Annual report 2023

Advancing Materials, Advancing Technology

REC Silicon is a global leader in silane-based, high-purity silicon materials.

With two U.S.-based manufacturing facilities and sales support offices in both Asia and the United States, REC Silicon is leading energy and technology providers worldwide in shaping the future with advanced silicon materials.

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Year in brief	4
Highlights and key figures	4
Letter from the CEO	5
This is REC Silicon	7
Group management	13
Board of Directors	14
Board of Directors' report	15
Sustainability	27

Corporate governance	63
Financials	70
Consolidated financial statements	71
Parent company financial statements	119
Responsibility statement	129
Auditor's report	135
Definition of alternative performance measures	139

Highlights and key figures

Retired USD 110 million corporate bond
Secured long-term corporate financing
Signed FBR Offtake contract securing sustainable Moses Lake operation
Moses Lake production re-start in November 2023, process on time for first delivery in late Q1 or early Q2 2024, and full capacity by YE 2024
Optimizing Butte operations, capacity expansions for specialty gases, EG polysilicon production to be discontinued during 2024
Yulin JV sale completed, gross proceeds of USD 136.1 million
December 2023 cash balance of USD 170.9 million

	USDm
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USDm

USD IN MILLION	2023	2022
Revenues	141.1	147.8
EBITDA	-80.5	-34.9
EBITDA margin	-57.0%	-23.6%
EBIT excluding impairment charges	-94.9	-58.0
Impairment charges	-8.1	-0.3
EBIT	-102.9	-58.3
EBIT margin	-72.9%	-39.4%
Profit/loss from continuing operations before tax	30.5	-87.0
Profit/loss from continuing operations	30.5	-87.0
Profit/loss from discontinued operations, net of tax	0.0	0.1
Earnings per share, basic and diluted (USD)	0.07	-0.21
Polysilicon production in MT (Siemens and granular)	1,103	1,456
Polysilicon sales in MT (Siemens and granular)	749	1,502
Silicon gas sales in MT	3,075	2,718

LETTER FROM THE CEO

Following on the heels of the positive momentum of 2022 that included the support from a new largest shareholder and announcements of "things to come", numerous important milestones were accomplished in 2023 that sets REC Silicon up for success. The Company is now on firmer footing than we have been in many years due to the successful conclusion of all the strategic initiatives that we stated would be our objectives for 2023.

One of the first highlights achieved for the Company in 2023 was the retirement of the USD 110 million senior secured bond with a corporate debt financing of USD 110 million. The loan was based on favorable terms that were fully guaranteed by the Company's largest shareholder Hanwha Solutions. The Company also closed three additional corporate loans in the amounts of USD 30 million, USD 100 million, and USD 40 million to fully fund the restart of the Moses Lake facility and to fund other capital projects in Butte. These loans allowed the Company to restart Moses Lake and to take advantage of opportunities in the silicon gases business to increase shareholder value. Next, the Company entered into a long-term supply agreement between the Company's subsidiary, REC Solar Grade Silicon LLC and Hanwha Q Cells Georgia, Inc., a wholly owned subsidiary of Hanwha Solutions for the sale of all the high purity granular polysilicon produced from the Moses Lake facility for the next 10 years. The agreement is fully secured with pricing that is index based subject to both a price minimum

and maximum and adjusted for a premium for US-sourced low-carbon material. The Moses Lake facility will also benefit from a USD 3 per kilogram tax credit from the Inflation Reduction Act for the sales of high purity granular polysilicon. The offtake agreement not only provided the Company with an influx of cash from significant prepayments, but also balances the downside risks and allows for upside opportunities. Most significant is that our counterparty is a high-quality industrial partner, well positioned in their market and we look forward to opportunities to continue to support their growth as a key partner.

With the funding in place, the Company successfully restarted the Moses Lake facility in November after being shut down since 2019. The short planning horizon and accelerated timing made for an increased degree of difficulty for such an intrinsically difficult endeavor to begin with. The initiation of the restart was due in large part to our talented and dedicated workforce that achieved the restart within the time frame that we

2024 looks brighter for the Company and the prospects for future years look even better.

consistently shared with stakeholders since the commencement of our restart strategy. We have also started up our Dichlorosilane (DCS) expansion in Butte. This will increase our capacity by 3X and allow us to regain market share as we will be able to follow our key customers' expansions. Combined with investments in container capacity, our ability to follow the strong market trends and recovery is further enhanced. Lastly, the Company closed on the sale of its shares in its Yulin JV for gross proceeds of approximately USD 136 million. As I stated before, the closing of this important transaction not only strengthened the Company's financial position but also allowed us to continue to focus our efforts on our US assets, particularly our recently started high purity granular polysilicon from the Moses Lake facility, a key piece of the development of a solar value chain in the US, along with available funds for investments in our gases business at the Butte facility to support the growth of the Semiconductor industry so that we will be in a strong position to take advantage of opportunities presented by significant

macro trends, government policies, our key products and our location within the US.

As a leading producer of silicon gases and high purity polysilicon, REC Silicon is well positioned to capitalize on the global megatrends of digitalization, energy transition and energy storage and to provide crucial material inputs in support of the IRA, Chips and Infrastructure Acts, Re-shoring to the United States and to supply our key customers globally. The Company has developed a strong market position in the semiconductor industry based on its operations in Butte. The restart of the Moses Lake facility has enabled the Company to provide high purity polysilicon to an emerging US solar value chain. This, together with the silicon gases business in Butte, the Company anticipates it will be a key resource to companies that are positioned to supply the necessary products required to actualize on the promise of these macro trends and initiatives.

Despite these exciting developments, REC Silicon also experienced challenges during 2023 that were largely outside of our control, however that did not preclude us from our duty to make necessary actions to mitigate what we could control. First, the semiconductor industry continued the downturn started in the latter half of 2022, which impacted sale prices and volumes of silicon gases during the year. However, our expectation is that the weakness has reached a stabilized bottom and is now showing signs of improvement for the coming quarters. We were able to shift into some markets that are not our primary focus to give buoyancy to our sales/production volumes. Second, our production costs increased, especially with respect to the cost of power for our Butte facility. We did everything we could to mitigate the precipitous power increase by raising our product prices, modifying our operations, and entering power hedges.

2024 looks brighter for the Company and the prospects for future years look even better. Our focus will remain on executing; continuing the ramp for Moses Lake, qualifying customers for our new DCS capacity in Butte, pursuing opportunities that arise in the nascent silicon anode material space and targeting key contracts to support our silicon gases growth. I continue to believe that we are ideally positioned with our proprietary technology and location to take advantage of new markets, new supply chains and incentives in the US, and growth opportunities within existing industries. REC Silicon has the right assets, in the right place at the right time. I am very optimistic that we will continue to accomplish what we set out to do and improve in every aspect that we can control to reach new heights in the coming years.

Kurt Levens President and CEO

This is REC Silicon

REC Silicon is a global leader in silanebased high purity silicon materials, with more than 40 years history in the industry. The company provides silicon materials for the energy transition

From its two US-based manufacturing facilities in Moses Lake, Washington and Butte, Montana and sales support offices in both Asia and the United States, the company is a leading energy and technology provider in shaping the future with advanced materials.

The base product for REC Silicon's activities is silane gas. Silane gas is used as a stand-alone product for use in semiconductors, flat panel displays, solar panels and as anode material for 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.

Silane gas - The core feedstock

Silane gas (SiH4) is the simplest form of silicon, and therefore the purest, making it the material of choice from memory processes to lithium-ion battery production, as well as thin film deposition uses, giving REC Silicon exposure to transition megatrends, including digitalization, renewable energy and energy storage.

The Silane gas is core feedstock for REC Silicon's production of specialty gases and silicon materials product lines, but also supplied as pure gas, distributed through the company's own specialized container fleet.

Starting with metallurgical grade silicon that is about 98% pure silicon, REC Silicon uses patented and proprietary hydrogenation and distillation processes that remove the impurities to levels measured in parts per trillion. The process is closed loop, meaning continuous while also recycling byproducts of the chemistry process. This results in optimal efficiency and lower process waste.

The result is the purest form of silicon in the world and precursor to our product lines.

A silicon gases company providing enabling materials for the energy transition

The business opportunity

Secular growth trends within in 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.

For REC Silicon this is further enhanced by concerns around supply security and embedded competence that is driving major efforts towards re-shoring industries that where first developed and commercialized in the United States, such as Photovoltaics and Semiconductors. Along with underlying growth trends, the Inflation Reduction Act, Chips Act and the Infrastructure Act all create clear pathways for REC Silicon to run its assets towards full utilization as well as expand in areas where the company has strong and distinct positions.

As the largest producer of Silane Gas and High Purity Granular Polysilicon outside of China, and the only one located in the United States, REC Silicon's is uniquely positioned to translate these circumstances into value for its shareholders.

Strategy

REC Silicon aim to continuously optimize utilisation of available silane gas capacity, high grading its product portfolio to maximize operational and to optimize its financial performance.

Supported by key legislative initiatives, the company is taking several steps to position itself with low-carbon products, targeting energy transition megatrends.

Priorities to pursue this strategy is the ongoing re-opening of the previously mothballed silane gas and polysilicon production in Moses Lake and investments in enhanced capacity for silane gas loading and specialty gases production at Butte.

Operations

From its production sites in Moses Lake, Washington and Butte, Montana, REC Silicon has a combined annual nameplate silane gas production capacity of over 30,000MT, utilized for production of specialty gases, solar- and electronic grade polysilicon, or sold in its pure.

Moses Lake

The Moses Lake facility has a nameplate capacity of around 24,000 tons of silane gas. The majority of the capacity will be used as for production of some 16,000 tons of monograde PV polysilicon.

The excess silane gas capacity is available for alternative purposes, including anode material in silane-based batteries.

Moses Lake uses a fluidized bed reactor technology (FBR) for production of polysilicon. FBR uses seed granules that are continuously fed into a chamber with heated silane gas. The circulation of gas causes the seed granules to flow like liquid as the silane gas breaks down and deposits silicon layers on the granules as the hydrogen is removed and recycled. Over time, the granules grow larger, heavier, and eventually finish out of the bottom of the reactor, ready to use. The FBR technology, use one-tenth of the electricity needed compared to the traditional Siemens technology, affords low-cost material and ultra-low carbon footprint, making its solar module value chain all that more sustainable.

The Moses Lake facility has been shut down since 2019, but is currently in the process of restarting, with full capacity utilization expected by year end 2024.

Butte

The Butte facility has an annual silane gas production capacity of 7,400 tons. Parts of this volume is sold as pure silane gas, while some goes into production of high-purity specialty gases and ultra-pure electronic grade polysilicon. In recent years the company has invested in additional capacity for specialty gases, including dichlorosilane (DCS), monochlorosilane (MCS) and disilane. The capacity increase was finalized during 2023.

The polysilicon production at Butte is based on the energy intensive Siemens technology. Following recent years increase in energy prices in the region, production of polysilicon is no longer financially sustainable, and in early 2024, REC Silicon decided to discontinue production of polysilicon at Butte. The polysilicon business will continue to produce for approximately six to nine months to fulfill polysilicon supply obligations to the company's customers.

The shut down will free up significant incremental silane gas capacity.

Markets

Renewable energy – PV market

Strong impact from IRA

35% increase in expected installations in 2022-27 from the introduction of the Inflation Reduction Act (IRA)
USD 100 billion of investments already announced from companies in the US, Asia and Europe
Full impact throughout the US value chain

Value chain explosion

Source: Rystad Energy

Limited existing value chain for PV in the US
Significant expansion is required, and announced for major value chain components
REC Silicon has the only announced expansion of solar grade polysilicon capacity (Moses Lake)

PV value chain capacity additions by 2026

The quest for low cost and low carbon

Strong demand from end users and module producers for a low carbon PV supply chain
Moses Lake has ~70% lower carbon intensity than traditional polysilicon which accounts for ~40% of the total PV carbon footprint
With IRA initiatives, Moses Lake is also competitive with Chinese producers on a cost per kg basis

Source: The Ultra Low Carbon Solar Alliance

PV manufacturing carbon footprint

Markets

Semiconductor market

Trillion-dollar industry by 2030

7% annual growth towards 2030
75% of growth from automotive electronics, wireless communication and computing/data storage
US market accounts for 34% of current demand

Manufacturers struggling to go green

Renewables share of energy mix in 2022

Strong net zero pledges among all major players
Lack of realistic clean energy options for growth among Taiwanese and South Korean producers
US has some of the largest access to renewable energy, to be increased further by the IRA

Taking back supply chain control

Strong US reliance on semiconductor imports
CHIPS Act main motive to re-shore production and reduce supply/demand gap
USD 200 billion of chip manufacturing investments already announced

Semiconductor 2030 outlook

Computing and data storage Wireless communication Automotive electronics Industrial electronics Consumer electronics Wired communication Source: McKinsey & Company

Source: FT, Korea Electric Power Corp, Taiwan Bureau of Energy, US EIA, Eurostat

200

400

600

800

1000

1200

Markets

Energy Storage– Silane gas

Driving battery storage growth

Global battery storage demand expected to grow 7x from 2022-2030
Battery storage demand for mobility is set to account for more than 90% of the growth
Battery storage demand in the US set to outpace Chinese growth with 26% p.a.

Electric mobility growth

Global EV sales expected to growth 13% p.a. 2020-40
Silane gas has strong potential as anode material in mobility battery storage
Mobility growth also positive for semiconductor and electronics industries

US supply chain response

China dominates the battery markets
Substantial initiatives in IRA have been met with rapid response
Battery storage supply chain in the US set to grow more than 7x, driven by mobility and utility scale storage demand

US battery storage supply chain

Source: The Ultra Low Carbon Solar Alliance

Group management

Kurt Levens

President & CEO

Mr. Levens joined the organization in 2002, CEO since September 2022.

Education

Bachelor of Science, United States

Military Academy at West Point.

Career

Mr. Levens has held executive and managerial positions in Commercial, Operations and Maintenance, Projects and General Management in the Electronic Materials-Gases and Petroleum industries.

Jack Yun

CFO

Mr. Yun joined the organization in 2022.

Education

MBA in Corporate Finance from the Ohio State University and MA in Economics from Yeonsei University, South Korea.

Career

Mr. Yun has held executive and managerial positions focusing on business development and strategy, executive management, and financial reporting and control. Prior to REC Silicon, he was Executive Vice President of Hanwha Solutions/Q-cells.

Dylan Jung

Chief Strategy Officer

Mr. Jung joined the organization in 2022.

Education

Mr. Jung was educated at Seoul National University and CEIBS.

Career

Mr. Jung was previously in the Strategy Division at Hanwha Solutions Corporation and the Planning Section Leader, Sales for Renewable Energy Components at Hanwha Business Group.

Board of Directors

Tae Won Jun

Chairman of the Board

Key Experience

Currently Chief Strategy Officer of the Strategy Division at Hanwha Corp. since 2019, and Chief Executive Officer at FutureProof since 2022.

Previously Executive Director for Morgan Stanley PE Asia (2016-2019), and Director, M&A at Hanwha Group (2012-2016)

Education

MBA, Wharton School, and Bachelor in Finance, Korea University

Dong Kwan Kim

Director

Key Experience

Currently Chief Executive Officer of the Strategy Division at Hanwha Corp. and Hanwha Solutions since Jan 2020.

Previously held multiple executive positions at Hanwha QCELLS Group

Education

Harvard University, 2006 Artium Baccalaureus, Government

Dr. Renate

Director

May 2022.

Key Experience

Oberhoffer-Fritz

Currently Vice Dean Talent Management and Diversity, and Professor, School of Medicine and Health, Technical University Munich, Advisory Board Member Fresenius University of Sustainability, Vienna

Member of the Board of Directors since

Education MD, Ph.D., Mainz and Ulm University, and Fellowship at Imperial College London

Vivian Bertseka Director

Key Experience Currently Board Member of Transition Zero, Blue Layer.

Previously

Founding Partner & COO, Just Climate (2020-2022) Investment Director, Generator IM Global Equity, (2015-2020) Growth Equity (2011-2015)

Education

MBA (distinction) from INSEAD, and Artium Baccalaureus in Applied Mathematics, Harvard University

Roberta Benedetti Director

Key Experience

Currently Senior advisor within energy and renewables with more than 20 years of experience in the energy sector. NED/Chairman in listed and unlisted European companies, with expertise in Governance, Risk and Sustainability and Compliance.

Previously held multiple executive positions at Enel (1998-2006), E.ON (2006-2016), and ANEV (2011-2016)

Education

Degree in Economics, University of Florence (Italy), and exchange at Ryerson Polytechnic University (Canada)

Board of Directors' report

2023 Highlights (compared to 2022)

Revenues of \$141.1M compared to \$147.8M in 2022
EBITDA of loss of (\$80.5M) compared to loss of (\$34.9M) in 2022
Cash balance of \$170.9M on December 31, 2023
Cash increase of \$65.7M in 2023
Cash outflows from operations of \$86.0M
Cash outflows from investing activities of \$8.7M
Cash inflows from financing activities of \$165.0M
Decrease effect on cash of changes in foreign exchange rates of \$4.6M
Silicon gas sales volumes of 3,075MT compared to 2,718MT in 2022
- 13.2% Increase in sales volume
10.1% Decrease in average silicon gas prices
Total polysilicon sales volumes of 749MT compared to 1,502MT in 2022
- Semiconductor grade polysilicon sales of 524MT compared to 1,045MT in 2022
- Average semiconductor grade polysilicon price increase of 96.1%
- Polysilicon inventory increase of 355MT
Finalized Corporate Bank loans
\$280M in term loans all guaranteed by Hanwha Solutions
Signed full form FBR offtake agreement
10 year take or pay agreement with Hanwha QCells Georgia, Inc
Received \$30M advance payment
Yulin JV sale completed
Gross proceeds of \$136.1M
Moses Lake start-up process commenced
- First product delivery in late Q1 or early Q2 2024 and full capacity by year end 2024

Business Activities

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

REC Silicon is a global leader in silane-based, high-purity silicon materials, delivering high-purity polysilicon and silicon gases to the solar and electronics industries.

REC Silicon operates manufacturing facilities in Moses Lake, Washington and Butte, Montana in the USA. REC Silicon's subsidiaries include: REC Silicon Inc., REC Solar Grade Silicon LLC, and REC Advanced Silicon Materials LLC in the United States. REC Silicon's sales and marketing activities for sales of solar grade polysilicon, semiconductor grade silicon and silicon gases are carried out in China, Japan, Korea, Taiwan, and in the United States.

Strategy and objectives

REC Silicon's strategy is to maintain its position as a technological innovator in the silicon materials industry.

REC Silicon intends to improve its competitive position and:

Fully ramp-up high purity granular polysilicon production in Moses Lake
Establish and continually improve profitable operations
Create customer connections as a provider of valuable solutions
Optimize efficiency of production assets
Focus on cost control
Focus on continued quality improvements
Pursue opportunities for growth through organic means as well as investments
Meet the targets as outlined in REC Silicon's Sustainability Report

2023 Summary

Financial highlights

Key Financials – REC Silicon Group

USD IN MILLION	2023	2022

Revenues	141.1	147.8
EBITDA	-80.5	-34.9
EBITDA margin	-57.0%	-23.6%
EBIT excluding impairment charges	-94.9	-58.0
Impairment charges	-8.1	-0.3
EBIT	-102.9	-58.3
EBIT margin	-72.9%	-39.4%
Profit/loss from continuing operations before tax	30.5	-87.0
Profit/loss from continuing operations	30.5	-87.0
Profit/loss from discontinued operations, net of tax	0.0	0.1
Earnings per share, basic and diluted (USD)	0.07	-0.21
Polysilicon production in MT (Siemens and granular)	1,103	1,456
Polysilicon sales in MT (Siemens and granular)	749	1,502
Silicon gas sales in MT	3,075	2,718

Revenues

Total revenues decreased by 4.5 percent from USD 147.8 million in 2022 to USD 141.1 million during 2023. This decrease is primarily due to decreased sales for semiconductor grade polysilicon. Nearly all revenues reported are in the Semiconductor Materials segment and decreased by 4.6 percent from USD 147.4 million in 2022 to USD 140.6 million in 2023.

Operations

During 2023 finished polysilicon produced by REC Silicon was manufactured in the Semiconductor Materials segment from its plant in Butte, Montana. The Company restarted FBR production from its plant in Moses Lake in Q4 of 2023.

Total polysilicon production decreased by 353MT (-24.2 percent) to 1,103MT in 2023 compared to 1,456MT in 2022. Essentially all production in 2023 and 2022 was from the semiconductor materials segment.

Total polysilicon inventories increased by 355MT in 2023.

Earnings

Earnings Before Financial Items and Income taxes (EBIT) for 2023 was a loss of USD 102.9 million. This represents an increased loss compared to an EBIT loss of USD 58.3 million in 2022.

EBITDA for 2023 was a loss of USD 80.5 million compared to an EBITDA of USD 34.9 million in 2022. The decrease in EBITDA

compared to 2022 is primarily the result of restart activities in the Solar Materials segment. EBITDA contributed by the Semiconductor Materials segment increased by USD 7.6 million to USD 14.0 million in 2023 due primarily increased silicon gas sales. EBITDA contributed by the Solar Materials segment decreased by USD 44.8 million due to restart activities. In Other and Eliminations, net operating costs increased by USD 8.4 million due to restart activities.

Technology, research, and development

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 our products to add value to our customers and further enhance our competitive position.

During 2023, research and development efforts were focused on maintaining minimum research lab operations to support the silicon gas and semiconductor grade polysilicon businesses.

Cash expenditures for research and development were USD 1.3 million in 2023 compared to USD 1.5 million in 2022. Total expenditures including depreciation were USD 1.7 million in 2023 and USD 1.9 million in 2022.

Segment information

Semiconductor Materials segment

REC Silicon manufactures polysilicon and silicon gases for semiconductor markets from its manufacturing facility in Butte, Montana. This facility is the world's largest supplier of silicon gases for semiconductor, flat panel display, and solar applications. On February 7, 2024, it was announced that REC Advanced Silicon Materials LLC will be shutting its polysilicon production capacity at its Butte, Montana facility. The polysilicon business will continue to produce for approximately six to nine months to fulfill polysilicon supply obligations to the company's customers.

Key Financials – Semiconductor Materials

USD IN MILLION	2023	2022

Revenues	140.6	147.4
EBITDA contribution	14.0	6.3
Contribution margin	9.9%	4.3%
Polysilicon production in MT (Siemens)	1,101	1,453
Polysilicon sales in MT (Siemens)	745	1,502
Silicon gas sales in MT	3,075	2,718

Markets

The power device market was strong in 2023 helping to drive demand for Float Zone semiconductor polysilicon. However, demand for Czochralski-grade semiconductor polysilicon remained depressed. The rapid growth in mobile applications, Silicon Gas Sales

1,000

Semiconductor Polysilicon Sales

along with renewable energy and the push for electric vehicles helped to keep demand up for advanced power devices in this sector. Power devices are playing a larger part in everyday technology and while that strength was evident in the market for 2023, we have yet to see the demand increase for integrated circuits used in consumer electronics. Issues in China included falling real estate prices and lower foreign investments continuing to cool the market demand while Semiconductor Fabs have been cutting utilization rates to slow re-building inventories. Memory and integrated circuits sectors remained weak as geopolitical issues and global inflation worries continued.

Silane gas for the PV market had solid demand in the fourth quarter of 2023. The flat panel display market was down at the end of 2023 after showing stronger signs in the second quarter and then weakness in the third quarter. Specialty gases saw an uptick in demand towards the end of 2023 and pointed to the first signals that downstream demand for some devices might be improving. Many industry analysts discussed the possibility that the trend had reached bottom and market demand should start to gradually increase. Improvements in logistics were seen early in the fourth quarter but then slowed again as the Red Sea Crisis affected scheduling and freight costs in European routes.

Financial Performance

In 2023, revenues for the Semiconductor Materials segment were USD 140.6 million compared to USD 147.4 million in 2022; a decrease of 4.6 percent.

Revenues from polysilicon sales decreased by 10.5 percent in 2023 compared to 2022. Total polysilicon sales volumes decreased by 50.4 percent from 1,502MT in 2022 to 745MT in 2023. The underlying sales volumes of semiconductor grade polysilicon were 524MT during 2023 compared to 1,045MT during 2022. Average prices realized for semiconductor grade polysilicon increased by 96.1 percent as the company focused on high grade FZ production and sales.

Revenues from silicon gas sales increased by 1.7 percent in 2023 compared to 2022. Silicon gas sales volumes were 3,075MT, a 13.2 percent increase compared to 2,718MT in 2022. Average annual prices for silicon gas decreased by 10.1 percent.

Total polysilicon production in the Semiconductor Materials segment decreased by 353MT to 1,101MT in 2023 compared to 1,453MT in 2022. The underlying production volumes of semiconductor grade polysilicon decreased by 288MT to 704MT for 2023. Inventories of polysilicon in the Semiconductor Materials segment increased by 355MT in 2023.

The Semiconductor Materials segment contributed USD 14.0 million of income to EBITDA during 2023. This compares to an EBITDA of USD 6.3 million in 2022.

Income contributed by the Semiconductor Materials segment represents revenues less production costs for products sold

during the period and excludes depreciation, amortization, impairment, and selling, general, and administrative expenses.

Solar Materials segment

REC Silicon manufactures polysilicon for the solar energy markets from its manufacturing facility in Moses Lake, Washington.

Key Financials – Solar Materials

USD IN MILLION	2023	2022

Revenues	0.4	0.2
EBITDA contribution	-64.8	-19.9
Contribution margin	NA	NA
Polysilicon production in MT (Siemens and granular)	3	3
Polysilicon sales in MT (Siemens and granular)	4	0

The Company restarted FBR production from its plant in Moses Lake in Q4 of 2023. The company is targeting a ramp to 50 percent operation during Q2 2024 and a ramp to 100 percent operation during Q4 2024. (see Risk Factors below).

Markets

Solar grade polysilicon prices inside China declined sharply in 2023 from 24.8/kg to \$8.0/kg by the end of 2023. Polysilicon supply in China increased to record levels as new capacity came online. This led to a rapid price collapse of Chinese polysilicon in 2023. The rapid drop in polysilicon prices shifted the pricing pressure

downstream as wafer prices also declined resulting in the expectation that the value chain will control costs to improve margins.

Wafer factory utilization rates declined towards the end of 2023 as the expected seasonal demand declined going into the new year leading to a slowdown in purchases of polysilicon. Between the anticipated demand decrease in first quarter 2024 and the increase in polysilicon supply, buyers for wafer factories controlled their purchases in anticipation of better pricing in early 2024.

The end of 2023 saw a strong shift away from P-type wafer production to N-type wafer production driving up demand for higher quality polysilicon. Prices for polysilicon produced outside China saw a slight decline and bifurcation of material between P-type (positive) and N-type (negative) polysilicon continued.

^* PV Insights – Mono-crystalline polysilicon prices

ASP for P-type polysilicon ended the year at USD \$21.7/kg and N-type at USD 25.6/kg.

Financial Performance

Revenues for the Solar Materials segment were USD 0.4 million during 2023 compared to USD 0.2 million in 2022.

The Solar Materials segment contributed a loss of USD 64.8 million to the Company's EBITDA during 2023. This compares to a loss of USD 19.9 million in 2022. The increased expenses are related to restart activities.

The loss contributed by the Solar Materials segment represents costs associated with restart activities and excludes depreciation, amortization, impairment, and selling, general, and administrative expenses.

Other and Eliminations

Other includes general administrative and sales activities in support of the manufacturing facilities in the United States and the Company's headquarters in Norway. It also includes costs associated with the Company's representative offices in Taiwan, Korea, China, and the United States.

Key Financials – Other and Eliminations

USD IN MILLION	2023	2022
Revenues	0.2	0.2
EBITDA contribution	-29.7	-21.3

Other and Eliminations EBITDA decreased to negative USD 29.7 million during 2023 compared to negative USD 21.3 million in 2022. Costs exclude depreciation, amortization and impairment.

Investments (Yulin JV)

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.

All regulations and government approvals in China for the transaction have been completed. 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. The purchase price was based upon a third-party appraisal of the valuation of the Yulin JV of approximately RMB 6.8 billion implying gross proceeds before transaction costs of approximately RMB 1 billion for REC Silicon's 15 percent share.

Financial items

Key Financials – REC Silicon Group

USD IN MILLION	2023	2022

Financial income	3.6	1.9
Interest expenses on borrowings	-14.9	-13.4
Expensing of up-front fees and costs	-1.8	-0.5
Interest expense on leases	-8.5	-8.6
Capitalized borrowing cost	8.4	3.0
Other financial expenses	-1.5	-1.4
Net financial expenses	-18.3	-20.9
Net currency gains/losses	12.7	-9.7
Gain from sale of Yulin JV	135.5	0.0
Net financial items	133.5	-28.7

Net financial items were a gain of USD 133.5 million in 2023 compared to an expense of USD 28.7 million in 2022. Net financial items are primarily associated with the sale of the Yulin JV. In December 2023, REC completed the sale transaction and net proceeds were USD 135.5M.

Net currency gains/losses are primarily related to the impact of exchange rate changes on the repayment of capital between REC companies. Additionally impacts on liabilities and cash deposits denominated in NOK. Net currency gains/losses include fluctuations between transaction currencies and the USD which is the reporting currency for the group.

Interest expenses on borrowings were USD 14.9 million in 2023 compared to USD 13.4 million in 2022. Interest expense on borrowings includes interest on the Company's senior secured bond for both years presented. The senior secured bond was repaid in April 2023. The company obtained USD 280 million in term loans during 2023, all guaranteed by Hanwha Solutions. Expense related to term loans was USD 10.8 million and expense related to guarantee fees were USD 1.8 million in 2023. Interest expense includes interest expense on a note payable associated with the settlement of the property tax dispute with Grant County, Washington. (See notes 17 and 25 to the consolidated financial statements).

Interest expense on leases was USD 8.5 million in 2023 compared to USD 8.6 million in 2022. This decrease can be attributed to increased principal lease payments (See Note 7 and 25 to the consolidated financial statements).

Capitalized borrowing costs were USD 8.4 million in 2023 and are related to capitalized interest associated with long term capital projects. Interest is capitalized at the blended effective external borrowing rate for the company of 8.1 percent.

The remaining expense can be attributed to interest on asset retirement obligations and interest on the pension obligation.

Income tax

The profit before tax from continuing operations of USD 30.5 million in 2023 and the loss of USD 87.0 million in 2022 resulted in no effective tax impact since it is offset by changes in unrecognized deferred tax assets. The profit in 2023 is offset by losses in the Company's unrecognized deferred tax asset. The losses will continue to be available to offset taxable income during future periods.

See note 18 to the consolidated financial statements.

Profit and loss

The profit from total operations was USD 30.5 million in 2023 compared to a loss of USD 86.8 million in 2022.

Cash flow

Net cash outflows from operating activities were USD 86.0 million in 2023 compared to USD 42.1 million in 2022. Cash outflows included USD 16.5 million of interest payments and a USD 1.3 million contribution to the defined benefit pension plan in the United States.

Net cash outflows from investing activities were USD 8.7 million in 2023 compared to cash outflows of USD 54.8 million in

Gross proceeds from the sale of the Yulin JV were 136.1 million in 2023. Proceeds from the sale of non-core assets were USD 0.7 million in 2023. Payments of capital expenditures were USD 145.7 million in 2023 and were primarily associated with FBR modifications which enabled the restart of Moses Lake production in Q4 of 2023. Other capital spending included the Dichlorosilane (DCS) gas expansion project in the Butte production facility.

Capital expenditures also include cost savings and improvement initiatives, routine replacement of production equipment, and capital necessary to maintain safe and reliable operations.

In addition, cash inflows included USD 0.2 million in 2023 and was the result of the release of restricted cash.

Cash inflows from financing activities were USD 165.0 million in 2023 and included USD 280.0 million from borrowings, partially offset by the repayment of the USD senior secured bond of USD 110 million and USD 1.1 million for the payment of the property tax note. Additionally, cash payments of USD 3.9 million were lease related. Cash inflows from financing activities in 2022 were USD 98.8 million and included payments of USD 0.9 million on the property tax note and USD 2.6 million payments of lease liabilities. These payments in 2022 were offset by proceeds from the issue of share capital in the amount of USD 109.5 million

There was also a negative effect of USD 4.6 million in 2023 due to cash balances held in NOK.

In total, cash balances increased by USD 65.7 million in 2023 to USD 170.9 million on December 31, 2023.

Financial position

Shareholders' equity increased to USD 76.4 million (13.8 percent equity ratio) on December 31, 2023, compared to USD 60.4 million (18.9 percent equity ratio) on December 31, 2022.

This increase was primarily the result of the profit from total operations of USD 30.5 million, a remeasurement of the pension of USD 0.9 million and USD 15.4 million of currency translation effects taken to equity.

Net debt increased by USD 104.3 million to USD 182.8 million on December 31, 2023, from USD 78.5 million on December 31, 2022. This increase was primarily the result of the increase in term loans of USD 280 million offset by the repayment of the senior secured bond of USD 110 million, and the increase in cash balance of USD 65.7 million, payment of USD 1.1 million in the Grant County WA property tax note and increase in lease liabilities of USD 1.3 million.

Net debt includes unamortized loan fees. Excluding unamortized capitalized borrowing costs, nominal net debt was USD 183.2 million on December 31, 2023, which represents an increase of

USD 104.6 million from USD 78.6 million on December 31, 2022 (See note 17 to the consolidated financial statements).

Going concern

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.

Rec Silicon ASA (NGAAP)

Financial review

In 2023, REC Silicon ASA had a negative EBIT of USD 2.7 million compared to a negative EBIT of USD 2.4 million in 2022. The Company recorded a net income of USD 55.6 million in 2023. The net income included net financial expenses of USD 58.3 million which includes reversal of impairment of internal loans of USD 72.1 million, interest income of USD 0.7 million and interest expenses of USD 9.9 million. Other major remaining items of net financial items were net currency losses of USD 4.6 million due to cash balances held in NOK. Interest income from subsidiaries was suspended for 2023 and 2022 due to the financial position and outlook of the borrowing companies. In 2022 The net loss included net financial expenses of USD 87.2 million which includes impairment of loans to US subsidiaries of USD 68.7 million, and interest expenses of USD 13.1 million. Other major

remaining items of net financial items were net currency losses of USD 7.1 million and interest income of USD 1.8 million. (See note M to the financial statements for REC Silicon ASA).

Total equity for the parent Company was USD 244.1 million on December 31, 2023, compared to USD 188.4 million on December 31, 2022. This increase is a result of the net income of USD 55.6 million discussed above.

Allocation of the Net Income for the Parent Company

The Board proposes that the net income for the year of USD 55.6 million be distributed to other equity.

Risk factors

The Group's activities expose it to a variety of financial risks, including market risk, operational risk, liquidity risk, credit risk, currency risk, interest-rate risk, and others (See note 3 to the consolidated financial statements).

REC Silicon's Board of Directors is responsible for determining the acceptable risk profile for the Company. The Board oversees risk management processes and conducts reviews of risks faced by the company and internal control procedures.

REC Silicon's management is responsible for reviewing and operationalizing the defined risk profile by maintaining a system for risk management. Management performs risk assessments

and actively monitors the development of material risks and initiates actions accordingly.

Risk assessments are performed periodically. The materiality of each risk factor is determined by assessing the likelihood and consequence of that risk. Risks are evaluated to determine whether the level is acceptable or unacceptable and to prioritize activities to mitigate those risks that have the greatest potential to impact Company performance. A broader risk assessment strategy will be developed in the future.

Market risk

On September 6, 2023, the Company announced entering into a full-form supply agreement between its subsidiary REC Solar Grade Silicon LLC and Hanwha Q Cells Georgia, Inc., ("Hanwha") a wholly owned subsidiary of Hanwha Solutions for a 10-year take-or-pay supply agreement for high purity FBR granular polysilicon produced from REC Silicon's facility at Moses Lake, Washington. The Supply Agreement provides for the sale to Hanwha of 100% of the prime high-purity granular production from the facility and replaces the binding term sheet between the parties that was announced on January 31, 2023. Prepayments will be credited against purchases of polysilicon pursuant to a linear reimbursement schedule over the 10-year term. The estimated total value of the Supply Agreement for the duration of the arrangement will fluctuate depending on market prices, which are currently estimated to be approximately \$3 billion.

The base price for the FBR granular polysilicon in the Supply Agreement will be determined by market indices (representative of markets outside and inside of China) adjusted for a premium for US-sourced low-carbon material. The high-purity FBR granular polysilicon will also benefit from the \$3 per kilogram tax credit from the Inflation Reduction Act. The first five years of the agreement, the base price is subject to both a price minimum and maximum that protects REC Silicon against potential low market prices in the near term. The second five years of the agreement, there is no minimum or maximum price, which provides the Company with upside to benefit from higher polysilicon market prices in the future.

On February 7, 2024, REC Silicon announced that REC Advanced Silicon Materials LLC will be shutting down its polysilicon production capacity at its Butte, Montana facility. The polysilicon business will continue to produce for approximately six to nine months to fulfill polysilicon supply obligations to the company's customers. After the supply obligations are satisfied, the company expects that the workforce in Butte will be reduced accordingly. The company is working out the details with respect to the shutdown and will provide additional information to impacted stakeholders as it becomes available.

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 one of the Group's polysilicon production facilities 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 to one of the Group's manufacturing facilities 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.

The Company restarted FBR production in Q4 of 2023. The company is targeting a ramp to 50 percent operation during Q2 of 2024 and a ramp to 100 percent operation during Q4 2024.

Successful execution of the Company's plan to fully ramp up production at the Moses Lake facility could require reversal of previous impairment.

Additional impairments and provisions would likely be required if the Moses Lake facility is not successfully ramped to full capacity.

Liquidity risk

Debt maturities in 2024 include USD 30 million for the Standard Chartered term loan, USD 1.2 million for the Grant County Property Tax note and USD 7.5 million for lease liabilities. On December 31, 2023, the Group has sufficient available cash to meet debt service and other anticipated operating cash flow requirements. Management's estimates of future cash requirements can be met from current working capital and cash flows generated by operations. (see note 7,17, 29 and 33).

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. Prior to 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 54.9 million on December 31, 2023. The guarantees will decrease annually and will expire in entirety in 2039.

Currency risk

The Company's net cash flows from continuing operations are primarily in USD. Debt is denominated in USD. The Group's currency risk relates primarily to cash balances held in currencies other than USD. The Group does not currently hold any hedging instruments to offset the risk of changes in exchange rates between the USD and NOK.

Corporate governance

Good corporate governance is essential to ensure that our business is run in a way that protects the long-term interest of all stakeholders. The Board of Directors has approved and implemented corporate governance principles endorsing and complying with the Norwegian Accounting Act and the Norwegian Code of Practice for Corporate Governance. The Group's compliance with the Code of Practice is described in the report on Corporate Governance for 2023 which is included in this Annual Report.

The Company has directors' and officers' liability insurance. The insurance covers the Board of Directors as well as officers of the company from legal personal liability for financial damage caused by the performance of their duties.

Sustainability

REC Silicon's sustainability report is presented separately in its own section of REC's annual report.

Market outlook

Initially, an increase in silicon gas demand for the semiconductor industry was expected in the third quarter but did not materialize. By the fourth quarter, new market signals led analysts to project that we have officially hit bottom and will now start the anticipated upward market trend. The current expectation is that a noticeable change in demand and market recovery is expected in the second half of 2024. There are still some concerns with global developments impacting on the costs of goods and potentially supply that could alter the market trajectory. However, overall market sentiment is that the demand will increase, and growth is just a few quarters away. Inflation appears to be heading in a direction that United States and European Central Banks like. Work is still needed to control inflation for 2024 and the European Central Bank has lowered the forecast for real GDP in 2024 while projecting unemployment to hold steady. Longer term, semiconductor market growth is still projected to follow the historical average of around 6 percent.

Silicon gas demand in 2024 is expected to increase compared to 2023 as downstream demand pulls upward through the year. PV market demand will continue to be a major contributor as strong growth in PV installations is forecasted for 2024. The

inventory of specialty gases appears to have declined enough that orders have started to increase. The market is projecting an increase in memory market demand as the year progresses, with an increase in consumer electronic demand in the second half of the year. Wafer production capacity will start to increase throughout the year and is projected to be back to 2022 levels by the end of the year setting up 2025 as a solid growth year. Automotive and cloud storage will continue to drive demand with AI quickly growing to have a larger share of the market in the next several years. As previously forecasted, the return to pre-pandemic purchasing patterns and replacement cycles of electronic goods is starting to show signs of returning.

As previously stated, Semiconductor polysilicon demand for logic and memory devices is expected to remain weak in the first half of 2024 while demand for silicon for discrete power devices is expected to remain strong. China will continue its push for localization of semiconductor supply, and this will affect polysilicon demand over the next several years. Demand for memory devices is expected to increase in 2024 but the wafer inventory supply will take longer to deplete. Therefore, the specialty silicon gases segment will likely see the memory market improvement first as it is used further downstream. The integrated circuit market should see growth overall. In the long term, market indications point to stratification with devices, especially in the power segment with different applications of silicon materials filling different levels, and other materials like silicon carbide, silicon nitride, and gallium nitride, all playing larger roles.

The United States Inflation Reduction Act continues to drive investment while policies around it continues to be defined. As these policies are completed more investments are anticipated. The semiconductor CHiPS Act not only spurred investments in the Unites States but has also led to other countries developing similar policies. These policies will help drive the global growth with semiconductor manufacturing and the requirement for more specialty gases. Meanwhile, additional battery industry grant opportunities created from the Bipartisan Infrastructure Legislation have been released and are expected to bring even more growth for battery manufacturing in the United States.

Globally, PV installations for 2024 are expected to exceed 450GW with overall demand above 500GW. Global inventories grew in 2023 continuing the pressure on pricing and this pressure is expected to continue to influence the entire supply chain. China doubled it polysilicon capacity from 2022 to 2023 with production up over 70 percent for the same time frame. While Siemens remains the mainstream technology, GCL in China is working aggressively to penetrate the market with the ramp-up of four large FBR granular polysilicon production bases. Polysilicon capacity will otherwise continue to slow as ramping of both polysilicon plants and wafer plants are now being delayed. Polysilicon prices will remain suppressed as long as oversupply persists. For 2024 the decline in demand for P-type (positive) wafers and increase in demand for N-type (negative) will create a potential shortage of higher quality polysilicon. Prices for these two types of polysilicon quality will continue to develop separately. The United States market will continue with its strong PV installation growth and efforts to grow its supply chain

sustainably while partnering with countries that support strong environmental, sustainability, and human rights policies.

Events after the balance sheet date

Forward looking statements

This report contains statements regarding the future in connection with the Group's growth initiatives, profit figures, outlook, strategies, and objectives. In particular, the section "Market Outlook" contains forward-looking statements regarding the Group's expectations. All statements regarding the future are subject to inherent risks and uncertainties, and many factors can lead to actual results and developments deviating substantially from what has been expressed or implied in such statements. These factors include the risk factors relating to REC Silicon's activities described in section "Risk Factors" above.

Lysaker, March 20, 2024 Board of Directors

Document is signed electronically

Tae Won Jun Chairman of the Board Dong Kwan Kim Deputy Chair

Vivian Bertseka Member of the Board

Roberta Benedetti Member of the Board Dr. Renate Oberhoffer-Fritz Member of the Board

William K. Levens President and CEO

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, 2023.

The consolidated financial statements of the Group have been prepared in accordance with IFRS® Accounting Standards as adopted by the EU and additional disclosure requirements as stated in the Norwegian Accounting Act that are applicable on December 31, 2023. 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, 2023. 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, 2023.

We confirm that, to the best of our knowledge:

The financial statements for the Group and the Company for the year ending December 31, 2023 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, 2023, and
The report from the Board of Directors for the year ending December 31, 2023 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 20, 2024 Board of Directors

Document is signed electronically

Tae Won Jun Chairman of the Board Dong Kwan Kim Deputy Chair

Vivian Bertseka Member of the Board

Roberta Benedetti Member of the Board Dr. Renate Oberhoffer-Fritz Member of the Board

William K. Levens President and CEO

Sustainability report

REC Silicon annual report 2023

General

About this report (basis for preparation)

REC Silicon's Sustainability Report for the fiscal year 2023 (1 January 2023 to 31 December 2023) is based on the European Union's Corporate Sustainability Reporting Directive (CSRD) and the accompanying European Sustainability Reporting Standards (ESRS). The Report is not yet fully aligned with the ESRS, but generally follows the same structure and prescribed contents. The Company is expected to be subject to these standards from the fiscal year 2025, at the latest.

This report has been reviewed by the Company's Audit Committee before being approved by the Board of Directors.

The report has been prepared on a consolidated basis equal to the consolidation of the Company's financial statements. The report covers certain aspects related to the upstream and downstream value chains, however, in accordance with the transitional provisions provided by ESRS, some information related to the value chain is omitted as no data with satisfactory integrity is available at the time of reporting.

REC Silicon's sustainability reporting follows the time horizons defined in ESRS for medium- and long-term horizons. Short-term is defined as 0-2 years, medium-term 3-5 years and long-term more than 5 years. The basis for preparation of metrics and value chain data is described in the relevant chapters, along with actions planned for improvement where applicable.

Data for CO2e emissions from grid electricity are based on annual reports from the US Environmental Protection Agency (EPA) for location-based emissions and from Green-e for market based. These data are reported with a two-year time lag and the 2023 reports thus refer to 2021 emission factors. The emission data for 2021, 2022 and 2023 are therefore calculated using 2021 emission factors and the data for 2021 and 2022 have been updated from 2020 emission factors, as a result. The difference between the previously reported data for 2021 and 2022 is not significant and therefore not specified separately.

Sustainability governance

Oversight over sustainability matters

The ultimate responsibility for sustainability-related matters lies with the Board of Directors. The Board considers sustainabilityrelated impacts, risks and opportunities as an integral part of strategic planning and decision-making.

The composition of the Board of Directors is detailed in the Corporate Governance Report (page 63) and the roles and responsibilities of the board members are outlined on page 66.

REC Silicon Board of Directors

Independent Directors	3
Total Directors	5
% Independent	60%

Female Directors	3
% Female	60%
Employee representation	0%

The members of the Board have strong sustainability credentials, either as executives of renewable energy companies or as experts and advisors within climate-related and renewable energy-related NGOs and investment businesses.

The Audit Committee is appointed by the Board of Directors and is the highest governing body responsible for the oversight of the Company's sustainability reporting. The Audit Committee is currently reviewing its responsibilities towards sustainability matters to make this more clearly defined.

The Audit Committee meets and considers sustainability matters at least quarterly including performance metrics and general policy, sustainability reporting, projects or strategic matters of relevance.

The below table outlines the frequency of the Board of Directors and the Audit Committee's consideration of sustainability matters during 2023 and which items that generally on the agenda:

Sustainability Matters
	Quarterly	Annually

The Board of Directors / Audit Committee
• Restart of Moses Lake
• Supply chain due diligence
• Whistleblower system
• Training on human rights
• Training on Code of Conduct
• Sustainability Reporting
• ESRS Compliance
• Climate KPIs
• Environmental KPIs

Other sustainability-related matters are considered on a caseby-case basis.

Integration with management

The responsibility for the implementation of sustainability-related policies and actions and for the performance measurement lies with the CEO, while the CFO has responsibility for the sustainability reporting.

REC Silicon is looking to establish an internal position tasked with establishing and implementing sustainability-related strategies, the setting of KPIs and the performance management of these, as well as with preparing external and internal quarterly and annual reporting on sustainability matters and performance. All targets and related KPIs will be approved by the Board of Directors.

Sustainability-related incentive schemes

The Company has not adopted any incentive schemes that specifically include sustainability-related performance. However, there is a very strong link between the strategic targets of REC Silicon and the performance on climate-related metrics. The performance-related incentive schemes include several KPIs for the successful penetration of energy transition markets, such as solar grade polysilicon production, silane gas and specialty gas sales, as well as contracts to supply anode material to energy storage companies.

Risk management and internal controls

The Company operates an operationally focused risk management system, which consists of two parts:

• Business continuity plan, which identifies all risks related to the continuation of operations and the corresponding mitigating

efforts. This plan was finalised during 2023 in connection with the Company being certified pursuant to the ISO 14001 standard.

• Process management system, which is PSM certified by the US Occupational Safety and Health Administration (OHSA), covering health and safety and containing requirements for the management of hazards associated with processes using highly hazardous chemicals.

REC Silicon is also ISO 9001 Quality Management System certified, which is due for renewal in 2024. On an enterprise level, there is currently no overriding risk management system addressing risks of a more strategic nature. However, the establishment of a proper ERM system is on the agenda and such system will, if implemented, include sustainability related risks.

Statement on due diligence

REC Silicon regularly conduct risk-based due diligence on business partners, including partners, agents and vendors that may include an assessment of their own compliance policies and procedures and commitment to ethical business practices. During 2023, a human rights due diligence was conducted on the Company's supply chain. The results of this are further described on page 55.

REC Silicon engages external advisors within the legal, financial, tax, insurance and risk areas as needed. In parallel, banks and other capital providers conduct their own due diligence processes with the support of independent advisors.

Strategy, business model and value chain

REC Silicon is a silicon materials company providing enabling products for the green energy transition. The base product is silane gas, which is based on metallurgical grade silicon. Silane gas is used as a stand-alone product for use in semiconductors, flat panel displays, solar panels and as anode material for batteries. It is also processed into solar grade polysilicon or refined into specialty gases for more advanced uses in the semiconductor and solar PV industries.

Strategy

The Company is in the process of adapting the overall corporate strategy to restore and maintain profitability after several years of losses. The objective is to position REC Silicon with low-carbon products targeting business opportunities in energy transition megatrends such as digitalisation, renewable energy and energy storage. These are markets that are expected to exhibit strong growth in the medium- to long-term.

Moreover, the strategic direction has strong support from key legislative initiatives such as the Inflation Reduction Act 2022 and the Infrastructure Investment & Jobs Act 2022, where the objectives are to build up US value chains to drive the energy transition. These initiatives include financial incentives that REC Silicon intends to capture.

The two key strategic steps taken by REC Silicon are:

Re-opening the previously mothballed silane and polysilicon facility in Moses Lake, which uses a low-energy production technology for low-carbon polysilicon for the solar PV industry
Investing in enhanced production capacity for silane gas and specialty gases targeting various sectors involved in the energy transition
Shutting down the energy-intensive and high-carbon polysilicon production in Butte, thus exiting the markets for polysilicon for the semiconductor industry

To this effect, REC Silicon is investing substantial financial resources. The Moses Lake re-start has an investment budget of around USD 170 million, the enhanced silane gas capacity USD 14 million, while the Butte polysilicon has resulted in an impairment charge of USD 7.5 million (Note 6 in the Financial Statements, page 89).

At full capacity, the Moses Lake operations are expected to generate USD 100 – 300 million of annual EBITDA, compared to several years of losses (Note 5 in the Financial Statements, 0

100

REC Silicon Market Exposure

Semiconductors Solar Other Energy storage

page 87). The Butte polysilicon shutdown is expected to increase annual EBITDA by USD 10-13 million, after this business' profitability has been rather subdued in recent years (Note 5 in the Financial Statements, page 87).

This process has been underway since 2022 and will continue through 2025. While it is driven by a clear business rationale to increase and maintain long-term profitability, another key outcome will be a significant increase in the exposure to renewable energy and energy storage. The exposure towards the semiconductor industry, flat panel providers and other industries will still be significant but represent less of the overall market exposure.

These industries are all focusing on driving down the embedded carbon footprint of their products throughout the value chain. Hence, providing low-carbon products is an integral part of REC Silicon's strategy going forward, making issues such as energy use, energy sourcing and carbon emissions from the supply chain and own operations key parameters for success for the Company.

Business model and value chain

The main raw material for silane gas is metallurgical grade silicon (MGS), which is processed from quartz or gravel mining and typically sourced from miners in Brazil, the US, Australia and western Europe.

The MGS is processed into silane gas using a hydrogenation process followed by a reactive distillation process using energy, hydrogen and natural gas.

The further processing into solar grade polysilicon uses the fluidized bed reactor (FBR) technology that combines heat and silane gas to produce granular polysilicon. The FBR technology uses 80%-90% less energy than traditional methods and therefore has significantly lower carbon intensity, reducing value chain GHG emissions by around 6%.

The solar grade polysilicon is sold directly to producers of silicon ingots and wafers used in solar PV panels. The silane gas is sold to a variety of users within several industries and is distributed using silane containers, where REC Silicon owns the largest

global fleet. The pricing of the products is set in competitive markets and contracts for delivery can be both short- and longterm.

Silane gas and specialty gases are used in memory processors, lithium-ion batteries, thin film depositions on flat panel displays and solar cells. The granular polysilicon is used for multicrystalline and monocrystalline solar ingot and wafer production in the manufacturing of solar modules.

The value chain and REC Silicon's positioning is illustrated to the right. This also includes a depiction of the carbon intensity of the value chains and the key inputs that go into the main products.

Interests and views of stakeholders

REC Silicon maintains a constant dialogue with its stakeholders as part of its normal business operations. To date, the Company has not engaged in any structured stakeholder engagement process and has not performed any stakeholder mapping to formalise the stakeholders' inputs with regards to sustainability matters.

As part of the preparation for ESRS compliance, REC Silicon will undertake a stakeholder mapping and engagement in connection with a Double Materiality Assessment (DMA) during 2024. The target will be to provide clear inputs to the DMA to determine which sustainability matters that are material to the Company.

The primary stakeholders to be engaged with include:

Employees
Clients and end-users
Suppliers
Lenders
Shareholders
The local community
The Board of Directors
The management

During 2023, a process was started to engage with the supply chain on human rights risks, which will continue and expand in the coming years. Pursuant to the Company's targets related to climate change, there will be further engagement with the supply chain on carbon emissions.

REC Silicon engages with the downstream value chain through its participation in the Ultra-low Carbon Solar Alliance and the Supply Chain Energy Program (DISC-e), labelling schemes to certify low carbon solar panels, as well as governmental initiatives to prioritise low-carbon suppliers in public tenders.

During 2023, significant efforts were made to secure client support for the strategic direction of the Company, which has resulted in the previously mentioned off-take agreement for low-carbon solar grade polysilicon, as well as opportunities to supply silane gas as anode material to several US-based manufacturers of battery storage solutions. This engagement makes it clear that low-carbon products and solutions are highly important.

The employee engagement is constant, with the prime focus on health and safety. Due to the recruitment drive on the back of the re-start of production at Moses Lake, employee satisfaction and the attractiveness as an employer has been highly important to the Company and employee turnover has been introduced as one of the KPIs for the management incentive scheme.

Material impacts, risks and opportunities

The DMA to be conducted during 2024 will provide a broad and granular description of the material impacts, risks and opportunities ("IROs"). However, REC Silicon has for the past years implemented the more obvious ones in its strategy and business model with a dedicated policy framework and operational KPIs. This has been based on a general review of the business and strategy, feedback from stakeholders and the use of recognised frameworks from organisations such as SASB and MSCI.

The impacts are partly found in the Company's own operations. For example, health and safety is important as the production process involves dangerous and toxic products, while the processes themselves involve significant energy use, with a corresponding carbon footprint, as well as the release of air pollutants and discharged water. Health and safety are also highly relevant in the upstream value chain.

The entire value chain is exposed to rising energy prices and carbon prices due to the high energy intensity. Some risks are more closely related to the Company's own operations, such as physical climate change risks, clients demanding low-carbon products, waste recycling and human rights breaches.

The opportunities are related to REC Silicon's own operations and its downstream value chain in the form of energy transition demand growth and a preference for low-carbon products. These are already part of the Company's strategy as outlined in this report.

REC Silicon - Key impacts, risks and opportunities

	Impact	Risk	Opportunity	Value chain
Climate change
GHG emissions				Up and downstream
Physical climate change				REC operations
Energy prices				Up and downstream
Carbon pricing				Up and downstream
Market demand				REC operations
Renewable energy				REC operations

Pollution				Value chain
Emissions to air				REC operations
Water discharges				REC operations
Water and marine resources				Value chain
Water consumption				Downstream

Resource use and circular economy				Value chain
Waste volumes				REC operations
Waste recycling and reuse				REC operations

Own workforce and workers in the value chain				Value chain
Health and safety				REC operations, upstream
Human rights breaches				REC operations, upstream

Business conduct				Value chain
Corruption and bribery				Up and downstream

Climate change

Impacts, risks and opportunities

	Link to strategy and business model
Impacts
GHG emissions	Silane gas and polysilicon value chains are energy intensive
Energy consumption	Silane gas and polysilicon value chains are energy intensive
Risks
Energy prices	Energy is a major cost component
Carbon prices	Direct impact on energy costs
Clients demand for low carbon products	Investments required in production lines and products
Extreme weather	Potential operational disruptions
Water scarcity	Potential operational disruptions
Emission restrictions	Cost impact
Opportunities
Clients demand low carbon products	Low-carbon solar grade polysilicon from Moses Lake
Energy transition growth	Silane gas and specialty gases production, solar grade polysilicon from Moses Lake
Renewable energy sources	Hydropower access at Moses Lake

Further details can be found in the TCFD Report in the Appendix on page 58.

Climate change transition plan

REC Silicon's ongoing strategic positioning is undertaken to capture business opportunities in connection with the energy transition. This is also a core element in global efforts of climate change mitigation.

The Company expects its exposure to shift from about two thirds towards semiconductors to about two thirds renewable energy and energy storage as a result.

To be successful in this strategic positioning, it is essential for REC Silicon to provide cost-efficient products that are also low in carbon-intensity. This is resulting in product portfolio changes that raise product margins through reduced energy intensity, while targeting markets where demand is expected to grow significantly. This builds enhanced business resilience through reduced exposure to energy prices, while at the same time significantly lowers the carbon-intensity of REC Silicon's product portfolio.

The key building blocks of the strategic positioning involves the following:

The re-opening of the energy efficient and low-carbon production facility at Moses Lake to supply products to the renewable energy sector and the energy storage sector
The shutdown of energy- and carbon intensive polysilicon production at Butte to free up silane gas production targeting industries enabling the energy transition, with additional capacity expansion for specialty gases.

REC Silicon has allocated significant capital resources to these efforts and will continue to do so in the period 2022-25.

In 2022, REC Silicon adopted a target to reduce the Scope 1 and 2 carbon intensity of its products by 40% by 2027, which will be a result of the implementation of the new business plan.

Recognising that the clients require a reduction of the embedded carbon emissions in their value chains, REC Silicon also has a target to engage with most of its suppliers to reduce their carbon intensity. For example, research shows that the use of materials with lower embodied carbon and energy efficient manufacturing processes can reduce the life cycle carbon footprint of solar PV systems by 40% or more.

4800

9600

14400

Policies, regulations and commitments

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:

Reducing the carbon intensity of the polysilicon production
Increasing the use of renewable energy in the production processes
Sourcing of raw materials from suppliers using low-carbon production methods

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 and the Bipartisan Infrastructure Law, aiming to take advantage of the incentives that are built into these two initiatives. These include tax credits for low-carbon production of solar grade polysilicon, 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.

As a member of the Ultra-low Carbon Solar Alliance, REC Silicon is committed to pursuing the development and production of ultra-low carbon inputs for the Solar PV industry. Part of this also involves efforts to establish industry wide labelling of products to guarantee a low carbon content. 19200 24000

Actions and resources

REC Silicon's actions and resources related to climate change are part of the ongoing strategic positioning of the Company. The primary objective is to exploit opportunities related to climate change mitigation through targeting energy transition enabling industries. An additional outcome of this is the reduction of the energy- and carbon intensity of REC Silicon's own operations. The purpose of these actions and their resource allocations are as follows:

Moses Lake restart

A decision was made in 2022 to restart the mothballed Moses Lake facility with operations starting in the fourth quarter of 2023.

The facility has a capacity of around 24,000 tons of silane gas, of which the majority will be used as input to supply around 16,000 tons of solar grade polysilicon annually. The facility uses the FBR technology for polysilicon which uses 80%-90% less energy than traditional production methods and significantly less volumes of water.

Moses Lake

Nameplate Silane Gas Capacity Idle capacity FBR Poly Silane Gas

The excess silane gas capacity primarily targets energy storage companies as silane gas is a potent anode material for batteries.

The benefits of Moses Lake are strengthened by the fact that it has access to renewable power from nearby hydropower sources.

To ensure commercial visibility for the re-start project, REC Silicon has entered into a 10-year offtake agreement with Hanwha Q-Cells, a leading manufacturer of solar panels for deliveries within the US. The company is negotiating directly with several battery manufacturers on contracts for the delivery of silane gas.

The facility is expected to reach full capacity utilisation by the end of 2024.

Butte reconfiguration

A decision was made in 2021 to increase the capacity for specialty gases, such as dichlorosilane (DCS), monochlorosilane (MCS) and disilane. These are used in the manufacturing of flat panel displays, semiconductors and solar cells. The capacity increase was finalised during 2023 at a cost of around USD 14 million. Capacity for silane gas and specialty gases may be raised going forward, depending on market growth.

In early 2024, a decision was made to discontinue the production of electronic grade polysilicon at Butte. This was partly driven by the fact that the Siemens-based production method at Butte is highly energy intensive and thus exposed to rising energy prices in the State of Montana. The shut-down will free up significant

incremental silane gas capacity targeting the traditional markets for silane gas and specialty gases and energy storage manufacturers, providing further penetration of energy transition-related markets.

The reconfiguration of Butte will result in a nameplate capacity of 7,400 tons of silane gas and a significant uplift in the capacity to supply specialty gases. It will reduce the energy costs significantly and strongly improve both the energy- and carbon intensity of the products supplied.

Impact on energy and carbon intensity

Energy use and energy intensity

REC Silicon is targeting a significant volume growth in the coming years, with the business plan aiming for approximately 5x volume growth in the next 2-3 years. The production mix will change significantly with Moses Lake going from zero share of production in 2022 and 2023 to about 75% of production volumes in 2025 and onwards.

In addition, the product mix at Butte will change significantly due to the shutdown of the highly energy intensive polysilicon production, resulting in a meaningful reduction in energy usage.

With Moses Lake at full capacity, the overall energy usage for REC Silicon is expected to increase, but with the total volume of product increasing five-fold, the energy intensity will fall markedly.

The carbon emissions from REC Silicon's operations will follow a similar path, as they are primarily tied to the use of energy.

Specialty gases Idle capacity

REC Silicon annual report 2023

1300

2600

3900

5200

6500

Scope 1+2 emissions and intensity

Overall GHG emissions (Scope 1+2) are expected to increase, but with production growing five-fold, the carbon intensity will drop.

Engaging with suppliers on GHG emissions

In 2022, REC Silicon committed to start engaging with its supply chain to reduce the embedded GHG emissions of its products. During 2023, preparatory work was undertaken as part of a wider supply chain due diligence project, which resulted in a comprehensive mapping of about 75% of the vendor business volume. Resources have been dedicated to engaging with suppliers both on human rights risks and on the mapping the suppliers' GHG emissions. The latter is an integral part of the strategy to provide low-carbon products going forward and will enable REC Silicon to source its key raw materials from suppliers that can guarantee low-carbon inputs.

Targets and performance

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 is based on the plan to restart the Moses Lake facility. Since this project implies a significant increase in overall production, it was decided that a carbon intensity target was more meaningful than a target to reduce absolute emissions.

The target and performance are illustrated in the chart to the right. The performance since the adoption of the target has been negative, primarily because Moses Lake is yet to produce on-spec volumes of low-carbon polysilicon, but also due to increased resource use, including energy, connected to the restart project itself, as well as lower-than-expected volumes at Butte. It is expected that the carbon intensity will show a clear, positive development from 2024 and onwards with an additional contribution from the shut-down of polysilicon production at Butte.

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

REC Silicon intends 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 will adhere to the GHG Corporate Value Chain Accounting in calculating upstream Scope 3 emissions.

The work will be based on the supply chain mapping that was done in 2023 and will be initiated during 2024. The objective of the target is to further document the low-carbon nature of REC Silicon's products and to ensure that efforts are initiated to drive down the embedded GHG emissions to strengthen the climate credentials of the energy transition.

REC Silicon Carbon Intensity Target

(tCOe per ton of product produced)

Performance metrics

Energy	Unit	2021	2022	2023
Fuel consumption from coal and coal products	MWh	0	0	0
Fuel consumption from crude oil and petroleum products	MWh	459	527	901
Fuel consumption from natural gas	MWh	179,924	180,236	241,649
Fuel consumption from other fossil sources	MWh	57	21	80
Consumption of purchased or acquired electricity, heat, steam, or cooling from fossil sources	MWh	563,179	595,022	618,248
Total fossil energy consumption	MWh	743,619	775,806	860,878
Percentage of fossil sources in total energy consumption	%	100%	100%	100%
Total energy consumption from nuclear sources	MWh	0	0	0
Share of energy consumption from nuclear sources	%	0%	0%	0%
Fuel consumption from renewable sources	MWh	0	0	0
Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources	MWh	0	0	0
Consumption of self-generated non-fuel renewable energy	MWh	0	0	0
Total renewable energy consumption	MWh	0	0	0
Percentage of renewable sources in total energy consumption	%	0%	0%	0%
Total energy consumption	MWh	743,619	775,806	860,878
Non-renewable energy production	MWh	0	0	0
Renewable energy production	MWh	0	0	0
Energy intensity from activities in high climate impact sectors	MWh/USDm	5,193	5,249	6,101
Energy intensity in own operations	MWh/Mt	165	179	205
Total energy consumption from activities in high climate impact sectors	MWh	743,619	775,806	860,878
Net revenue from activities in high climate impact sectors	USDm	143	148	141
Net revenue from activities other than in high climate impact sectors	USDm	0	0	0

	Retrospective				Milestones and target years
GHG emissions	Unit	2021	2022	2023	Change	2027	'23 in % of target
Scope 1 GHG Emissions
Gross Scope 1 GHG emissions	tCO2e	32,608	32,799	49,100	50%
- Scope 1 emissions intensity	tCO2e/Mt	7.7	7.2	7.6	4%
Share of Scope 1 GHG emissions from regulated emission trading schemes	%	0%	0%	0%
Scope 2 GHG Emissions
Gross location-based Scope 2 emissions	tCO2e	154,240	162,960	179,064	10%
- Scope 2 location-based emissions intensity	tCO2e/Mt	33.7	34.2	37.5	10%
Gross market-based Scope 2 emissions	tCO2e	158,358	167,311	177,960	6%
- Scope 2 market-based emissions intensity	tCO2e/Mt	34.6	35.1	38.5	10%
Significant Scope 3 Emissions
Fuel and energy-related activities (not included in Scope 1 and 2)	tCO2e	13,279	15,032	17,369	16%
Waste generated in operations	tCO2e	n.a.	75	90	19%
Total Scope 3 Emissions	tCO2e	13,279	15,107	17,459	16%
Total GHG emissions (Location Based)	tCO2e	200,127	210,866	245,624	16%
Total GHG emissions (Market Based)	tCO2e	204,245	215,217	244,519	14%
GHG emission intensity
Net revenue	USDm	143.2	147.8	141.1	-5%
GHG emissions intensity - location based, Scope 1+2+3	tCO2e/USDm	1,398	1,427	1,741	22%
GHG emissions intensity - market based, Scope 1+2+3	tCO2e/USDm	1,426	1,456	1,733	19%
Metric tons produced	Mt	4,507	4,343	4,196	-3%
GHG emissions intensity - location based, Scope 1 + 2	tCO2e/Mt	41.5	45.1	54.4	21%
GHG emissions intensity - market based, Scope 1 + 2	tCO2e/Mt	42.4	46.1	54.1	17%	25.4	213%
Production numbers	Unit	2021	2022	2023	Change
Polysilicon production	Mt	1,307	1,453	1,187	-18%
Net Silane gases production	Mt	3,200	2,890	3,009	4%
Total production	Mt	4,507	4,343	4,196	-3%

Pollution

	Link to strategy and business model
Impacts
Emissions to air	The production of silane gas and polysilicon results in emissions of SOx, NOx, CO, VOCs and particulate matter
Emissions to water	The production results in significant discharges of water
Risks
Permit breaches	Repeated or severe breaches may result in fines or loss of permits
Accidental release or spills	May result in damage to air, water or soil and lead to significant fines or liabilities for damages
Tighter regulations	May result in incremental investments in equipment or systems to prevent pollution
Opportunities
Maintain strong reputation	Important for client and employee retainment and relations with local communities

Policies related to pollution

REC Silicon's Code of Conduct and Sustainability Policy addresses pollution as part of the objective of protecting the environment.

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.

Accordingly, the Company is obligated to ensure that all required environmental permits are maintained and kept current. Chemicals and other potentially hazardous materials are to be identified to ensure their safe handling, movement, storage, use and disposal. The Code also requires a systematic approach to identify, manage, and track air emissions. Finally, the Code requires REC Silicon to maintain close relations and constant dialogue with the local communities and authorities to ensure that any concerns can be raised and that the impact of the operations on the local communities and environment are minimized.

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 storm management permits.

REC Silicon has a Pollution Prevention Plan and a Process Safety Management plan to ensure that any unwanted pollution, releases or spills are contained.

Actions and resources

REC Silicon uses scrubbers to capture air pollution from its production processes. The emissions to air are measured by a 3rd party and reported to the state authorities at least annually. The emissions to air of non-GHG gases are reported in the performance metrics section.

In connection with the ramp-up of the Moses Lake production, the Company has renewed and updated the necessary permits for air, water and industrial waste for this facility.

Wastewater from the Butte facility is filtered to remove any effluents and ensure that it is at least on par with drinking water quality before being discharged. This is subject to monthly whole effluent toxicity (WET) testing by a 3rd party, which is reportable to the state authorities. Any solid waste recovered from the filtering process is disposed of as non-hazardous waste.

The Butte facility maintains a stormwater basin to prevent flooding which is subject to the same environmental permit regime to prevent any pollution to soil.

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

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 has been no process to develop further pollution-related targets other than staying within the environmental permits.

Performance metrics

ESRS E2 – Pollution	Unit	2021	2022	2023

Emissions to air by pollutant
SOx sulphur dioxide emissions	Mt	n.a.	0.4	0.4
NOx nitrogen oxides emissions	Mt	n.a.	50.8	100.3
CO carbon monoxide emissions	Mt	n.a.	30.4	39.3
Volatile organic compounds (VOC)	Mt	n.a.	2.1	1.92
Particulate matter	Mt	n.a.	13.6	57.3
Coarse particulate matter (PM10)	Mt	n.a.	5.2	4.7
Fine particulate matter (PM2.5)	Mt	n.a.	2.9	2.7
Other	Mt	n.a.	4.6	4.6

Water and marine resources

Impacts, risks and opportunities

	Link to strategy and business model
Impacts
Water consumption	The production process consumes 250 cubic meters per ton of product
Water discharges	The production process releases 350 cubic meters of water per ton of product
Risks
Permit breaches	Water discharges in Butte need to be above drinking water quality, risk of fines or loss of permits
Accidents	Could result in significant damage to water resources and/or result in financial damages
Extreme weather	High precipitation could result in flooding and release of water pollutants
Opportunities
Maintain strong reputation	Important for client and employee retainment and relations with local communities

Policies related to water

Through the Code of Conduct and Sustainability Policy REC Silicon has a commitment to employ a systematic approach to identify, manage and track storm water management. There are otherwise no other policies specifically targeting water consumption, other than restricting water discharge pollution, as outlined in the previous chapter.

Water permits are issued by the state authorities Montana Department of Environmental Quality and Washington State Department of Ecology for Butte and Moses Lake, respectively. According to the WWF Water Risk Filter, none of the facilities are located in areas of high or extremely high water baseline stress.

Actions and resources

The shut-down of polysilicon production in Butte is expected to result in a significant reduction of water use and water discharge. The ramp-up of production at Moses Lake will offset some, but the production process for polysilicon in Moses Lake is more water efficient than at Butte so the overall water intensity is expected to go down meaningfully.

A project is expected to start in 2024 to rebuild the water management system in Butte due to the change in production mix. The solution will most likely be separate containment sites for wastewater evaporation, reducing the release of wastewater to soil.

Targets related to water

There are no targets related to water consumption, while there is a target of no breaches of environmental permits relating to water discharges, as outlined in the previous chapter.

Performance metrics

ESRS E3 - Water and marine resources	Unit	2021	2022	2023
Surface water withdrawn from freshwater	Mill m3	2.2	2.4	2.4
Produced water withdrawn from freshwater	Mill m3	0.1	0.1	0.1
A - Total water withdrawal	Mill m3	2.3	2.5	2.5
Water discharge to surface water	Mill m3	1.5	1.5	1.5
Water discharge to groundwater	Mill m3	0.0	0.0	0.0
Water discharge to third-party water	Mill m3	0.0	0.0	0.0
B - Total water discharge	Mill m3	1.5	1.5	1.5
Total water consumption (A-B)	Mill m3	0.8	1.0	1.0
Share of water from regions with High Water Baseline Stress	%	0	0	0
Share of water from regions with Extremely High Water Baseline Stress	%	0	0	0
Water discharge share of water withdrawal	%	64%	59%	59%
Water consumption per produced unit	'000 m3/Mt	0.18	0.24	0.25
Waste water discharge per produced unit	'000 m3/Mt	0.33	0.34	0.35

Resource use and circular economy

Impacts, risks and opportunities

	Link to strategy and business model
Impacts
Waste volumes	The production process produces about 1.4 tons of waste per ton of product
Waste disposal	Nearly all waste is solid waste that goes to landfilling
Risks
Waste disposal regulations	Could imply higher waste disposal costs and require incremental investments in waste handling
Opportunities
Increase recycling or re-use	Solid waste from emissions scrubbers could have alternative uses and value
Maintain strong reputation	Important for client and employee retainment and relations with local communities

Policies related to resource use and circular economy

The Code of Conduct and Sustainability Policy outlines an obligation 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

A project to consider alternative uses of the solid waste harvested from the air pollution scrubbers has been considered for some time but is yet to be processed forward.

Targets related to resource use and circular economy

There are no targets related to resource use and/or circular economy other than the general obligation to reduce waste, as outlined in the Code of Conduct and Sustainability Policy.

Performance metrics

During 2023, non-hazardous waste increased by 14%, while hazardous waste was flat year-on-year. Waste per ton of product was up 18%. The increase in total volume reflect preparations for the restart at Moses Lake and the higher increase in waste intensity reflects the fact that Moses Lake did not have any production during the year. The recycling rate increased but is still very low.

The waste streams generated are typical for the physical and chemical processing of non-metalliferous minerals, as silicon is a non-metal.

The non-hazardous waste mostly consists of industrial special waste that goes to landfill, such as:

Filter press solids, consisting of dewatered material from wastewater treatment and primarily containing non-metallic minerals (spent silicon and lime) from emission control wet scrubbers
Neutralised dryer material solids, which is a by-product of the hydrogenation process containing a mixture of trace metals and non-metallic minerals (spent silicon, sodium carbonates, neutralised metal chlorides and oxides).

The other waste that goes to landfill is mixed ordinary waste and office refuse.

Some non-hazardous is recycled, such as:

Wood, paper, cardboard, used oil and aluminium pop cans
Scrap metal, including scrap iron, tin, insulated wire, low-grade electric motors, stainless steel and aluminium
Hazardous waste subject to reclamation and recovery includes:
Metals, (EPA code H010), such as used batteries, spent lamps and mercury containing articles
Energy materials (H050, H061) such as used oil, waste methanol and activated carbon.

Miscellaneous hazardous small items are incinerated, while oily debris (absorbents) goes to landfill after prior treatment, and liquid wastes such as washout water are applied on land after treatment.

ESRS E5 - Resource use and circular economy	Unit	2021	2022	2023

Waste Hazardous waste generated	Mt	1.4	1.1	0.1
Hazardous waste diverted from disposal	Mt	n.a.	0.1	0.1
Hazardous waste directed to disposal	Mt	n.a.	1.0	0.0
Non-hazardous waste generated	Mt	5,315	5,209	5,934
Non-hazardous waste diverted from disposal	Mt	n.a.	95	82
- Non-hazardous waste diverted from disposal due to recycling	Mt	n.a.	32	39
- Non-hazardous waste diverted from disposal due to other recovery operations	Mt	n.a.	63	42
Non-hazardous waste directed to disposal	Mt	n.a.	5,115	5,853
Total waste generated	Mt	5,316	5,210	5,934
Total waste diverted from disposal	Mt	n.a.	95	82
Total waste directed to disposal	Mt	n.a.	5,116	5,853
Non-recycled waste	Mt	n.a.	5,179	5,813
Recycled waste	Mt	n.a.	32	39
Percentage non-recycled waste	%	n.a.	99%	98%
Waste Intensity
Total waste per produced unit	Mt	1.2	1.2	1.4

Own workforce

Impacts, risks and opportunities

	Link to strategy and business model
Impacts
Health and safety	The production processes include the handling of dangerous substances and exposure to high temperatures
Gender balance	The workforce is male dominated and could result in insufficient consideration of gender rights
Business stability	Highly competitive business environment with volatility that could result in permanent or temporary layoffs or loss of jobs
Risks
Injuries, fatalities or ill health	Resulting from exposure to dangerous substances or high temperatures, also potentially resulting in damage to assets and production equipment
Workplace harassment or violence	Could result in legal action, loss of reputation and failure to attract and retain personnel
Insufficient pay or excessive working hours	Could result in failure to attract and retain personnel
Opportunities
Training to ensure high quality operations	Build strong relations with clients, workforce and local communities
Job creation	REC Silicon is a large employer in the communities where it operates

Policies related to own workforce

The Code of Conduct and Sustainability Policy contains extensive requirements relating to the Company's own workforce. REC Silicon supports and acknowledges recognised human and labor rights standards as set out in:

The International Bill of Human Rights
The United Nations Guiding Principles on Business and Human Rights
The ten principles of the UN Global Compact
The OECD Guidelines for Multinational Enterprises
The International Labour Organisation Declaration on Fundamental Principles and Rights at Work

The objective of the Code is to provide a working environment free from any form of discrimination and abuse and to support all employees to fully develop their potential.

The Code also includes important requirements when it comes to Health and Safety, where the objective is to achieve zero harm to employees, contractors, customers, and the public.

The aim is for every activity to be carried out safely and securely, complying with the highest international health, safety and security standards and the prevailing laws and regulations where REC Silicon operates.

Engagement with own workforce

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.

Butte holds quarterly roundtable meetings for safety, production and human resource matters for all employees. This will also be initiated at Moses Lake in 2024.

Finally, both facilities hold monthly safety meetings with the employees to discuss safety issues, which also act as a platform to raise any concerns regarding health and safety.

Whistleblower and grievance mechanisms in place

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 employment for severe cases. Remedy to any affected party will be determined on a case-bycase basis.

Actions and action plans

Most actions are health and safety related as this is the overriding focus of the daily operations. Health and Safety actions and plans are continuous efforts that focus on:

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
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 a monthly safety meeting.

These actions are designed to meet the objectives of the Code of Conduct and Sustainability Policy and help the Company achieve its targets for health and safety matters.

In connection with the announcement in early 2024 to shut down the Butte polysilicon production, REC Silicon will take action to ensure proper treatment of the workforce affected by this decision, which is likely to result in redundancies.

Targets relating to own workforce

Health and safety have the highest priority and REC Silicon aims to prevent all work-related accidents, injuries, and occupational illnesses.

The target is zero incidents, zero injuries, and no harm to employees, contractors, partners, customers, and communities. Maintaining a strong health and safety performance represents the Company's license to operate.

Characteristics of REC Silicon's employees

With the project to restart production at Moses Lake, the workforce has grown significantly in recent years. Please see the information on page 51.

Non-employees in own workforce

In connection with the Moses Lake project, some non-employees have been recruited from outside providers to assist in the project. Please see the information on page 51.

Collective bargaining coverage

REC Silicon does not maintain any collective bargaining agreements with its workforce. However, the Policies state that the right to collective bargaining is supported by the Company.

Composition of own workforce

The executive management consists of three males. The operations 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 51.

Adequate wages and social protection

All employees are paid adequate wages and the entire workforce 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, so this is not disclosed.

Training and skills development indicators

The Company provides regular training to its employees. The average training hours per employee increased sharply during 2023 due to the requirements related to the reopening of Moses Lake.

The training courses are online based 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.

All employees also undertake annual training on the prevention of workplace harassment and violence, on the whistleblower reporting system and on the Code of Conduct and Sustainability Policy.

Health and safety management

REC Silicon's Health Management System covers all employees. The system is based on risk analysis, risk and hazard mitigation and risk management, which is followed up with training on a variety of aspects.

1) Health-related aspects from the impact of the operations on the physical, mental and social well-being of individuals are managed through training, IH evaluations, labelling and employee assistance programs covering:

Workplace environment and conditions (ergonomics, air quality, noise and lighting)
Chemical hazards (substance exposure)
Physical hazards (radiation and temperatures)
Psychosocial factors (stress, violence and harassment)
Lifestyle factors (nutrition, physical activity, substance abuse)
Product safety (consumer health risks)

2) Illness prevention aspects are managed through risks assessments, incident response processes, health surveillance and monitoring, preventive health practices and emergency preparedness and response.

3) Risk management from prevention and mitigation through training, evaluations and procedures for:

Ergonomics training
IH evaluations for noise, chemical and radiation exposure and air quality
Hazard analyses for physical hazards
Programs and systems for air quality
Wellness programs for lifestyle-related risks
Stress and mental health improvements

4) Physical and mental well-being aspects are managed through wellness committees and programs, with information and guidance provided to the employees through flyers, toolkits, and forms.

REC Silicon has an extensive set of HSE procedures, safety departments at each facility, and employee-driven processes that monitor, audit and further develop safety procedures, practices, and protocols.

The Company maintains an updated compliance certificate for its products for hazard substances, substances of very high concern and other environmentally restricted substances.

REC Silicon's management system is ISO 9001:2015 certified (July 2021) and the environmental management system is ISO 14001:2015 certified (October 2023).

REC Silicon's health and safety performance has had a positive development in the past two years and is well within the national average for its industry. Further details are in the data supplement.

Work-life balance metrics

92% of the employees are entitled to take family-related leave and 3% of those took such leave during 2023.

Remuneration metrics

The female employees have an average salary equating to 95% of the average salary of male employees.

The total remuneration ratio between the Company's highest paid individual and the median remuneration ratio is 11.7 times.

Incidents of discrimination

The company recorded no incidents of discrimination during 2023. The number of complaints filed through channels for people to raise concerns amounted to 11. This is the first year where this has been recorded. There were no material fines, penalties or compensation paid for damages because of human rights violations.

Performance metrics

ESRS S1 - Own workforce	Unit	2021	2022	2023
Characteristics of own workforce
Total number of permanent employees	#	289	360	495
- Female	#	48	54	77
- Male	#	241	306	419
Temporary employees	#	n.a.	5	12
- Female	#	n.a.	n.a.	6
- Male	#	n.a.	n.a.	6
Non-guaranteed hours employees	#	n.a.	0	0
- Female	#	n.a.	n.a.	n.a.
- Male	#	n.a.	n.a.	n.a.
Total new hires	#	n.a.	99	186
Number of employee turnover (leavers)	#	n.a.	n.a.	45
Peromanent employee turnover rate	%	n.a.	4.6%	9.0%
Total number of non-employees in own workforce	#	n.a.	n.a.	20
- of which self-employed people	#	n.a.	n.a.	2
- of which provided by undertakings primarily engaged in employment activities	#	n.a.	n.a.	20

Percentage of employees covered by collective bargaining agreements	%	0%	0%	0%
Number of employees (head count) at top management level	#	n.a.	8	11
- Female	%	n.a.	20%	18%
- Male	%	n.a.	80%	82%

Employees - by age
< 30	#	n.a.	30	65
30-50	#	n.a.	171	230
> 50	#	n.a.	164	199

< 30	%	n.a.	8%	13%
30-50	%	n.a.	46%	47%
> 50	%	n.a.	44%	40%

ESRS S1 - Own workforce	Unit	2021	2022	2023

Percentage of employees that are paid an adequate wage	%	n.a.	n.a.	100%
Percentage of employees covered by social protection	%	n.a.	n.a.	100%
Percentage of employees with disabilities	%	n.a.	n.a.	n.a.
Training and skills development
Percentage of employees that participated in regular performance and career development review	%	n.a.	n.a.	0%
- Female	%	n.a.	n.a.	n.a.
- Male	%	n.a.	n.a.	n.a.
Average number of training hours per employee	#	n.a.	19	98
- Female	#	n.a.	n.a.	85
- Male	#	n.a.	n.a.	101

Health and safety metrics
Percentage of own workforce covered by health and safety management system	%	n.a.	n.a.	100%
Number of fatalities as a result of work-related injuries or ill health	#	0	0	0
- Own workforce	#	n.a.	n.a.	n.a.
- Other workers on undertaking's site	#	n.a.	n.a.	n.a.
Number of recordable work-related accidents for own workforce (TRI)	#	8	8	7
Rate of recordable work-related accidents for own workforce (TRIF)	# / mn hrs	14.8	13.5	8.2
Number of cases of recordable work-related ill health of employees	#	n.a.	n.a.	0
Number of days lost to work-related injuries, fatalities or ill health (LTI)	#	4	1	1
Rate of days lost to work-related injuries (LTIF)	# / mn hrs	7.4	1.7	1.2
Serious incidents (SI)	#	0	0	0
Serious incidents frequency (SIF)	# / mn hrs	0	0	0
Hours worked for own workforce	#	538,758	592,816	857,308
Safe Job Analyses	#	299	281	1,250
Hazard Recognition Audits	#	331	349	503

Work-life balance
Percentage of employees entitled to take family-related leave	%	n.a.	n.a.	92%
Percentage of entitled employees that took family-related leave	%	n.a.	n.a.	3%
- Female	#	n.a.	n.a.	1
- Male	#	n.a.	n.a.	11

ESRS S1 - Own workforce	Unit	2021	2022	2023
Remuneration metrics
Average annual pay female employees	USD '000			44.7
Average annual pay male employees	USD '000			47.1
Gender pay gap	%	n.a.	90%	95%
Remuneration for the highest paid individual	USD	n.a.	n.a.	863,156
Median annual remuneration for all employees	USD	n.a.	n.a.	101,084
Annual total remuneration ratio	%	n.a.	n.a.	854%
Incidents, complaints and severe human rights impacts
Incidents of discrimination	#	0	0	0
Number of complaints filed through channels for people in own workforce to raise concerns	#	n.a.	n.a.	11
Amount of material fines, penalties and compensation for damages as a result of human rights violations	USD '000	n.a.	n.a.	0

Workers in the value chain

Impacts, risks and opportunities

	Link to strategy and business model
Impacts
Health and safety	MGS is sourced from the mining industry
Human rights	About 20% of the company's purchase volumes are sourced from countries that rank high on human rights risks
Risks
Accidents	Delivery disruptions of critical raw materials
Human rights breaches	Reputational risk as purchaser, instability in the supply chain
Client demands	Possible loss of business for failure to monitor human rights risks in the supply chain
Opportunities
Stable supply chain	Engagement with suppliers leads to better and more stable relationships

Policies related to workers in the value chain

REC Silicon's Code of Conduct and Sustainability Policy extends to the supply chain workers, explicitly stating that suppliers and business partners are required to share REC Silicon's approach to human rights and are required to follow all security practices and ensure sufficient human rights training of their staff. REC Silicon also requires its suppliers and business partners to share its commitment to health and safety.

A specific Business Partner Code of Conduct was established in 2023 as part of a supply chain due diligence project to map the human rights risks in the supply chain. This Code makes explicit requirements for suppliers and business partners, based on the same principles as REC Silicon's own Code of Conduct and Sustainability Policy. Suppliers and business partners are expected to formally sign their commitment to the requirements of the Code. The process to get suppliers to sign off on the requirements of the Code was started in 2023.

Engagement with workers in the value chain

The engagement has been limited to date. The next step in the supply chain due diligence project is to get suppliers and business partners to sign off on the requirements of the Business

Partner Code of Conduct. This will be followed up through direct engagement with suppliers on human rights, including reporting and monitoring. At such stage, REC Silicon expects to enter more formal engagement with the workers and/or their representatives, at least as part of the monitoring.

Channels or processes for value chain workers to raise concerns

REC Silicon's whistleblower system is available to all workers in the supply chain and to business partners in general. However, there have been no attempts thus far to disseminate information of its availability to these groups. This will be addressed through the next steps in the supply chain due diligence project.

Actions and action plans

The supply chain due diligence project follows the OECD Due Diligence Guideline which includes six steps. The first two steps were performed in 2023, involving i) the embedding of responsible business conduct into policies and management systems and ii) identifying and assessing adverse impacts. As a result, REC Silicon now has a comprehensive overview of its supply


Scope of 2023 project	1.	Embed responsible business conduct into policies and management systems
	2.	Identify and assess adverse impacts (update at least anually)
Next steps 2024	3.	Cease, prevent or mitigate impacts
Future steps (except 5)	4.	Track implementation and results of actions and plans
	5	Communicate how impacts are addressed
	6.	Provide for or cooperate in remediation when appropriate

chain with risk assessments performed for vendors representing about 75% of the purchase volume in a normal business year.

The next step, to be performed in 2024, involves a process to cease, prevent or mitigate impacts. REC Silicon is starting this by asking the large and important suppliers to sign off on the requirements of the Business Partner Code of Conduct. High risk suppliers are asked to provide documentation on key risks, such as collective bargaining/freedom of association, child/forced labor, discrimination in workforce, wages, and a statement/ position on corruption. All large suppliers will also be asked to commit to annual self-assessments on human risks.

This will lead on to more regular engagement with the suppliers and their workforce, with a monitoring system to be established, along with clearer communication on the availability of the Company's whistleblower system. Further actions to cease, prevent or mitigate will be considered based on the documentation provided by the suppliers considered high risk.

The process and completion of steps to date are illustrated in the table to the right.

More details on the supply chain due diligence will be reported in the annual Transparency Report, which will be released within 30 June 2024.

Targets relating to value chain workers

REC Silicon has a 2024 target of getting around 50 suppliers representing a cumulative vendor volume of approximately USD 100m to sign off on the requirements of the Business Partner Code of Conduct and to provide documentation on key human rights risk.

Business Conduct

Impacts, risks and opportunities

	Link to strategy and business model
Impacts
Corruption and bribery incidents	The Company's supply chain is partly found in countries that rank high on corruption risk
Risks
Corruption and bribery incidents	Could involve REC Silicon personnel, resulting in fines or damages or loss of business
Violation of laws	Could result in fines, damages or loss of business
Human rights breaches	A meaningful part of the supply chain is found in countries that rank high on human rights risks

Policies related to business conduct

The Code of Conduct and Sustainability Policy clearly states that 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.

REC Silicon has zero tolerance for any form of corruption, without exception. Rules and controls have been adopted to prevent and combat the risk of corruption in the performance of activities.

Non-compliance is treated as a serious violation and a disciplinary matter. Employees shall be protected against any sanctions from REC Silicon or any representative of the Company for refusing to participate in any action that is or can be perceived as corruption, bribery, or facilitation payment.

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. REC Silicon creates value by supporting a competitive market, operating fairly, and fighting illegal practices.

The Company promotes and supports active dialogue and cooperation with international, national, and local authorities and institutions. REC Silicon investigates all potential integrity concerns and cooperates fully with the relevant authorities.

REC Silicon protects confidential information and intellectual property with written agreements with third parties to ensure the correct management, internally and externally, of all such confidential information, which, if improperly disclosed, can undermine corporate competitiveness and damage corporate reputation.

Promotion and dissemination of the Code of Conduct and Sustainability Policy is made available to all stakeholders and may be retrieved on REC Silicon's website and intranet. It is delivered to all of REC Silicon's employees upon hiring and will be disseminated when updates or changes occur.

REC Silicon has a whistle-blower service, and all employees have a right and duty to report any violations of the principles of the Code of Conduct. Information shared through the whistleblower process will be shared only with those who have a need to know and will be kept confidential. For a more detailed description of the processes, see the disclosures under whistleblower and grievance function on page page 47.

The employees should always feel free to express fears or draw attention to actions with possible ethical implications. REC

Silicon will not tolerate, under any circumstances, any form of retaliation against any person who has raised concerns in good faith and in no case will take or threaten any adverse action or discrimination of any kind against those who report wrongdoings or express concerns regarding ethical issues.

Relationships with suppliers

Large and critical suppliers make up about 75% of the annual purchase volume for REC Silicon. About half are suppliers of critical raw materials and the remainder spread across manufacturing of machinery and components, engineering and construction and various services.

Most of the vendors are large corporations with significant global exposure where REC Silicon typically buys from US subsidiaries, based on long term relationships. REC Silicon is particularly attentive to supply chain disruptions for critical raw materials, as well as potential human rights risks, as outlined in the previous section. Material human rights risks will be considered when establishing or maintaining relationships with certain suppliers.

Small suppliers make up 25% of the annual purchase volumes and the majority are local or regional companies providing various services or specialised parts or components. Most have been suppliers to REC Silicon for several years and represent an important part of the Company's contribution to the local

communities and economies. There is no specific policy or criteria regarding small suppliers.

Anti-corruption and anti-bribery training

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 employee's duty to report any violation of the principles of the Code of Conduct, and the whistleblower system exists for this purpose.

Incidents of corruption and bribery

There were no incidents of corruption reported during 2023, in line with the performance in previous years.

TCFD Disclosure

Governance

Describe the board's oversight of climate related risks and opportunities	The ultimate responsibility for sustainability-related matters lies with the Board of Directors. The Audit Committee is appointed by the Board of Directors and is the highest governing body responsible for the oversight of the Company's sustain ability reporting. The Audit Committee is currently reviewing its responsibilities towards sustainability matters to make this more clearly defined. Sustainability matters are considered at least quarterly, including performance metrics and general policy, reporting or strategic matters of relevance. Climate-related opportunities are part of the overall corporate strategy, which involves a strategic positioning of REC Silicon as a provider of silicon materials to industries that enable the energy transition, such as the semiconductor industry, the solar PV industry and the energy storage industry.
Describe the management's role in assessing and managing climate-related risks and opportunities	Project and operational risks, generally related to health and process safety, are reported monthly to the management along with related KPIs. Other climate-re lated risks and performance metrics are reported quarterly and considered before being presented to the Audit Committee. Climate-related opportunities are part of the Company's ongoing business and strategy and has resulted in major strategic decisions being presented to the Board of Directors for approval. REC Silicon is in the process of establishing an internal position tasked with establishing and implementing sustainability-related strategies, the setting of KPIs and the performance management of these, as well as with preparing external and internal quarterly and annual reporting on sustainability matters and performance. All targets and related KPIs are approved by the Board of Directors.

Describe the board's
oversight of climate
related risks and
opportunities

The ultimate responsibility for sustainability-related matters lies with the Board of
Directors. The Audit Committee is appointed by the Board of Directors and is the
highest governing body responsible for the oversight of the Company's sustain
ability reporting. The Audit Committee is currently reviewing its responsibilities
towards sustainability matters to make this more clearly defined. Sustainability
matters are considered at least quarterly, including performance metrics and
general policy, reporting or strategic matters of relevance. Climate-related
opportunities are part of the overall corporate strategy, which involves a strategic
positioning of REC Silicon as a provider of silicon materials to industries that
enable the energy transition, such as the semiconductor industry, the solar PV
industry and the energy storage industry.

Describe the
management's role in
assessing and managing
climate-related risks and
opportunities

Project and operational risks, generally related to health and process safety, are
reported monthly to the management along with related KPIs. Other climate-re
lated risks and performance metrics are reported quarterly and considered
before being presented to the Audit Committee. Climate-related opportunities
are part of the Company's ongoing business and strategy and has resulted in
major strategic decisions being presented to the Board of Directors for approval.
REC Silicon is in the process of establishing an internal position tasked with
establishing and implementing sustainability-related strategies, the setting
of KPIs and the performance management of these, as well as with preparing
external and internal quarterly and annual reporting on sustainability matters
and performance. All targets and related KPIs are approved by the Board of
Directors.

Strategy

Describe the climaterelated risks and opportunities the organization has identified over the short, medium and long term

See risks and opportunity table on page 61. REC Silicon defines short term as 0-2 years, medium term 3-5 years and long term more than 5 years, which are aligned with the definitions of the CSRD. Rising energy prices is a key risk in the short to medium term and has already resulted in the decision to discontinue the polysilicon production at Butte. Carbon prices could represent a risk in the medium to long term through driving up costs for key inputs to the production process and the Company's own production costs. In parallel, clients' demand is expected to swing towards low-carbon products, which could result in REC Silicon having to change its product mix and invest in new product lines and technologies. This process has already been underway since 2022 and is part of the Company's strategy to capture opportunities related to climate change through providing low-carbon products to energy transition enabling industries, such as the semiconductor industries, solar PV industries and energy storage industries. These risks will be subject to a thorough review in connection with the Double Materiality Assessment, which REC Silicon will undertake in 2024.

Describe the impact of climate related risks and opportunities on the organization's business, strategy and financial planning

The decision to re-open Moses Lake to produce low-carbon polysilicon to the US solar PV industry and the decision to discontinue the energy-intensive polysilicon production at Butte to free up silane gas production capacity targeting semiconductors, solar panels and energy storage industry are clear examples of how REC Silicon is adapting its business strategy and financial planning to mitigate risks and capture opportunities related to climate change. The Company is committing substantial financial resources to this strategic positioning which will span several years from 2022 through 2025. This also fits with industry and regulatory environments which is focused on reducing the carbon intensity of value chains that drive the energy transition and REC Silicon is taking clear strategic steps to take its share of the burden and thereby capture significant business opportunities going forward.

Strategy

Describe the resilience of the organization's strategy, taking into consideration different climate-related scenarios, including a 20C or lower scenario

The Company has undertaken scenario analyses for the demand for the solar PV industry, as part of its long-term strategy. In particular, the various scenarios published by the International Energy Agency (IEA) have been considered to inform the Company's strategy with regards to growth opportunities, as well as the need to secure access to raw materials and inputs, as well as energy sources, that are resilient to both physical and transition risks. Tighter scenarios involving global warming in line with the Paris Agreement (1.50C) is likely to provide substantial growth opportunities for the Company's products targeting the solar PV industry. Looser scenarios implying increased levels of global warming are also likely to result in significant market growth for the Company's products. In both cases, the lowered energy intensity of the operations mitigate the Company's exposure to risks related to energy prices in general, and carbon taxes on fossil fuel sources in particular. Moreover, the repositioning of the Company's product portfolio towards low-carbon products specifically targeting the energy transition is expected to result in a solid platform for future growth.

Risk management		Metrics and targets
Describe the organization's processes for identifying and assessing climate related risks	Risks of a more strategic nature are identified and assessed through contin uous stakeholder dialogue, participation in collaboration and initiatives across the value chain and through following up on key legislative initiatives such as the Inflation Reduction Act 2022. The supply chain has been mapped and will be used to source low-carbon raw materials produced with a high degree of renewable energy sources. Operational climate-related risks are identified and assessed continuously as part of the risk management system.	Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process	The key metric used is Scope 1 + 2 GHG emissions per ton of product produced. This also involves sub metrics such as energy intensity per ton of product produced and the percentage of renewable energy used in production. Scope 2 emissions are market based. The GHG emissions are calculated in line with the GHG Protocol.
Describe the organization's processes for managing climate-related risks	The key strategic risk element is to ensure low-carbon raw materials and energy sources. Raw materials are sourced through long-term frame agreements with key suppliers that are chosen on the basis of security of supply and low carbon footprints. Energy for the production processes is, where possible, secured from renewable sources. Generic risks related to operations are managed as part of the overall safety and risk management system. Risks related to extreme weather events are managed through a Pollution Prevention Plan, a Process Safety Plan and a Stormwater Management Plan. The environmental risk management system was ISO 14001 certified in 2023.	Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 GHG emissions, and the related risks	GHG emissions have been reported annually since 2011 (Scope 1 + 2). See Climate Disclosures in this report. The Company has also committed to assess its upstream Scope 3 emissions within 2027.
		Describe the targets used by the organization to	The Company has a target to reduce the GHG intensity of its production (Scope 1 and 2) by 40% by 2027 with 2021 as the baseline. The Company has mapped
Describe how processes for identifying, assessing and managing climate related risks are integrated into the organization's	Generic risks are managed at group level through the general risk management system, including physical climate risks like adverse weather conditions which could result in operational stoppages and unwanted pollution and spills. Longer term risks, like transition risks, are part of the overall strategic framework of the Company and are integrated into long-term planning, along with the corre sponding climate-related opportunities. As mentioned above, such risks and	manage climate-related risks and opportunities and performance against targets	its supply chain and will use this to start a process to map its upstream Scope 3 emissions. Targets relating to this will be set in due course.
overall risk management	opportunities have already been implemented into the long-term strategy of the Company.

Climate related risks

Risk type	Classification	Description	Likelihood	Mitigation	Timeframe
Physical	Acute	Increased severity and frequency of extreme weather like storms and drought leading to disruption of operations and the supply of raw materials and lead to unwanted spills and pollution	More likely than not	• Emergency response preparedness • Risk management systems • Inventory management	MT →
	Chronic	Water scarcity affecting operations	About as likely as not	• Reduce water intensity of operations	LT
	Policy and legal	Higher carbon pricing levels impacting the cost of natural gas and electricity from non-renewable sources	Very likely	• Energy efficiency improvements • Focus on low-energy products like silane gas, specialty gases and polysilicon from Moses Lake • Source electricity from renewable sources	MT →
		Restrictions on emission levels	Likely	• Ensure production is energy efficient and low carbon • Non GHG-emissions absorption measures	MT →
Transition		Transportation costs increase due to higher carbon prices	Likely	• Conscious supplier choices • Fossil-free transportation solutions	MT →
	Technology	Polysilicon is replaced as a key conducting material in the electronics or solar industry with other solutions that are less energy intensive	About as likely as not	• Explore alternative uses for polysilicon • Expand the uses of silane gas and specialty gases, for example as battery anode material	LT
	Market	Buyers of polysilicon continue to require lower embodied carbon emission of polysilicon	Very likely	• Maintain production of low-carbon polysilicon at Moses Lake • Source raw materials from low-carbon producers	MT →
	Reputation	Stigmatization of industry sectors with high energy usage and emissions	More likely than not	• Focus products on sectors driving or enabling the energy transition	LT

Time Horizons: ST (short-term) 0-2 years, MT (medium term) 3-5 years, LT (long term) More than 5 years.

Climate related opportunities

Opportunity type	Classification	Description	Likelihood	Driver	Timeframe
Resource efficiency	Energy efficiency	Use the FBR at Moses Lake technology to produce poly silicon, this technology requires 80%-90% less energy per ton of product than the Siemens technology (90% of world production)	Very likely	• Production at Moses Lake facility restarted in Q4'23 (solely FBR production • Secure long-term offtake contracts with solar industry • Shutdown of Butte polysilicon operations	ST →
	Reuse of raw materials	Reuse solid waste from processing	About as likely as not	• R&D into alternative uses for the solid waste created from processing MGS into silane and polysilicon	LT
Energy sources	Lower emission sources	Source electricity required in production from renewable energy sources	Very likely	• Moses Lake facility has access to hydropower	MT →
		Source MGS from suppliers with access to renewable energy	Very likely	• Direct purchasing volumes to producers of low-carbon MGS • Require suppliers to switch to renewable energy	MT →
Products and services	Diversification	Develop more uses of silane gas and specialty gases	Very likely	• Contracts for delivery of silane gas as anode material for batteries • Expand market penetration of silane gas for uses in semiconductor and solar PV industries	ST →
Markets	Solar PV industry	Capture the substantial growth in the deployment of solar panels as a key renewable energy source	Very likely	• Restart Moses Lake • US regulatory initiatives (such as the Inflation Reduction Act) • Low-carbon value chain	ST →
	Semiconductor industry	Capture the substantial growth associated with the digital ization of society	Very likely	• Expand silane gas capacity at Butte • R&D investments to improve product portfolio	ST →
Resilience	Energy transition	Firmly placed in value chains that are key enablers in the energy transition	Very likely	• Continue to develop capacity in line with market growth • R&D investments to improve product portfolio	ST →

Time Horizons: ST (short-term) 0-2 years, MT (medium term) 3-5 years, LT (long term) More than 5 years

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 governance 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 2023. 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 believes the solar industry plays a key role as a longterm supplier of sustainable energy and its business is focused on the production of polysilicon and silicon gases for the solar and electronics industries. To make solar electricity competitive with traditional energy sources, the Group focuses on product improvements and cost (including energy) reductions through the introduction of new process and product technologies as well as continuous productivity enhancement and technology development.

The Group'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 Group's business activities, to create value for its shareholders in a sustainable manner considering financial,

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 acceptable 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 Group'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 USD 76.4 million on December 31, 2023, which represented 13.8 percent of total assets. The debt-to-equity ratio was 6.2. 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 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 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 2023.

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 11, 2023 (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 corporate 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, 2023, 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 2024 or no later than 15 months from the date of the 2023 AGM.

For further information about the mandates given to the Board, reference is made to the minutes from the AGM, which are available on the Company's website (www.recsilicon.com).

4. Equal treatment of shareholders and transactions with close associates

The Company seeks to conform to the principles for equal treatment 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's 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 2023.

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 transferable. 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 shareholders 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 percent of the Company's share capital.

Notification

The Board ensures that the resolutions and supporting information 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 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 encouraged 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 2023 AGM was held digitally on May 11th, with 20.86 percent of the Company's shares represented.

Deviation from the Code of Practice

The Code of Practice recommends separate voting for candidates 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 applicable legislation, the situation, and consequences of electing a board contrary to legislation should be discussed at the General Meeting and shareholders should base their votes on the views discussed.

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' remuneration.

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, 2023, the Board consisted of five members (see table below), of which three were female and independent from the

main shareholders. The directors are elected by the general meeting for a term of one year and may be re-elected.

The AGM elected Tae Won Jun (Chair), Dong Kwan Kim (Deputy Chair), Renate Oberhoffer-Fritz, Paraskevi (Vivian) Bertseka and Roberta Benedetti as the Company's Board for a period until the annual general meeting of 2024.

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 information 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 experience. Board members are encouraged to own shares in the Company. An overview of Board members' share ownership in the Company is available in note 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 administration 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 Company uses independent third-party valuations in case of significant transactions with closely related parties which are not to be considered by the general meeting. There were two agreements announced in 2023 between the Group and its

Overview of the Board on December 31, 2023

Name	Role	Considered independent of main share holders	Independent of Group Management	Independent of material business contacts	Served since	Term expires	Participation Board meetings 2023

Tae Won JUN	Chair	No	Yes	No	21-Oct-2022	AGM 2024	3 of 5
Dong Kwan KIM	Board Member	No	Yes	No	21-Oct-2022	AGM 2024	2 of 5
Dr. Renate Oberhoffer-Fritz	Board member	Yes	Yes	Yes	02-May-2022	AGM 2024	5 of 5
Paraskevi (Vivian) Bertseka	Board member	Yes	Yes	Yes	21-Oct-2022	AGM 2024	5 of 5
Roberta Benedetti	Board Member	Yes	Yes	Yes	22-Dec-22	AGM 2024	5 of 5

shareholders, directors, Group Management or other related parties that could be described as a material transaction. Details on the related-party transactions are disclosed in the consolidated financial statements, note 10 and corresponding Section 3-19 announcements issued by the Board for such transactions may be found on the Company's website.

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, 2023, the Audit Committee members were Dr. Renate Oberhoffer-Fritz, Ms. Paraskevi (Vivian) Bertseka, and Ms. Roberta Benedetti. The Audit Committee held 5 meetings in 2023.

The Audit Committee supports the Board with the assessment and control of financial risk, financial reporting, Sustainability reporting, auditing, control, and prepares discussions and resolutions 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-audit-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, 2023, the Compensation Committee members were Tae Won JUN and Dong Kwan KIM, both independent of the Group Management. During 2023, the Compensation Committee met three times.

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 management. 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 indicators. 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

assessment. 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 financial 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.

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 16).

Members of the Board and/or companies with which they are associated should not take on specific assignments for the Company in addition to their appointment as a member of the Board, 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 2023.

12. Remuneration of the Group management

The guidelines for salary and other compensation to Group Management was presented at the AGM in May 2023. 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 16).

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 2023. Further details on the incentive program are disclosed in note 32 of the consolidated financial statements.

The 2023 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 information is provided in English.

The Board adopted an Investor Relations ("IR") policy specifying, 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 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 is in charge of coordinating the Company's communications to the market and to existing and potential investors of the Company. The IR Officer is an independent 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, KPMG, is appointed by the general meeting and is 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, material 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 independent auditor's report.

Financial statements

Consolidated financial statements	71
Parent company financial statements	119
Responsibility statement	129
Auditor's report	135
Definition of alternative performance measures	139

Consolidated financial statements

REC Silicon Group

Consolidated statement of financial position
Consolidated statement of income
Consolidated statement of comprehensive income
Consolidated statement of changes in equity
Details of consolidated comprehensive income
Consolidated statement of cash flows
	Notes to the Consolidated financial statements	78
Note 01	General information	78
Note 02	Summary of significant accounting policies 78
Note 03	Financial risk management	82
Note 04	Critical accounting judgments and key sources of estimation uncertainty	84
Note 05	Segment and revenue information	85
Note 06	Fixed assets	89

Note 07	Leases	90
Note 08	Impairments of cash-generating units	92
Note 09	Investments	94
Note 10	Related party transaction	95
Note 11	Derivative financial instruments	96
Note 12	Receivables and prepayments	96
Note 13	Inventories	97
Note 14	Cash and cash equivalents and restricted bank accounts	97
Note 15	Shareholder information	98
Note 16	Management and Board of Directors' compensation, loans, shares, bonds	99
Note 17	Borrowings	102
Note 18	Income tax expense a nd deferred tax assets and liabilities	104
Note 19	Retirement benefit obligations and expenses	107

	Trade payables, provisions and other
	liabilities	109
Note 21	Government grants	110
Note 22	Other operating expenses	111
Note 23	Other income and expenses	111
Note 24	Employee benefits	112
Note 25	Financial income and expenses	112
Note 26	Earnings per share	113
Note 27	Dividends per share	113
Note 28	Research and development	113
Note 29	Commitments, guarantees, pledges	114
Note 30	Other information financial instruments	115
Note 31	Claims, disputes, contingent liabilities
	and contingent assets and risks	117
Note 32	Share-based compensation	117
Note 33	Events after the reporting period	118
	Note 20

Consolidated statement of financial position

USD in million	Notes	2023	2022
ASSETS
Non-current assets
Intangible assets	6	0.8	1.0
Land and buildings	6	33.6	31.1
Machinery and production equipment	6	40.2	24.6
Other tangible assets	6	4.0	2.7
Assets under construction	6	180.9	62.4
Property, plant and equipment	6	258.7	120.9
Right of use assets	7	32.2	30.4
Other non-current receivables	12	0.4	0.1
Financial assets and prepayments		0.4	0.1
Total non-current assets		292.2	152.3
Current assets
Inventories	13	58.5	38.3
Receivables and prepayments	12, 30	30.7	23.2
Restricted bank accounts	14	0.6	0.8
Cash and cash equivalents	14	170.9	105.3
Total current assets		260.7	167.5
Total assets		552.9	319.9

USD in million	Notes	2023	2022
EQUITY AND LIABILITIES
Shareholders' equity	15
Paid-in capital		3,027.7	3,027.7
Other equity and retained earnings		-2,951.3	-2,967.3
Total shareholders' equity		76.4	60.4
Non-current liabilities
Retirement benefit obligations	19	7.0	8.6
Non-current provision, interest calculation	20	23.8	19.3
Non-current financial liabilities, interest bearing	17	253.0	4.2
Non-current lease liabilities	7	62.4	65.8
Non-current prepayments	20	24.9	0.0
Other non-current liabilities, not interest bearing	32	0.7	1.3
Total non-current liabilities		371.7	99.1
Current liabilities
Trade payables and other liabilities	20	60.7	46.5
Current financial liabilities, interest bearing	17	30.9	111.0
Current lease liabilities	7	7.5	2.8
Current prepayments	20	5.7	0.1
Total current liabilities		104.8	160.3
Total liabilities		476.5	259.5
Total equity and liabilities		552.9	319.9

Lysaker, March 20, 2024 Board of Directors

Document is signed electronically

Tae Won Jun Chairman of the Board Dong Kwan Kim Deputy Chair

Vivian Bertseka Member of the Board

Roberta Benedetti Member of the Board Dr. Renate Oberhoffer-Fritz Member of the Board

William K. Levens President and CEO

Consolidated statement of income

USD in million	Notes	2023	2022
Revenues	5	141.1	147.8
Cost of materials		-30.5	-27.3
Changes in inventories		12.5	-3.8
Employee benefit expenses	16, 24, 32	-69.6	-44.1
Other operating expenses	22	-142.9	-107.1
Other income and expenses	23	9.0	-0.5
EBITDA1		-80.5	-34.9
Depreciation	6	-10.9	-19.9
Amortization	6	0.0	0.0
Depreciation of right of use assets	7	-3.4	-3.1
Impairment	6, 7, 8	-8.1	-0.3
Total depreciation, amortization and impairment		-22.4	-23.4
EBIT 2		-102.9	-58.3

Financial income	25	3.6	1.9
Net financial expenses	9, 25	-18.3	-20.9
Net currency gains/losses	25	12.7	-9.7
Gain from sale of Yulin JV	9	135.5	0.0
Net financial items		133.5	-28.7

USD in million	Notes	2023	2022

Profit/loss before tax from continuing operations		30.5	-87.0
Income tax expense/benefit from continuing operations	18	0.0	0.0
Profit/loss from continuing operations		30.5	-87.0
Profit/loss from discontinued operations, net of tax 1	17, 30	0.0	0.1
Profit/loss from total operations		30.5	-86.8

Attributable to:
Owners of REC Silicon ASA		30.5	-86.8
Earnings per share (In USD)
From total operations
-basic	26	0.07	-0.21
-diluted	26	0.07	-0.21

¹ EBITDA - EBIT excluding depreciation, amortization and impairment.

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

Consolidated statement of comprehensive income

USD in million	2023	2022
Profit/loss	30.5	-86.8
Other comprehensive income, net of tax:
Remeasurement of defined benefit plans	0.9	3.5
Sum items that will not be reclassified to profit or loss	0.9	3.5
Items that may be reclassified subsequently to profit or loss:
Currency translation differences	-15.4	0.9
Sum items that may be reclassified subsequently to profit or loss	-15.4	0.9
Total other comprehensive income	-14.5	4.4
Total comprehensive income	16.0	-82.4
Total comprehensive income attributable to:
Owners of REC Silicon ASA	16.0	-82.4

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 2022
On January 1, 2022		53.6	2,822.7	41.8	2,918.2	539.0	-3,423.9	33.3
Share issue		5.5	104.0	0.0	109.5	0.0	0.0	109.5
Total comprehensive income		0.0	0.0	0.0	0.0	0.0	-82.4	-82.4
On December 31, 2022		59.2	2,926.7	41.8	3,027.7	539.0	-3,506.3	60.4
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

Details of consolidated comprehensive income

Translation differences
to profit and loss		earnings	Total

			-3,423.9
0.0	0.0	-86.8	-86.8


0.0	0.0	3.5	3.5
0.0	0.0	3.5	3.5

0.9	0.0	0.0	0.9
0.9	0.0	0.0	0.9
0.9	0.0	3.5	4.4
0.9	0.0	-83.3	-82.4
28.8	20.9	-3,556.0	-3,506.3

			-3,506.3
			30.5


			0.9
			0.9

-15.4	0.0	0.0	-15.4
			-15.4
			-14.5
-15.4	0.0	31.4	16.0
13.4	20.9	-3,524.6	-3,490.3
	that can be transferred 27.9 28.8 0.0 0.0 0.0 -15.4 -15.4	Acquisition 20.9 20.9 0.0 0.0 0.0 0.0 0.0	Retained -3,472.7 -3,556.0 30.5 0.9 0.9 0.0 0.9

Consolidated statement of cash flows

USD in million	Notes	2023	2022
Cash flows from operating activities
Profit/loss before tax 1		30.5	-87.0
Depreciation, amortization and impairment	6, 7, 8	22.4	23.4
Proceeds from sale of Yulin JV	9	-136.1	0.0
Changes in receivables, prepayments from customers etc.	12	25.1	5.9
Changes in inventories	13	-20.3	-5.2
Changes in payables, accrued and prepaid expenses	20	3.0	10.9
Changes in VAT and other public taxes and duties	20	1.3	0.0
Currency effects not cash flow or not related to operating activities	25	-12.3	10.2
Other items		0.2	-0.3
Net cash flow from operating activities		-86.0	-42.1
Cash flows from investing activities
Proceeds from sale of Yulin JV	9	136.1	0.0
Proceeds/Payments finance receivables and restricted cash	14	0.2	1.1
Proceeds from sale of property, plant and equipment and intangible assets	6	0.7	0.0
Payments for property, plant and equipment and intangible assets	6	-145.7	-55.9
Net cash flow from investing activities		-8.7	-54.8

USD in million	Notes	2023	2022
Cash flows from financing activities
Proceeds from issue of share capital	15	0.0	109.5
Payments of lease liabilities	7	-3.9	-2.6
Payments of borrowings and up-front/waiver loan fees	17	-111.1	-8.1
Proceeds from borrowings	17	280.0	0.0
Net cash flow from financing activities		165.0	98.8

Effect on cash and cash equivalents of changes in foreign exchange rates	25	-4.6	-7.2
Net increase/decrease in cash and cash equivalents		65.7	-5.2
Cash and cash equivalents at the beginning of the period		105.3	110.5
Cash and cash equivalents at the end of the period		170.9	105.3
1 Profit/loss before tax from operations includes
Interest Paid		-16.5	-22.0

Interest Received 3.6 1.9

Notes to the Consolidated financial statements

Note 01 General information

Note 02 Summary of significant accounting policies

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

Company and its subsidiaries (together, REC Silicon Group or Group) have a presence in the international solar energy industry. Group operations are focused on the production of polysilicon and silicon gases for the solar and electronics industries.

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

These consolidated financial statements have been approved for issue by the Board of Directors on March 20, 2024 and are subject to approval by the Annual General Meeting scheduled for May 14, 2024.

The principal accounting policies applied in the preparation of these consolidated 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 interpretations, 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 significant 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.

2.3 Segment reporting

REC Silicon produces silicon gas and polysilicon for the semiconductor industries at its manufacturing facility in Butte, Montana. The Company also produces polysilicon for the photovoltaic industry at its manufacturing facility in Moses Lake, Washington. The Company's organization structure, management team, operating strategy, and performance measurement reporting support the determination 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 headquarters 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 performance 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 translated 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 functional 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, 2023, an intercompany loan from REC Silicon ASA to REC Silicon, Inc. of USD 116.8 million, and a loan from REC Silicon ASA to REC Silicon AS of USD 160 million (converted to equity in 2023) were regarded as a part of the net investment.

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 depreciation 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

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets. Goodwill is carried at cost less accumulated impairment losses. Goodwill related to equity accounted investments is included in the carrying value of investments. On December 31, 2023 and 2022 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.

(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 circumstances 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 comprehensive 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 financial liabilities (including derivatives) which are classified at fair value.

2.10 Accounting for derivative financial instruments and hedging activities

Derivatives are recognized at fair value on the date a derivative contract is entered into and are subsequently measured for changes in fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative unless the Group has the intention and ability to settle the contracts net. The method of recognizing resulting gains or losses depends on whether the derivative is designated and qualifies as a hedging instrument and the nature of the item being hedged. Derivatives are categorized as held for trading unless they are designated and qualify as hedging instruments. See note 11.

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 experience 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 transaction 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 instruments 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 obsolescence. 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 labor, 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.

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 restoration, 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 comprehensive 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 consideration. 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.

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 determined, 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 activities, 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 interpretations, issued by the IASB and approved by the EU, that are relevant to its operations as effective. A number of changes to standards were effective beginning January 1, 2023 but they did not have a material effect on the Group's financial statement.

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 objectives, 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, 2023, 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, 2023 and 2022, 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.

(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).

During 2023, the Company announced a corporate debt financing totaling USD 280 million. REC Silicon's largest shareholder Hanwha Solutions has fully guaranteed the debt financing resulting in favorable terms compared to other financing alternatives.

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, the 'Yulin JV'.

All regulations and government approvals in China for the transaction have been completed. REC Silicon received gross proceeds of USD 136.1 million

(see note 9, 17, 29)

Accordingly, 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 is appropriate at the date of the accounts.

(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 30 for 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 2023 the Group had hedged a portion of its electricity needs for its semiconductor segment business for own use.

3.2 Fair value estimation

Fair value estimation is discussed in notes 9 and 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 operating cash flow requirements and to meet debt service obligations.

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).

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 recoverable 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 8 and 9).

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. (note 20)

Note 05 Segment and revenue information

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	32.4	23.0%		32.4	22.9%
Customer 2	27.6	19.6%		27.6	19.6%
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, 2022

	Semiconductor materials		Solar materials	Other		REC Silicon
USD in million		%	%	%		%
Customer 1	39.7	26.9%			39.7	26.9%
Customer 2	23.2	15.7%			23.2	15.7%

	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%	0.3	86.4%	0.2	100.0%	18.5	13.1%
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	13.6%	0.0	0.0%	15.5	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%	0.4	100.0%	0.2	100.0%	141.1	100.0%

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

	Semiconductor materials			Solar materials		Other		REC Silicon
USD in million		%		%		%		%
China	40.1	27.2%	0.0	0.0%	0.0	0.0%	40.1	27.1%
USA	21.5	14.6%	0.2	100.0%	0.2	100.0%	21.9	14.8%
Taiwan	21.3	14.5%	0.0	0.0%	0.0	0.0%	21.3	14.4%
Korea	20.8	14.1%	0.0	0.0%	0.0	0.0%	20.8	14.1%
Singapore	18.4	12.5%	0.0	0.0%	0.0	0.0%	18.4	12.5%
Denmark	11.2	7.6%	0.0	0.0%	0.0	0.0%	11.2	7.6%
Japan	8.4	5.7%	0.0	0.0%	0.0	0.0%	8.4	5.7%
Other	1.8	1.2%	0.0	0.0%	0.0	0.0%	1.8	1.2%
Belgium	1.4	0.9%	0.0	0.0%	0.0	0.0%	1.4	0.9%
France	0.9	0.6%	0.0	0.0%	0.0	0.0%	0.9	0.6%
Hong Kong	0.8	0.6%	0.0	0.0%	0.0	0.0%	0.8	0.6%
Czech Republic	0.7	0.5%	0.0	0.0%	0.0	0.0%	0.7	0.5%
Canada	0.1	0.0%	0.0	0.0%	0.0	0.0%	0.1	0.0%
Switzerland	0.0	0.0%	0.0	0.0%	0.0	0.0%	0.0	0.0%
Germany	0.0	0.0%	0.0	0.0%	0.0	0.0%	0.0	0.0%
Total revenues	147.4	100.0%	0.2	100.0%	0.2	100.0%	147.8	100.0%

Geographic distribution of revenues based on customer location for year ended December 31, 2022

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	61.3%
Polysilicon	54.0	38.4%	0.0	13.6%	0.0	0.0%	54.0	38.3%
Other	0.0	0.0%	0.3	86.4%	0.2	100.0%	0.5	0.4%
Total revenues	140.6	100.0%	0.4	100.0%	0.2	100.0%	141.1	100.0%

Revenues by category for year ended December 31, 2022

	Semiconductor materials			Solar materials		Other		REC Silicon
USD in million		%		%		%		%
Silicon gas	86.5	58.7%	0.0	0.0%	0.0	0.0%	86.5	58.5%
Polysilicon	61.0	41.3%	0.0	0.0%	0.0	0.0%	61.0	41.2%
Other	0.0	0.0%	0.2	100.0%	0.2	100.0%	0.4	0.3%
Total revenues	147.4	100.0%	0.2	100.0%	0.2	100.0%	147.8	100.0%

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

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 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, 2023

USD in million	Semiconductor materials	Solar materials	Other	Total
Revenues	140.6	0.4	0.2	141.1

Cost of materials	-26.8	-3.6	-0.1	-30.5
Change in inventories	7.2	5.4	-0.1	12.5
Employee benefit expense	-30.1	-26.2	-13.4	-69.6
Other operating expenses	-81.3	-45.0	-16.7	-142.9
Other income and expenses	4.4	4.2	0.3	9.0
Total current costs	-126.6	-65.1	-29.9	-221.6
	0.0	0.0	0.0	0.0
EBITDA contribution	14.0	-64.8	-29.7	-80.5

Depreciation of fixed Assets	-9.8	-0.7	-0.5	-10.9
Amortization	0.0	0.0	0.0	0.0
Depreciation of leased Assets	-2.6	-0.8	0.0	-3.4
Impairment	-7.0	-1.1	0.0	-8.1
Total depreciation, amortization, and impairment	-19.3	-2.6	-0.5	-22.4

EBIT contribution	-5.4	-67.4	-30.2	-102.9

Segment information for the year ended December 31, 2022

	Semiconductor	Solar
USD in million	materials	materials	Other	Total
Revenues	147.4	0.2	0.2	147.8
Cost of materials	-26.9	-0.4	0.0	-27.3
Change in inventories	-4.7	1.4	-0.5	-3.8
Employee benefit expense	-25.7	-8.8	-9.5	-44.1
Other operating expenses	-83.8	-12.3	-11.0	-107.1
Other income and expenses	0.0	0.0	-0.5	-0.5
Total costs	-141.1	-20.1	-21.5	-182.8
EBITDA contribution	6.3	-19.9	-21.3	-34.9
Depreciation of fixed Assets	-11.1	-8.4	-0.5	-19.9
Amortization	0.0	0.0	0.0	0.0
Depreciation of leased Assets	-2.6	-0.6	0.0	-3.1
Impairment	-0.3	0.0	0.0	-0.3
Total depreciation, amortization, and impairment	-13.9	-9.0	-0.5	-23.4
EBIT contribution	-7.6	-28.9	-21.8	-58.3

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

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

USD in million	2023	2022

Spot Contract Revenue	74.1	93.9
Structured (Regional/Volume pricing)	57.9	44.8
Tiered (Volume pricing)	9.2	9.1
Total	141.1	147.8

New contract with a customer

On September 6, 2023. REC Solar Grade Silicon LLC, a subsidiary of Silicon ASA entered into a full form supply agreement with Hanwha Q Cells Georgia, Inc., a wholly owned subsidiary of Hanwha Solutions for a 10 year take-or pay supply agreement for high purity granular polysilicon produced from REC Silicon's facility at Moses Lake, Washington utilizing its proprietary FBR process. The Supply Agreement will provide the Company with a 10-year secure offtake for all the prime high purity granular production from the Moses Lake facility. The estimated total value of the Supply Agreement for the duration of the arrangement will fluctuate depending upon market prices, which are currently estimated to be approximately \$3 billion.

The contract specifies an annual committed volume, which serves as the base volume for the offtake agreement. The first delivery is scheduled for 2024. Therefore, as of December 31, 2023, the performance obligation does not apply, implying that the total transaction price will be fully realized in the contracted future years. Similar to other sales, we will recognize revenue as products are delivered.

For the first five years of the agreement, the base price is subject to both a price minimum and maximum that protects REC Silicon against potential low market prices in the near term. For the second five years of the agreement, there is no minimum or maximum price, which provides the Company with upside to benefit from higher polysilicon market prices in the future. The high purity FBR granular polysilicon will also benefit from the \$3 per kilogram tax credit from the Inflation Reduction Act.

To secure the Supply Agreement obligations and to support the restart of the Moses Lake facility, Hanwha made a USD 30 million prepayment at the time of the signing (see note 10) and will make an additional USD 50 million prepayment upon the first delivery. The prepayment will be credited against purchases of high purity granular polysilicon pursuant to a linear reimbursement schedule over the 10-year term. As of December 31, 2023, there has been no high purity granular polysilicon delivered to the customer. Consequently, no revenue has been recognized in the fiscal year 2023, and no prepayment has been credited.

The table below represents the prepayment received from Hanwha Q Cells Georgia, Inc

Prepayment received from contracts with customers

USD in million	2023	2022
On January 1	0.0	0.0
Addition	30.0	0.0
Revenue recognized	0.0	0.0
On December 31	30.0	0.0

The relevance of a significant financing component is determined by its financing benefits relative to the overall transaction volume and other factors. The prepayment's impact on the benefits and significance in accounting reports is deemed negligible, consequently the prepayments are not considered to result in a significant financing component.

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, 2023	31.1	24.6	2.7	62.4	120.9
1 Net additions	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	-8.1	-0.6	0.0	-10.9
Impairment 2	0.0	-0.6	0.0	-7.5	-8.1
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

Carrying value on January 1, 2022	33.3	34.7	2.6	12.5	83.1
1 Net additions	0.0	7.2	0.8	49.9	58.0
Disposals	0.0	0.0	0.0	0.0	0.0
Depreciation and amortization	-2.2	-17.3	-0.4	0.0	-19.9
Impairment 2	0.0	0.0	-0.2	0.0	-0.3
Carrying value on December 31, 2022	31.1	24.6	2.7	62.4	120.9
On December 31, 2022
Historical cost	140.9	2,161.3	73.4	104.0	2,479.6
Accumulated depreciation/amortization/impairment	-109.7	-2,136.7	-70.7	-41.6	-2,358.7
Carrying value on December 31, 2022	31.1	24.6	2.7	62.4	120.9

¹ Net additions include transfers from assets under construction.

² Impairment recorded in 2023 is primarily related to the writedown of assets in the semiconductor segment as a result of the announced exit from the polysilicon business line. The majority of the impairment is related to an ongoing project under construction.

Specification of useful lives and depreciation

At year-end 2023, estimated useful lives by asset class were as follows:

Land and Buildings 0-27.5 years (weighted average approximately 16.3 years)
Machinery and equipment 0-26.5 years (weighted average approximately 4.5 years)
Other tangible fixed assets (weighted average approximately 5.5 years)

Assets under construction are not yet ready for their intended use and depreciation has not started.

Reviews of estimated useful lives of property, plant, and equipment for 2023 and 2022 resulted in only minor changes.

Intangible assets

	Assets under	Total intangible
USD in million	development	Other	assets
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
Carrying value on January 1, 2022	0.5	0.4	0.9
Internal Development	0.1	0.0	0.1
Amortization	0.0	0.0	0.0
Carrying value on December 31, 2022	0.6	0.3	1.0
On December 31, 2022
Historical cost	0.9	67.9	68.8
Accumulated amortization/impairment	-0.3	-67.5	-67.8
Carrying value on December 31, 2022	0.6	0.3	1.0

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.

Intangible assets are primarily related FBR technology in REC Silicon (2-9 years).

Reviews of estimated useful lives of intangible assets for 2023 and 2022 resulted in only minor changes.

Note 07 Leases

Right of use Assets

USD in million	Land and buildings	Machinery	Gas plants	Other	Total

Balance on January 1, 2023	0.0	0.5	29.9	0.0	30.4
Depreciation	-0.1	-0.1	-3.2	0.0	-3.4
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

Balance on January 1, 2022	0.1	1.2	32.0	0.1	33.2
Depreciation	-0.1	-0.2	-2.8	-0.1	-3.1
Additions	0.0	0.0	0.0	0.0	0.0
Impairments	0.0	0.0	0.0	0.0	0.0
Adjustments	0.0	-0.5	0.7	0.0	0.3
Balance on December 31, 2022	0.0	0.5	29.9	0.0	30.4

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

Lease Liabilities

USD in million	2023	2022
Maturity analysis - contractual undiscounted cash flows
Less than 1 year	15.6	11.1
1 - 2 years	15.6	14.5
2 - 3 year	15.5	14.5
3 - 4 years	15.5	14.5
4 - 5 years	15.5	14.5
More than 5 years	30.4	44.4
Total undiscounted lease liabilities on December 31	108.2	113.6
Lease liabilities included in the statement of financial position on December 31	70.0	68.6
Current	7.5	2.8
Non-current	62.5	65.8

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, 2023 and December 31, 2022.

Leases recognized in profit or loss

USD in million	2023	2022

Interest on lease liabilities	8.5	8.6
Depreciation of right-of-use assets	3.4	3.1
Gain(-)/loss(+) due to terminations, purchases, impairments, and other changes	0.0	0.5
Expenses relating to short-term leases	0.1	0.1
Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets	0.0	0.0

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 2023, the Group made lease payments totaling USD 12.4 million, comprised of USD 3.9 million of lease liability payments and USD 8.5 million imputed interest. See note 25 below.

In addition, payments of USD 0.1 million related to leases for low-value-assets and short-term durations which are exempt under IFRS 16 have been expensed in 2023. See note 22 below.

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, 2023 and 2022.

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

Management has concluded that changes in markets for solar grade polysilicon, the restart of Moses Lake FBR facility, and changes to the discount rate were sufficient to indicate a potential change in the valuation of the long-lived assets of the Solar Materials CGU.

REC Solar Grade Silicon LLC and Hanwha Q Cells Georgia, Inc. entered into a 10 year take-or pay supply agreement for high purity FBR granular polysilicon produced at REC Silicon's facility at Moses Lake. The Offtake provides for the sale to Hanwha Q Cells Georgia Inc. of 100% of the prime FBR production from the facility.

The base price for the Offtake will be determined by market indices adjusted for a premium for US-sourced low carbon material. The base price is also subject to both a minimum and maximum that protects REC Silicon against potential future low market prices that could otherwise threaten the longterm prospects for the Company. (See note 10)

The Company performed an evaluation of potential operating scenarios including the supply agreement and various market prices to perform impairment testing. The results of Impairment testing on the Solar Materials CGU and resulted in estimated values in use that approximated the carrying value of the Solar Materials CGU. Consequently, no additional impairment or reversal of impairment was recognized in 2023.

The Company will monitor developments associated with the restart of the Moses Lake production facility to determine if estimated recoverable amounts associated with the Solar Materials CGU increase significantly during future reporting periods.

For the semiconductor segment, impairment indicators considered were exiting the polysilicon business, a change to discount rate and high energy costs. After impairing specific polysilicon production assets (see note 6) it was determined that low book values on remaining assets compared to market cap and assumed stand alone price of the segment resulted in no impairment test.

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, full or partial compensation by incentive schemes or increased effectiveness resulting in limited impact on operating cash flows. The Inflation Reduction Act has a \$3 per kilogram tax credit for the production of solar-grade polysilicon, with these tax credits being accounted for in the cash flows.

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 years presented. 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 applied is based on the Company's cost of capital which has been estimated using the weighted average of the required rates of return for the Company's equity and debt (WACC). The required rate of return for the Company's equity is estimated using the capital assets pricing model (CAPM). The required rate of return on debt is estimated on the basis of a risk-free rate of return plus a credit risk premium derived from analysis of the debt costs and loading of public companies similar to REC Silicon. The discount rate is estimated on an after-tax basis and adjusted to estimate the equivalent before tax discount rate using the Company's estimated before and after-tax cash flows and evaluated for reasonableness. The discount rates used on December 31, 2023 and 2022 are reflected in the table below:

Discount rates (%)

	2023		2022
	Post-tax	Pre-tax	Post-tax	Pre-tax
Solar Materials CGU	12.7	13.9	14.4	17.5

Key assumptions and sensitivities

Key assumptions include future revenues (sales prices and sales volume), cost of major inputs, conversion costs and efficiency (production volume), and maintenance capital expenditures.

Costs have been estimated using contractual obligations, third party indexes when appropriate, and historical spending trends adjusted for inflation.

Capital expenditures required to fully restart and ramp the Moses Lake FBR facility have been included in the analysis.

The table below presents the estimated change in impairment of the Solar Materials 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, 2023 impairment analysis.

Key assumptions for 2023

	Estimated change
Change	in impairment

+/-1% point	-11.8/+13.3
+/-2%	+/-39.2
+/-2%	+/-11.5
+/-2%	-/+5.7

Negative amounts represent an estimated increase in impairment.

Carrying value

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

On December 31, 2023

	Semiconductor	Solar
USD in million	materials	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

On December 31, 2022

USD in million	Semiconductor materials	Solar Materials	Other	Total

Trade and other receivables	18.9	0.7	3.6	23.2
Inventories	33.7	4.6	0.0	38.3
Current assets	52.5	5.3	3.6	61.5
Long term assets	93.3	51.4	7.5	152.2
Trade payables and other current liabilities	-30.1	-9.3	-4.4	-43.7
Long term liabilities	-8.6	0.0	0.0	-8.6
Allocation of other	4.7	2.1	-6.8	0.0
Carrying values	111.8	49.5	0.0	161.3

Note 09 Investments

Other investments

The Group entered into a joint arrangement in China; Shaanxi Non-Ferrous Tian Hong REC Silicon Materials Co., Ltd. (Yulin JV) in February 2014. On February 1, 2018, REC Silicon Pte. Ltd (REC Silicon) and Shaanxi Non-Ferrous Tian Hong New Energy Co. Ltd. (SNF) entered into a supplemental agreement in relation to outstanding capital contributions. This supplemental agreement reduced REC Silicon's equity ownership to 15 percent.

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.

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 note 16.

Related companies

On September 6, 2023. REC Solar Grade Silicon LLC, a subsidiary of Silicon ASA entered into a full form supply agreement with Hanwha Q Cells Georgia, Inc., a wholly owned subsidiary of Hanwha Solutions for a 10 year take-or pay supply agreement for high purity granular polysilicon produced from REC Silicon's facility at Moses Lake, Washington utilizing its proprietary FBR process. The Supply Agreement provides for the sale to Hanwha of 100% of the prime high purity granular production from the facility. The Supply Agreement will provide the Company with a 10-year secure offtake for all the prime high purity granular production from the Moses Lake facility.

The base price for the polysilicon in the Supply Agreement will be determined by market indices adjusted for a premium for US-sourced low carbon material. The high purity FBR granular polysilicon will also benefit from the \$3 per kilogram tax credit from the Inflation Reduction Act. For the first five years of the agreement, the base price is subject to both a price minimum and maximum that protects REC Silicon against potential low market prices in the near term. For the second five years of the agreement, there is no minimum or maximum price, which provides the Company with upside to benefit from higher polysilicon market prices in the future.

The estimated total value of the Supply Agreement for the duration of the arrangement will fluctuate depending upon market prices, which were estimated to be approximately USD 3 billion at the time of signing.

To secure the Supply Agreement obligations and to support the restart of the Moses Lake facility, Hanwha made a USD 30 million prepayment at the time of the signing see notes 5 and 20) and will make an additional prepayment at first delivery (see note 31). The Prepayment will be credited against purchases of high purity granular polysilicon pursuant to a linear reimbursement schedule over the 10-year term.

Hanwha Solutions together with its affiliate Hanwha Corporation control 33.3% 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 Dong Kwan Kim, CEO Hanwha Solutions, as deputy chair. Both chair Tae Won Jun and deputy chair Dong Kwan Kim recused themselves from discussing and voting on the Supply Agreement.

The Supply Agreement was assessed by two independent third-party experts in the industry that confirmed to the REC Silicon ASA board of directors that the Supply Agreement is balanced, at arm's length, and contains consistent commercial terms to other similar polysilicon Supply Agreement transactions in the industry. The Supply Agreement presented an attractive opportunity compared to other commercial conversations after taking into account relevant considerations. The board of directors are therefore of the view that the Supply Agreement has been entered into on arm's length market terms and in the best interests of REC Silicon ASA and its shareholders as a whole. Reference is made to the announcements made in accordance with section 3-19 of the Norwegian Public Limited Liability Companies Act, published on January 31 and September 6, 2023.

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 1.4 million in services. In 2022 REC Silicon received USD 0.2 million in services.

Note 11 Derivative financial instruments

See note 30 below for additional information on the fair value of financial instruments.

After the settlement of the indemnification loans in 2022, REC Silicon no longer has any material derivatives.

Note 12 Receivables and prepayments

USD in million	2023	2022
Trade receivables and accrued revenues	24.7	26.4
Provision for loss on trade recivables	-2.7	-9.6
Trade receivables - net	21.9	16.8
Prepaid costs	8.7	6.3
VAT and other public taxes and duties receivables	0.0	0.0
Other non-current and current receivables	0.0	0.1
Total receivables and prepayments	30.7	23.3

Specification of provision for loss on trade receivables

USD in million	2023	2022

On January 1	-9.6	-14.4
Change in provisions	6.9	4.8
On December 31	-2.7	-9.6

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

In the fourth quarter of 2023 REC Silicon exhausted efforts to collect from previously impaired customers. As a result, the company wrote off USD 6.9 million in receivables as well as reversed the provision for the same amount. This resulted in a net zero change to receivables. REC will continue to seek all collection options on remaining impaired accounts. There was no bad debt expense recorded in 2023. The provision for loss on trade receivables is limited to a small number of customers and although unlikely that any funds will be collected, the provision will remain until all efforts are exhausted (see note 30). On December 31, 2023 the review of the provision included the fact that the Company has not experienced any bad debt since 2018.

Note 13 Inventories

Inventories in the statement of financial position

	2023			2022
USD in million	Before writedowns	Writedowns	After writedowns	Before writedowns	Writedowns	After writedowns
Stock of materials, merchandise, production supplies	18.1	0.0	18.1	12.1	0.0	12.1
Spare parts	44.3	-33.1	11.2	42.8	-33.4	9.4
Work in progress	12.8	-2.3	10.5	9.4	-2.3	7.1
Finished goods	25.1	-6.4	18.7	12.8	-3.1	9.7
Total	100.4	-41.8	58.5	77.1	-38.8	38.3

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.

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	2023	2022
Restricted bank accounts current	0.6	0.8
Total restricted bank accounts	0.6	0.8

On December 31, 2023 restricted bank accounts consisted of USD restricted cash for the US subsidiaries of USD 0.6 million. On December 31, 2022, restricted bank accounts consisted of USD 0.2 million security for bank guarantees for REC Solar AS (a subsidiary of the Company) and restricted cash for the US subsidiaries of USD 0.6 million.

Note 15 Shareholder information

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

		2023		2022
Name of shareholders		No. of shares	Ownership	No. of shares	Ownership
HANWHA 1)		140,208,552	33.33%	140,208,552	33.33%
MORGAN STANLEY & Co. LLC 2)	Nominee	22,028,592	5.24%	9,614,334	2.29%
NORDNET LIVSFORSIKRING AS	Ordinary	4,367,214	1.04%	5,418,313	1.29%
SKANDINAVISKA ENSKILDA
BANKEN AB	Ordinary	4,219,281	1.00%	345,693	0.08%
BNP PARIBAS - DUBLIN	Nominee	0	0.00%	12,619,185	3.00%
Total shares outstanding		420,625,659		420,625,659

¹ Hanwha 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.

² On December 31, 2023 Water Street Capital Inc holds 21,209,077 shares through a nominee account with Morgan Stanley

The list of shareholdings above is based on the VPS shareholder register on December 31, 2023 and 2022. Actual shareholding may deviate due to the use of nominee accounts, share lending, forward contracts or other contractual arrangements.

On December 31, 2023, REC Silicon ASA had 34,318 shareholders (37,280 on December 31, 2022). The total number of outstanding shares was 420,625,659 on December 31, 2023 and December 31, 2022 each with a par value of NOK 1.

At the Annual General Meeting on June 22, 2023, 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, 2023. Both authorizations were valid until the 2024 Annual General Meeting, but in any event not longer than 15 months.

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. Following amendments to the PLA, the statement is now subject to new and more detailed requirements for determining salaries and other remuneration. From January 1, 2021, the board is required to prepare both guidelines for such determinations (section 6-16 (a)) and a report that provides an overview of paid and outstanding remuneration (section 6-16(b)). The guidelines are forward-looking and are adopted by the Annual General Meeting through a binding vote, while the report is retrospective and is subject to an advisory vote at the Annual General Meeting

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 were presented to the Annual General Meeting in 2021, where a binding vote on these guidelines was held in accordance with the new regulations. 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 2024.

The guidelines for determination of salary and other compensation for leading employees, as outlined in the annual general meeting in 2023, have been complied with in 2023. See www.recsilicon.com/investors/agm for 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 2023. See note 32 for details of share-based compensation programs.

Salary and other compensation to the Group's Board of Directors and Management for 2023 and 2022 are described below.

Compensation of the Group Management for 2023

Amounts in USD		Bonus	Share based	Share based		Other
Name	Base salary	earned and max %	compensation earned	compensation paid	Pension benefits	taxable benefits	Severance
Kurt Levens	643,653	165,237	-60,491	82,418	33,000	103,822	0
President and CEO		50%
Jeong Ryul Yun	196,402	84,472	0	0	0	163,591	0
CFO		NA
Dongjin Jung	92,304	25,227	0	0	0	103,859	0
Chief Strategy Officer		NA
Total 2023	932,360	274,936	-60,491	82,418	35,942	371,271	0

Compensation of the Group Management for 2022

Amounts in USD		Bonus earned and	Share based compensation	Share based compensation	Pension	Other taxable
Name	Base salary	max %	earned	paid	benefits	benefits	Severance
Kurt Levens	131,414	15,102	96,564	58,569	0	30,681	0
President and CEO from September 28, 2022		50%
James A. May II	243,255	0	0	34,093	27,450	162,460	514,695
President and CEO to September 28, 2022		50%
Jeong Ryul Yun	49,234	23,540	0	0	0	61,024	0
CFO From October 3, 2022		110%
Douglas Moore	124,336	4,116	0	0	12,529	52,983	0
CFO to October 2, 2022		25%
Dongjin Jung	14,497	4,921	0	0	0	15,094	0
Chief Strategy Officer from November 1, 2022		50%
Total 2022	562,735	47,678	96,564	92,662	39,979	322,241	514,695

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 estimated 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 2023 there was a total of USD 0.7 million in cash payments made with respect to share-based compensation to all eligible participants, and USD 0.5 million in 2022.

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 benefits 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 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

Compensation of the Board of Directors paid in 2022

Amounts in USD
Name	Member at December 31, 2022	Board compensation
Tae Won Jun	Yes	0
Dong Kwan Kim	Yes	0
Renate Oberhoffer-Fritz	Yes	48,054
Vivian Bertseka	Yes	0
Roberta Benedetti	Yes	0
Koo Yung Lee	No	0
Maeng Yoon Kim	No	0
Seung Deok Park	No	0
Annette Malm Justad	No	15,585
Audun Stensvold	No	12,988
Heike Heiligtag	No	24,225
Total 2022		100,852

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

On December 31, 2023 and 2022 there was a loan in the amount of USD 40 thousand to Dongjin Jung.

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, 2023 and 2023. Refer to note 32 for details of the share option program.

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
Dongjin 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

The table includes those that were members on December 31, 2022

Name		Options	Shares
Kurt Levens	Group Management	388,600	440
Jeong Ryul Yun	Group Management	0	0
Dongjin 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, 2023

	Number of options
Name	Kurt Levens	Strike price NOK
2021 Program	133,279	17.5
2020 Program	81,068	3.5
2019 Program	41,266	8.1
Total	255,613

Note 17 Borrowings

Financial liabilities, interest bearing

USD in million	2023	2022
Non-current financial liabilities, interest bearing
Bank Loan - KEB Hana Bank	110.0	0.0
Bank Loan - KEB Hana Bank	100.0	0.0
Bank Loan - NongHyup	40.0	0.0
Grant County WA tax settlement (USD)	3.0	4.2
Total non-current financial liabilities, interest bearing	253.0	4.2
Current financial liabilities, interest bearing
Senior Secured Bond	0.0	110.0
Bank Loan - Standard Chartered	30.0	0.0
1 Capitalized Borrowing Cost	-0.4	-0.1
Grant County WA tax settlement (USD)	1.2	1.1
Total current financial liabilities, interest bearing	30.9	111.0

¹ Amortized as part of effective interest.

Movements in borrowing

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

On April 3, 2023 the Company completed a three-year corporate debt financing of USD 110 million from KEB Hana Bank for the purpose of retiring the senior secured bond that matured on April 13, 2023 which was repaid. The loan has an interest rate of three-month SOFR + 1.8%. The financing is guaranteed by REC Silicon's largest shareholder Hanwha Solutions with a guarantee fee of 0.9% per year.

On June 14, 2023 REC Silicon ASA through its subsidiary REC Silicon Inc, signed an agreement for a one-year USD 30 million facility loan from Standard Chartered Bank for the purpose of supporting the capital needs of the company. The loan has an interest rate of one-month SOFR + 2.2%. This facility loan is part of the overall financing plan for the company's ongoing restart and expansion initiatives and is fully guaranteed by REC Silicon's largest shareholder Hanwha Solutions with a guarantee fee of 0.9% per year.

On July 20, 2023 REC Silicon ASA through its subsidiary REC Silicon Inc, entered into a three-year loan agreement for a USD 100 million term loan from KEB Hana Bank for the purpose of supporting capital needs of the company. The term loan is part of the overall financing plan for the company's ongoing restart of the Moses Lake FBR facility. The loan has an interest rate of three-month SOFR + 1.5%. The term loan is also fully guaranteed by REC Silicon's largest shareholder Hanwha Solutions with a guarantee fee of 0.9% and a 0.5% fee for a standby letter of credit

On September 15, 2023 REC Silicon ASA through its subsidiary REC Silicon Inc, entered into a three-year agreement for a USD 40 million term loan from Nonghyup Bank for the purpose of supporting the restart capital needs of the company. The loan has an interest rate of three-month SOFR + 2.0%. The term loan is also fully guaranteed by REC Silicon's largest shareholder Hanwha Solutions with an annual guarantee fee of 0.9% per year. (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, 2023, the remaining fair value of the property tax note was USD 4.2 million. Total remaining undiscounted payments on the property tax note are USD 5.3 million.

In 2023 the Company repaid USD Senior Secured Bond (REC04, ISIN NO0010820590).

On December 31, 2023 and 2022, the Company had complied with all financial covenants and other restrictions in the loan agreements.

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

On December 31, 2023			Maturity analysis - contractural payments to be made, including interest
USD in million	Carrying amount	Total	0-6 Months	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

On December 31, 2022			Maturity analysis - contractural payments to be made, including interest
USD in million	Carrying amount	Total	0-6 Months	7-12 Months	2024	2025	2026	2027	After 2027
USD Senior secured bond	109.9	110.0	110.0	0.0	0.0
Grant County WA tax settlement	5.3	7.0	0.0	1.8	1.8	1.8	1.8
Accrued Finance Costs	2.8	2.8	6.3
Trade payables and other liabilities	44.8	44.8	43.5	0.0	1.3	0.0	0	0.0
Lease Liabilities	68.6	113.6	5.6	5.6	14.5	14.5	14.5	14.5	44.4
Total	231.4	281.7	165.4	7.3	17.6	16.3	16.3	14.5	44.4

For information regarding provisions see note 20. For information regarding retirement benefit obligations see note 19.

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.

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

	Interest rate (%)	Currency	Amounts in million Maturity		Borrower
Bank Loan - KEB Hana Bank	3 mon SOFR+1.8%	USD	110.0	2026	REC Silicon ASA
Bank Loan - KEB 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	11.50 Fixed	USD	4.2	2026	REC Solar Grade Silicon

The nominal interest rates and currency distribution on December 31, 2022 were as follows

	Interest rate (%)	Amounts Currency in million		Borrower
USD Senior Secured Bond	11.50 Fixed	USD	110.0	REC Silicon ASA
Grant County WA tax settlement	11.50 Fixed	USD	5.3	REC Solar Grade Silicon

Note 18 Income tax expense a nd deferred tax assets and liabilities

Recognized income tax expense

USD in million	2023	2022
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 continuing operations

USD in million	2023	2022

Profit/loss before tax	30.5	-87.0
Tax calculated at domestic tax rates applicable to profits /losses in the respective countries	-3.5	18.5
Effects of changes in tax rates and use of another tax rate for parts of profits /losses	2.4	-0.8
Expenses not deductible for tax purposes	1.2	0.0
Effects of not recognized deferred tax assets, including reversal of previous years	-0.2	-17.7
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 22.5 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 2023 and 2022.

Income tax assets and liabilities in the statement of financial position

USD in million	2023	2022
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

Deferred tax assets and liabilities, based on classification as current and non-current are as follows

USD in million	2023	2022
Deferred tax assets
Deferred tax asset to be recovered after 12 months	88.7	61.4
Offset deferred tax assets and liabilities	-88.7	-61.4
Total	0.0	0.0
Deferred tax liabilities
Deferred tax liability to be settled after 12 months	88.7	61.4
Offset deferred tax assets and liabilities	-88.7	-61.4
Total	0.0	0.0
Net deferred tax liabilities	0.0	0.0

Tax losses and tax credit carryforwards are presented as deferred tax assets to be recovered after 12 months in the table above.

The following are the major deferred tax liabilities (-) and assets (+) recognized by the Group and movements during 2023

USD in million	Balance Jan 1	Recognized in income	Translation difference	Balance Dec 31
Total non-current assets	-59.6	-29.2	1.8	-86.9
Total non-current liabilities	0.0	0.0	0.0	0.0
Total current liabilities	0.0	0.0	0.0	0.0
Tax losses and tax credits carry-forward recognized	59.6	29.2	-1.8	86.9
Total	0.0	0.0	0.0	0.0

The following are the major deferred tax liabilities (-) and assets (+)

recognized by the Group and movements during 2022

USD in million	Balance Jan 1	Recognized in income	Recognized in OCI/equity	Translation difference	Balance Dec 31
Total non-current assets	-58.2	-7.7	0.0	6.3	-59.6
Total non-current liabilities	-0.1	0.1	0.0	0.0	0.0
Total current liabilities	2.4	-2.2	0.0	-0.2	0.0
Tax losses and tax credits carry-forward
recognized	55.9	9.8	0.0	-6.1	59.6
Total	0.0	0.0	0.0	0.0	0.0

¹ Tax losses and tax credit carry-forwards recognized on December 31, 2023 related to REC Silicon in the USA were USD 0.0 million and USD 88.1 million related to REC Silicon ASA. Tax losses and tax credit carry-forwards recognized on December 31, 2023 related to REC Silicon in the USA were USD 0.0 million and USD 59.6 million related to REC Silicon ASA.

Accumulated income taxes recognized to equity on December 31

USD in million	2023	2022

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.

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

USD in million 2023	2022

Total non-current assets 82.4	79.1
Total current assets -0.4	1.2
Total non-current liabilities 18.7	19.2
Total current liabilities 9.8	8.6
Tax losses carry forward 371.3	360.5
Total 481.7	468.6

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

USD in million	2023	2022

REC Silicon ASA (Norway)	33.5	40.2
REC Solar AS (Norway)	154.3	177.9
REC Silicon US operations	289.9	266.7
Other	4.1	-16.3
Total	481.7	468.6

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 169.8 million on December 31, 2023 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 46.9 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 notified REC Silicon ASA that they consider to change the company's income tax assessment for the years 2019-2022. The basis for this notification is 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 under tax audit. The company has responded to the tax office's notification and the company maintains its view that the subsidiaries have not had 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.

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, 2023 and 2022. 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	2023	2022
Gross retirement benefit obligations on January 1	33.5	44.2
Interest cost on pension obligations	1.7	1.2
Remeasurements recognized through OCI	0.8	-10.3
Benefits paid, paid-up policies and disability obligation	-1.7	-1.6
Gross retirement benefit obligations on December 31	34.2	33.5
Fair values of plan assets on January 1	24.8	30.8
Actuarial return on plan assets	2.9	-6.0
Pension premiums	1.3	1.6
Benefits paid, paid-up policies and disability reserve	-1.7	-1.6
Fair value of plan assets on December 31	27.3	24.8
Funded status on December 31	7.0	8.6
Net retirement benefit obligations on December 31	7.0	8.6

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	2023	2022

Net retirement benefit obligations on January 1 Net periodic benefit costs including net interest	8.6 0.5	13.4 0.4
Remeasurements recognized through OCI	-0.9	-3.5
Pension premiums and benefits paid	-1.3	-1.6
Net retirement benefit obligations on December 31	7.0	8.6

The amounts recognized in the statement of income are as follows

USD in million	2023	2022

Total benefit plans	0.0	0.0
Defined Contribution	3.5	2.4
Total contribution expenses (see note 24)	3.5	2.4
Net interest expense	0.4	0.4

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

USD in million	2023	2022

Experience adjustments	0.0	0.2
Effects of changes in assumptions	0.9	-10.4
Total remeasurements (gains (-)/losses (+)) on gross retirement benefit obligations	0.8	-10.3
Return on plan assets, excluding amounts included in interest	-1.7	6.8
Total remeasurements (gains (-)/losses (+)) recognized through Other Comprehensive Income	-0.9	-3.5

During 2023 the effects of changes in assumptions were due to a dcrease 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 16.8 million before income taxes on December 31, 2023. Of this, a loss of USD 16.8 million was related to ASiMI (excluding translation difference).

On December 31, 2023, 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

	2023	2022

Discount rate	4.85	5.1
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, 2023 and December 31, 2022. 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, 2023 and December 31, 2022.

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 3.1/(3.7) million on December 31, 2023.

Note 20 Trade payables, provisions and other liabilities

Non-financial liabilities

USD in million	2023	2022

Non-current prepayments	24.9	0.0
Current portion of prepayments	5.7	0.1
Total prepayments	30.7	0.1

Provisions

USD in million	2023	2022
Provisions non-current - interest bearing	23.8	19.3
Total provision	23.8	19.3

Trade payables and other liabilities

USD in million	2023	2022

Trade and other payables Accrued costs for capex	41.4 0.0	31.8 0.0
VAT and other public taxes and duties payables	4.2	2.9
Accrued operating costs	12.0	6.0
Accrued finance costs	1.6	2.8
Other non-interest bearing liabilities	1.5	3.0
Trade payables and other liabilities	60.7	46.5

Specification of provisions

USD in million	2023	2022

On January 1	19.3	20.2
Change in estimate in asset retirement obligation	3.5	-1.8
Net periodic asset retirement obligation costs including net interest	1.0	0.9
On December 31	23.8	19.3

Non-current provisions

During 2023 the Company recorded an increased provision for asset retirement obligations (ARO) of USD 3.5 million. This was primarily due to a change in discount rates. Discount rates decreased compared to the previous year due to fluctuations in market rates. On December 31, 2023 the Company has recorded USD 23.8 million in AROs. These obligations consist of USD 2.5 million to restore leased wastewater containment ponds to conditions specified in the lease agreement and USD 21.3 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, 2023, a one percent increase to the discount rates would decrease the provision by USD 6.3 million, while a one percent decrease to the discount rates would increase the provision by USD 9.0 million.

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.

On December 31, 2022, the AROs represent the present value of estimated future costs discounted at 5.4 percent for 6 years for the wastewater containment ponds. The restoration of the production sites is discounted at 5.7 percent for 37.5 years. Total undiscounted amounts were USD 3.8 million for the ponds, and 144.8 million for the production sites.

Climate related risk has 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 2023. 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).

Note 22 Other operating expenses

USD in million	2023	2022
Freight, postage and transportation	3.8	4.3
Energy and water	56.2	55.0
Lease and rental expenses	1.1	0.6
Total operating, service and maintenance costs	48.1	29.1
Consultancy and auditor fees	22.4	9.4
Own work capitalized on fixed assets	-0.5	-0.3
IT and telecommunications costs	3.7	2.5
Travel and entertainment costs	1.1	0.6
Insurance costs	5.8	4.6
Other operating costs	1.2	1.3
Other operating expenses	142.9	107.1

Note 23 Other income and expenses

USD in million	2023	2022
Restructuring cost and employee termination benefits	0.0	-0.5
Other	0.1	0.0
Employee Retention Credit	6.0	0.0
Insurance proceeds	2.6	0.0
Gains on disposal of non-current asset	0.3	0.0
Total other income and expenses	9.0	-0.5

In 2023 Other income and expense primarily relates a refundable tax credit received from the United States Government and insurance proceeds received from the cleanup and restoration from equipment damaged by a fire in 2022. (see note 21).

Auditor's remuneration

USD in million	2023	2022
Statutory Audit (only relating to statutory auditor)	0.7	0.5
Other assurance services (only relating to statutory auditor)	0.0	0.1
Tax advisory services (only relating to statutory auditor)	0.1	0.0
Other non-audit services (only relating to statutory auditor)	0.0	0.0
Total auditors remuneration	0.8	0.6

Note 24 Employee benefits

USD in million	2023	2022
Salaries	49.1	32.0
Bonus and sales commission - employees	5.0	0.8
Share option expense	-0.6	0.4
Social security tax	3.8	2.2
Defined Contribution	3.5	2.4
Other employee related costs	8.8	6.2
Employee benefit expenses	69.6	44.1

The average number of permanent employees during 2023 was 432. The average number of permanent employees during 2022 was 311.

There were loans provided to employees in the amount of USD 0.1 million on December 31, 2023 (see note 16) and 0.1 on December 31, 2022. There were no guarantees provided to employees on December 31, 2023 or 2022

Note 25 Financial income and expenses

USD in million	2023	2022
Interest income from financial assets not at fair value through profit or loss	3.6	1.9
Total income from financial assets not at fair value through profit or loss	3.6	1.9
Interest expenses for USD Senior Secured Bond	-3.5	-12.7
Interest expenses for Property Tax dispute	-0.6	-0.8
Interest expenses for term loans	-10.8	-0.1
Expensing of up-front fees and costs	-1.8	-0.5
Interest on leaase liabilities	-8.5	-8.6
Calculated/imputed interest other - added to principal - external	-1.0	-0.9
Capitalization of borrowing costs	8.4	3.0
Other expenses from financial assets and liabilities	-0.5	-0.4
Net financial expenses	-18.3	-20.9
Net currency gains/losses	12.7	-9.7
Gain from sale of Yulin JV	135.5	0.0
Net financial items	133.5	-28.7

Interest income in 2023 includes interest on cash deposits of USD 3.6 million

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

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

Currency gains in 2023 were primarily the result of the repayment of capital between REC Silicon companies. This gain was partially offset by a stronger USD compared to NOK on cash balances the company has in NOK.

Additional information to the statement of cash flows on interest, up-front fees, and other costs paid Interest paid is approximately USD 16.5 million in 2023 and USD 22.0 million in 2022.

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

	2023	2022

Profit/loss from continuing operations (USD in million)	30.5	-87.0
Profit/loss from total operations (USD in million)	30.5	-86.8
Weighted average number of ordinary shares in issue (in million)	420.6	418.1
Basic earnings per share from continuing operations (USD per share)	0.07	-0.21
Basic earnings per share from total operations (USD per share)	0.07	-0.21

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 2023 or 2022.

Note 28 Research and development

USD in million	2023	2022

Research and development expense	1.7	1.9
Development capitalized	0.0	0.0
Total research and development	1.7	1.9

Research and development activities consist of improvements to current production processes and equipment as well as activities designed to enhance quality, improve efficiency, and reduce production cost. Research and development expenses in the table above include depreciation of USD 0.4 million in 2023 and 2022.

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, 2023. 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 subsequent to 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 recognized for other assets, liabilities, and investments.

Contractual purchase obligations and minimum operating lease payments on December 31, 2023

USD in million	Total	2024	2025	2026	2027		2028 After 2028

Total purchase of goods, services Total purchase of CAPEX	80.0 39.0	79.9 39.0	0.0 0.0	0.0 0.0	0.0 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	119.1	119.0	0.0	0.0	0.0	0.0	0.0

Purchase obligations consist primarily of long-term contracts for the restart of granular production in Moses Lake as well as 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, 2023 were zero and on December 31, 2022 amounted to USD 1.1 million with USD 0.2 million of restricted cash as security.

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, 2023 and USD 54.9 million on December 31, 2022. The guarantees will decrease from 2024 to 2039 when they will expire in their entirety.

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.

	2023			2022
USD in million	Carrying amount	Max. Exposure		Max. Exposure
Cash and bank (incl. restricted bank accounts)	171.5	171.5	106.0	106.0
Trade receivables and accrued revenues	21.9	21.9	16.8	16.8
Other non-current and current receivables	0.0	0.0	0.1	0.1
Finance receivables and short-term loans	0.0	0.0	0.0	0.0
Total	193.4	193.4	123.0	123.0

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

Geographical	2023	2022	Sector	2023	2022	Industry	2023	2022

Europe	43%	9%	Manufacturing	67%	61%	Electronic	92%	68%
Korea	17%	9%	Wholesale	33%	39%	Solar	8%	32%
Japan	11%	1%	Other	0%	0%	Other	0%	0%
North America	11%	14%
Taiwan	10%	10%
China	4%	54%
Singapore	3%	2%
Other Asia	2%	1%
Total	100%	100%		100%	100%		100%	100%

The table above is calculated with respect to gross trade receivables. The provision for loss on trade receivables is exclusively concentrated on customers in the solar industry in China and Taiwan.

The Group is dependent on a small number of customers. In 2023, three customers represented approximately 55 percent of revenue for the Group. In 2022 four customers represented 57 percent. Since nearly all revenue is from the semiconductor segment, approximately 55 percent of the revenue in 2022 for the Semiconductor segment consisted of three customers and four customers represented 57 percent in 2022. The Solar Materials segment was represented by two customers in 2023 and one in 2022.

Three customers represented approximately 64 percent of total trade receivables for The Group on December 31, 2023 (three customers represented approximately 60 percent on December 31, 2022).

Approximately 69 percent of the trade receivables for the Semiconductor segment consisted of three customers in 2023 and 60 percent in 2022, while approximately 100 percent of the trade receivables for the Solar Materials segment was represented by two customers in 2023 and three in 2022. See note 5 Segment Information above.

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, 2023

		Aging of receivables past due
	Total carrying		< 30	>30<90	>90<365	>365
USD in million	amount	Not due	Days	Days	Days	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
Prepaid Costs	8.7
Total receivables and prepayments	30.7

Analysis of aging of receivables on December 31, 2022

		Aging of receivables past due
	Total carrying		< 30	>30<90	>90<365	>365
USD in million	amount	Not due	Days	Days	Days	Days
Trade receivables	26.4	12.0	4.2	0.6	0.0	9.6
Provision for loss on trade recivables	-9.6	0.0	0.0	0.0	0.0	-9.6
Other non-current and current receivables	0.1	0.1	0.0	0.0	0.0	0.0
Total receivables	16.9	12.1	4.2	0.6	0.0	0.0
Prepaid Costs	6.3
Total receivables and prepayments	23.2

The provision for doubtful accounts includes the impact of adopting IFRS 9 which requires the Company to estimate expected credit losses (ECL) based upon historical experience. The Company has prepared analyses to calculate an ECL estimated at 0.22 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, 2023, approximately 19 percent of the not due receivables were secured by bank guarantees with no past due receivables secured by credit insurance. On December 31, 2022, approximately 33 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 1.1 (-1.1) million calculated on outstanding amounts on December 31, 2023 and 2022.

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 calculated 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 2023 and 2022.

Exchange rate sensitivity on financial instruments on December 31

		Change + 10% compared to functional currencies
USD in million	2023	2022
Financial assets	0.1	5.7
Financial liabilities	-0.1	0.0
Total	0.0	5.7
Of which to equity
USD receivables as part of net investment	0.0	0.0
Rest is to profit or loss	0.0	5.7

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.

Restart of production facility in Moses Lake

The Company restarted FBR production in Q4 of 2023. The company is targeting a ramp to 50 percent operation during Q2 of 2024 and a ramp to 100 percent operation during Q4 2024. First delivery to Hanwha Q Cells is expected in late Q1 or early Q2 2024. At first delivery, REC Silicon will receive a second prepayment from Hanwha Q Cells. (See notes 5 and 10)

Successful execution of the Company's plan to fully ramp production at the Moses Lake facility could require reversal of previous impairment.

Additional impairments and provisions would likely be required if the Moses Lake facility is not successfully ramped to full capacity.

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 entitlement 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 2023 zero share options were granted. In 2018, 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 15.2 for 2018, 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, 2023

Program	Exercise price (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

Options outstanding on December 31, 2022

Program	Exercise price (nok)	No. options	Total fair value (USD million)	Remaining contractual life (year)	Total expensed (USD million)
2018	15.2	342,371	0.1	0.5	0.1
2019	8.1	676,113	0.8	1.5	0.6
2020	3.5	1,015,787	1.5	2.5	1.0
2021	17.5	1,118,923	0.9	3.5	0.4
Total		3,153,194	3.4		2.1

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 also by options exercised. Options forfeited for 2023 and 2022 were 82,210 and 228,500 respectively. During 2023 the total amount of shares exercised were 334,488 from program year 2018, 328,737 from program year 2019, and 329,708 from program year 2020.

The amount recognized in the statement of income for share-based compensation was a credit of USD 0.6 million in 2023 and USD 0.4 million in 2022. On December 31, 2023, USD 0.6 million has been reported in the line other non-current liabilities on the statement of financial position and USD 0.3 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 2023 there was USD 0.7 million in cash payments made with respect to share-based compensation, and USD 0.5 million in 2022.

Note 33 Events after the reporting period

On February 7, 2024 REC Silicon announced that REC Advanced Silicon Materials LLC will be shutting down its polysilicon production capacity at its Butte, Montana facility. The polysilicon business will continue to produce for approximately six to nine months to fulfill polysilicon supply obligations to the company's customers. After the supply obligations are satisfied, the company expects that the workforce in Butte will be reduced accordingly. The company is working out the details with respect to the shutdown and will provide additional information to impacted stakeholders as it becomes available.

Parent company financial statements

REC Silicon ASA

Parent company balance sheet (NGAAP)	120
Parent company income statement (NGAAP)	121
Parent company statement of cash flows
(NGAAP)	122

		123
Note A	Summary of significant accounting principles and general	123
Note B	Equipment and intangible assets	123
Note C	Shares in subsidiaries	124
Note D	Receivables from subsidiaries	124
Note E	Cash and cash equivalents and restricted bank accounts	125
Note F	Interest bearing liabilities	125
Note G	Equity	126

Note H	Employee benefits	126
Note I	Income taxes	127
Note J	Other operating expenses	129
Note K	Interest and currency	130
Note L	Derivatives, other current liabilities	131
Note M	Impairment of financial assets	131
Note N	Research and development	132
Note O	Guarantees and bond	133
Note P	Related parties	133
Note Q	Contingent liabilities	134
Note R	Events after the reporting period	134

Parent company balance sheet (NGAAP)

On December 31 (USD in thousand)	Notes	2023	2022
ASSETS
Non-current assets
Equipment and intangible assets	B	30	30
Investments in subsidiaries	C	133	133
Non-current receivables from subsidiaries	D	336,820	210,000
Total non-current assets		336,983	210,163

Current assets
Other receivables		375	362
Restricted bank accounts current	E	13	214
Total current receivables		388	576
Cash and cash equivalents	E	17,027	90,841
Total current assets		17,415	91,417
Total assets		354,398	301,580

On December 31 (USD in thousand)	Notes	2023	2022
EQUITY AND LIABILITIES
Shareholders' equity
Share capital	G	49,629	49,629
Share premium	G	199,677	199,677
Total paid-in capital	G	249,306	249,306
Other equity and retained earnings	G	-5,223	-60,870
Total shareholders' equity	G	244,083	188,436

Non-current liabilities
Interest-bearing liablities	F	110,000	0
Total non-current liabilities		110,000	0

Current liabilities
Trade payables		15	212
Social security tax, VAT and other taxes		57	30
Interest-bearing liabilities	F	0	109,857
Other current liabilities	L	243	3,045
Total current liabilites		315	113,144
Total liabilities		110,315	113,144
Total equity and liabilities		354,398	301,580

Lysaker, March 20, 2024 Board of Directors

Document is signed electronically

Tae Won Jun Chairman of the Board Dong Kwan Kim Deputy Chair

Vivian Bertseka Member of the Board

Roberta Benedetti Member of the Board Dr. Renate Oberhoffer-Fritz Member of the Board

William K. Levens President and CEO

Parent company income statement (NGAAP)

Year ended December 31 (USD in thousand)	Notes	2023	2022
Revenues		0	0
Employee benefit expenses	H	-215	-159
Other operating expenses	J	-2 485	-2 253
EBIT		-2 700	-2 412
Interest income, external		722	1 813
Interest expense, external	K	-9 920	-13 119
Other financial expenses	K	-8	-9
Net currency gains/losses	K	-4 592	-7 140
Impairment of financial assets	M	72,145	-68 709
Net financial items		58,347	-87 164
Profit/loss before income tax		55,647	-89 576
Income tax expenses from continuing operations	I	0	0
Profit / loss from continuing operations		55,647	-89 576
Profit / loss from discontinued operations, net of tax		0	147
Profit/ loss for the total operations		55,647	-89 429
Profit/loss for the year is distributed as follows
Other equity (uncovered loss)	G	55,647	-89 429
Total distributed		55,647	-89 429

Parent company statement of cash flows (NGAAP)

Year ended December 31 (USD in thousand)	2023	2022
Cash flows from operating activities
Loss before tax	55,647	-89,576
1 Impairment gains or losses on financial assets	-72,145	68,709
Changes in receivables external	-13	-85
Changes in payables	-170	73
Reversal of derivatives and indemnification loan	0	147
Currency effects not cash flow or not related to operating activities 2	183	-7,232
Other items3)	-2,641	7,839
Net cash flow from operating activities	-19,139	-20,125
Cash flow from investing activities
Proceeds from finance receivables and restricted cash	20,208	0
1 Payments of receivables internal	-74,883	-85,009
Net cash flow from investing activities	-54,675	-85,009
Cash flow from financing activities
Increase in equity	0	109,511
Payment of loans	-110,000	-7,086
Proceeds from new loans	110,000	0
Net cash flow from financing activities	0	102,425
Net increase/decrease in cash and cash equivalents	-73,814	-2,709
Cash and cash equivalents at the beginning of the period	90,841	93,550
Cash and cash equivalents at the end of the period	17,027	90,841

¹ Impairment gains and losses on financial assets. See note M.

² The Currency gains and losses are primarily related to bank accounts in NOK revalued.

³ Other items consist of the expensing of up-front loan fees and amortization of interests and other items.

Notes to the Parent company financial statements

Note A Summary of significant accounting principles and general

REC Silicon ASA (the Company) is a holding company with corporate management and financial functions.

The financial statements have been prepared in compliance with the Norwegian Accounting Act and Norwegian generally accepted accounting principles (NGAAP) in effect on December 31, 2023 The Company's reporting and functional currency is in US Dollar (USD).

The reporting currency used in the consolidated financial statements is US Dollar (USD). The consolidated financial statements of the Group have been prepared in accordance with IFRS. The Company's accounting principles are similar to the accounting principles for the Group unless otherwise noted. Financial statement disclosures for the Company that are substantially different from the disclosures for the Group are shown below. See notes to the consolidated financial statements.

Group contributions and dividends that are subject to approval by the Annual General Meeting are recognized according to IFRS in the consolidated financial statements at the time of approval. For the Company's financial statements according to NGAAP, these are recognized in the fiscal year they relate to. Group contributions to subsidiaries are recognized as investment in shares in subsidiaries, net of tax.

Subsidiaries, jointly controlled entities, and associates are carried at the lower of cost or estimated recoverable amount in the Company's financial statements. In the consolidated financial statements, these are consolidated or accounted for using the equity method.

In the Company's financial statements, payments expected to be made during the next 12 months on non-current financial assets or liabilities are reclassified to current financial assets or liabilities.

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

The financial statements of the Company have been approved for issue by the Board of Directors on March 20, 2024 and are subject to approval by the Annual General Meeting scheduled for May 14, 2024.

Note B Equipment and intangible assets

Equipment and intangible assets consist of office equipment and furniture.

There has been no addition and disposal during 2023 and 2022. The tangible assets were fully depreciated on December 31, 2020.

Note C Shares in subsidiaries

Company		Business office	Carrying amount on December 31 (USD in thousand)
	Ownership/ voting right		2023	2022
REC SILICON AS	100%	Bærum	11	11
REC SOLAR AS	100%	Bærum	122	122
Total			133	133

Sub-subsidaries	Ownership/ voiting right	Business office
REC Silicon AS subsidiaries
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

Note D Receivables from subsidiaries

Non-current interest-bearing receivables from subsidiaries are USD loans to the subsidiaries with carrying value USD 336,800 thousand on December 31, 2023 and USD 193,700 thousand on December 31, 2022. In 2023 the Company reversed the impairment of these receivables by USD 158,100 thousand.

In 2022 the Company impaired these receivables by USD 68,709 thousand. These loans are not interest-bearing and is deemed as part of the long-term financing of the US operation. See note M.

Other current receivables consist of receivable/ loan to REC Silicon Pte. Ltd. The Company had in previous years impaired the receivables/ loan to REC Silicon Pte. Ltd due to the subsidiary's financial situation and obligations. In 2023 the impairment of USD 5,208 thousand was reversed as the receivable from REC Silicon Pte Ltd was repaid to REC Silicon ASA. See note M.

Note E Cash and cash equivalents and restricted bank accounts

Cash and cash equivalents consist of bank deposits.

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

On December 31 (USD in thousand)	2023	2022
Current	13	214
Total restricted bank accounts	13	214

On December 31, 2023, current restricted bank accounts consist of USD 13 thousand to secure employees' tax deductions in REC Silicon ASA.

On December 31, 2022, current restricted bank accounts include USD 13 thousand to secure employees' tax deductions in REC Silicon ASA.

See note 14 to the consolidated financial statements for a description of restricted bank accounts.

Note F Interest bearing liabilities

On December 31 (USD in thousand)	2023	2022
Non-current
USD bank loan	110,000	0
Total non-current interest bearing liabilities	110,000	0
Current
USD senior secured bond	0	110,000
Unamortized fees in relation to interest bearing liabilities	0	-143
Total non-current interest bearing liabilities	0	109,857
Total interest bearing liabilities	110,000	109,857

In March 2023 the company entered into a bank loan of USD 110 million from KEB Hana Bank. The loan from KEB Hana Bank was fully guaranteed by Hanwha Solutions, REC Silicon ASA´s major shareholder. In April 2023 the company repaid the REC 04 Bond loan of USD 110 million.

See note 17 to the consolidated financial statements for details of the Company's interest-bearing liabilities.

Note G Equity

USD in thousand		Share capital Share premium	Other equity and retained earnings (uncovered losses)	Total
Equity on January 1, 2022	44 125	95 670	28,559	168,354
Share issue	5 504	104 007	0	109,511
Loss for the year	0	0	-89,429	-89,429
Equity on December 31, 2022	49 629	199 677	-60,870	188,436
Profit for the year	0	0	55,647	55,647
Equity on December 31, 2023	49 629	199 677	-5,223	244,083

On December 31, 2023, REC Silicon ASA had 34,318 shareholders (37,280 on December 31, 2022). The total number of outstanding shares was 420,625,659 on December 31, 2023 and 2022, each with a par value of NOK 1.

Capital increase/private placement

On January 19, 2022, the Company successfully completed a private placement of Equity with gross proceeds of NOK 964 million while issuing 48,213,001 new shares at NOK 20. The new share capital of the Company is NOK 420,625,659, divided into 420,625,659 shares, each with a par value of NOK 1.

Note H Employee benefits

Employee benefit expenses

USD in thousand	2023	2022
Payroll	-184	-152
Social security tax	-31	-7
Pension expense including social security tax	0	0
Other employee related costs	0	0
Employee benefit expenses	-215	-159

The average number of employees measured in man-years was 0.3 during 2023 and 0.0 for 2022. There were no loans or guarantees to employees on December 31, 2023 and 2022.

Payroll includes compensation to Board of Directors. For compensation and shareholdings for Group management and Board of Directors see note 16 to the consolidated financial statements. Additionally, the executive management remuneration report prepared in accordance with the provisions of the Norwegian Public Companies Act will be prepared for the Annual General Meeting in 2024.

Pension plans

On December 31, 2023, and 2022 the Company has one employee in Denmark and no employees located in Norway and had thereby stopped maintaining a defined contribution pension plan for employees. As long as the company had employees located in Norway, the company maintained a contribution plan that fulfilled the requirements of Norwegian law: "Lov om obligatorisk tjenestepensjon".

Note I Income taxes

Recognized income tax expense

USD in thousand	2023	2022

Current income tax benefit (+) / expense (-) for the year	0	0
Total deferred tax benefit (+) / expense (-) for the year	0	0
Changes in estimates related to prior years	0	0
Total income tax benefit (+) / expense (-) for the year in the income statement	0	0

Relationships between income tax expense/

benefit to profit/loss before taxes

USD in thousand	2023	2022

Profit/Loss for before taxes	55,647	-89,429
Tax calculated at domestic tax rate of 22%	-12,242	19,674
1 Expenses not deductible for tax (-) /reversal (+)(permanent differences)	0	0
Impairment gain (loss) (permanent differences) 1	15,872	-15,116
Other permanent differences 2	29,876	16,571
Effects of not recognized deferred tax assets, including reversal of previous years	-33,506	-21,130
Current income tax benefit (+) / expense (-) for the year	0	0
Changes in estimates related to prior years	0	0
Total income tax benefit (+) / expense (-) for the year in the income statement	0	0
Effective tax rate	0%	0%

¹ Impairment gains (losses) of financial assets.

² Other permanent differences consist of income and cost registered in USD financial statement, but not applicable for tax calculation, and income and cost registered in NOK Tax financial statement, but not applicable for the USD financial statement.

Current income tax

USD in thousand	2023	2022

Profit/Loss for before taxes	55,647	-89,429
Impairment gains and losses on shares and loans - permanent differences	-72,145	68,709
Expenses not deductible for tax (+) / reversal (-) (permanent differences)	0	0
Other permanent differnces 1	17,558	-64,854
Changes in temporary differences	23,269	95,913
Basis for income tax before utilization (-) / increase (+) of tax losses carried forward	-24,329	-10,339
Utilization (-) / increase (+) of tax losses carried forward	24,329	10,339
Basis for current tax in the income statement	0	0
Estimated 22 percent current income tax	0	0
Current income tax benefit (+) expense (-) for the year	0	0
Basis for current tax in the income statement	0	0
Cost for capital increase	0	0
Tax loss caried forward	0	0
Basis for current tax in balance sheet	0	0
Current tax asset (+) / liability (-)	0	0

¹ Other permanent differences consist of income and cost registered in USD financial statement, but not applicable for tax calculation, and income and cost registered in NOK Tax financial statement, but not applicable for the USD financial statement.

Specification of temporary differences and tax losses, deferred tax assets and liabilities

USD in thousand	2023	2022
Fixed assets	-14	-25
Up-front fee and Capitalized borrowing cost	0	115
Interest bearing liabilities	0	0
Derivatives	0	0
Net urealized gains on non-current foreign exchange receivables and liabilities	402,977	364,740
Other	-7,864	-8,116
Tax losses carried forward	-547,398	-538,821
Total temporary differences and tax loss carried forward	-152,299	-182,106

Tax percentage	22%	22%
Deferred tax assets (-) / liabilities (+)	-33,506	-40,063
Deferred tax assets not recognized	33,506	40,063
Deferred tax assets (-) / liabilities (+) in the balance sheet	0	0
Change in deffered tax assets (-)/ liabilities (+) in the balance sheet	0	0
Total deferred tax benefit (-)/ expense (+) for the year	0	0

The following are the deferred tax liabilities (+) and assets (-) recognized by the Company and movement during 2023 and 2022

USD in thousand	Balance Jan 1, 2023	Recognized in income	Recognized in equity	Translation differences	Balance Dec 31, 2023
Fixed assets	-25	10	0	1	-14
Up-front fee and capitalized borrowing cost	115	-107	0	-8	0
Interest bearing liabilities	0	0	0	0	0
Net urealized gains on non-current foreign exchange receivables and liabilities	364,740	47,695	0	-9,459	402,977
Other	-8,116	0	0	251	-7,864
Tax losses carried forward	-538,821	-24,329	0	15,752	-547,398
Total	182,106	23,269	0	6,538	-152,299

USD in thousand	Balance Jan 1, 2022	Recognized in income	Recognized in equity	Translation differences	Balance Dec 31, 2022
Fixed assets	-42	14	0	4	-25
Up-front fee and capitalized borrowing cost	550	-386	0	-49	115
Interest bearing liabilities	-10,772	9,871	0	901	0
Net urealized gains on non-current foreign exchange receivables and liabilities	302,065	96,766	0	-34,090	364,740
Other	-9,071	-11	0	966	-8,116
Tax losses carried forward	-590,949	-10,339	0	62,467	-538,821

Total 308,219 95,913 0 30,199 -182,106

Note J Other operating expenses

Specification of other operating expenses

USD in thousand	2023	2022
Operating lease expenses	-21	-17
Audit remuneration	-326	-268
Consultancy fee	-1,812	-771
Insurance	-242	-252
Other operating expenses	-84	-945
Total Other operating expenses	-2,485	-2,253

Future payment obligations

The future aggregate minimum payment obligation is as follows.

		2023			2022
USD in thousand	Operating lease	Other	Total	Operating lease	Other	Total
No later the 1 year	0	69	69	0	71	71
Later than 1 year but not later than 5 years	0	0	0	0	0	0
Later than 5 years	0	0	0	0	0	0
Total	0	69	69	0	71	71

Audit remuneration

USD in thousand	2023	2022
Statutory audit	-264	-134
Other non-audit services	-62	-134
Total auditor's remuneration expensed	-326	-268

Note K Interest and currency

Interest income, internal

The Company conducts financing for the Group. The Company has loans to the US operation. See note D and M. In 2019 the Company and the US borrowers agreed to make addendums to the loan agreements. Due to the borrowers' financial position and outlook for the next two years (2019 and 2020) no interest should be calculated and paid. In 2021 the Company and the borrowers agreed to make new addendums to the loan agreements. Due to the borrowers' financial position and outlook for the next two years (2021 and 2022) no interest should be calculated and paid. The same addendum was applied in 2022 for 2023 and 2024. If the circumstances change during the period, the interest shall be changed back to the interest described in the loan agreements. No interest has been recognized in the period from 2019 to 2023.

Interest expenses, external

Specification of interest expenses, external

USD in thousand	2023	2022
Interest USD senior secured bond and bank loan	-9,920	-13,119
Total Interest expenses, external	-9,920	-13,119

Interest expenses include expensing of upfront fees, see note 25 to the consolidated financial statements.

Currency gains and losses

Specification of net currency gains and losses

USD in thousand	2023	2022
Net currency gains / losses on other - mainly bank deposit	-4,592	-7,140
Total Net currency gains and losses	-4,592	-7,140

Note L Derivatives, other current liabilities

Derivatives

REC Silicon ASA had no derivative contracts in 2023 and 2022.

Specification of other current liabilities

On December 31 (USD in thousand)	2023	2022
Accrued interest on interest-bearing liabilities	0	2,741
Accrued operating costs	243	304
Total Other current liabilities	243	3,045

Note M Impairment of financial assets

2023
USD in thousand	Shares in REC Silicon AS	Receivables to US operations	Receivables on REC Silicon AS	Receivables related to REC Silicon Pte Ltd

Par value / cost on January 1	108,104	1,001,928	85,009	5,208
Accumulated impairment on January 1	-108,093	-808,228	-68,709	-5,208
Carrying value on January 1	11	193,700	16,300	0
Addition	159,872		74,883	0
Repayment	0	-15,000		-5,208
Conversion from loan to equity			-159,872
Impairment / reversal (+)	-159,872	158,100	68,709	5,208
Carrying value on December 31	11	336,800	20	0
Par value / cost on December 31	267,976	986,928	20	0
Accumulated impairment on December 31	-267,965	-650,128	0	0
2022				Receivables
USD in thousand	Shares in REC Silicon AS	Receivables to US operations	Receivables on REC Silicon AS	related to REC Silicon Pte Ltd
Par value / cost on January 1	108,104	1,001,928	0	5,208
Accumulated impairment on January 1	-108,093	-808,228	0	-5,208
Carrying value on January 1	11	193,700	0	0
Addition	0	0	85,009	0

Impairment 0 0 -68,709 0 Carrying value on December 31 11 193,700 16,300 0

Par value / cost on December 31 108,104 1,001,928 85,009 5,208 Accumulated impairment on December 31 -108,093 -808,228 -68,709 -5,208 REC Silicon ASA owns all the shares in REC Silicon AS which owns REC Silicon Inc. that is the holding company of the USA operations. In addition, REC Silicon AS owns all the shares in REC Silicon Pte Ltd.

In 2020 REC Silicon AS impaired the value of the shares in REC Silicon Pte Ltd with USD 12.9 million. As a consequence of the impairment loss in REC Silicon AS, REC Silicon ASA impaired their shares in REC Silicon AS.

In 2023 REC Silicon Pte Ltd repaid the receivables of USD 5.2 million. The repayment was made due to proceeds from the successful sale of shares in Yulin JV. The receivables related to REC Silicon Pte Ltd previously fully impaired, therefore in 2023 had an income of USD 5.2 million related to reversal of impairment of the loan.

REC Silicon AS shares in REC Silicon Inc, were impaired to zero in 2016.

The impairment gain in 2023 and loss in 2022 represents the book value in excess of the fair value of loans to REC Silicon ASA's subsidiaries.

Estimates of the value of US operations were calculated using the fair values of financial assets and liabilities held by the US entities and the net present value of cash flows of operations in the United States.

Note N Research and development

REC Silicon ASA did not conduct any activities associated with research and development during 2023 and 2022.

Note O Guarantees and bond

All Bank guarantees on December 31, 2023 have been terminated. Bank guarantees on December 31, 2022 amounted to USD 1.1 million with USD 0.2 million of restricted cash as security. This includes bank guarantees for the benefit of REC Solar AS of USD 1.1 million with USD 0.2 million of restricted cash as security.

The Company 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, 2023 and USD 54.9 million on December 31, 2022. The guarantees decrease from 2024 to 2039 when they will expire in their entirety.

The Company and some of its subsidiaries where in 2022 jointly and severally liable for certain loans established by the Company.

Relevant loan agreement on December 31, 2022 was as follows:
REC04: USD Senior Secured Callable bond, USD 110 million. The tenor is from April 13, 2018 to April 13, 2023.
The Company and the following subsidiaries of the Company are jointly and several liable for the above-mentioned loan on December 31, 2022: REC Silicon AS, REC Silicon Inc., REC Advanced Silicon Materials LLC, REC Solar Grade Silicon LLC and REC Silicon Pte. Ltd.

In 2023 the bond loan REC04 were repaid and the abovementioned guarantees where removed. The new financing does not have guarantee clauses related to the subsidiaries of REC Silicon ASA, as the loan is guaranteed by Hanwha Solutions, the major owner of REC Silicon ASA.

Note P Related parties

Related parties' transactions for the Company are primarily loans to its subsidiaries (see note D and M)). These loans are included in non-current receivables from subsidiaries (see the balance sheet). Since 2019 there has been no interest income calculation, see note K. Guarantee fees to Hanwha Solutions, REC Silicon ASA´s largest shareholder, are related to financial guarantees from Hanwha Solutions for a USD 110 million bank loan to REC Silicon ASA from KEB Hana Bank in 2023. Group Management and Board of Directors' compensation, ownership of shares and options, loan agreements and guarantees are shown in note 16 to the consolidated financial statements.

Note Q Contingent liabilities

Note R Events after the reporting period

REC had no contingent liabilities on December 31, 2023 and 2022.

Asset Impairment Refer to the section "Risk Factors" in the Board of Director's report, the accounting policies in note 2.8, the critical accounting judgments and key sources of estimation uncertainty described in Note 4, and Note 8 in the consolidated financial statements and parent company financial statements note M. The key audit matter How the matter was addressed in our audit The impairment assessment of the Solar Materials CGU with a total net carrying value of USD 145.2 million is considered a risk area due to recurring net operating losses, increased raw material prices, changes in markets for solar grade polysilicon, changes to the discount rate and uncertainties related to the restart of FBR production at the Moses Lake production facility. The recoverable amount is determined based on value in use calculations which rely on external factors, management's assumptions, and estimated future performance. Key assumptions applied in management's assessment are future revenues (sales prices and sales volume), cost of major inputs, conversion costs and yield ratio (production volume), government grants expected to be received from the US Inflation Reduction Act, and maintenance capital expenditures, in addition to the successful restart of the Moses Lake production facility. Significant professional judgement is required when evaluating whether management's assessments are reasonable and supportable. In the parent company financial statements, impairment assessment resulted in a net reversal of impairment on financial assets of USD 72.1 million. In the consolidated financial statements, no additional impairment or reversal of impairment was recognized. Our audit procedures in this area included: - We evaluated the historical accuracy of management's budgets and forecasts and challenged management on the current year cash flow forecasts as well as the timing of future cash flows; - We evaluated the growth assumptions and management's future business plan assumptions; - We engaged our own valuation specialists to assess the mathematical and methodological integrity of management's impairment models and the discount rates applied with reference to market data; - We evaluated management's sensitivity analysis to determine the impact of reasonably possible changes and by comparing to our own sensitivity analysis; - We considered the impairment disclosures in light of the requirements and if information regarding key assumptions and sensitivities adequately reflected the underlying assets impairment assessments; and - We compared the carrying value of loans to the subsidiaries with the calculated value of the assets, to assess if valuation of loans is consistent with the value of the assets.

Other Information

The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors' report and the other information accompanying the financial statements. The other information comprises information in the annual report, but does not include the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the information in the Board of Directors' report nor the other information accompanying the financial statements.

In connection with our audit of the financial statements, our responsibility is to read the Board of Directors' report and the other information accompanying the financial statements. The purpose is to consider if there is material inconsistency between the Board of Directors' report and the other information accompanying the financial statements and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors' report and the other information accompanying the financial statements otherwise appears to be materially misstated. We are required to report if there is a material misstatement in the Board of Directors' report or the other information accompanying the financial statements. We have nothing to report in this regard.

Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors' report

is consistent with the financial statements and
contains the information required by applicable statutory requirements.

Our opinion on the Board of Director's report applies correspondingly to the statements on Corporate Governance and Sustainability Report.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation of financial statements of the Company that give a true and fair view in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and for the preparation of the consolidated financial statements of the Group that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the EU. Management is responsible for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's and the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern. The financial statements of the Company use the going concern basis of accounting insofar as it is not likely that the enterprise will cease operations. The consolidated financial statements of the Group use the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's and the Group's internal control.
evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's and the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit

Definition of alternative performance measures

An Alternative Performance Measure (APM) is a measure of historic or future financial performance, financial position, or cash flows other than a financial measure defined or specified in the applicable financial reporting framework.

The Company has identified the following APMs used in reporting:

EBIT	EBIT is an acronym for Earnings Before Tax and represents profit/loss excluding income tax expense/benefit, net financial items, and share of profit/loss from investments in associates.	EBITDA Margin	EBITDA margin is calculated by dividing EBITDA by revenues. EBITDA and revenues are reflected on the Company's statement of income, in note 5 Segment Information, and in the financial highlight tables in this report in lines similarly titled.
	EBIT is reflected on the consolidated statement of income on the line titled EBIT. EBIT has been reported as a loss of USD 102.9 million for the year ended December 31, 2023, and a loss of USD 58.3 million for the year ended December 31, 2022.		EBITDA margin has been calculated and is reported in the financial highlight tables for REC Silicon Group, in the key financials table for each operating segment.
EBIT Margin	EBIT margin is calculated by dividing EBIT by revenues. EBIT and revenues are reflected on the Company's statement of income, in note 5 Segment Information, and in the financial highlight tables in this report in lines titled similarly.	EBITDA Contribution	EBITDA contribution is used to describe the contribution of each of the operating segments, other, and eliminations to the Company's total EBITDA. For the operating segments, EBITDA contributions represents revenues less cost of manufacturing excluding depreciation and amortization. For other, EBITDA contribution represents primarily operating costs.
	EBIT margin has been calculated and is reported in the financial highlight tables for REC Silicon Group.		A table reconciling the EBITDA contribution of each operating segment along with other and eliminations to the Company's total EBITDA can be found in note 5 Segment Information.
EBITDA	EBITDA is an acronym for Earnings Before Tax, Depreciation, and Amortization. EBITDA is EBIT excluding depreciation, amortization, and impairment. EBITDA is reflected on the consolidated statement of income on the line titled EBITDA. EBITDA	EBIT Contribution	EBIT contribution is used to describe the contribution of each of the operating segments, other, and eliminations to the Company's total EBIT. For the operating segments, EBIT contributions represents revenues less cost of manufacturing including depreciation and amortization.
	has been reported as a loss of USD 80.5 million for the year ended December 31, 2023, and a loss of USD 34.9 million for the year ended December 31, 2022.		For other, EBIT contribution represents primarily operating costs. A table reconciling the EBIT contribution of each operating segment along with other and eliminations to the Company's total EBIT can be found in note 5 Segment Information.

Equity Ratio	The equity ratio is calculated by dividing total shareholders' equity by total assets. Total shareholders' equity and total assets are reflected on lines similarly titled on the Company's statement of financial position.
	On December 31, 2023, the equity ratio is 13.8 percent and is calculated by dividing USD 76.4 million total shareholders' equity by USD 552.9 million in total assets.
	On December 31, 2022, the equity ratio is 18.9 percent and is calculated by dividing USD 60.4 million total shareholders' equity by USD 319.9 million in total assets.
Net Debt	Net debt is the carrying value of interest-bearing debt instruments less cash and cash equivalents.
	The carrying value of debt can be found in note 17 Borrowings in the table under the caption carrying amount and cash can be found in the statement of financial position on the line titled cash and cash equivalents.
	On December 31, 2023, net debt was USD 182.8 million or USD 283.8 million total carrying value of the Company's debt (from note 17 Borrowings) plus 69.9 million current and non-current lease liabilities (from the statement of financial position) less USD 170.9 million in cash in cash equivalents.
	On December 31, 2022, net debt was USD 78.5 million or USD 115.2 million total carrying value of the Company's debt (from note 17 Borrowings) plus 68.6 million current and non-current lease liabilities (from the statement of financial position) less USD 105.3 million in cash in cash

Nominal Net Debt Nominal Net debt is the contractual repayment values of interest-bearing debt instruments (excluding interest) less cash and cash equivalents.

The contractual repayment values of debt can be found in note 17 Borrowings in the table under the caption contractual repayments including interest and cash can be found in the statement of financial position on the line titled cash and cash equivalents.

On December 31, 2023, nominal net debt was USD 183.2 million or USD 284.2 million contractual repayment values of the Company's debt plus 69.9 million current and non-current lease liabilities (from the statement of financial position) less USD 170.9 million in cash in cash equivalents.

On December 31, 2022, nominal net debt was USD 78.6 million or USD 115.3 million contractual repayment values of the Company's debt plus 68.6 million current and non-current lease liabilities (from the statement of financial position) less USD 105.3 million in cash in cash equivalents.

equivalents.

REC Silicon ASA

Lysaker Torg 5, 3 etg. PO Box 63 1324 Lysaker Norway

About REC Silicon

REC Silicon ASA is a leading producer of advanced silicon materials, supplying high-purity polysilicon and silicon gases to the solar and electronics industries worldwide. We combine nearly 40 years experience and best-in-class proprietary technology to deliver on customer expectations. Our two U.S. based plants have a combined production capacity of more than 30,000 MT of high purity silane gas. REC Silicon is headquartered in Lysaker, Norway and listed on the Oslo stock exchange under the ticker: RECSI.

Phone +47 407 24 086

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REC Silicon

3726_10-k_2024-03-21_d2436e51-a625-4e76-a0b8-0ace583d9ccd.pdf

Annual report 2023

Advancing Materials, Advancing Technology

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CONTENTS

Highlights and key figures

LETTER FROM THE CEO

This is REC Silicon

Silane gas - The core feedstock

A silicon gases company providing enabling materials for the energy transition

The business opportunity

Strategy

Operations

Moses Lake

Butte

Markets

Renewable energy – PV market

Strong impact from IRA

Value chain explosion

PV value chain capacity additions by 2026

The quest for low cost and low carbon

PV manufacturing carbon footprint

Markets

Semiconductor market

Trillion-dollar industry by 2030

Manufacturers struggling to go green

Taking back supply chain control

Semiconductor 2030 outlook

Markets

Energy Storage– Silane gas

Driving battery storage growth

Electric mobility growth

US supply chain response

US battery storage supply chain

Group management

Kurt Levens

Education

Career

Jack Yun

Education

Career

Dylan Jung

Education

Career

Board of Directors

Tae Won Jun

Key Experience

Education

Dong Kwan Kim

Key Experience

Education

Vivian Bertseka Director

Previously

Education

Roberta Benedetti Director

Key Experience

Education

Board of Directors' report

2023 Highlights (compared to 2022)

Business Activities

Strategy and objectives

2023 Summary

Financial highlights

Revenues

Operations

Earnings

Technology, research, and development

Segment information

Semiconductor Materials segment

Key Financials – Semiconductor Materials

Markets

Semiconductor Polysilicon Sales

Financial Performance

Solar Materials segment

Key Financials – Solar Materials

Markets

Financial Performance

Other and Eliminations