The Company was incorporated on 30 June 2020. The Company's audited financial statements for 2023 have

been prepared in accordance with International Financial Reporting Standards (IFRS). Following the admission

to trading on Euronext Growth Oslo in 2021 and Oslo Stock Exchange per 1 July 2022, the Group has report-

ed consolidated financial statements in accordance with IFRS, with the Company as the parent company, in-

cluding quarterly financial statements.

Significant accounting policies

This note provides a list of the significant accounting policies adopted in the preparation of these consolidat-

ed financial statements. These policies have been consistently applied to the previous year presented, unless

otherwise stated.

Basis for preparation

The consolidated financial statements have been prepared in accordance with International Financial Report-

ing Standards (IFRS) adopted by the European Union and associated interpretations, as well as Norwegian

disclosure requirements pursuant to the Norwegian Accounting Act applicable as of 31 December 2023. The

consolidated financial statements were approved by the board of directors on 10 April 2024. The company

was incorporated on 30 June 2020 but did not have any activity before Arendals Fossekompani ASA

(“

AFK

”)

increased the share capital by contribution in kind in form of shares in Tekna Holding AS on 11 March 2021.

The transaction represents a capital reorganization and is not in scope of IFRS 3 Business combinations.

Management has determined that predecessor accounting best reflects the economic substance of the trans-

action, since AFK

’

s ownership and control is not changed as a result of the transaction. The financial state-

ments are based on predecessor values from Tekna Holdings Canada Inc.

‘

s consolidated financial statements.

To be able to provide relevant historical financial information, predecessor accounting is applied retrospec-

tively, and the financial statements are therefore presented based on the assumption that the transaction was

completed 1 January 2019 (opening balance for these financial statements). The financial statements have

been prepared using the historical cost principle, except for financial instruments at fair value through profit

or loss. The Group recognizes changes in equity arising from transactions with owners in the statement of

changes in equity. Other changes in equity are presented in the statement of other comprehensive income.

Preparation of financial statements in accordance with IFRS requires the use of assessments, estimates and

assumptions that influence which accounting policies shall be applied, and influence recognized amounts for

assets and liabilities, revenues, and costs. Actual amounts can deviate from estimated amounts. Estimates and

underlying assumptions are reviewed on an ongoing basis. Changes in accounting estimates are recognized

in the period in which they arise if they only apply to that period. If the changes also apply to subsequent

periods, the effect is allocated over the current and subsequent periods.

Accounting policies

The accounting policies applied in the preparation of the consolidated financial statements are described

below. In case that subsidiaries have used other principles to prepare their separate annual financial state-

ments, adjustments have been made so the consolidated financial statements are prepared according to

common policies.

Principles of consolidation

Business combinations

The acquisition method of accounting is used to account for the acquisition of shares that lead to control

over another company. The Group's consideration is allocated to identifiable assets and liabilities. These are

recognized in the consolidated financial statements at fair value at the date when control is obtained. Good-

will is calculated when the consideration exceeds identifiable assets and liabilities:

•

The consideration transferred; plus

•

Any non-controlling interest in the acquired entity; plus, any gradual acquisition, the fair value of existing

shareholdings in the acquired entity; less

•

Net value (normally fair value) of identifiable net assets included in the transaction

If those amounts are less than the fair value of the net identifiable assets of the business acquired, the differ-

ence is recognized directly in profit or loss as a bargain purchase. If the business combination is achieved in

stages, the investment changes classification from associated company to subsidiary, the upward adjustment

of the existing shareholding at fair value is recognized as a gain in the income statement. A buyout of non-

controlling interests is considered a transaction with owners and does not require a calculation of goodwill.

Non-controlling interests for such transactions are adjusted based on a proportionate share of the subsidi-

ary's equity.

                 

Losses in the parent company

’

s financial statements

When an investment is reclassified from fair value through other comprehensive income to subsidiary or as-

sociated company, the investment

’

s carrying amount at the time control or significant influence is obtained is

used as recognized cost.

Subsidiaries

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

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

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

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

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

Associated companies

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

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

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

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

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

Elimination of intercompany transactions

Intercompany transactions, balances and unrealized gains and losses on transactions between group compa-

nies are eliminated.

Foreign currency translation

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

’

s entities

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

(‘

the

functional currency

’).

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

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

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

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

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

’

s current financing, underlying

operations and reduced ties to AFK.

Transactions and balances

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

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

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

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

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

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

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

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

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

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

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

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

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

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

income.

Group companies

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

presentation currency are translated into the presentation currency as follows:

•

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

balance sheet,

•

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

translated at average exchange rates, and

•

all resulting exchange differences are recognized in other comprehensive income.

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

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

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

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

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

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

                 

Revenue recognition

Revenues from contracts with customers

Under IFRS 15, Tekna recognizes as revenue the agreed transaction price in a contract with a customer at the

time when the Group transfers the control of a distinct product or service to the customer at an amount that

reflects the consideration to which the Group expects to be entitled in exchange for those goods and ser-

vices. For each performance obligation identified at the inception of the contract, it is separately determined

if those performance obligations are satisfied at a point in time or on an over-time basis. Revenue regarding

each performance obligation is recognized when that performance obligation is satisfied. Consequently, rev-

enue is recognized in full upon completion of a contract if it includes only one performance obligation or

more than one performance obligations that are satisfied at the same time. The Group

’

s main revenues come

from the sale of metal powders and delivers plasma systems for powder production of advanced materials.

There are several types of customer contracts depending on what the customer needs. Some contracts may

include only one type of service while other contracts include two or more types of services, hence the trans-

action price will be allocated between different types of revenue depending on the performance obligation.

Transaction price - Sale of metal powders

The Group determines the transaction price to be the amount of consideration which it expects to be entitled

in exchange for transferring the promised goods and services to the customer, net of discounts and sales

related taxes. Sales related taxes are regarded as collected on behalf of the authorities. The Group considers

whether there are other promises in the contract that are separate performance obligations to which a por-

tion of the transaction price needs to be allocated.

Fixed price contracts - Sale of plasma systems for powder production of advanced materials

The Group transfers control of plasma systems over time, and therefore, satisfies a performance obligation

and recognizes revenue over time. The asset has no alternative use and the entity has enforceable right to

payment for performance completed to date. Revenue from manufacturing and distribution of thermal plas-

ma systems are recorded under the percentage-of-completion method. Under this method, contract income

and profits are recognized proportionally with the degree of completion of work when persuasive evidence

of an arrangement exists, the sales price is fixed or determinable and collection is reasonably assured. The

degree of completion is determined using the cost-to-cost method, which consists in comparing the actual

costs incurred with the total expected costs.

Contract balances

Contract balances consist of client-related assets and liabilities. Contract assets relate to consideration for

work complete, but not yet invoiced at the reporting date. The contract assets are transferred to trade receiv-

ables when the right to payment has become unconditional, which usually occurs when invoices are issued to

the customers. When a client pays consideration in advance, or an amount of consideration is due contractu-

ally before transferring of the license or service, then the amount received in advance presented as a liability.

Contract liabilities represent mainly prepayments from clients for unsatisfied or partially satisfied performance

obligations in relation to licenses and services. Contract assets are within the scope of impairment require-

ments in IFRS 9. For contract assets the simplified approach is applied, and the expected loss provision is

measured at the estimate of the lifetime expected credit losses.

Income tax

Income tax on the profit for the period consists of current and deferred tax. Income tax is recognized in the

income statement with the exception of tax on items that are recognized directly in equity or in other com-

prehensive income. The tax effect of the latter items is recognized directly in equity or in other comprehen-

sive income. Current tax is the forecast tax payable on the year's taxable income at current tax rates at the

balance sheet date, and any adjustments of tax payable for previous years less tax paid in advance. Deferred

tax liabilities are calculated based on the balance sheet-oriented liability method taking into account tempo-

rary differences between the carrying amount of assets and liabilities for financial reporting and tax values.

The following temporary differences are not considered: goodwill not deductible for income tax purposes,

the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences

relating to investments in subsidiaries that are not expected to reverse in the foreseeable future. The provi-

sion for deferred tax is based on the expected manner of realization or settlement of the carrying amount of

assets and liabilities, measured at the tax rates in force at the balance sheet date. Deferred tax assets are rec-

ognized only to the extent that it is probable that the asset can be utilized against future taxable results. De-

ferred tax assets are reduced to the extent that it is no longer probable that the related tax asset will be real-

ized. Tax assets that can only be utilized via group contributions from the parent company are not recog-

nized until the contribution has actually been paid and is recognized in the individual companies.

                 

Leases

The company's and the group's leases consist mainly of office space, machines, cars, IT equipment and other

office machines. Assets and liabilities arising from a lease are initially measured on a present value basis.

Right-of-use assets are measured at cost comprising the following:

•

the amount of the initial measurement of lease liability

•

any lease payments made at or before the commencement date less any lease incentives received

•

any initial direct costs, and restoration costs.

Lease liabilities include the net present value of the following lease payments:

•

fixed payments (including in-substance fixed payments), less any lease incentives receivable

•

variable lease payment that are based on an index or a rate, initially measured using the index or rate as

at the commencement date

•

amounts expected to be payable by the group under residual value guarantees

•

the exercise price of a purchase option if the group is reasonably certain to exercise that option,

•

and payments of penalties for terminating the lease, if the lease term reflects the group exercising that

option.

Lease payments to be made under reasonably certain extension options are also included in the measure-

ment of the liability. The lease payments are discounted using the lessee

’

s incremental borrowing rate, being

the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of sim-

ilar value to the right-of-use asset in a similar economic environment with similar terms, security and condi-

tions.

Impairment of assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortization and are test-

ed annually for impairment, or more frequently if events or changes in circumstances indicate that they might

be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate

that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which

the asset

’

s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an as-

set

’

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

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

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

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

the end of each reporting period.

Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on

hand and deposits held at call with financial institutions.

Trade receivables

Trade receivables are recognized initially at the amount of consideration that is unconditional, unless they

contain significant financing components when they are recognized at fair value. They are subsequently

measured at amortized cost using the effective interest method, less loss allowance. See note 8 for further

information about the group

’

s accounting for trade receivables.

Inventories

Raw materials and stores, work in progress and finished goods are recognized at the lower of cost and net

realizable value. Net realizable value is the estimated sales price in ordinary operations, less the estimated

costs for completion and sales costs. Cost is based on an average historical cost for raw material and includes

costs incurred upon procurement of goods and the costs of bringing them to their present condition and

location. For finished goods and work in progress, cost is calculated as a share of the indirect costs based on

normal utilization of capacity.

Financial instruments

Non-derivative financial instruments

Non-derivative financial instruments consist of investments in debt and equity instruments, trade and other

receivables, cash and loans, trade payables and other debts.

Trade and other receivables that fall due in less than three months are not discounted. Non-derivative finan-

cial instruments are measured on initial recognition at fair value plus any directly attributable transaction

costs. After initial recognition, the instruments are measured as described below.

                 

Interest-bearing loans are valued at fair value less transaction costs on initial recognition in the balance sheet.

Instruments are subsequently measured at amortized cost, with any differences between cost and redemp-

tion value recognized over the term of the loan as part of the effective interest rate.

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

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

the financial asset have substantively been transferred.

Financial assets classified as held for trading

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

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

Other

Other non-derivative financial instruments are measured at amortized cost less any impairment losses.

Property, plant and equipment

The depreciation methods and periods used by the group are disclosed in note 10. The assets

’

residual values

and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset

’

s carrying amount is written down immediately to its recoverable amount if the asset

’

s carrying

amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are in-

cluded in profit or loss. When revalued assets are sold, it is group policy to transfer any amounts included in

other reserves in respect of those assets to retained earnings.

Intangible assets

Other intangible assets and development

Development costs that are directly attributable to the design and testing of identifiable and unique software

products controlled by the group are recognized as intangible assets where the following criteria are met:

•

it is technically feasible to complete the product so that it will be available for use

•

management intends to complete the product and use or sell it

•

there is an ability to use or sell the product

•

it can be demonstrated how the product will generate probable future economic benefits

•

adequate technical, financial and other resources to complete the development and to use or sell the

product are available, and

•

the expenditure attributable to the product during its development can be reliably measured.

Directly attributable costs that are capitalized as part of the product include employee costs and an appropri-

ate portion of relevant overheads. Capitalized development costs are recorded as intangible assets and

amortized from the point at which the asset is ready for use.

Development expenditure that does not meet the criteria above are recognized as an expense as incurred.

Development costs previously recognized as an expense are not recognized as an asset in a subsequent pe-

riod.

Amortizations methods and periods Refer to note 11 for details about amortization methods and periods

used by the group for intangible assets.

Trade and other payables

These amounts represent liabilities for goods and services provided to the group prior to the end of the fi-

nancial year which are unpaid. The amounts are unsecured and are usually paid within 60 days of recogni-

tion. Trade and other payables are presented as current liabilities unless payment is not due within 12 months

after the reporting period. They are recognized initially at their fair value and subsequently measured at

amortized cost using the effective interest method.

                 

Borrowings

Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequent-

ly measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the re-

demption amount is recognized in profit or loss over the period of the borrowings using the effective interest

method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to

the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is de-

ferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of

the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized

over the period of the facility to which it relates.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement

of the liability for at least 12 months after the reporting period.

Pensions

For defined contribution plans, the group pays contributions to publicly or privately administered pension

plans. The group has no further payment obligations once the contributions have been paid. The contribu-

tions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized

as an asset to the extent that a cash refund or a reduction in the future payments is available.

Share-based compensation

For share-based compensation by equity instruments granted that do not vest until the employee completes

a specified period of service, it is assumed that the services to be rendered as consideration for the equity

instruments will be received in the future, during the vesting period. Such services are accounted for as they

are rendered by the employee during the vesting period, with a corresponding increase in equity.

Government Grants

Government grants are recognized when there is reasonable assurance that the grant will be received, and

all attached conditions will be complied with. The grants related to an expense are presented as other reve-

nues, not against the expense. The grants related to fixed assets or intangible assets are recorded against the

cost on a systematic basis over the periods that the related costs, for which it is intended to compensate, are

expensed. When the grant relates to an asset, it is presented in the statement of financial position by deduct-

ing the grant in arriving at the carrying amount of the asset. The grant is recognized in the income statement

over the useful life of a depreciable asset as a reduced depreciation.

Contributed equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or

options are recognized as a deduction, net of tax, from the proceeds. On the repurchase of treasury shares,

the purchase amount including directly attributable costs are recognized as a change in equity. Purchased

shares are classified as treasury shares and reduce total equity. When treasury shares are sold, the received

amount is recorded as an increase in equity, and the subsequent gain on the transaction is recognized in

share premium.

Dividends

Provision is made for the amount of any dividend declared, being appropriately authorized and no longer at

the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the

reporting period.

Earnings per share

Basic earnings per share is calculated by dividing:

•

the profit attributable to owners of the company, excluding any costs of servicing equity other than ordi-

nary shares by

•

the weighted average number of ordinary shares outstanding during the financial year, adjusted for bo-

nus elements in ordinary shares issued during the year and excluding treasury shares (note 19).

•

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to

take into account:

•

the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary

shares, and

•

the weighted average number of additional ordinary shares that would have been outstanding assuming

the conversion of all dilutive potential ordinary shares.

Segment information

The Chief Operating Decision Maker (CODM) assesses the financial performance and position of the Group

and makes strategic decisions. The internal financial reporting to the CODM is on a consolidated basis. As a

result, the Group has only one reportable segment. The CODM is identified as the Board of Directors.

                 

Note 2 Revenue from contracts with customers

Accounting principles and information related to external customers are described in the Organization and

accounting principles. There was one customer that represented 17.7 per cent or more of the Group's total

revenues on an annual basis in 2023.

Disaggregation of revenue from contracts with customers

Notes to the Consolidated Financial Statements (continued)

2023

Amounts in CAD 1000

Revenue recognized at a point in time

-

25,692

1,031

489

27,212

Revenue recognized over time

13,677

-

-

-

13,677

Revenue from external customers

13,677

25,692

1,031

489

40,888

Contribution margin

8,572

8,493

675

489

18,230

Contribution margin %

62.7%

33.1%

65.5%

100.0%

44.6%

Revenue from external customers specified per geographical area:

North America

8,914

10,118

515

244

19,791

Europe

2,599

11,873

515

245

15,233

Asia

2,164

3,700

-

-

5,864

Total

13,677

25,692

1,030

489

40,888

2022

Amounts in CAD 1000

Revenue recognized at a point in time

-

18,909

1,521

222

20,652

Revenue recognized over time

6,238

-

-

-

6,238

Revenue from external customers

6,238

18,909

1,521

222

26,889

Contribution margin

2,794

5,677

657

222

9,350

Contribution margin %

44.8%

30.0%

43.2%

100.0%

34.8%

Revenue from external customers specified per geographical area:

North America

1,608

7,204

760

111

9,684

Europe

-

9,827

760

111

10,698

Asia

4,629

1,878

-

-

6,507

Total

6,238

18,909

1,521

222

26,889

Amounts in CAD 1000

2023

2022

Salaries

1,711

1,850

Materials and other costs

836

1,135

R & D Tax credits

-161

-253

Research and Development costs

2,386

2,732

Less: development capitalized

-428

-532

Research expensed

1,958

2,200

                

Note 3 Other income

Accounting principles and information related to grants and other income are described in the Accounting

Principles.

Amounts in CAD 1000

2023

2022

Grant

1,001

755

Gain/loss disposals

-9

12

Other

-

-

Other Income

991

767

Note 4 Remuneration and employee benefits

Amounts in CAD 1000

2023

2022

Salaries

16,853

16,903

Social security contributions

2,857

2,721

Pension costs

504

438

Other benefits

641

738

Capitalized as development, inventories etc.

-3,712

-4,791

Total employee benefit expenses

17,143

16,009

Average number of full time employees

218

219

Note 5

Other operating expenses

Amounts in CAD 1000

2023

2022

Maintenance equipment & buildings

807

831

Marketing, travel and representation costs

1,439

1,616

Consultants and professional fees

1,071

5,717

IT costs

1,217

1,482

Bad debts

4,033

33

Manufacturing overhead costs

1,680

1,156

Total operating expenses

10,248

10,835

Amounts in CAD 1000

2023

2022

Statutory audit

356

374

Other assurance services

38

261

Tax advisory

20

30

Other non-audit services

5

22

Total remuneration to auditor

420

687

Amounts in CAD 1000

2023

2022

Tax payable on ordinary income

303

114

Adjustment for previous years

-

-

Current tax expense

303

114

Deferred tax expense

1,163

-

Total tax expense in the income statement

1,467

114

Reconciliation of effective tax rate

Profit / (loss) before income tax

-13,543

-22,404

Tax based on current ordinary tax rate

-3,589

-5,937

Effect of non-deductible expenses

357

29

Effect of unrecognised tax loss carryforward

4,725

5,908

Effect of changed tax assessments for previous years

-26

114

Total tax expense

1,467

114

Effective tax rate

-10.83%

-0.51%

  

Amounts in CAD 1000

2023

Assets

Liabilities

Net assets

Property, plant and equipment

236

-

236

Intangible assets

-

-1,207

-1,207

Other items

29

-

29

Tax loss carryforward

20,192

-

20,192

Unrecognised tax assets

-20,192

-

-20,192

Recognised tax loss carryforward

942

-

942

Deferred tax asset/liability

1,207

-1,207

-0

Offsetting of assets and liabilities

-

-1,163

-1,163

Net deferred tax asset/liability

1,207

-2,370

-1,163

Amounts in CAD 1000

2022

Assets

Liabilities

Net assets

Property, plant and equipment

-

-208

-208

Intangible assets

-

-1,216

-1,216

Other items

719

-

719

Tax loss carryforward

25,254

-

25,254

Unrecognised tax assets

-24,549

-

-24,549

Recognised tax loss carryforward

705

-

705

Deferred tax asset/liability

1,424

-1,424

0

Offsetting of assets and liabilities

Net deferred tax asset/liability

1,424

-1,424

0

2023

2022

Amounts in CAD 1000

Raw materials

10,336

10,840

Work in progress

386

712

Finished goods

6,886

9,039

Total inventories (net after provision for obsolescence)

17,607

20,592

2023

2022

Amounts in CAD 1000

Balance at 1 january

4,996

3,648

New provisions recognised during the year

3,055

2,218

Provisions reversed

-3,313

-871

Balance at 31 December

4,737

4,996

When producing powder of a specific alloy, the process generates a distribution of size fractions, which are

dedicated to various markets and applications. Some of the size fractions could accumulate in inventory, de-

pending on the demand and on the level of market penetration.

A provision for slow moving inventory is

recorded by Tekna following a periodic review of historical sales data for each fraction as well as the growth

rate of sales and order intake. The provision could fluctuate depending on the level of inventory and the his-

toric performance of sales.

Note 8

Trade and other receivables

2023

2022

Amounts in CAD 1000

Trade receivables from contracts with customers

9,930

5,676

Loss allowance

-4,075

-42

Total

5,855

5,634

ooooo

2023

2022

Balance at 1 january

-42

-26

New write-downs recognised during the year

-4,033

-38

Write-downs reversed

-

22

Balance at 31 December

-4,075

-42

Tekna made a provision of CAD 4.0 million in the fourth quarter 2023 related to one joint venture. This provi-

sion for bad debt on receivables is considered non-recurring. The expense is excluded from Tekna's Adjusted

EBITDA and has no cash effect. The 50/50 joint venture was established with a business partner in 2020 to

produce and market nickel alloy powders. The entry into this market has proven less profitable than antici-

pated due to the market conditions, and the joint venture has been loss making since the inception. The loss-

es have been funded by the joint venture partners. Tekna has reported its share of these losses, an accumu-

lated total of CAD 5.6 million, as loss on associated company. Even though no formal decision has been

made by the joint venture partners, Tekna considers it unlikely that the business activities of the joint venture

will continue unchanged. Tekna expects that the contemplated changes will have a positive impact on cash

flow going forward.

2023

2022

Indirect Tax Receivable

363

599

Refundable deposit on Raw material

489

703

Grant and Investment tax credit receivable

167

440

Loan to employees

934

-

Prepaid Expenses

585

505

Total

2,538

2,246

Total trade and other receivables

8,394

7,880

Amounts in CAD 1000

2023

2022

Total cash at bank

10,148

11,364

Restricted cash

-

-

Note 10 Property, plant and equipment

Property, plant and equipment is recognized at historical cost less depreciation. Depreciation is calculated

using the straight-line method over their estimated useful lives as follows:

Asset

Period

Asset

Period

Building

25 years

Permanent systems incl. development cost

10 years

Equipment incl. development cost

5-8 years

Right-of-Use (RoU) assets

5-8 years

Mobile Infrastructure incl. development cost

25 years

Amounts in CAD 1000

2023

Vehicles,

machinery

and

equipment

Buildings

and land

RoU assets

Total

Year ended 31 December 2023

Cost at 1 January 2023

21,200

12,460

3,115

36,775

Additions, net of tax credits &

Translation adjustments

7,549

880

356

8,785

Grants

-799

-195

-

-994

Disposal

-41

-

-

-41

Cost at 31 December 2023

27,909

13,145

3,471

44,525

Accumulated depreciation at 1 January 2023

11,106

4,904

1,525

17,535

Depreciation

1,928

559

605

3,092

Disposal

-31

-

-

-31

Translation adjustments

28

6

1

35

Accumulated depreciation at 31 December 2023

13,031

5,469

2,131

20,631

Carrying amount at 31 December 2023

14,878

7,676

1,340

23,894

Amounts in CAD 1000

2022

Vehicles,

machinery

and

equipment

Buildings

and land

RoU assets

Total

Year ended 31 December 2022

Cost at 1 January 2022

18,429

11,811

1,132

31,372

Additions, net of tax credits &

Translation adjustments

3,830

758

1,983

6,571

Grants

-1,059

-109

-

-1,168

Disposal

-

-

-

-

Cost at 31 December 2022

21,200

12,460

3,115

36,775

Accumulated depreciation at 1 January 2022

9,735

4,363

701

14,799

Depreciation

1,414

569

823

2,806

Translation adjustments

-43

-28

1

-70

Accumulated depreciation at 31 December 2022

11,106

4,904

1,525

17,535

Carrying amount at 31 December 2022

10,094

7,556

1,590

19,240

                 

Note 11

Intangible assets

Amounts in CAD 1000

2023

Technologies

IP and licenses

Development

Total

Year ended 31 December 2023

Cost at 1 January 2023

10,767

4,978

2,466

18,211

Additions, net of tax credits

-

235

193

428

Grants

-

-1

-49

-50

Cost at 31 December 2023

10,767

5,212

2,610

18,589

Accumulated amortization at 1 January 2023

6,820

2,507

347

9,674

Amortization

718

278

134

1,130

Disposal

-

-

-

-

Accumulated amortzation and impairment at

31 December 2023

7,538

2,785

481

10,804

Carrying amount at 31 December 2023

3,230

2,427

2,129

7,785

Amounts in CAD 1000

2022

Technologies

IP and licenses

Development

Total

Year ended 31 December 2022

Cost at 1 January 2022

10,767

4,689

2,268

17,724

Additions, net of tax credits

-

311

221

532

Grants

-

-22

-23

-45

Cost at 31 December 2022

10,767

4,978

2,466

18,211

Accumulated amortization at 1 January 2022

6,102

2,248

157

8,507

Amortization

718

259

190

1,167

Disposal

-

-

-

-

Accumulated amortzation and impairment at

31 December 2022

6,820

2,507

347

9,674

Carrying amount at 31 December 2022

3,948

2,471

2,119

8,537

Estimated useful lives

15 years

15 years

10 years

Intangible assets are recognized at historical cost less amortization. Amortization is calculated using the

straight-line method to allocate the cost over their estimated useful lives. Intangible assets with definite useful

life consists of acquired technology, internally generated intangible assets arising from development costs as

well as licenses for software. Useful life varies between four and ten years.

If there are indications of impairment for the intangible assets with defined useful life, an impairment test is

performed. For 2023, there are no such indications.

Development cost is recognized as an asset when it is identifiable and the company has the power to obtain

the future economic benefits following from the underlying resource and to restrict the access of others to

those benefits.