD in million	Change	Estimated changein impairment
Post-tax discount rate	+/-1% point	-6.7/+5.7
Sales prices	+/-2%	NA
Volume (production and sales)	+/-2%	NA
Spending	+/-2%	-/+11.4
Semiconductor Materials CGU USD in million	Change	Estimated changein impairment
Post-tax discount rate	+/-1% point	-18.3/+21.5
Sales prices	+/-2%	+/-21.2
Volume (production and sales)	+/-2%	+/-15.1
Spending	+/-2%	-/+11.4

Negative amounts represent an estimated increase in impairment.

REC Silicon annual report 2024

102

Financials

Financials | Consolidated financial statements

Carrying value

The tables below reflect the development of carrying values for each cash generating unit.

On December 31, 2024

USD in million	Semiconductor materials	Solar Materials	Other	Total
Trade and other receivables	14.4	5.4	5.8	25.5
Inventories	22.2	5.2	0.0	27.4
Current assets	36.6	10.6	5.8	52.9
Long term assets	97.9	5.1	5.1	108.1
Trade payables and other current liabilities	-13.7	-41.9	-9.3	-64.9
Long term liabilities	-3.3	0.0	0.0	-3.3
Allocation of other	1.5	0.0	-1.5	0.0
Subtract leasing	-31.0	-34.0	0.0	-65.1
Carrying values	88.0	-60.2	0.0	27.8

On December 31, 2023

USD in million	Semiconductor materials	Solar Materials	Other	Total
Trade and other receivables	24.1	1.1	5.4	30.7
Inventories	35.9	22.7	0.0	58.5
Current assets	60.0	23.7	5.4	89.2
Long term assets	94.2	190.5	6.2	291.0
Trade payables and other current liabilities	-16.4	-32.0	-10.5	-59.0
Long term liabilities	-7.0	0.0	0.0	-7.0
Allocation of other	0.4	0.6	-1.1	0.0
Subtract leasing	-32.3	-37.6	0.0	-69.9
Carrying values	99.0	145.2	0.0	244.3

Note 09 Investments

Other investments

In the fourth quarter of 2023 The Group closed the sale of its 15 percent equity interest in the Shaanxi Non-Ferrous Tian Hong REC Silicon Materials Co., Ltd joint venture, Yulin JV. REC Silicon received gross proceeds of USD 136.1 million. Proceeds were reduced by transaction costs of USD 0.6M. This sale generated a non-recurring gain for the company in 2023 in the amount of USD 135.5 million. Ater the close of this transaction the group has no investments.

REC Silicon annual report 2024

103

Financials

Financials | Consolidated financial statements

Note 10 Related party transaction

The Group has related party relationships with its subsidiaries, associates, joint ventures and with its Group Management and Board of Directors. Transactions with subsidiaries have been eliminated on consolidation and are not reported as related party transactions in the consolidated financial statements for the Group.

Key management compensation, shareholdings, loans etc.

Group Management and Board of Directors’ compensation, ownership of REC Silicon ASA shares, options and bonds, loan agreements and guarantees are shown in note16.

Related companies

Hanwha Solutions together with its affiliate Hanwha Corporation control 33.3 percent of the shares in REC Silicon ASA and is represented at the board of directors by Tae Won Jun, CSO Hanwha Corporation, as the board chair and Jooyong Chung, Head of M&A and Executive Vice President of Hanwha Aerospace, as deputy chair.

On August 2, 2024, REC Silicon Inc entered a USD 25 million short-term loan with Hanwha International LLC. On November 4, 2024, REC Silicon Inc, and REC Silicon Inc’s wholly owned subsidiaries entered an additional USD 25 million short-term loan with Hanwha International LLC. Hanwha International LLC is an affiliate of the company’s two largest shareholders Hanwha Solutions and Hanwha Corporation. Interest paid to Hanwha international for these two loans amounted to USD 0.7 million in 2024. (see note 17)

On January 24, 2025, REC Silicon ASA entered into an additional USD 40 million term loan with Hanwha International LLC, supporting REC Silicon’s capital needs during the shutdown process at Moses Lake and the Company’s transition into a pure play silicon gas provider. The term loan has a maturity date of January 2026. Further, the bridge loans of USD 25 and USD 25 million with Hanwha International LLC rolled into this loan at their maturity dates on February 2 and February 4, 2025, respectively.

In 2024, REC Silicon paid Hanwha Solutions USD 3.1 million for guarantee and letter of credit fees related to bank loans. In 2023, REC Silicon paid Hanwha Solutions USD 2.0 million for guarantee and letter of credit fees related to bank loans. (see note 17)

REC Silicon has an agreement with Hanwha Solutions and Hanwha subsidiaries to provide services to REC Silicon. In 2023 REC Silicon received USD 2.9 million in services. In 2023 REC Silicon received USD 1.4 million in services.

Note 11 Discontinued operations

On December 30, 2024, the Company announced that it ceased production at its Moses Lake, Washington facility, abandoning all of its polysilicon assets, which constitute a major line of business. In the financial statement for the year ended December 31 2024, results and cash flows of the polysilicon business are treated as discontinuing operations. The equipment involved in the production of silicon gases will be maintained in a safe and recoverable mode that incurs minimal interim costs, allowing the unit to restart with reasonable notice. This will give the Company the flexibility to capitalize on future customer demand for Silicon Anode or other gases while minimizing near-term operational costs.

Due to this, the silicon gas assets are not abandoned and the impairment is presented as continuing business.

This announcement follows the Company’s decision to shut down polysilicon production at its Butte, Montana facility in February 2024. The production facilities were completely halted by the end of December 2024, and clean-up activities have commenced, including the removal of remaining raw materials from the facilities.

Moving forward, REC Silicon will focus its business efforts on silicon gases where the Company has clear strength, market positioning, and product differentiation. The Company is prioritizing driving costs out of its silicon gas assets and optimizing production, with a goal to return to profitability.

The shutdown of the Moses Lake facility follows numerous, previously disclosed efforts to improve the level of some key impurities that resulted primarily from the post-reactor product finishing and handling systems. Initiatives included changing contact materials, procedures, operating conditions and parameters, passivation measures and bypassing equipment; and bringing in third-party resources to assist in evaluating and mitigating the situation. However, the Company was unsuccessful in its attempts to fully rectify the issues and ultimately received an unsuccessful qualifica-tion test, as announced on December 17, 2024 (see note8).

The following statement of income is an analysis of discontinued operation.

REC Silicon annual report 2024

104

Financials

Financials | Consolidated financial statements

Analysis of discontinued operations

Consolidated statement of income		Dec 31, 2024			Dec 31, 2023
USD in million	Total operations	Of which discontinued	Continued	Total operations	Of which discontinued	Continued
Revenues	143.6	2.8	140.8	141.1	0.4	140.8
Cost of materials	-56.1	-35.4	-20.7	-30.5	-3.6	-26.9
Changes in inventories	-27.9	-11.9	-15.9	12.5	5.4	7.1
Employee benefit expenses	-80.7	-37.1	-43.6	-69.6	-26.2	-43.5
Other operating expenses	-144.1	-66.4	-77.8	-142.9	-45.0	-98.0
Other income and expense	-3.6	-3.0	-0.7	9.0	4.2	4.7
EBITDA	-168.8	-150.9	-17.9	-80.5	-64.8	-15.7
Depreciation	-20.4	-11.7	-8.7	-10.9	-0.7	-10.2
Amortization	0.0	0.0	0.0	0.0	0.0	0.0
Depreciation of right of use assets	-4.3	-1.7	-2.6	-3.4	-0.8	-2.6
Impairment	-246.1	-196.4	-49.7	-8.1	-1.1	-7.0
Total depreciation, amortization and impairment	-270.9	-209.8	-61.0	-22.4	-2.6	-19.8
EBIT	-439.7	-360.7	-78.9	-102.9	-67.4	-35.5
Financial income	3.1	0.0	3.1	3.6	0.2	3.4
Net financial expenses	-20.8	7.6	-28.4	-18.3	1.8	-20.1
Net currency gains/losses	0.1	0.0	0.1	12.7	0.0	12.7
Gain from sale of Yulin JV	0.0	0.0	0.0	135.5	0.0	135.5
Net financial items	-17.7	7.6	-25.3	133.5	2.0	131.5
Profit/loss before tax	-457.4	-353.1	-104.2	30.5	-65.4	95.9
Income tax expense/benefit from continuing operations	0.0	0.0	0.0	0.0	0.0	0.0
Profit/loss from continuing operations			-104.2			95.9
Profit/loss from discontinued operations		-353.1			-65.4
Profit/loss from total operations	-457.4			30.5
	Total	Discontinued	Continuing	Total	Discontinued	Continuing
Profit/loss attributable to owners of REC Silicon ASA	-457.4	-353.1	-104.2	30.5	-65.4	95.9
Comprehensive income attributable to owners of REC Silicon ASA	-454.4	-353.1	-101.3	16.0	-65.4	81.4
Earnings per share (In USD)
-basic	-1.09	-0.84	-0.25	0.07	-0.16	0.23
-diluted	-1.09	-0.84	-0.25	0.07	-0.16	0.23

REC Silicon annual report 2024

105

Financials

Financials | Consolidated financial statements

Cashflows of discontinued operations

The following table shows the cashflows of the Solar Materials Segment for 2024 and 2023. It includes cashflows to and from REC Silicon Inc as the US entities of REC Silicon have a cash pooling arrangement and net cash from REC Silicon Inc to the Solar Materials segment is reported in the line Net cash flow from financing activities.

USD in million	2024	2023
Net cash flow from operating activities	-113.6	-41.1
Net cash flow from investing activities	-77.2	-125.6
Net cash flow from financing activities	190.5	166.7
Cash and cash equivalents at the beginning of the period	0.2	0.2
Cash and cash equivalents at the end of the period	0.0	0.2

Note 12 Receivables and prepayments

USD in million	2024	2023
Trade receivables and accrued revenues	12.7	24.7
Provision for loss on trade recivables	-0.7	-2.7
Trade receivables - net	12.1	21.9
Prepaid costs	9.4	8.7
Other non-current and current receivables	4.1	0.0
Total receivables and prepayments	25.5	30.7

Specification of provision for loss on trade receivables

USD in million	2024	2023
On January 1	-2.7	-9.6
Change in provisions	2.1	6.9
On December 31	-0.7	-2.7

The provision for doubtful accounts includes the review of expected credit losses (ECL) based upon historical experience.

In the fourth quarter of 2024 REC Silicon exhausted efforts to collect from previously impaired customers. As a result, the company wrote off USD 2.1 million in receivables as well as reversed the provision for the same amount. This resulted in a net zero change to receivables. There was no bad debt expense recorded in 2024. The remaining provi-sion of USD 0.7 million is the result of expected credit loss. On December 31, 2024, the review of the provision included the fact that the Company has not experienced any bad debt since 2018.

REC Silicon annual report 2024

106

Financials

Financials | Consolidated financial statements

Note 13 Inventories

Inventories in the statement of financial position

Inventories have been written down to estimated net realizable values. Write-downs of materials and spare parts represent the estimated obsolescence related to items held in inventories at cost. Write-downs of work in progress and finished goods have been estimated by comparing the net realizable value of anticipated sales to the manufacturing costs of items held in inventory.

		2024			2023
USD in million	Before writedowns	Writedowns	After writedowns	Before writedowns	Writedowns	After writedowns
Stock of materials, merchandise, production supplies	6.6	0.0	6.6	18.1	0.0	18.1
Spare parts	51.4	-45.5	5.8	44.3	-33.1	11.2
Work in progress	8.6	-5.7	2.9	12.8	-2.3	10.5
Finished goods	74.6	-62.5	12.1	25.1	-6.4	18.7
Total	141.2	-113.7	27.4	100.4	-41.8	58.5

Note 14 Cash and cash equivalents and restricted bank accounts

Cash and cash equivalents are primarily bank deposits.

Restricted bank accounts (not included as cash and cash equivalents)

USD in million	2024	2023
Restricted bank accounts current	0.6	0.6
Total restricted bank accounts	0.6	0.6

On December 31, 2024 and 2023 restricted bank accounts consisted of USD restricted cash for the US subsidiaries of USD 0.6 million.

REC Silicon annual report 2024

107

Financials

Financials | Consolidated financial statements

Note 15 Shareholder information

The following shareholders held one percent or more of the total outstanding shares in REC Silicon ASA on December 31.

		2024		2023
Name of shareholders		No. of shares	Ownership	No. of shares	Ownership
HANWHA‌1		140,208,552	33.33%	140,208,552	33.33%
MORGAN STANLEY & Co. LLC‌2	Nominee	30,244,369	7.19%	22,028,592	5.24%
NORDNET LIVSFORSIKRING AS	Nominee	4,149,382	0.99%	4,367,214	1.04%
SKANDINAVISKA ENSKILDA BANKEN AB	Ordinary	0	0.00%	4,219,281	1.00%
TOTAL SHARES OUTSTANDING		420,625,659		420,625,659

1Hanwha Solutions and Hanwha Corporation, (together “Hanwha”) holds shares via two nominee accounts, Citibank N.A. 89,733,473 shares, Hongkong and Shanghai Banking Corp 50,475,079 shares.

2On December 31, 2024 Water Street Capital Inc holds 22,602,654 shares through a nominee account with Morgan Stanley.

The list of shareholdings above is based on the VPS shareholder register on December 31, 2024 and 2023. Actual shareholding may deviate due to the use of nominee accounts, share lending, forward contracts or other contractual arrangements.

On December 31, 2024, REC Silicon ASA had 31,883 shareholders (34,318 on December 31, 2023). The total number of outstanding shares was 420,625,659 on December 31, 2024, and December 31, 2023, each with a par value of NOK 1.

At the Annual General Meeting on May 14, 2024, the Board was authorized to increase the share capital with up to NOK 84,125,000, which was approximately 20 percent of the share capital at that time, through one or more increases in the share capital. The Annual General meeting also authorized the Board to acquire treasury shares in the Company (up to a maximum of ten percent of the nominal value of the existing share capital). Shares may be acquired at minimum NOK 1 per share and maximum NOK 150 per share. The authorization to acquire treasury shares has not been used and remained available on December 31, 2024. Both authorizations were valid until the 2025 Annual General Meeting, but in any event not longer than 15 months.

REC Silicon annual report 2024

108

Financials

Financials | Consolidated financial statements

Note 16 Management and Board of Directors’ compensation, loans, shares, bonds

The Board’s statement on executive management remuneration (the “statement”) has been prepared in accordance with the provisions of the Norwegian Public Companies Act (PLA), the Norwegian Accounting Act, and the Norwegian Code of Practice for Corporate Governance

REC Silicon’s board has prepared proposed guidelines for the company’s executive remuneration policy in accordance with the provision in section 6-16 (a). The proposed guidelines, which provide a broader and deeper discussion of the principles for remuneration to key management, were effective from 2021 onwards. The guidelines are available on REC Silicon’s website. The executive management remuneration report in accordance with regulations will be prepared for the for the Annual General Meeting in 2025.

The guidelines for determination of salary and other compensation for leading employees, as outlined in the annual general meeting in 2024, have been complied with in 2024. See www.recsilicon.com/investors/agmfor the Remuneration Report.

The Board of Directors had previously implemented incentive programs during previous periods whereby employee entitlements are linked to the share price development of the Company’s shares. There were no shares granted in 2024. See note 32for details of share-based compensation programs.

Salary and other compensation to the Group’s Board of Directors and Management for 2024 and 2023 are described below.

Compensation of the Group Management for 2024

Amounts in USD Name	Base salary	Bonus earned and max %	Share based compensation earned	Share based compensation paid	Pension benefits	Other taxable benefits
Kurt Levens	765,000	0	-92,906	13,708	34,500	77,517
President and CEO		50%
Jack Yun	156,020	0	0	0	0	256,280
CFO		NA
Dylan Jung	88,683	0	0	0	0	143,962
Chief Strategy Officer		NA
Total 2024	1,009,703	0	-92,906	13,708	34,500	477,760

REC Silicon annual report 2024

109

Financials

Financials | Consolidated financial statements

Compensation of the Group Management for 2023

Amounts in USD Name	Base salary	Bonus earned and max %	Share based compensation earned	Share based compensation paid	Pension benefits	Other taxable benefits
Kurt Levens	643,653	165,237	-60,491	82,418	33,000	103,822
President and CEO		50%
Jack Yun	196,402	84,472	0	0	0	163,591
CFO		NA
Dylan Jung	92,304	25,227	0	0	0	103,859
Chief Strategy Officer		NA
Total 2023	932,360	274,936	-60,491	82,418	33,000	371,271

All amounts are exclusive of social security tax. There were no payments and benefits from the Group for services outside their functions as Group Management. Base salary represents the amount, including holiday pay that was paid in the year.

Bonus amounts represent bonuses earned during each year and are normally paid and reported as taxable income for the employee in the subsequent year.

Share-based compensation amounts represent synthetic share option programs further described in note 32. The esti-mated fair value of the options is expensed over the estimated vesting periods. The amounts shown above as earned are the amounts expensed in the relevant year. Amounts reported as share-based compensation earned are derived using the Black Scholes option pricing model and may not match actual payments made depending upon the market value of the Company’s stock on the exercise date. During 2024 there was a total of USD 0.1 million in cash payments made with respect to share-based compensation to all eligible participants, and USD 0.7 million in 2023.

Pension benefits include benefits earned with respect to defined benefit plans and contributions related to defined contribution plans.

Other taxable benefits include housing, company car, cash in lieu of paid time off, and certain other benefits. The bene-fits vary, and the amounts in the table are the amounts that are taxable based on rules and regulations in the relevant tax jurisdictions.

Compensation of the Board of Directors paid in 2024

Amounts in USD Name	Member at December 31, 2024	Board compensation
Tae Won Jun	Yes	0
Jooyong Chung	Yes	0
Renate Oberhoffer-Fritz	Yes	86,116
Vivian Bertseka	Yes	87,569
Robert Neuhauser	Yes	52,698
Dong Kwan Kim	No	0
Roberta Benedetti	No	32,216
Total 2024		258,600

Compensation of the Board of Directors paid in 2023

Amounts in USD Name	Member at December 31, 2023	Board compensation
Tae Won Jun	Yes	0
Dong Kwan Kim	Yes	0
Renate Oberhoffer-Fritz	Yes	86,647
Vivian Bertseka	Yes	88,559
Roberta Benedetti	Yes	86,055
Total 2023		261,261

Loans and guarantees for Group Management, Board of Directors and shareholders

On December 31, 2024 and 2023 there was a loan in the amount of USD 40 thousand to Dylan Jung. The loan originated on December 13, 2022 in the amount of USD 40 thousand and has a term of forty months with and interest rate of zero.

Shareholdings, options and bonds

The number of shares and options owned by members of the Board of Directors and the Group Management, including closely related parties, are shown in the table below. The table includes board members and key management on December 31, 2024, and 2023. Refer to note 32for details of the share option program.

REC Silicon annual report 2024

110

Financials

Financials | Consolidated financial statements

The table includes those that were members on December 31, 2024

Name		Options	Shares
Kurt Levens	Group Management	173,813	440
Jack Yun	Group Management	0	0
Dylan Jung	Group Management	0	0
Tae Won Jun	Board of Directors	0	0
Jooyong Chung	Board of Directors	0	0
Dr. Renate Oberhoffer-Fritz	Board of Directors	0	0
Vivian Bertseka	Board of Directors	0	0
Robert Neuhauser	Board of Directors	0	0

The table includes those that were members on December 31, 2023

Name		Options	Shares
Kurt Levens	Group Management	255,613	440
Jeong Ryul Yun	Group Management	0	0
Donglin Jung	Group Management	0	0
Tae Won Jun	Board of Directors	0	0
Dong Kwan Kim	Board of Directors	0	0
Dr. Renate Oberhoffer-Fritz	Board of Directors	0	0
Vivian Bertseka	Board of Directors	0	0
Roberta Benedetti	Board of Directors	0	0

Details of options outstanding on December 31, 2024

						Information regarding the reported financial year
Kurt Levens, CEO					Opening balance	During the year		Closing balance
Specification of plan	Plan period	Award date	Vesting Dates	End of holding period	Shares previously awarded	Shares awarded/ (expired)	Shares exercised / Settled in Cash
								Shares subject to a performance condition
									Shares awarded and unexercised at year end subject to a holding period / Value
2021 Plan - Strike Price NOK 17.5	2021 - June 30 2026	May 11, 2021	June 30, 2024 33.33%	July 1, 2026	133,279	0	0	133,279	133,279
			June 30, 2025 33.33%				$0		$4,572
			June 30, 2026 33.33%
2020 Plan - Strike Price NOK 3.5	2020 - June 30 2025	May 12, 2020	June 30, 2023 33.33%	July 1, 2025	81,068	0	40,534	40,534	40,534
			June 30, 2024 33.33%				$13,708		$5,490
			June 30, 2025 33.33%
2019 Plan - Strike Price NOK 8.1	2019 - June 30 2024	May 9, 2019	June 30, 2022 33.33%	July 1, 2024	41,266	-41,266	0	0	0
			June 30, 2023 33.33%				$0		$0
			June 30, 2024 33.33%
				Total Shares	255,613	-41,266	40,534	173,813	173,813
				Total USD	$116,675		$13,708		$10,062

REC Silicon annual report 2024

111

Financials

Financials | Consolidated financial statements

Note 17 Borrowings

Financial liabilities, interest bearing

USD in million	2024	2023
Non-current financial liabilities, interest bearing
Bank Loan - Hana Bank	110.0	110.0
Bank Loan - Hana Bank	100.0	100.0
Bank Loan - NongHyup	40.0	40.0
Grant County WA tax settlement (USD)	1.6	3.0
Total non-current financial liabilities, interest bearing	251.6	253.0
Current financial liabilities, interest bearing
Capitalized Borrowing Cost‌1	-0.4	-0.4
Bank Loan - Standard Chartered	50.0	30.0
Related Party Loan - Hanwha International	50.0	0.0
Grant County WA tax settlement (USD)	1.4	1.2
Total current financial liabilities, interest bearing	101.0	30.9

1Amortized as part of effective interest.

Movements in borrowing

USD in million	Bank loans	Related party loan	Tax settlement note	Total
Balance on January 1, 2024	279.6	0.0	4.2	283.8
Proceeds from borrowings	50.0	50.0	0.0	100.0
Payments of borrowings	-30.0	0.0	-1.2	-31.2
Change capitalized borrowing cost	0.0	0.0	0.0	0.0
Balance on December 31, 2024	299.6	50.0	3.0	352.6
USD in million	Bank loans	USD senior secured bond	Tax settlement note	Total
Balance on January 1, 2023	0.0	109.9	5.3	115.2
Proceeds from borrowings	280.0	0.0	0.0	280.0
Payments of borrowings	0.0	-110.0	-1.1	-111.1
Change capitalized borrowing cost	-0.4	0.1	0.0	-0.2
Balance on December 31, 2023	279.6	0.0	4.2	283.8

In June 2024 REC Silicon Inc extended its USD 30 million facility loan from standard Chartered Bank in New York. The facility is fully guaranteed by REC Silicon’s largest shareholder Hanwha Solutions and will mature on June 13, 2025.

On August 16, 2024, REC Silicon Inc entered into an additional USD 20 million facility loan from Standard Chartered Bank in New York through an amendment to the existing facility loan of USD 30 million. This additional facility loan is fully guaranteed by REC Silicon’s largest shareholder Hanwha Solutions and will mature on June 13, 2025, the same date as the existing facility loan.

REC Silicon annual report 2024

112

Financials

Financials | Consolidated financial statements

On August 2, 2024, REC Silicon Inc entered into a USD 25 million short-term loan with Hanwha International LLC, for the purpose of supporting the capital needs of REC Silicon. On November 4, 2024, REC Silicon Inc, and REC Silicon Inc’s wholly owned subsidiaries entered into a USD 25 million short-term loan with Hanwha International LLC to meet the near-term capital requirements.

On January 24, 2025, REC Silicon ASA entered into a USD 40 million term loan with Hanwha International LLC, supporting REC Silicon’s capital needs during the shutdown process at Moses Lake and the Company’s transition into a pure play silicon gas provider. The term loan has a maturity date of January 2026. Further, the bridge loans of USD 25 and USD 25 million with Hanwha International LLC rolled into this loan at their maturity dates on February 2 and February 4, 2025, respectively. Hanwha International LLC is an affiliate of the company’s two largest shareholders Hanwha Solutions and Hanwha Corporation. See note 10

On October 14, 2020, the Company entered into a settlement agreement with Grant County, Washington settling its property tax dispute for tax years 2012 through 2015. REC Silicon agreed to pay Grant County USD 3.0 million by December 15, 2020, and USD 1.75 million each year for the next six years. The settlement resulted in the recognition of a note payable using an interest rate of 11.5 percent used to impute the value of the liability. The note is effectively secured, as a matter of law, by the real property at the Moses Lake plant. On December 31, 2024, the remaining fair value of the property tax note was USD 3.0 million. Total remaining undiscounted payments on the property tax note are USD 3.5 million.

The Company does not have any financial covenants but is subject to restrictions on additional debt, pledging assets, and other actions that may affect repayment ability without preapproval from the lenders.

The following are the contractual maturities of financial instruments excluding provisions and retirement benefit obligations:

On December 31, 2024				Maturity analysis - contractural payments to be made, including interest
USD in million	Carryingamount	Total	0-6Months	7-12 Months	2026	2027	2028	2029	After 2029
Bank Loan - KEB Hana Bank	110.0	110.0	0.0	0.0	110.0
Bank Loan - KEB Hana Bank	100.0	100.0	0.0	0.0	100.0
Bank Loan - Standard Chartered	50.0	50.0	50.0
Bank Loan - NongHyup	40.0	40.0	0.0	0.0	40.0
Related Party Loan - Hanwha International‌1	50.0	50.0	50.0
Grant County WA tax settlement	3.0	3.5	0.0	1.8	1.8
Accrued Finance Costs	3.6	3.6	3.6
Trade payables and other liabilities	60.2	60.2	60.2
Lease Liabilities	65.1	96.3	8.2	8.2	16.3	16.3	16.1	6.0	25.1
Total	481.8	513.6	172.0	9.9	268.1	16.3	16.1	6.0	25.1

1In January 2025 REC Silicon Inc and Hanwha agreed additional loans and to consolidate existing loans with a due date of January 2026

On December 31, 2023				Maturity analysis - contractural payments to be made, including interest
USD in million	Carryingamount	Total	0-6Months	7-12 Months	2025	2026	2027	2028	After 2028
Bank Loan - KEB Hana Bank	110.0	110.0	0.0	0.0	0.0	110.0
Bank Loan - KEB Hana Bank	100.0	100.0	0.0	0.0	0.0	100.0
Bank Loan - Standard Chartered	30.0	30.0	30.0
Bank Loan - NongHyup	40.0	40.0	0.0	0.0	0.0	40.0
Grant County WA tax settlement	4.2	5.3	0.0	1.8	1.8	1.8
Accrued Finance Costs	1.6	1.6	1.6
Trade payables and other liabilities	44.8	60.7	60.7	0.0	0.0	0.0
Lease Liabilities	70.0	108.2	7.8	7.8	15.6	15.5	15.5	15.5	30.4
Total	400.6	455.8	100.2	9.6	17.3	267.3	15.5	15.5	30.4

For information regarding provisions see note 20. For information regarding retirement benefit obligations see note19.

The differences between carrying amounts and total expected payments in the tables above are due to the effect of discounting. All cash flows are undiscounted.

REC Silicon annual report 2024

113

Financials

Financials | Consolidated financial statements

The nominal interest rates and currency distribution on December 31, 2024 were as follows

	Interest rate (%)		Currency	Amounts in million	Maturity	Borrower
Bank Loan - Hana Bank		3 mon SOFR+1.8%	USD	110.0	2026	REC Silicon ASA
Bank Loan - Hana Bank		3 mon SOFR+1.5%	USD	100.0	2026	REC Silicon Inc
Bank Loan - Standard Chartered		1 mon SOFR+2.0%	USD	50.0	2025	REC Silicon Inc
Bank Loan - NongHyup		3 mon SOFR+2.0%	USD	40.0	2026	REC Silicon Inc
Related Party Loan - Hanwha International‌		1 mon SOFR+2.2%	USD	50.0	2025	REC Silicon Inc
Grant County WA tax settlement	11.5%	Fixed	USD	3.0	2026	REC Solar Grade Silicon LLC

The nominal interest rates and currency distribution on December 31, 2023 were as follows

	Interest rate (%)		Currency	Amounts in million	Maturity	Borrower
Bank Loan - Hana Bank		3 mon SOFR+1.8%	USD	110.0	2026	REC Silicon ASA
Bank Loan - Hana Bank		3 mon SOFR+1.5%	USD	100.0	2026	REC Silicon Inc
Bank Loan - Standard Chartered		1 mon SOFR+2.2%	USD	30.0	2024	REC Silicon Inc
Bank Loan - NongHyup		3 mon SOFR+2.0%	USD	40.0	2026	REC Silicon Inc
Grant County WA tax settlement	11.5%	Fixed	USD	4.2	2026	REC Solar Grade Silicon LLC

REC Silicon annual report 2024

114

Financials

Financials | Consolidated financial statements

Note 18 Income tax expense and deferred tax assets and liabilities

Recognized income tax expense

USD in million	2024	2023
Current income tax expense (-) / benefit (+)	0.0	0.0
Deferred tax expense (-) / benefit (+)	0.0	0.0
Total income tax expense (-) / benefit (+) in the statement of income	0.0	0.0

Relationship of income tax expense/benefit to profit/loss from total operations

USD in million	2024	2023
Profit/loss before tax from total operations	-457.4	30.5
Tax calculated at domestic tax rates applicable to profits /losses in the respective countries	96.2	-3.5
Effects of changes in tax rates and use of another tax rate for parts of profits /losses	8.0	2.4
Expenses not deductible for tax purposes	-2.3	1.2
Effects of not recognized deferred tax assets, including reversal of previous years	-101.8	-0.2
Total income tax expense (-) / benefit (+) in the statement of income	0.0	0.0
Effective tax rate	0%	0%

The income tax calculation for the Group is primarily based on blended corporate income tax rates of 22 percent in Norway and approximately 23.1 percent in the USA.

Income tax for REC Silicon in the USA is based on nominal 21 percent federal tax rate plus estimated state taxes. The effective tax rate for REC Silicon in the USA was 0 percent in 2024 and 2023. Income tax in the US is filed on a consol-idated basis under REC Silicon Inc with REC Solar Grade Silicon LLC and REC Advanced Silicon Materials LLC being considered disregarded entities.

Income tax assets and liabilities in the statement of financial position

USD in million	2024	2023
Current tax assets	0.0	0.0
Current tax liabilities	0.0	0.0
Net current tax assets (+) / liabilities (-)	0.0	0.0
Deferred tax assets	0.0	0.0
Deferred tax liabilities	0.0	0.0
Net deferred tax assets (+) / liabilities (-)	0.0	0.0

Accumulated income taxes recognized to equity on December 31

USD in million	2024	2023
Effect of transition to IAS 39 on January 1, 2005	2.3	2.3
Effect of actuarial gains and losses	-4.8	-4.8
Effect of conversion of convertible bonds	-61.0	-61.0
Effect of costs for capital increase	12.9	12.9
Effect of translation differences on loans as part of net investment	12.6	12.6
Total deferred tax	-37.9	-37.9
Current tax - effect of costs for capital increase	13.1	13.1
Total	-24.8	-24.8

Amounts in table above exclude translation differences on deferred tax. Negative numbers are a reduction to equity.

REC Silicon annual report 2024

115

Financials

Financials | Consolidated financial statements

The following main deferred tax assets have not been recognized on December 31

USD in million	2024	2023
Total non-current assets	143.6	82.4
Total current assets	1.2	-0.4
Total non-current liabilities	-16.7	18.7
Total current liabilities	-12.2	9.8
Tax losses carry forward	429.9	371.3
Total	545.8	481.7

Distribution of the deferred tax assets that have not been recognized on December 31

USD in million	2024	2023
REC Silicon ASA (Norway)	3.1	33.5
REC Solar AS (Norway)	145.6	154.3
REC Silicon US operations	393.6	289.9
Other	3.5	4.1
Total	545.8	481.7

The deferred tax asset in the United States was generated due to net operating losses on a tax basis, the accelerated reversal of book to tax differences for depreciation caused by the recognition of impairment (financial statement only), and other taxable temporary differences which are expected to reverse on a more definite schedule. The deferred tax asset in the United States associated with net operating losses was USD 208.7 million on December 31, 2024 includes USD 122.9 million associated with net operating losses generated in 2017 and prior years which expire between 2031 and 2037. Deferred tax assets of USD 85.8 million are due to net operating losses generated after 2017 which do not expire.

In the United States, in the event of a change in the ultimate company’s ownership, utilization of net operating losses and tax credit carry forwards are subject to certain limitations under Section 382 of the Internal Revenue Code. The company initiated a study in 2022. The study was completed in 2023, and the table above represents the results of the study.

The deferred tax asset in Norway was generated due to net operating losses on a tax basis and other taxable temporary differences which are expected to reverse on a more definite schedule. The Norwegian Tax office has changed the company’s income tax assessment for the years 2019-2022 during 2024. The basis for this change where an ongoing tax audit relating to whether interest should have been charged on loans provided from REC Silicon ASA to Rec Silicon Inc and Rec Solar Grade Silicon LLC. As a temporary measure, due to the financial situation in these subsidiaries, the company has not charged interest on the loans in the period 2019 to 2024. The company has not made any preliminary tax provisions for this matter in the periods 2023 and 2024 as the Norwegian Tax office has yet to review these years in their assessment with their estimates for the subsidiaries debt bearing capacity in this period. The company has not recognized any deferred tax asset relating to its tax losses carry forward.

Deferred tax assets have not been recognized due to requirements in IAS 12 for convincing evidence of available future taxable income to offset prior tax losses. In Norway, net operating losses do not expire.

REC Silicon annual report 2024

116

Financials

Financials | Consolidated financial statements

Note 19 Retirement benefit obligations and expenses

The cost of defined pension benefit plans is expensed in the period that the employee renders services and becomes eligible to receive benefits. The cost of defined contribution plans is expensed as contributions become payable.

REC Silicon has an employer-sponsored defined contribution retirement plan (401 (k)) for employees in the United States. The REC Silicon subsidiary REC Advanced Silicon Materials LLC (ASiMI) in the United States had defined benefit plans at the time it was acquired in 2005. At that time, these plans were frozen, and no future benefits are accruing to the members of the plans. Previous pension rights remain unchanged and are fully vested. The tables below for defined benefit plans are related to Advanced Silicon Materials LLC only.

For defined benefit plans, the plan assets and the projected benefit obligations were measured on December 31, 2024 and 2023. An independent actuary performed actuarial calculations. The present value of the projected defined benefit obligation, and the related current service cost, were measured using the projected unit credit method.

Defined benefit plans

USD in million	2024	2023
Gross retirement benefit obligations on January 1	34.2	33.5
Interest cost on pension obligations	1.6	1.7
Remeasurements recognized through OCI	-2.8	0.8
Benefits paid, paid-up policies and disability obligation	-1.8	-1.7
Gross retirement benefit obligations on December 31	31.2	34.2
Fair values of plan assets on January 1	27.3	24.8
Actuarial return on plan assets	1.2	2.9
Pension premiums	1.3	1.3
Benefits paid, paid-up policies and disability reserve	-1.8	-1.7
Fair value of plan assets on December 31	28.0	27.3
Funded status on December 31	3.3	7.0
Net retirement benefit obligations on December 31	3.3	7.0

The plan assets relate to one of three ASiMI plans and are currently invested in a mix of 45% equity funds and 55% fixed income funds.

Retirement benefit obligations in the statement of financial position

USD in million	2024	2023
Net retirement benefit obligations on January 1	7.0	8.6
Net periodic benefit costs including net interest	0.4	-0.5
Remeasurements recognized through OCI	-2.9	-0.9
Pension premiums and benefits paid	-1.2	-1.3
Net retirement benefit obligations on December 31	3.3	7.0

The amounts recognized in the statement of income are as follows

USD in million	2024	2023
Total benefit plans	0.0	0.0
Defined Contribution	3.8	3.5
Total contribution expenses (see note24)	3.8	3.5
Net interest expense	0.4	0.5

REC Silicon annual report 2024

117

Financials

Financials | Consolidated financial statements

Remeasurements of the net defined benefit liability recognized through Other Comprehensive Income (gains (-)/losses (+))

USD in million	2024	2023
Experience adjustments	-0.4	0.0
Effects of changes in assumptions	-2.5	0.9
Total remeasurements (gains (-)/losses (+)) on gross retirement benefit obligations	-2.8	0.8
Return on plan assets, excluding amounts included in interest	-0.1	-1.7
Total remeasurements (gains (-)/losses (+)) recognized through Other Comprehensive Income	-2.9	-0.9

During 2024 the effects of changes in assumptions were due to an increase in discount rate and changes in financial and demographic assumptions for the ASiMI plans.

The cumulative re-measurement loss recognized to equity through other comprehensive income was USD 13.9 million before income taxes on December 31, 2024. Of this, a loss of USD 16.8 million was related to ASiMI (excluding transla-tion difference).

On December 31, 2024, the mortality table was based on Pri-2012 total dataset base rate mortality table with projected generationally using MP-2021. The Society of Actuaries (SOA) is an actuarial organization that periodically reviews mortality data and publishes mortality tables and improvement scales. In October 2019, the SOA released the Pri-2012 Mortality Tables for private-sector retirement plans in the U.S. The Pri-2012 report contains different sets of mortality tables based on complete dataset or various subsets. The Total dataset base rate table was selected.

The principal actuarial assumptions used to determine retirement benefit obligations on December 31

	2024	2023
Discount rate	5.50	4.85
Future salary increases	NA	NA
Future pension increases	NA	NA
Future increase in social security base amount	NA	NA
Future turnover	NA	NA

The assumptions used to determine the benefit cost for the year are determined at the beginning of the year. The expected return for the ASiMI plans equals the discount rate.

The expected remaining service life until retirement for participants of the defined benefit obligation for the ASiMI plans are approximately 7.3 years at both December 31, 2024 and December 31, 2023. Pension premiums of USD 1.5 million are expected to be paid during 2024 to the ASiMI defined benefit plans.

The maturity profile includes the weighted average duration of the defined benefit obligations and includes items such as timing of the benefit payments. The weighted average duration of the defined benefit obligation is 11 years at both December 31, 2024 and December 31, 2023.

For the ASiMI benefit plans, a one percentage point increase (decrease) in discount rate is estimated to decrease (increase) the pension obligation by approximately USD 0.1/(0.1) million on December 31, 2024.

REC Silicon annual report 2024

118

Financials

Financials | Consolidated financial statements

Note 20 Trade payables, provisions and other liabilities

Non-financial liabilities

USD in million	2024	2023
Non-current prepayments	33.4	24.9
Current portion of prepayments	1.2	5.7
Total prepayments	34.5	30.7

Trade payables and other liabilities

USD in million	2024	2023
Trade and other payables	41.8	41.4
Accrued costs for capex	0.0	0.0
VAT and other public taxes and duties payables	5.5	4.2
Accrued operating costs	8.7	12.0
Accrued finance costs	3.6	1.6
Other non-interest bearing liabilities	0.8	1.5
Trade payables and other liabilities	60.2	60.7

Provisions

USD in million	2024	2023
Provisions, current	8.2	0.0
Provisions non-current - interest bearing	26.3	23.8
Total provision	34.5	23.8

Specification of provisions

USD in million	2024	2023
on January 1	23.8	19.3
Restructuring costs	8.2	0.0
Change in estimate in asset retirement obligation	1.3	3.5
Net periodic asset retirement obligation costs including net interest	1.3	1.0
on December 31	34.5	23.8

REC Silicon annual report 2024

119

Financials

Financials | Consolidated financial statements

Current provisions

As a result of shutting down polysilicon production in Moses Lake in December 2024 the Company recorded a provision for employee termination benefits in the amount of USD 8.2 million. At the time of the announcement on December 30, 2024 the company had a detailed plan for the shutdown and restructuring of Moses Lake. Impacted employees were eligible for termination benefits ranging from 8-13 weeks of their salary. Payments to impacted employees will take place during the first half of 2025.

Non-current provisions

During 2024 the Company recorded an increased provision for asset retirement obligations (ARO) of USD 1.3 million. This was primarily due to a change in estimated cleanup costs. On December 31, 2024, the Company has recorded USD 26.3 million in AROs. These obligations consist of USD 3.0 million to restore leased wastewater containment ponds to conditions specified in the lease agreement and USD 23.3 million for the eventual cleanup of the Company’s manufacturing operations in Moses Lake, Washington and Butte, Montana.

Estimates are sensitive to changes in discount rates used to calculate provisions for AROs. On December 31, 2024, a one percent increase to the discount rates would decrease the provision by USD 6.7 million, while a one percent decrease to the discount rates would increase the provision by USD 9.4 million.

On December 31, 2024, the AROs represent the present value of estimated future costs discounted at 5.2 percent for 4 years for the wastewater containment ponds. The restoration of the production sites is discounted at 6.0 percent for 35.5 years. Total undiscounted amounts were USD 3.7 million for the ponds, and 183.9 million for the production sites.

On December 31, 2023, the AROs represent the present value of estimated future costs discounted at 5.0 percent for 5 years for the wastewater containment ponds. The restoration of the production sites is discounted at 5.4 percent for 36.5 years. Total undiscounted amounts were USD 3.1 million for the ponds, and 133.5 million for the production sites.

Relevant regulations to climate related risk have been considered in the calculation of the ARO. There could be changes in environmental regulations impacting the company going forward, but no related legislation has been passed at the current time that is expected to impact the group.

The restoration of production sites is subject to significant uncertainty due to variability in restoration requirements imposed by regulatory authorities as well as the timing of restoration.

Note 21 Government grants

There were no government grants receivables recognized on December 31, 2024. There was no Government grant income in 2024. Government grant income in 2023 was USD 6.0 million and was the result of refunds received from the United States Government for Employee Retention Credit. The Employee Retention Credit (ERC) – sometimes called the Employee Retention Tax Credit or ERTC – is a refundable tax credit for eligible businesses that had employees and were affected during the COVID-19 pandemic. The credit is a broad-based refundable tax credit designed to encourage employers to keep employees on their payroll. (see note 23).

REC Silicon annual report 2024

120

Financials

Financials | Consolidated financial statements

Note 22 Other operating expenses

USD in million	2024	2023
Freight, postage and transportation	3.1	3.6
Energy and water	31.3	52.6
Lease and rental expenses	0.7	0.6
Total operating, service and maintenance costs	22.1	19.7
Consultancy and auditor fees	12.3	12.1
Own work capitalized on fixed assets	-0.6	-0.4
IT and telecommunications costs	2.4	3.0
Travel and entertainment costs	0.7	1.0
Insurance costs	3.5	3.5
Other operating costs	2.3	2.3
Other operating expenses	77.8	98.0

The amounts for 2023 are re-presented for discontinued operations, see note11.

Auditor’s remuneration

USD in million	2024	2023
Statutory Audit (only relating to statutory auditor) Deloitte	0.4	0.0
Statutory Audit (only relating to statutory auditor) KPMG	0.4	0.7
Other assurance services (only relating to statutory auditor)	0.0	0.1
Tax advisory services (only relating to statutory auditor) KPMG	0.0	0.0
Other non-audit services (only relating to statutory auditor) Deloitte	0.0	0.0
Total auditors remuneration	0.8	0.8

Note 23 Other income and expenses

USD in million	2024	2023
Restructuring cost and employee termination benefits	-1.8	0.0
Other	0.1	0.0
Employee Retention Credit	0.0	4.4
Insurance proceeds	0.0	0.0
Gains on disposal of non-current asset	1.0	0.3
Total other income and expenses	-0.7	4.7

The amounts for 2023 are re-presented for discontinued operations, see note11.

In 2024 other expense primarily relates to employee termination benefits as a result on shutting down polysilicon production in the Semiconductor Materials Segment in Butte. Gain on disposal of non-current asset is the result of selling non-core assets in 2024.

REC Silicon annual report 2024

121

Financials

Financials | Consolidated financial statements

Note 24 Employee benefits

USD in million	2024	2023
Salaries	32.3	30.8
Bonus and sales commission - employees	2.2	5.0
Share option expense	-0.7	-0.6
Social security tax	2.2	2.4
Defined Contribution	3.8	3.5
Other employee related costs	3.9	2.3
Employee benefit expenses	43.6	43.5

The amounts for 2023 are re-presented for discontinued operations, see note11.

Excluding the Solar Materials Segment the average number of permanent employees during 2024 was 249. The average number of permanent employees during 2023 was 260.

There were loans provided to employees in the amount of USD 0.1 million on December 31, 2024 (see note 16) and 0.1 on December 31, 2023. There were no guarantees provided to employees on December 31, 2024 or 2023.

Note 25 Financial income and expenses

USD in million	2024	2023
Interest income from financial assets not at fair value through profit or loss	3.1	3.4
Total income from financial assets not at fair value through profit or loss	3.1	3.4
Interest expenses for USD Senior Secured Bond	0.0	-3.5
Interest expenses for Property Tax dispute	-0.6	-0.6
Interest expenses for term loans	-20.6	-10.2
Expensing of up-front fees and costs	-3.1	-1.8
Interest on leaase liabilities	-4.2	-4.3
Calculated/imputed interest other - added to principal - external	-0.3	-0.3
Capitalization of borrowing costs	0.8	1.0
Other expenses from financial assets and liabilities	-0.4	-0.4
Net financial expenses	-28.4	-20.1
Net currency gains/losses	0.1	12.7
Gain from sale of Yulin JV	0.0	135.5
Net financial items	-25.3	131.5

The amounts for 2023 are re-presented for discontinued operations, see note11.

Interest income in 2024 includes interest on cash deposits of USD 3.1 million.

Expensing of up-front fees and costs is primarily related to letter of credit and loan guarantee charged by Hanwha Solutions. (See notes 10and 17)

Calculated interest is interest calculated on asset retirement obligations (see note 20).

Additional information to the statement of cash flows on interest, up-front fees, and other costs paid

Interest paid is approximately USD 30.3 million in 2024 and USD 16.5 million in 2023.

REC Silicon annual report 2024

122

Financials

Financials | Consolidated financial statements

Note 26 Earnings per share

Basic

Basic earnings per share (EPS) is calculated by dividing the profit/loss attributable to equity holders of the Company by the weighted average number of ordinary shares issued during the year, excluding treasury shares.

Earnings per share

	2024	2023
Profit/loss from continuing operations (USD IN MILLION)	-104.2	95.9
Profit/loss from discontinued operations (USD IN MILLION)	-353.1	-65.4
Profit/loss from total operations (USD IN MILLION)	-457.4	30.5
Weighted average number of ordinary shares in issue (IN MILLION)	420.6	420.6
Basic earnings per share from continuing operations (USD per share)	-0.25	0.23
Basic earnings per share from discontinued operations (USD per share)	-0.84	-0.16
Basic earnings per share from total operations (USD per share)	-1.09	0.07

Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding. If the effect increases EPS from continuing operations, it is anti-dilutive and is then not included in diluted EPS.

Dilutive EPS equals basic EPS for both years.

Note 27 Dividends per share

The Board of Directors did not propose any dividend payments for financial years 2024 or 2023.

REC Silicon annual report 2024

123

Financials

Financials | Consolidated financial statements

Note 28 Research and development

USD in million	2024	2023
Research and development expense	3.4	1.7
Development capitalized	0.0	0.0
Total research and development	3.4	1.7

REC Silicon’s long-term competitive position is based on cost efficiency and industry-leading product performance. REC Silicon’s research and technology development activities are designed to enhance quality, improve efficiency, and reduce production costs of its products to add value to its customers and further enhance its competitive position.

During 2024, research and development efforts were focused on lab operations to support silicon gas businesses.

Cash expenditures for research and development were USD 3.0 million in 2024, compared to USD 1.3 million in 2023. Total expenditures, including depreciation, were USD 3.4 million in 2024 and USD 1.7 million in 2023.

Note 29 Commitments, guarantees, pledges

Purchase obligations consist of significant items for which the Group is contractually obligated to purchase from third parties on December 31, 2024. Operating lease payments show contractual minimum future payments.

In cases where contracts can be terminated or reduced, the reduced amount has been included as estimated payments in the first period after the reporting period. Consequently, the amounts presented in the table represent the estimated unavoidable portion of the Group’s expected future costs related to purchase obligations and lease payments. It does not reflect the Group’s expected future cash outflows.

Purchase obligations and operating lease payments are undiscounted and exclude the payment of amounts recog-nized for other assets, liabilities, and investments.

Contractual purchase obligations and minimum operating lease payments on December 31, 2024

USD in million	Total	2025	2026	2027	2028	2029	After 2029
Total purchase of goods, services	42.2	42.1	0.0	0.0	0.0	0.0	0.0
Total minimum operating lease payments	0.1	0.0	0.0	0.0	0.0	0.0	0.0
Total purchase obligations and minimum operating lease payments	42.3	42.2	0.1	0.1	0.0	0.0	0.0

Purchase obligations consist primarily of contracts for Metallurgical Grade Silicon. Operating leases are short-term or low-value leases that meet the exceptions in IFRS 16 Leases.

Guarantees and pledges

Bank guarantees on December 31, 2024, were zero and on December 31, 2023.

The Group provided parent company guarantees for the REC Solar Group related to the performance of solar panels and systems and the sale of REC ScanModule AB. The Group has been provided with offsetting guarantees by REC Solar Holdings AS. The guarantees are valid for relevant warranty periods and are limited by warranties provided on solar panels and systems. Parent company guarantees for REC Solar were USD 28.1 million on December 31, 2024, and December 31, 2023. The guarantees will decrease beginning 2025 and by 2039 they will expire in their entirety.

REC Silicon annual report 2024

124

Financials

Financials | Consolidated financial statements

Note 30 Other information financial instruments

Fair values of financial instruments

For all financial assets and liabilities, the carrying amounts represent a reasonable approximation of fair value.

Credit risk

The maximum credit risks related to financial assets are estimated in the table below.

	2024		2023
USD in million	Carrying amount	Max. Exposure	Carrying amount	Max. Exposure
Cash and bank (incl. restricted bank accounts)	10.9	10.9	171.5	171.5
Trade receivables and accrued revenues	12.1	12.1	21.9	21.9
Other non-current and current receivables	4.1	4.1	0.0	0.0
Finance receivables and short-term loans	0.0	0.0	0.0	0.0
Total	27.0	27.0	193.4	193.4

Shared characteristics that identify each concentration of trade receivables on December 31

Geographical	2024	2023	Sector	2024	2023	Industry	2024	2023
Europe	25%	43%	Wholesale	72%	33%	Electronic	100%	92%
North America	24%	11%	Manufacturing	28%	67%	Solar	0%	8%
Malaysia	19%	0%	Other	0%	0%	Other	0%	0%
Korea	19%	17%
Taiwan	6%	10%
Japan	3%	11%
Other Asia	2%	2%
Singapore	1%	3%
China	1%	4%
Total	100%	100%		100%	100%		100%	100%

The table above is calculated with respect to gross trade receivables

The Group is dependent on a small number of customers. In 2024, three customers represented approximately 69 percent of revenue for the Group. In 2023 three customers represented 56 percent.

Three customers represented approximately 84 percent of total trade receivables for The Group on December 31, 2023 (three customers represented approximately 64 percent on December 31, 2023).

See note 5Segment Information above.

REC Silicon annual report 2024

125

Financials

Financials | Consolidated financial statements

Amounts overdue but not impaired between 90 and 365 days were zero in 2023 and 2022. (see table below)

Analysis of aging of receivables on December 31, 2024

			Aging of receivables past due
USD in million	Total carryingamount	Not due	< 30Days	>30<90 Days	>90<365 Days	>365 Days
Trade receivables	12.7	7.7	4.7	0.3	0.0	0.0
Provision for loss on trade recivables	-0.7	0.0	-0.4	-0.3	0.0	0.0
Other non-current and current receivables	4.1	4.1	0.0	0.0	0.0	0.0
Total receivables	16.2	11.8	4.3	0.0	0.0	0.0

Analysis of aging of receivables on December 31, 2023

			Aging of receivables past due
USD in million	Total carryingamount	Not due	< 30Days	>30<90 Days	>90<365 Days	>365 Days
Trade receivables	24.7	15.6	4.0	2.3	0.0	2.7
Provision for loss on trade recivables	-2.7	0.0	0.0	0.0	0.0	-2.7
Other non-current and current receivables	0.0	0.0	0.0	0.0	0.0	0.0
Total receivables	21.9	15.6	4.0	2.3	0.0	0.0

The provision for doubtful accounts includes the impact of expected credit losses (ECL) based upon historical experience. The Company has prepared analyses to calculate an ECL estimated at 0.21 percent of sales. However, because expected credit losses are low and accounts receivable consists of relatively large outstanding balances, use of the ECL to record credit losses at the time of sale would result in provisions for losses on trade receivables that are collected. Therefore, the Company uses the ECL rate as a guideline and evaluates the potential that balances will not be received based upon days outstanding, customer payment histories, and other information regarding past due balances. In general, provisions are recorded for accounts which are greater than 60 days past due unless there is a clear indication that payment will be received.

On December 31, 2024, approximately 2 percent of the not due receivables were secured by bank guarantees with no past due receivables secured by credit insurance. On December 31, 2023, approximately 19 percent of not due trade receivables were secured by bank guarantees.

Sensitivities

Interest rate sensitivity

A change in interest rates will affect interest payments on variable interest rate liabilities, cash, and restricted cash. The net effect of a one percentage point increase (decrease) in interest rates is estimated to affect profit or loss for the year by USD 3.4 (-3.4) million calculated on outstanding amounts on December 31, 2024.

Exchange rate sensitivity

The table below shows the estimated impact of a 10 percent increase in foreign currency rates compared to functional currencies for each entity. A decrease in the same percentage would create the opposite effect. The amounts calcu-lated in the table below are for REC Silicon ASA at period end and do not reflect fluctuations during the year. The table below shows the effects of changes in exchange rates on positions denominated in NOK for 2024 and 2023.

Exchange rate sensitivity on financial instruments on December 31

	Change + 10% compared to functional currencies
USD in million	2024	2023
Financial assets	0.1	0.1
Financial liabilities	-0.1	-0.1
Total	0.0	0.0
Of which to equity
USD receivables as part of net investment	0.0	0.0
Rest is to profit or loss	0.0	0.0

REC Silicon annual report 2024

126

Financials

Financials | Consolidated financial statements

Note 31 Claims, disputes, contingent liabilities and contingent assets and risks

The Group is involved in legal disputes in the ordinary course of business. Provisions are recognized for the expected outcomes in accordance with applicable accounting rules. Provisions are based on Group Management’s estimate of likely outcomes based on prior experience, the source, and the facts and circumstances of a claim. The final outcomes of such disputes and litigation are subject to significant uncertainty and actual outcomes may vary from provisions recognized. Provisions are adjusted to reflect the most recent facts and circumstances.

Risk Factors

Market risk

In January 2025, REC Silicon announced that its US affiliate QCells, its customer for granular polysilicon produced at Moses Lake, entered into a mutually agreeable termination agreement. Per the agreement, the reimbursement of the prepayment of USD 30 million by REC Silicon to QCells has been delayed for one year without interest and without any further obligation by either party, including the payment of any liquidated damages.

On February 7, 2024, REC Silicon announced that REC Advanced Silicon Materials LLC was shutting down its polysil-icon production capacity at its Butte, Montana facility. The polysilicon business continued to produce for approximately nine months to fulfill polysilicon supply obligations to the company’s customers.

Operational risk

The Group’s production processes involve manufacturing, processing, storage, use, handling, distribution and transport of silane gas and other substances of an explosive or hazardous nature. Accidents or mishandlings involving these substances could cause property damage or injury, which could lead to significant liabilities and costs for the Group. The occurrence of a catastrophic event at the silane gas production facilities at Butte could adversely impact production capacity at such facility for a significant period of time. In addition, an interruption in the supply of materials and services could disrupt production capacity for a significant period of time. Despite insurance coverage, the Group could incur uninsured losses and liabilities arising from such events, and/or suffer substantial losses in operational capacity, which could have a significant adverse effect on the Group’s business, prospects, financial results, and results of operations.

The production process for the Butte facility is energy intensive and subject to risk from high energy prices.

Liquidity risk

Debt maturities in 2025 include USD 50 million for the Standard Chartered term loan, which needs to be rolled over, USD 1.8 million for the undiscounted Grant County Property Tax note and USD 16.4 million for undiscounted lease liabili-ties. On December 31, 2024, the Group does not have sufficient available cash to meet debt service and other anticipated operating cash flow requirements. Management acknowledges that additional sources of capital are required to meet obligations. The Company is actively negotiating securing additional financing aiming to close in the first half of 2025. Furthermore, the Company is looking to sell noncore assets during 2025. Management estimates future cash require-ments can be met from the previously mentioned additional funding, along with cash flows generated by operations from the Semiconductor segment. (see notes 7, 17, 29and 33to the consolidated financial statements).

Credit risk

Credit risk is primarily related to trade receivables and guarantees provided for discontinued operations. In trade receivables, sources of credit risk include geographic, industry and customer concentrations, and risks related to the collection. Policies and procedures are in place for managing credit risk, including obtaining securities where possible. Market and customer specific developments affect credit risk.

The Group provided parent company guarantees for the REC Solar Group related to the performance of solar panels and systems and the sale of REC ScanModule AB. The Group has been provided with offsetting guarantees by REC Solar Holdings AS. The guarantees are valid for relevant warranty periods and are limited by warranties provided on solar panels and systems. Parent company guarantees for REC Solar were USD 28.1 million on December 31, 2024. The guarantees will decrease starting in 2025 and will expire entirely by 2039.

Climate risk

The Company evaluates the risks and opportunities arising from climate change, which may impact its financial state-ment items, including assets, liabilities, and profitability.

The Company monitors the potential impact of climate-related policies, legal changes, and shifts in consumer trends on its financial statements. For the current fiscal year, no assets have been impaired, or costs recognized due to climate-related risks. Impairments may arise in the future due to changes in climate-related regulations and market conditions, and the company will continue to monitor these risks.

REC Silicon annual report 2024

127

Financials

Financials | Consolidated financial statements

Note 32 Share-based compensation

The share-based incentive program is intended to award and incentivize outstanding performance by eligible employees and to attract and retain strong talent in business-critical functions.

The synthetic options under this Program entitle the holder to receive a cash payment equivalent to the difference between a specific number of options multiplied by the strike price for such options and the same number of REC shares multiplied by the weighted average market price of REC shares on the disbursement dates. The options entitle-ment does not need to be exercised by any action by the eligible employee and will be automatically disbursed by REC following the applicable disbursement date for such year.

The cash payment is limited to a maximum amount in each calendar year. The maximum amount is each employee’s base salary effective January 1 in the year of the relevant disbursement date.

The value of unvested options is calculated using the Black Scholes option pricing model and may not match actual payments made depending upon the market value of the Company’s stock on the exercise date. During 2024 zero share options were granted. In 2019, 2020 and 2021, 1,200,000 share options were granted to certain key employees. The first three years are a lock-up period. The vesting of the options for eligible employees will take place in equal parts after the third, fourth and fifth years of each program, on each June 30 of each year. The options were granted at a strike price of NOK 8.1 in 2019, 3.5 in 2020, and 17.5 in 2021. Any unexercised options are forfeited upon termination of employment, unless the employee retires, in which case options are maintained.

Fair values are estimated each reporting date using the Black-Scholes option price model.

Options outstanding on December 31, 2024

Program	Exerciseprice (nok)	No. options	Total fair value(USD million)	Remaining contractual life (year)	Total expensed(USD million)
2020	3.5	329,707	0.0	0.5	0.0
2021	17.5	1,089,900	0.0	1.5	0.0
Total		1,419,607	0.1		0.1

Options outstanding on December 31, 2023

Program	Exerciseprice (nok)	No. options	Total fair value(USD million)	Remaining contractual life (year)	Total expensed(USD million)
2019	8.1	328,736	0.3	0.5	0.3
2020	3.5	659,415	0.6	1.5	0.5
2021	17.5	1,089,900	0.2	2.5	0.1
Total		2,078,051	1.2		0.9

Differences between the number of options granted for each year and the number of outstanding options in the table above are due to options that have been forfeited upon termination of employment, and by options exercised. Options forfeited for 2024 and 2023 were zero and 82,210 respectively. During 2024 the total amount of shares exercised were 329,708 from program year 2020. During 2024 328,736 options from program year expired.

The amount recognized in the statement of income for share-based compensation was a credit of USD 0.7 million in 2024 and USD 0.6 million in 2023. On December 31, 2024, USD 0.0 million has been reported in the line other non-cur-rent liabilities on the statement of financial position and USD 0.1 million in accrued operating costs (see note 20). The liabilities associated with share-based compensation are derived using the Black Scholes option pricing model and may not match actual payments made depending upon the market value of the Company’s stock on the exercise date. During 2024 there was USD 0.1 million in cash payments made with respect to share-based compensation, and USD 0.7 million in 2023.

REC Silicon annual report 2024

128

Financials

Financials | Consolidated financial statements

Note 33 Events after the reporting period

On January 24, 2025, REC Silicon announced that it has entered into a USD 40 million term loan with Hanwha International LLC, supporting REC Silicon’s capital needs during the shutdown process at Moses Lake and the Company’s transition into a pure play silicon gas provider.

Further, the bridge loans of USD 25 million and USD 25 million with Hanwha International LLC rolled up into this loan at their maturity dates on February 2 and February 4, 2025, respectively. The terms of the loan are generally in line with the financial terms of the Company’s existing bank loan agreements, secured by the assets of the Company. The maturity date is January 24, 2026.

REC Silicon also announced that its US affiliate and QCells, its customer for granular polysilicon produced at Moses Lake, entered into a mutually agreeable termination agreement. Per the agreement, the reimbursement of the prepay-ment of USD 30 million by REC Silicon to QCells has been delayed for one year without interest and without any further obligation by either party, including the payment of any liquidated damages.

Hanwha International LLC is an affiliate of the Company’s two largest shareholders, Hanwha Solutions and Hanwha Corporation.

REC Silicon annual report 2024

129

Financials

Financials | Consolidated financial statements

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 REC Silicon ASA (the Company) for the year ending December 31, 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 on December 31, 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 on December 31, 2024. The report from the Board of Directors and CEO, including the report on corporate governance and sustainability, for the Group and the Company has been prepared in accordance with the Norwegian Accounting Act and the Norwegian Accounting Standard no. 16 applicable on December 31, 2024.

We confirm that, to the best of our knowledge:

The financial statements for the Group and the Company for the year ending December 31, 2024 have been prepared in accordance with applicable accounting standards, and

The information in the financial statements gives a true and fair view of the Group’s and the Company’s assets, liabilities, financial position, and results of operations for the year ending December 31, 2024, and

The report from the Board of Directors for the year ending December 31, 2024 includes a fair review of:

The development, results of operations and position for the Group and the Company, and

The principal risks and uncertainties for the Group and the Company.

Lysaker, March 24, 2025

Board of Directors

Document is signed electronically

Tae Won Jun

Chairman of the Board

Jooyong Chung

Deputy Chair

Vivian Bertseka

Member of the Board

Robert Neuhauser

Member of the Board

Dr. Renate Oberhoffer-Fritz

Member of the Board

William K. Levens

President and CEO

REC Silicon annual report 2024

130

Financials

Financials | Statement of compliance

Parent company financial statements

REC Silicon ASA

Parent company balance sheet (NGAAP) 132

Parent company income statement (NGAAP) 133

Parent company statement of cash flows (NGAAP) 134

Notes to the Parent company financial statements 135

Note A Summary of significant accounting principles and general 135

Note B Equipment and intangible assets 135

Note C Shares in subsidiaries 136

Note D Receivables from subsidiaries 136

Note E Cash and cash equivalents and restricted bank accounts 137

Note F Interest bearing liabilities 137

Note G Equity 138

Note H Employee benefits 138

Note I Income taxes 139

Note J Other operating expenses 141

Note K Interest and currency 142

Note L Derivatives, other current liabilities 143

Note M Impairment of financial assets 143

Note N Research and development 144

Note O Guarantees and bond 145

Note P Related parties 145

Note Q Contingent liabilities 145

Note R Going concern 146

REC Silicon annual report 2024

131

Financials

Financials | Parent company financial statements

Parent company balance sheet (NGAAP)

On December 31 (USD in thousand)

Notes

2024

2023

ASSETS

Non-current assets

Equipment and intangible assets

B

30

Investments in subsidiaries

C

133

Non-current receivables from subsidiaries

D , M

125,492

336,820

Total non-current assets

125,655

336,983

Current assets

Other receivables

327

375

Restricted bank accounts current

E

12

13

Total current receivables

339

388

Cash and cash equivalents

E

2,240

17,027

Total current assets

2,579

17,415

Total assets

128,234

354,398

On December 31 (USD in thousand)

Notes

2024

2023

EQUITY AND LIABILITIES

Shareholders' equity

Share capital

49,629

Share premium

199,677

Total paid-in capital

249,306

Other equity and retained earnings

-233,182

-5,223

Total shareholders' equity

16,124

244,083

Non-current liabilities

Interest-bearing liablities

F

110,000

Total non-current liabilities

110,000

Current liabilities

Trade payables

136

15

Social security tax, VAT and other taxes

34

57

Other current liabilities

L

1,940

243

Total current liabilites

2,110

315

Total liabilities

112,110

110,315

Total equity and liabilities

128,234

354,398

Lysaker, March 24, 2025

Board of Directors

Document is signed electronically

Tae Won Jun

Chairman of the Board

Joo-Yong Chung

Deputy Chair

Vivian Bertseka

Member of the Board

Robert Nauhauser

Member of the Board

Dr. Renate Oberhoffer-Fritz

Member of the Board

William K. Levens

President and CEO

REC Silicon annual report 2024

132

Financials

Financials | Parent company financial statements

Parent company income statement (NGAAP)

Year ended December 31 (USD in thousand)

Notes

2024

2023

Revenues

0

Employee benefit expenses

H

-328

-215

Other operating expenses

J

-1,921

-2,485

EBIT

-2,249

-2,700

Interest income, external

386

722

Interest expense, external

K

-8,748

-9,920

Other financial expenses

K

0

-8

Net currency gains/losses

K

52

-4,592

(Impairment)/reversal of impairment of financial assets

D , M

-217,400

72,145

Net financial items

-225,710

58,347

Profit/loss before income tax

-227,959

55,647

Income tax expenses

I

0

Profit/ loss

-227 959

55 647

Profit/loss for the year is distributed as follows

Other equity (uncovered loss)