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20
2
1
FOR BETTER
EXPERIENCES
poLight ASA
Annual Report
Annual Report 2021
Page 2
Contents
This is poLight .................................................................................................................................................... 3
Message from the CEO ...................................................................................................................................... 6
Board of directors .............................................................................................................................................. 7
Management ..................................................................................................................................................... 8
Investor information .......................................................................................................................................... 9
Board of directors’ report ................................................................................................................................ 12
Corporate governance report .......................................................................................................................... 21
Group financial statements ............................................................................................................................. 30
poLight ASA financial statements .................................................................................................................... 64
Independent auditor’s report .......................................................................................................................... 78
Contact details ................................................................................................................................................. 83
Annual Report 2021
Page 3
THIS IS POLIGHT
poLight ASA is a Norwegian company, headquartered in Horten, which has introduced a unique optical lens
to the market for both consumer devices and professional applications. The new lens replicates the lens of
the human eye, enabling new user experiences and easing the implementation of autofocus functions in
various applications.
poLight’s patented, proprietary technology offers considerable benefits, such as extremely fast focus,
compact xy-dimension, no magnetic interference, low power consumption and constant field of view. These
features, and others, open the way for its use in a multitude of as yet unimagined ways.
poLight has employees and long-term consultants in Norway, Finland, France, UK, Russia, China and Taiwan,
and is also represented in South Korea and Japan. Since the company was founded in 2005, it has acquired
world-class expertise in optics, polymers and MEMS technology. The poLight team comprises highly skilled
researchers and technical specialists, all aiming to develop world-leading imaging technologies.
Instant
focus
Small
real
estate
Constant
field of
view
+
+
Extremely low
power
consumption
+
OEMs
Annual Report 2021
Page 4
Technology
The company has developed and patented TLens

– a tuneable optical Lens, which outperforms today’s
standard Voice Coil Motor (VCM) lens in that it offers instant focus, small size, low power consumption, stable
field of view and no magnetic interference.
The poLight lens is constructed around a piezo element (pzt film), which is placed on a thin glass membrane
and acts as an actuator. A patented polymer is sandwiched between two high-quality glass layers.
The piezo material on the thin glass membrane is designed to spherically deform the polymer when a voltage
is applied to it. This structure offers a tuneable lens of high optical quality. When the piezo is in standby
mode, no force is applied to the thin glass and light passes through the two glass components, and the
polymer, without deviation. When a voltage is applied, the piezo actuator will immediately force the thin
glass membrane to bend accordingly. This generates a perfect lens, and an optical power, which focuses the
light rays. Due to the optical matching between the glass membrane, the polymer and the supporting glass,
and poLight’s unique anti-reflective coating, the optical transmittance is optimised for the visible spectrum.
Other coatings can be applied to change the characteristics of the product. The TLens can either be used on
top of a fixed-focus camera module (i.e. add-on concept) or integrated as part of the lens stack (i.e. add-in
concept).
Product portfolio
Based on the TLens technology platform (see above), poLight has launched the TLens

Silver and TLens

Silver Premium, as well as the related ASIC driver (PDA 50), which controls the supply of variable voltage to
all TLens

products and makes them change focus. TLens

Platinum will be the next product to be developed.
From an application perspective, the main difference between the various TLens

products is that they can
be used with different sensor formats (size of the image sensor) due to different aperture sizes (the
transparent “opening” in the actuator). The TLens

can be supplied as a “packaged” version to enable quick
integration/testing.
The TLens

Silver Premium is considered suitable for both consumer and industrial products, whereas the
TLens

Silver is best suited for industrial applications where optical range is important.
Annual Report 2021
Page 5
Supply Chain
poLight is fabless and uses partners for most manufacturing processes, except for the polymer, which is
produced at the company’s headquarters in Norway. STMicroelectronics is poLight´s manufacturing partner
for the MEMS actuator, utilising their thin film piezo technology in an 8-inch semiconductor fabrication plant
in Italy. Polymer and wafers with actuators are shipped to manufacturing partners in the Philippines and
Taiwan, which assemble the complete TLens

products and ship them to camera module vendors.
Market
poLight’s TLens technology is suitable for a wide variety of applications, particularly those where there is a
need for compact and high-quality autofocus solutions that benefit from high speed, small size and low power
consumption. Such applications include, but are not limited to, smartwatches, smartphones, augmented
reality (AR) glasses, other wearables/IoT, industrial scanners, readers and sensors, and medical equipment.
Smartphones and wearables
• Large addressable market for
which billions of cameras are
produced each year
• 1.5 billion phones per year with
1 front camera and an average
of 3 back cameras
• Potential addressable market for TLens®/poLight
technology estimated at 3 billion units per year
Barcode/Industrial
• Evolving from 1D laser to 2D
imaging barcode readers
• Lasers replaced by camera
systems, where autofocus
will improve efficiency
• Barcode technology is
spreading to new industries
• OEM scan engine vendors today are increasingly
looking to enable machine vision capabilities on
their current offerings
Augmented Reality (AR)
• AR is expected to grow
significantly, as the technology
is rapidly expanding beyond
entertainment and gaming to
an increasing number of
industrial, commercial,
educational applications, and eventually consumer
devices
Other
• New opportunities are
emerging that could
represent significant
potential
• Video conferencing and
endoscopy are just two
examples of new opportunities for poLight
technology
From Gel > MEMS Wafer > TLens® > Camera module > OEM
Camera
Module
Suppliers
OEMs
Annual Report 2021
Page 6
MESSAGE FROM THE CEO
2021 was another busy year, with a high level of activity on several customer cases resulting in four design-
wins and good progress on several Proof of Concept (PoC) projects. The opportunity pipeline is promising.
The design-win related to the augmented reality (AR) product is of strategic importance for the company.
The activity and opportunity pipeline we see in this market segment is impressive. The technical attributes
of TLens

, its speed, compactness, low power consumption and no gravity sensitivity, are viewed as key for
AR applications.
Smartphone-related activity has been high. Together with our customers, we are working hard to mature
cases and qualify TLens

for commercial use. This is a very demanding process, requiring much effort and
resources. We have made encouraging progress, even though there are hurdles still to be overcome. Making
our supply chain ready for various applications is also demanding. Most of our available resources are
currently engaged in the above-mentioned efforts. We are therefore strengthening our organisation in order
to handle the predicted increase in activity, both with respect to supporting and maturing customer cases
and handling technical and supply chain challenges.
The organisation is working hard under a lot of pressure, so I would like to take this opportunity to thank the
entire poLight team. We are all very motivated to do everything possible to further develop a world-class
tuneable optics company and create shareholder value.”
Dr Øyvind Isaksen
CEO, poLight ASA
XUN
Smartwatch
Max Pro
XIAOMI Mi
Bunny 4 Pro
smart watch
MAXHUB
UC W20
Honeywell
EX 30 barcode
scanner
Augmented reality
– world-facing camera
Machine Vision
– direct marking reading
Barcode reader
– assembly line
Annual Report 2021
Page 7
BOARD OF DIRECTORS
Ann
-
Tove Kongsnes
Chair
Ann-Tove Kongsnes is an Investment Director at
Investinor AS. Kongsnes has over her career
gained extensive experience from investments,
development, M&A, IPO’s and exits of technology
companies. Prior to this, she worked for 7 years
with international marketing, and was formerly a
Director of Marketing and Operations. Kongsnes
has extensive board experience, and currently
serves on the boards of 6 of Investinor’s portfolio
companies in addition to 4 Chair/member seats in
Nomination Committees. She holds an MSc in
Economics and Business Administration from HIB
and took the Advanced Program in Corporate
Finance at NHH.
Thomas Görling
Board member
Thomas Görling is a Senior Investment Director at
Stiftelsen Industrifonden (Sweden) with a
comprehensive involvement in building successful
technology companies. Representing
Industrifonden, he has been engaged in a number
of portfolio company boards, at present
Medtentia International Ltd Oy (Finland) and
eBuilder AB (Sweden). Before joining
Industrifonden in 1998, Mr Görling held
management positions within the European
optical instrument and systems industry. Thomas
holds a Master of Science from the Royal Institute
of Technology in Stockholm, and studied business
economics at Stockholm University.
Grethe Viksaas
Board member, Independent
Grethe Viksaas has a long career from the
Northern European managed service provider
Basefarm AS. First as founder and CEO, and later
as executive chair and member of the board of
directors. Prior to Basefarm, Ms Viksaas served
as CEO for SOL System AS and in several
management positions in IT companies. She has
experience from numerous board positions,
including Telenor ASA. She is currently a non-
executive director on the boards of Link
Mobility Group Holding ASA and Crayon Group
Holding ASA. She also serves as Chair of the
Board in No Isolation AS and Farmforce AS. Ms
Viksaas has a master's degree in computer
science from the University of Oslo.
Svenn
-
Tore Larsen
Board member, Independent
Mr. Larsen is an Electronic Engineer from the
University of Strathclyde, UK. He was
appointed Chief Executive Officer of Nordic
Semiconductor in February 2002. Mr. Larsen
has broad international experience in the
semiconductor business, previously as Director
for the Nordic region for Xilinx Inc. He has also
been working at Philips Semiconductor.
Dr Juha Alakarhu
Board member, Independent
Juha Alakarhu is the VP of Imaging at Axon in
Tampere, Finland. He runs the Axon R&D office
in Finland and is responsible for the imaging
system for Axon camera products. Dr
Alakarhu’s entire career has been devoted to
developing cameras. Before joining Axon in
2018, he worked for Nokia and Microsoft,
where he developed several pioneering camera
solutions, such as oversampling (the 41-
megapixel camera), optical image stabiliser,
and virtual reality technology. Juha Alakarhu
holds a PhD from Tampere University of
Technology.
Annual Report 2021
Page 8
MANAGEMENT
Dr Øyvind Isaksen
Chief Executive Officer
Øyvind Isaksen has been CEO of poLight since
August 2014. He has previously held several
CEO positions, most recently in the publicly
listed company Q-Free ASA, which he left in
January 2014, after 7 years as CEO. Øyvind
Isaksen holds a PhD in Applied Physics.
Pierre Craen
Chief Technology Officer
Pierre Craen has more than 20 years’ experience
in opto-mechanical systems engineering. Prior to
joining poLight, he managed product development
teams at Varioptic, Barco and Motorola/Symbol.
Mr Craen holds an MSc in Optical Engineering
from Sup-Optic, as well as an MSc in Applied
Physics.
Alf Henning Bekkevik
Chief Financial Officer
Alf Henning Bekkevik has a background from
Arthur Andersen (E&Y), Wallendahl, Fjord
Line, Grenland Group, and, most recently, as
VP Finance for Wood Group Norway AS. He
holds a master’s degree in business &
economics (Siviløkonom) from NHH, and is a
certified public accountant.
Marianne Sandal
Chief Operating Officer
Marianne Sandal has more than 15 years’
experience heading worldwide operations in
Nera ASA (telecommunications) and Q-Free ASA
(intelligent transportation systems). Ms Sandal
holds a BSc in Mechanical Engineering, in addition
to courses in economics and management from
BI Norwegian School of Management.
Annual Report 2021
Page 9
INVESTOR INFORMATION
Share price development
poLight ASA (PLT) has one class of shares. Its shares were listed on the Oslo Stock Exchange on 1 October
2018 at NOK 50 per share. The company had 10,385,096 shares outstanding at the close of 2021, each with
a nominal value of NOK 0.20.
In 2021, the Group’s share price rose from NOK 83.80 per share at the beginning of the year to NOK 186.40
at close. During the year, the share price varied between NOK 83.80 and NOK 253.00 per share. In total,
15,597,290 shares were traded in 2021, equivalent to 150% of the shares outstanding.
Major shareholders and voting rights
poLight had 6,876 shareholders registered in the Norwegian Central Securities Depository (VPS) as at 31
December 2021. The 20 largest shareholders owned shares representing 51.4% of the share capital. Non-
Norwegian shareholders owned 22.8% of the shares. All the shares registered by name carry equal voting
rights. The shares are freely negotiable.
0
200
400
600
800
1 000
1 200
1 400
0
50
100
150
200
250
300
Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21
PLT OSEBX
OSEBX
PLT
Annual Report 2021
Page 10
poLight shareholders as at 31 December 2021
Ordinary
shares
Share-
holding
Voting
rights
% %
Investinor Direkte AS
1 779 858
17,1 % 17,1 %
Stiftelsen Industrifonden
1 048 825
10,1 % 10,1 %
Nordnet Bank AB (nominee)
449 476 4.3 % 4.3 %
Nordnet Livsforsikring AS
425 822
4,1 % 4,1 %
ABN AMRO Global Custody Services (nominee)
390 101
3,8 % 3,8 %
VPF Pareto Investment
157 109
1,5 % 1,5 %
VPF Nordea Avkastning
155 615 1,5 % 1,5 %
VPF Nordea Kapital
113 988 1.1 % 1.1 %
LHH AS
100 000 1,0 % 1,0 %
Wiseth Holding AS
89 500
0,9 % 0,9 %
J.P. Morgan Bank Luxembourg S.A. (nominee)
74 528
0,7 % 0,7 %
Danske Bank A/S (nominee)
73 654
0,7 % 0,7 %
VPF Nordea Norge Plus
72 507
0,7 % 0,7 %
Stefan Sveen
66 500
0,6 %
0,6 %
Saxo Bank A/S (nominee)
60 686
0,6 % 0,6 %
Fjellstuens Eftf. AS
59 500
0,6 % 0,6 %
Kjell Mossefin
57 358
0,6 %
0,6 %
Trond Andersen
55 960
0,5 % 0,5 %
Asbjørn John Buanes
55 731
0,5 % 0,5 %
Erik Schellhorn
53 801
0,5 %
0,5 %
Total number of shares owned by top 20 shareholders 5 340 519 51.4% 51.4%
Number of shares owned by other shareholders 5 044 577 48.6% 48.6%
Total number of shares 10 385 096 100.0% 100.0%
An overview of the 20 largest shareholders is available on the poLight website, updated each week.
Employee share programme
The Board is authorised to issue shares through share option schemes up to a total nominal value of NOK
182,564, equal to 912,820 shares. In 2021, 83,515 shares were issued in order to fulfil the obligation to
provide shares following the exercise of share options. As at 31 December, 809,173 share options (equal to
7.8% of shares outstanding) were outstanding, all at a weighted average strike price of NOK 62.10 per share.
Corporate actions/events Date
Follow-up purchase order for barcode scan engine product 11.03.2021
Webcam launched with advanced TLens® autofocus function
06.04.2021
Received purchase order for web camera product
07.04.2021
Received another purchase order for web camera product
21.04.2021
TLens® confirmed to be used in a machine vision product
18.05.2021
Smartphone project cancelled due to portfolio changes
29.07.2021
Annual Report 2021
Page 11
Follow-up purchase order for barcode scan engine product
09.08.2021
Purchase order received for mass production preparation for a surgical device
20.08.2021
Private Placement successfully raised a total of NOK 125 million
13.09.2021
Additional purchase order received related to surgical device
21.09.2021
Subsequent offering raised gross proceeds of NOK 12.8 million
21.10.2021
Design-win confirmation from first AR customer
01.12.2021
Awarded a barcode design-win for manufacturing line applications
07.12.2021
poLight ASA won its VAT appeal
16.12.2021
Dividends and dividend policy
poLight is focused on developing and commercialising its technology and intends to retain any future
earnings in the foreseeable future to finance development activities, operations and business growth. The
company has not previously distributed any dividends to its shareholders and does not expect to do so in the
foreseeable future. Any future decision to pay a dividend will depend on the company's financial position,
operating profit and capital requirements.
Analyst coverage
poLight does not currently have analyst coverage. Any changes will be updated on the company’s website
www.polight.com.
Financial calendar 2022
Date Event
1
8
February
2022
Quarterly Report
–
Q4
2021
2
7
April
2022
Annual report
2021
12 May 2022 Quarterly Report – Q1 2022
2
5
May
2022
Annual General Meeting
18 August 2022 Half-yearly Report 2022
03 November 2022 Quarterly Report – Q3 2022
1
6
February
202
3
Quarterly Report
–
Q4
2022
Further information can be found on the company’s website www.polight.com and at www.newsweb.no.
poLight’s IR policy can be found at www.polight.com.
Annual Report 2021
Page 12
BOARD OF DIRECTORS’ REPORT
Overall progress in 2021 has been encouraging. poLight´s TLens

was selected for inclusion in four new
products, representing both consumer and professional applications, confirming the versatility and market
potential of poLight’s unique technology. There was a high level of activity related to smartphone and
augmented reality (AR) throughout the year, which has led to important business opportunities being
explored.
Corporate events in 2021
At the AGM held on 26 May 2021, Ann-Tove Kongsnes was elected as the Board’s chair for the remaining
year, replacing Eivind Bergsmyr. Grethe Viksaas, Svenn-Tore Larsen and Juha Alakarhu were re-elected for
another two years and Thomas Görling was elected for two years as a new board member. Thomas Görling
is a Senior Investment Director at Stiftelsen Industrifonden (Sweden) with a comprehensive involvement in
building successful technology companies. Before joining Industrifonden in 1998, Mr Görling held
management positions within the European optical instrument and systems industry.
The AGM also appointed Thomas Wrede Holm for another two years as the chair of the company’s
Nomination Committee.
On 16 June 2021, Grethe Viksaas became a member of the Audit Committee, replacing Eivind Bergsmyr.
In the second half of 2021, poLight successfully raised NOK 138 million, including a subsequent offering of
approximately NOK 13 million, through the issue of new shares priced at NOK 110 per share.
Annual Report 2021
Page 13
In December 2021, Norway’s Tax Appeals Board issued a final decision and upheld the appeal filed by poLight
in 2018 against the Norwegian Tax Administration’s decision to exclude the company from the VAT register
and demand payment of VAT deductions with effect from January 2013. Accordingly, NOK 12.4 million was
recognised in the fourth quarter 2021. The outstanding amount was received in January 2022.
Manufacturing and operations
poLight works primarily with two categories of sub-contractors – a MEMS/wafer supplier (ST
Microelectronics (ST) in Italy) and assembly partners. While ST produces the wafers/actuators, the assembly
partners assemble the complete product. The polymer (i.e. lens material) is produced at poLight’s
headquarters.
poLight collaborates with two assembly partners in Asia. The focus has been on yield-improvement initiatives
and securing supplies for existing and new customer projects. The targeted monthly assembly capacity is
planned to exceed 1 million towards the end of 2022. Material flow (e.g. wafers) and final test capacity are
planned accordingly. Push out–pull in is continuously evaluated depending on the market situation and
capacity availability.
ST has been, and is still, processing a backlog of wafers ordered by poLight, which is scheduled to be cleared
by the end of 2022. Important projects designed to improve the optical performance of the TLens

were
initiated during the year.
Lead time and capacity constraints in the industry remain challenging and require long-term commitments
regarding materials and capacity.
Product development
During most of the year, a significant portion of the company’s R&D resources were devoted to supporting
ongoing customer projects and operational activities related to final test equipment and yield-improvement
processes. On customer-related projects, the focus was to support aspects of TLens

integration, running
and analysing reliability tests for smartphone cases, and implementing product improvements.
Furthermore, poLight has engaged in discussions with smartphone-related vendors concerning new and
advanced design concepts based on poLight’s existing products and its technology platform in general.
Market
Customer-related activities continued at a high level during the whole year. poLight is actively engaged in
several segments. This includes consumer market devices, such as smartphones and accessories, as well as a
broad range of professional applications, such as barcode readers, medical devices and AR. Interest in our
solutions remains high, and the company continues to make progress on several projects with potential
customers in these segments. TLens

technology is increasingly being recognised by a wide range of potential
customers. Over time, this is expected to develop into a diversified revenue base for poLight.
Consumer market
The new camera module concept, based on add-in TLens

design, is continuing to attract strong interest. This
camera module concept has the potential to become a widely used solution for selfie cameras and may
represent a route to the main camera (back camera) for TLens

. During the year, several Proof of Concept
(PoC) projects, with OEMs and camera module (CM) vendors, made progress. Customers show considerable
enthusiasm for the technology, and significant investments have been made to qualify the use of TLens

.
Annual Report 2021
Page 14
Customer requirements are stringent and a significant amount of company resources has been allocated to
these cases.
At the end of the year, poLight’s TLens is being used in 11 ongoing Proof-of-Concept (PoC) projects relating
to the consumer market, while 24 have been completed – a total of 35 projects. AR consumer-oriented cases
account for four of the ongoing and two of the completed PoCs. Eight PoCs are in the planning stage.
Augmented Reality (AR) market
During the last quarter of the year, it was announced that the company had received a design-win
confirmation, and first mass production purchase order, related to an AR product. The product is expected
to go on sale in 2022.
Currently, TLens

is being considered by several other market players for use in next generation AR headsets,
and testing/prototype building is continuing. TLens’ low power consumption, no gravity sensitivity, high
speed and compactness are highlighted as key technical benefits. Currently, the company is engaged in three
projects (design-ins) and eight ongoing PoCs. In addition, four OEMs are considering starting PoCs. The
ongoing projects (design-ins) are all related to professional use cases, i.e. low volume, and two of them have
the potential to conclude in 2022. Four of the ongoing PoCs target the consumer market (i.e. higher volume).
The use case for TLens® mainly relates to world-facing cameras, but the company is also involved in a laser
display application.
The AR market is entering a very important phase, and poLight expects to see several companies releasing
new AR products in the coming years. Most of the initial customer cases relate to the professional/enterprise
market, so the initial volumes are relatively low. It is expected that over time AR devices will address the
consumer market, prompting a significant increase in demand. However, this is likely to be some years down
the road.
Industrial market
During the year, the company announced two new design-wins related to barcode reading and received two
follow-up orders for the EX30 from Honeywell.
The company is currently involved in two projects (design-ins) and six ongoing PoCs (of which two are for
barcode applications), while as many as nine OEMs are planning PoCs (four of which are barcode related).
poLight will continue to actively explore this important market, which is expected to be a significant gross
margin contributor in the longer term.
Other applications
In other application areas, the company achieved one design-win (Kavli Institute for Systems Neuroscience
and Centre for Neural Computation, a microscope for internal use), and one design-in related to a compact
surgical device that is due to go on sale in 2022. In addition, there are five ongoing PoCs and eight planned
PoCs.
The medical/science area is currently the area of highest activity within this grouping. In addition to some
surgical equipment cases, several cases like Kavli’s are now maturing. The company sees this activity primarily
as important for brand building and as a contribution to important research.
Annual Report 2021
Page 15
Sustainability
poLight aims to be a responsible company with regard to working conditions, human rights, the environment
and anti-corruption efforts. The company promotes a healthy, safe and fair working environment in
accordance with applicable laws and regulations, including the UN Global Compact. poLight has established
a code of conduct as an initial step in developing formal guidelines, principles, procedures and standards
related to corporate social responsibility. poLight is not regulated by any environmental permits or regulatory
mandates.
Management carries out an annual ESG (environmental, social and governance) assessment, including a risk
assessment, which is subject to evaluation by poLight ASA’s Board of Directors. The top three risks that are
of importance to both stakeholders and poLight are:
1. Quality risks – customer satisfaction
To ensure quality in customer deliveries, poLight makes significant efforts to support the customer in the
integration of the TLens

as well as thoroughly testing of the products before shipping.
2. Competence risks – employee attraction
Research, development and manufacturing of TLens

technology requires a high level of competence.
To retain and attract new employees in an organic growth phase, it is therefore extremely important for
poLight to be perceived as an exciting and competitive employer.
3. Supply chain risks
poLight places great emphasis on qualifying and carrying out continuous improvement processes
together with manufacturing partners to ensure the quality, cost efficiency and robustness of the supply
chain. While managing supply chain partners in general is demanding, it is particularly complex when
preparing for various ramp-up scenarios in today’s challenging global supply chain situation.
The company is increasingly aware of its role in contributing to the UN Sustainable Development Goals. As
an example, poLight’s products are already in use in medical scientific equipment and hence contributes to
important research benefitting the greater society. From a business perspective this is not short- or medium-
term key for the company, but important to support for other reasons mentioned above. Also, poLight´s
technology might be used in compact surgical devices making surgical procedure safer and more efficient.
Organisation
poLight had 21 full-time employees and one part-time employee at the close of 2021, compared to 23 full-
time and no part-time employees in 2020. In addition, 10 consultants were engaged on long-term contracts,
compared with four in 2020. The employees and consultants were located in eight different countries and
represented 10 different nationalities. Women made up 22% of the workforce, compared with 26% in 2020.
poLight is committed to being a healthy workplace, which provides equal opportunities for development to
all employees, irrespective of gender, ethnicity or other characteristics.
poLight’s code of conduct states that: “poLight expects dedicated employees, who treat others with respect
and maintain open communications. There shall be no discrimination or harassment on the grounds of age,
gender, disabilities, race, sexual orientation, ethnic origin, religion or political affiliation. poLight shall be an
attractive workplace with an inclusive working environment. poLight expects its employees not to act in ways
that could harm the poLight brand. When we are working in cultures other than our own, we treat everyone
– individuals as well as organisations – with respect, and act in accordance with national laws and regulations.
We also pay attention to local etiquette and values in the countries where we are working. In meetings with
contacts outside poLight, we behave with professionalism and courtesy. poLight supports and respects
Annual Report 2021
Page 16
internationally recognised human rights, including those set out in the International Labour Organization’s
conventions. The company respects the right to freedom of association and opposes any form of
child labour, forced labour or discrimination, and requests all representatives and suppliers to abide by the
same principles. All employees, partners, etc., are made aware of these guidelines.”
poLight is committed to the health, safety and welfare of its employees and their families, and its customers.
Sickness absence came to 0.7% in 2021, compared with 2.2% in 2020. Sickness absence remains well below
the Norwegian national average of approximately 6.4% (2020: 6.2%). No work-related accidents caused
personal injuries or material damage in 2021.
Liability insurance
Members of poLight ASA’s Board and management are covered by directors and officers liability insurance
provided by AIG. The insurance also includes poLight’s subsidiaries. The Board considers the coverage to be
reasonable.
Financial development, poLight Group
The Group’s consolidated revenue in 2021 totalled NOK 10.0 million, compared with NOK 3.0 million in 2020.
The revenue reflects sales of TLens

and ASICs for commercial use and sample deliveries of TLens

and ASICs
for customer development projects.
Cost of sales totalled NOK 3.9 million in 2021, compared with NOK 0.7 million in 2020.
R&D expenses amounted to NOK 25.4 million, up from NOK 20.4 million in 2020. No development
expenditures have been capitalised in the past two years. Expensed R&D costs include R&D management,
patents, improvements of the existing TLens, feasibility study of new concepts, and costs related to
integration of TLens in new customer applications/products.
Sales and marketing expenses totalled NOK 7.2 million, up from NOK 5.4 million in 2020. Operational/supply
chain expenses totalled NOK 9.1 million, up from NOK 8.0 million in 2020.
Administrative expenses totalled NOK 6.9 million, down from NOK 7.7 million in 2020. As a result of the
positive outcome of the VAT appeal, NOK 11.6 million was recognised as a cost reduction in 2021. In 2020,
as a result of being re-registered in the VAT register, VAT refunds of NOK 8.2 were recognised, whereof NOK
7.6 million was recognised as a reduction of administrative expenses.
Depreciation and amortisation amounted to NOK 11.9 million, down from NOK 12.1 million in 2020.
The Group made an operating loss of NOK 54.3 million in 2021, compared with an operating loss of NOK 51.4
million in 2020.
Net financial items in 2021 totalled NOK 0.9 million, up from NOK 0.4 million in 2020. This is attributable
primarily to interest on bank deposits and interest of NOK 0.8 million on the VAT claim. The tax expense in
2021 came to NOK 0.1 million, compared with NOK 0.2 million the year before.
The Group made a net loss of NOK 53.5 million in 2021, compared with a net loss of NOK 51.2 million in 2020.
This represents a loss in 2021 of NOK 5.65 per share on a fully-diluted basis, compared with a loss of NOK
5.83 per share in 2020.
Annual Report 2021
Page 17
Financial position
As at 31 December 2021, total assets came to NOK 238.7 million, compared with NOK 141.8 million at year-
end 2020. Total equity came to NOK 213.4 million, compared with NOK 128.8 million at year-end 2020. Share
issues carried out in the second half 2021 raised NOK 130.3 million in net proceeds.
Intangible assets amounted to NOK 33.4 million as at 31 December 2021, compared with NOK 43.6 million at
the close of 2020, reflecting amortisation over the year. Trade and other receivables totalled NOK 22.1 million
(NOK 6.0 million in 2020), including recognised government grants of NOK 7.3 million (NOK 5.0 million in
2020), and VAT claim receivables.
As at 31 December 2021, the company had cash and cash equivalents of NOK 157.8 million, compared with
NOK 77.2 million at the close of 2020. The change was mainly a function of liquidity consumed by operating
activities and net proceeds from share issues.
Long-term liabilities totalled NOK 3.9 million at year-end 2021 (NOK 0 million in 2020). The increase is
attributable to a new lease for the company’s headquarters in Horten, which was signed in the second
quarter 2021. Total current liabilities at year-end 2021 totalled NOK 21.3 million (NOK 12.9 million in 2020).
Cash flow
Net cash flow used in operating activities totalled NOK 49.5 million in 2021, compared with NOK 42.6 million
in 2020. Net cash flow used in investing activities totalled NOK 2.1 million in 2021, compared with NOK 0.2
million used in 2020. Net cash flow from financing activities totalled NOK 132.3 million in 2021 (NOK 46.6
million in 2020). The positive cash flow from financing activities reflects the net proceeds from the share
issues carried out in the second half of 2021, which raised NOK 13.3 million in net proceeds.
Financial development, parent company
In 2021, the parent company generated NOK 10.0 million in gross revenue, compared with NOK 3.1 million
the year before. It made an operating loss of NOK 55.9 million in 2021, after total operating expenses of NOK
62.1 million. In 2020, the parent company made a loss of NOK 52.3 million, after total operating expenses of
NOK 54.7 million.
Operating expenses in 2021 include employee expenses (including consultants engaged on long-term
contracts) of NOK 38.4 million, compared with NOK 26.8 million in the preceding year. The parent company
had on average 19 employees and consultants in 2021, compared with 15 in 2020. In 2021, other operating
expenses amounted to NOK 12.8 million, compared with NOK 17.0 million in 2020. (See Note 3.)
poLight ASA made a net loss of NOK 54.2 million in 2021, compared with a loss of NOK 49.9 million in 2020.
The Board proposes that NOK 49.8 million be transferred from the share premium fund and NOK 4.4 million
from retained earnings. The Board does not propose payment of a dividend for 2021.
Share capital
As at 31 December 2021, poLight ASA had a share capital of NOK 2.1 million, consisting of 10,385,096 shares,
with a nominal value of NOK 0.20 each.
Annual Report 2021
Page 18
poLight employees have been granted options to subscribe for shares under share options schemes. The
Board is authorised to issue shares – in share option schemes – up to a total nominal value of NOK 182,564
(912,820 shares at a nominal value of NOK 0.20). As at 31 December, 809,173 share options (equal to 7.8%
of shares outstanding) have been granted, all at a weighted average strike price of NOK 62.10 per share with
a range from NOK 18.90 to NOK 114.
Risks and risk management
poLight’s risk management is based on the principle that risk assessment is an integral part of all business
activities. Reference is also made to the ESG risk assessment described in Sustainability chapter. As a
technology company with global operations, poLight is exposed to risk factors of a financial and operational
nature, which may affect business activities and the company’s financial position. poLight’s Board places a
high priority on managing risk and has established routines and policies to limit overall risk exposure.
Market risk: poLight develops highly innovative autofocus lenses for consumer and industrial products. The
markets for these products are undergoing rapid technological changes. poLight’s future success will depend
on the company’s ability to meet changing industry demands, develop new technologies that address
prospective customers’ increasingly sophisticated requirements, and ensure high-quality and cost-effective
mass production.
IPR-related risk: To protect the poLight’s intellectual property rights (IPR), poLight relies on a combination of
patents, copyright and trademark laws, trade secrets, confidentiality procedures and contractual provisions.
IPR constitutes one of poLight’s key assets and poLight actively seeks to protect its products and technologies
in the markets and geographic regions where it operates, and elsewhere as deemed relevant. In its use of
IPR, poLight faces several risks. For example, third parties may illegally copy or utilize the poLight’s IPR, third
parties may (with or without merit) claim that the poLight’s use of IPR infringes the IPR of that third party, or
the IPR of others may limit the poLight’s freedom to operate.
Foreign exchange risk: poLight is subject to certain financial risks associated with currency and interest rates.
While the company has had limited revenue so far, it does incur costs in various currencies. No single large
currency risk that could have a significant impact on the company’s net profit has been identified. Proceeds
from share issues are kept in NOK. poLight has not entered into any hedging agreements.
Liquidity risk: poLight currently operates at a loss. For the next 12 months, the Group's principal source of
liquidity will still be cash generated from financing, equity and debt, in addition to net cash flows generated
from sales. The company may in the future seek to raise further capital to finance R&D activities and
expansion plans.
Corporate governance
poLight aims to comply with the Code of Practice for Corporate Governance published by the Norwegian
Corporate Governance Board (NUES). A separate section of this annual report provides further details of the
poLight Group’s corporate governance.
Going concern and events in 2021
The risk factors associated with the Covid-19 pandemic relate mainly to the supply chain and an inability to
move employees/competence between Europe and Asia. This latter has been offset by strengthening the
local organisation in Asia. Supply chain-related risk means that the company needs to plan for material and
Annual Report 2021
Page 19
capacity far in advance of specific customer demands. The pandemic may also have led to some delays in
customer qualification programmes.
For the next 12 months, the Group's principal source of liquidity will still be cash generated from financing,
equity and/or debt, in addition to net cash flows generated from sales. Management and the Board of
Directors are continuously evaluating the Group’s liquidity requirements. There are no plans to raise more
capital through share issues in the next 12 months.
Accordingly, these consolidated financial statements have been prepared under the assumption that both
the Group and the parent company are going concerns, and management confirms that this is an appropriate
assumption.
Outlook
The company continued to make progress during 2021, with four design-wins and several active customer
projects.
The opportunity pipeline is developing positively, with progress in the augmented reality (AR) space being
considered particularly promising. Smartphone customers and the company put considerable effort into
maturing cases and qualifying TLens

for commercial use. This is a very demanding process. Encouraging
progress has been made during the year, even though there are hurdles still to be overcome. Making our
supply chain ready for various applications is also demanding. Most of our available resources are currently
engaged in the above-mentioned efforts. We are therefore strengthening our organisation in order to handle
the predicted increase in activity, both with respect to supporting and maturing customer cases and handling
technical and supply chain challenges.
Tuneable optics are gaining increased attention, and poLight is one the key players in this important
technology space. The focus area going forward will continue to be smartphone, AR and barcode applications.
Annual Report 2021
Page 20
Statement by the Board of Directors and the CEO
We confirm that, to the best of our knowledge, the consolidated financial statements for 2021 have been
prepared in accordance with IFRS, as adopted by the EU, as well as additional disclosure requirements set
out in the Norwegian Accounting Act; and that the financial statements for the parent company for 2021
have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting
practice in Norway; and that the information presented in the financial statements provides a true and fair
view of the parent company and the Group’s assets, liabilities, financial position and results for the period as
a whole; and that the Board of Directors’ report provides a true and fair view of the development,
performance and financial position of the parent company and the Group, and includes a description of the
material risks that the Board of Directors, at the time of writing this report, considers could have a significant
impact on the financial performance of the Group.
poLight ASA
Horten, 27 April 2022
Ann
-
Tove Kongsnes (sign)
Chair
Thomas Görling
(sign)
Board member
Grethe Viksaas (sign)
Board member, Independent
Svenn
-
Tore Larsen (sign)
Board member, Independent
Juha Alakarhu (sign)
Board member, Independent
Øyvind Isaksen (sign)
Chief Executive Officer
Annual Report 2021
Page 21
CORPORATE GOVERNANCE REPORT
1. Governance principles and objectives
poLight ASA (“poLight” or the “company”) seeks to create sustained shareholder value and pays due respect
to the company’s various stakeholders. These include its shareholders, employees, business partners, society
in general and the public authorities. poLight is committed to maintaining a high standard of corporate
governance and has established principles and guidelines that define the roles and relationship between the
shareholders, the Board of Directors (the “Board”) and the company’s executive management
(“management”).
poLight is incorporated and registered in Norway and subject to Norwegian law. The company’s shares are
listed on the Oslo Stock Exchange. As an issuer of shares, the company must comply with rules applicable to
companies listed on the Oslo Stock Exchange and rules applicable to public limited companies in general.
The company observes the Norwegian Code of Practice for Corporate Governance, issued by the Norwegian
Corporate Governance Board (the “Code of Practice”). The Code of Practice is available at www.nues.no.
Application of the Code of Practice is based on the “comply or explain” principle, which stipulates that any
deviations from the code, should be explained. poLight seeks to follow the Code of Practice, and any deviation
will be explained in the corporate governance report included in its annual report. poLight’s corporate
governance policy is available on its website, www.polight.com, in accordance with the company’s IR policy.
The principles and implementation of corporate governance are subject to annual review by the company’s
Board of Directors. The corporate governance policy was last reviewed and approved 11 January 2021.
2. Business
The operations of the company comply with the business objective set forth in its Articles of Association,
which reads as follows:
“The company’s purpose is to develop and deliver optical components and all naturally related activities,
including ownership of shares and other securities in other companies.”
The Board of Directors has established goals, strategies and a risk profile for the company within the
definition of its business objective which are described in the Annual Report. These are subject to annual
review by the Board.
poLight has adopted a set of ethical guidelines (code of conduct) which represents the foundation of poLight’s
corporate culture. The guidelines define the core principles and ethical standards for the company’s
operations, and the integration of stakeholder considerations and how these relate to the value creation by
the company. The code of conduct applies to the members of the Board, all employees and representatives
of poLight as well as direct business partners such as agents or re-sellers. The code is available at
www.polight.com.
Annual Report 2021
Page 22
3. Equity and dividends
Capital adequacy
As at 31 December 2021, poLight's consolidated equity totalled NOK 213.4 million, which is equivalent to
89% of total assets. Liabilities were mainly trade payables and other payables. The Board of Directors is
responsible for ensuring that poLight is adequately capitalised relative to the company’s goals, strategy and
risk profile.
Dividend policy
poLight has not previously distributed any dividends to its shareholders and does not expect to pay any
dividend in the foreseeable future. The company is focused on developing and commercialising its technology
and intends to retain any future earnings to finance development activities, operations and business growth.
Any future decision to pay a dividend will depend on the company's financial position, operating profit and
capital requirements.
Authorisations to the Board of Directors
On 26 May 2021, the annual general meeting (AGM) granted the Board of Directors an authorisation to issue
new shares to holders of share options in poLight who exercise their rights to subscribe for new shares. The
authorisation to issue new shares at a nominal value of NOK 0.20 each, up to the share capital equivalent of
NOK 182,564, is valid until the date of the 2022 AGM, or 30 June 2022 at the latest. As at 31 December 2021,
shares equal to a share capital of NOK 16,703 have been issued under this authorisation.
The AGM on 26 May 2021 granted the Board a general authorisation to issue shares and to increase the share
capital by a maximum of NOK 365,128. The authorisation is valid until the 2022 AGM, or 30 June 2022 at the
latest. As at 31 December 2021, shares equal to a share capital of NOK 250,551.80 have been issued under
this authorisation.
The AGM also granted the Board an authorisation to buy back shares equal to a share capital of NOK 182,564.
The authorisation is valid until the 2022 AGM, or 30 June 2022 at the latest. The authorisation had not been
utilised as at 31 December 2021.
4. Equal treatment of shareholders and transactions with related parties
Pre-emption rights to subscribe
In the event of an increase in share capital, the Board shall propose that existing shareholders be granted
pre-emptive rights. If the Board decides to waive the pre-emptive rights of existing shareholders pursuant to
an authorisation granted to it by a general meeting of shareholders, the reason therefor shall be publicly
disclosed in a stock exchange announcement.
Trading in treasury shares
Any trading undertaken by the company in its own shares shall be carried out through the stock exchange,
and always at prevailing market prices. If there is limited liquidity in the company’s shares, other ways shall
be considered to ensure that all shareholders are treated equally. There has been no trading in treasury
shares after the IPO in 2018.
Approval of agreements with shareholders and related parties
In the event of not immaterial transactions between the company and its shareholders, a shareholder’s
parent company, members of the Board, executive personnel or close associates of any such party, the Board
Annual Report 2021
Page 23
shall arrange for an independent third-party valuation. There were no transactions with close non-group
related parties in 2021. For further details see Note 20 to the financial statements in the Annual Report.
5. Shares and negotiability
poLight ASA has one class of shares and each share carries equal rights, including the right to participate in
general meetings. All shareholders shall be treated equally, unless there is just cause for treating them
differently. The company’s shares are freely negotiable.
6. General meetings
The general meeting of shareholders is the company’s highest decision-making body. The Board shall ensure
that the general meeting is an effective forum for communication between the shareholders and the Board,
and enable as many shareholders as possible to exercise their rights through their attendance. Extraordinary
general meetings (EGM) may be called by the Board at any time, or by shareholders representing at least 5%
of the shares.
Notification
The Board will ensure that proposed resolutions and any supporting material shall be sufficiently detailed
and comprehensive to enable shareholders to understand and form an opinion on all matters to be
considered at the general meeting.
Registration and proxies
Deadlines for shareholders to give notice of their attendance at the general meeting shall be set as close to
the date of the general meeting as practically possible. Shareholders who cannot attend the general meeting
may vote by proxy on each individual matter.
Agenda and execution
The agenda for the general meeting is set by the Board. The agenda shall include detailed information on the
resolutions to be considered, as well as the Nomination Committee’s recommendations. The shareholders
attending may vote to determine who will chair the general meeting.
The Board and the general meeting’s chair shall ensure that the shareholders are able to vote separately on
each candidate nominated for election.
Representatives of the Board and the Nomination Committee’s chair shall be present at general meetings.
Although general meetings will normally be chaired by the Board’s chair, the Board must also ensure that the
general meeting can appoint an independent chairperson.
In 2021, poLight held its AGM on 26 May.
7. Nomination Committee
Composition
The company shall have a nomination committee consisting of two to three members, see section 7 of its
Articles of Association. The general meeting elects the Nomination Committee’s members and chair, and
determines their remuneration.
Annual Report 2021
Page 24
As at 31 December 2021, the Nomination Committee consisted of the following three members: Thomas
Wrede Holm (Investinor), Jan Erik Hæreid (independent) and Anne E. H. Worsøe (independent). The
committee’s members were elected by the AGM for terms lasting until the company's AGM in 2022 or 2023.
None of the Nomination Committee’s members are members of the Board or executive management. The
majority of the Nomination Committee’s members are deemed to be independent of the company’s Board
and executive management.
Tasks
The Nomination Committee is responsible for recommending candidates for election to the Board and the
Board’s chair, and the remuneration payable to members of the Board and its sub-committees. It also
recommends candidates for election to the Nomination Committee itself. The objectives, responsibilities
and functions of the committees are detailed in the company’s “Guidelines for the Nomination
Committee”.
All shareholders are entitled to nominate candidates for election to the Board of poLight ASA. Nominations
are submitted by sending an e-mail to the Nomination Committee’s chair at the following address:
thomas.wrede-holm@investinor.no. Nominations must be received well in advance to be considered for
election at poLight’s AGM. All proposals should include information about the candidate, grounds for
consideration and contact details for the person nominating the candidate concerned.
8. The Board of Directors – composition and independence
According to the company’s Articles of Association, the Board of Directors shall consist of up to five members.
At 31 December 2021, the Board consisted of the following five members: Ann-Tove Kongsnes (Chair),
Thomas Görling, Grethe Viksaas, Juha Alakarhu and Svenn-Tore Larsen.
The Board’s chair has been elected by the general meeting. Members of the Board are elected for a term of
up to two years at a time and may be re-elected. poLight’s annual report and website provide details of board
members’ background and expertise.
All members of the Board are considered independent of executive management and material business
associates. Further, Grethe Viksaas, Juha Alakarhu and Svenn-Tore Larsen are independent of the company’s
major shareholder(s). The Board of Directors does not include executive personnel.
Annual Report 2021
Page 25
Name Role
Considered
independent
Served
since Term expires
Participation
at Board
Meetings 2020
Shares in poLight
31 December
(direct/ indirect)
Ann-Tove
Kongsnes
Chair No December
2011
AGM 2022 100% 1,779,858 (1)
Thomas Görling Board
member
No May 2021 AGM 2023 100% 1,048,825 (2)
Grethe Viksaas Board
member
Yes June 2018 AGM 2023 100%
Juha Alakarhu Board
member
Yes May 2019 AGM 2023 100%
Svenn-Tore
Larsen
Board
member
Yes May 2019 AGM 2023 86%
1) Ann-Tove Kongsnes is Investment Director and Head of International Affairs at Investinor AS, which held 1.78 million shares
in poLight ASA at 31 December 2021
2) Thomas Görling is a Senior Investment Director at Stiftelsen Industrifonden, which held 1.05 million shares in poLight ASA
at 31 December 2021
Members of the Board of Directors are encouraged to own shares in the company.
9. The work of the Board of Directors
The Board of Directors’ tasks
The Board of Directors is elected by the shareholders to oversee executive management, and to make sure
that the long-term interests of shareholders and other stakeholders are properly served. The Board has
ultimate responsibility for management and the company’s activities in general. Its main responsibilities
include the company’s organisation and planning, and the control and supervision of its operations.
The Board shall also ensure that the organisation of the company’s accounting and cash management is
compliant and under satisfactory control. The Board adopts an annual plan for its work, with particular
emphasis on objectives, strategy and implementation.
Instructions to the Board of Directors
The Board has issued instructions for its own work, as well as for the CEO, to allocate duties and
responsibilities between the CEO and the Board of Directors. The instructions are based on applicable laws
and well-established practices. The current instructions were last amended by the Board in April 2015.
Members of the Board of Directors and the company’s executive management shall notify the Board in the
event of any material direct or indirect interest in a transaction entered into by the company.
The Board’s instructions state that, in situations when its chair cannot, or should not, lead the work of the
Board, the longest-serving director shall chair the Board, until an interim chairperson has been elected by
and from among the directors present.
Annual Report 2021
Page 26
Audit Committee
The Audit Committee supports the Board with respect to the assessment and control of financial risk,
financial reporting, auditing and control, and prepares discussions and resolutions for board meetings. The
Audit Committee does not make decisions on behalf of the Board, and the establishment of the Audit
Committee does not alter the Board’s legal responsibilities or tasks. In addition, under the whistleblower
procedure, complaints from employees and other concerned parties are received and followed up by the
Audit Committee. The Chief Financial Officer participates in the meetings of the Audit Committee. The
committee holds at least one meeting per year with the auditor without the Chief Financial Officer or any
other members of the Group Management and administration being present.
The Audit Committee held five meetings in 2021 and was in regular contact with the company’s auditor
regarding audits of the statutory accounts. The committee also assesses and monitors the auditor’s
independence, including non-audit services provided by the auditor.
The committee makes recommendations to the Board with respect to the appointment, retention and
termination of the Group’s auditor as well as the auditor’s fees. The committee reviews complaints regarding
accounting, internal controls and auditing matters.
The tasks and rules of procedure of the Audit Committee are further regulated in the Audit Committee
Charter.
The Audit Committee shall consist of at least two members of the Board. The Audit Committee shall in total
have the expertise that, based on the company’s organisation and operations, is necessary to carry out its
tasks. At least one of the members of the Audit Committee is to be independent of the operations and have
accounting or auditing qualifications. The Board shall appoint one member of the committee to be its chair.
As at 31 December 2021, the Audit Committee consisted of the following two members: Ann-Tove Kongsnes
and Grethe Viksaas.
Remuneration Committee
The Board of Directors has established a remuneration committee which assists and facilitates decision-
making related to the remuneration of executive personnel. The purpose of the Remuneration Committee is
to ensure thorough and independent preparation of matters relating to compensation to the executive
personnel. The Remuneration Committee puts forth a recommendation for the Board of Directors’ guidelines
for remuneration to senior executives in accordance with section 6-16a of the Norwegian Public Limited
Liability Companies Act.
The Remuneration Committee shall consist of at least two members of the Board of Directors. The
Remuneration Committee’s members and chair are appointed for a term of two years. All members must be
independent of the company’s executive management.
As at 31 December 2021, the Remuneration Committee consisted of the following three members: Ann-Tove
Kongsnes, Grethe Viksaas and Thomas Görling.
Evaluation of the Board
The Board evaluates its performance and expertise annually.
Annual Report 2021
Page 27
10. Risk management and internal control
The Board places a high priority on managing risk, and has established routines and policies to limit overall
risk exposure. The rules and guidelines take into account the extent and nature of the company’s activities
and the integration of stakeholder considerations in the company’s value creation through its corporate
values, ethical guidelines and corporate social responsibility policies.
The Board conducts an annual review of the company’s most important areas of risk exposure and its internal
control arrangements.
poLight’s risk management is based on the principle that risk assessment is an integral part of all business
activities. As a technology company with global operations, poLight is exposed to various risk factors of a
financial and operational nature, which may affect business activities and the company’s financial position.
Management reports monthly to the Board of Directors on key operational developments, including project
risk assessments, and on financial performance. In addition, quarterly financial reports are prepared and
distributed to the financial market, in accordance with the Oslo Stock Exchange’s requirements.
Detailed information on the company’s operational and financial risks are included in the Annual Report.
11. Remuneration of the Board of Directors
The remuneration payable to board members is decided by the AGM, based on the Nomination Committee’s
recommendation. The remuneration paid shall reflect the Board of Directors’ responsibilities, competence,
time involved, and the complexity of the business.
The remuneration of the Board of Directors shall not be performance-based and shall not contain option
elements. Members of board sub-committees shall be compensated separately. The company shall not
provide loans to board members. Detailed information on the remuneration of board members is specified
in Note 20 to the consolidated financial statements.
Members of the Board of Directors and/or companies with which they are associated should not take on
specific assignments for the company in addition to their directorships. Should they do so, however, this must
be disclosed to the full Board. The remuneration for such additional duties must be approved by the Board
of Directors.
12. Remuneration of executive management
The Board of Directors prepares guidelines for the remuneration of the company’s executive management.
These guidelines are communicated annually to the Annual General Meeting. A separate remuneration
report will be published on poLight's website as a part of the notification of the Annual General Meeting.
The remuneration paid to members of executive management consists of a fixed salary in combination with
certain benefits in kind and an performance-based bonus, in addition to participation in a share option
scheme. See Note 20 Related parties, in the consolidated financial statements for further details.
Performance-related remuneration of executive personnel in the form of share options, bonus programmes,
or the like, shall be linked to value creation for the shareholders or the company’s earnings performance over
time.
Annual Report 2021
Page 28
13. Information and communications
The Board places great emphasis on open, honest and timely dialogue with shareholders, potential investors,
analysts and other participants of the capital markets. The primary purpose of poLight’s external information
activities, is to provide the financial markets with sufficient information to accurately appraise the company’s
shares. Such information shall be presented factually and soberly, and shall be issued using methods and
channels that ensure simultaneous, fair and wide distribution. All information is published in English, which
is poLight’s corporate language.
The company’s primary channels for communication are its interim reports, the annual report and associated
financial statements. poLight also issues other notices to shareholders when appropriate. All reports and
notices are issued and distributed in accordance with the Oslo Stock Exchange’s rules and practices, and are
made available on the company’s website, and at www.newsweb.no.
poLight has adopted an investor relations policy and guidelines for the company’s contact with shareholders
other than through general meetings. The CEO and the CFO are responsible for communicating with
shareholders, the stock exchange, analysts and the media. The general meeting provides a forum for
shareholders to raise issues with the Board. The Board of Directors will review and evaluate the content of
the IR policy at least annually.
14. Takeovers
General
In the event of a takeover bid, the Board of Directors and the company’s executive management each have
an individual responsibility to ensure that the company’s shareholders are treated equally, and that the
company’s activities are not unnecessarily interrupted. The Board has a special responsibility to ensure that
the shareholders have sufficient information and time to form an informed opinion about the offer.
The Board has established guiding principles for how it will act in the event of a takeover bid. These are
available at www.polight.com.
If an offer is made for the company’s shares, the Board shall issue a statement evaluating the offer, and make
a recommendation as to whether, in the Board’s opinion, the shareholders should or should not accept the
offer. If the Board finds itself unable to give a recommendation to shareholders on whether or not to accept
the offer, it should explain the reasons for this. The Board of Director’s statement on a takeover bid shall
make it clear whether the views expressed are unanimous, and if this is not the case, it shall explain the
reasons why specific members of the Board do not endorse the statement.
The Board shall consider whether to arrange a valuation from an independent expert. If any member of the
Board, or close associates of such member, or anyone who has recently held such a position but has ceased
to do so, is either the bidder or has a particular personal interest in the bid, the Board shall arrange an
independent valuation. This shall also apply if the bidder is a major shareholder. Any such valuation should
either be enclosed with the Board’s statement or reproduced or referred to in the statement.
15. Auditor
The company’s external auditor is KPMG. Each year, the Audit Committee ensures that it receives a
presentation of the auditor’s plan for its annual audit of the company. Additionally, the Audit Committee
requires the auditor to participate in Audit Committee meetings where any of the following is on the agenda:
the annual financial statements, accounting principles, assessment of any important accounting estimates
Annual Report 2021
Page 29
and matters of importance on which there has been disagreement between the auditor and the company’s
management.
At least once a year, the Audit Committee and the auditor will jointly review the company’s internal control
procedures, including identification of weaknesses and proposals for improvement. The auditor also at least
once a year meets with the Audit Committee without the presence of the CEO and CFO.
The remuneration paid to the auditor is approved by shareholders at the AGM. The Audit Committee will
provide the AGM with a breakdown of the fee paid for audit work and fees paid for other services, if any.
Annual Report 2021
Page 30
GROUP FINANCIAL STATEMENTS
Consolidated statement of comprehensive income for the year ended 31 December
(in NOK 000)
Note
2021
2020
Sale of goods 4
8 683
2 590
Rendering of services
1 350
429
Revenue
10 032
3 019
Cost of sales 12
3 851
698
Gross profit
6 182
2 321
Research and development expenses 5.4
-
25 360
-20 432
Sales and marketing expenses 5.5
-
7 224
-5 419
Operational / supply chain expenses 5.6
-
9 139
-7 972
Administrative expenses 5.7
-
6 868
-7 734
Depreciation and amortisation 8,9,19
-
11 923
-12 132
Operating profit / loss (-)
-
54 332
-51 369
Finance income
5.2
1 830
1 356
Finance costs 5.2
-
887
-938
Net financial items
944
417
Profit / loss (
-
) before tax
-
53 388
-
50 952
Income tax expense 6
-
93
-203
Profit / loss (-) for the year
-
53 481
-51 155
Attributable to:
Equity holders of the parent
-
53 481
-51 155
Non-controlling interests
0
0
Earnings per share:
Basic, attributable to ordinary equity holders of the parent (NOK) 7
-
5.65
-
5.83
Diluted, attributable to ordinary equity holders of the parent (NOK) 7
-
5.65
-
5.83
Annual Report 2021
Page 31
Consolidated statement of other comprehensive income for the year ended 31 December
(in NOK 000)
Note
2021 2020
Profit / loss (-) for the year -53 481 -
51 155
Other comprehensive income
Exchange differences on translation of foreign operations -5
212
Income tax effect 0 0
Net other comprehensive income to be reclassified to profit or loss in subsequent
periods -5
212
Total comprehensive income for the year, net of tax -53 486 -
50 943
Attributable to:
Equity holders of the parent -53 486 -
50 943
Non
-
controlling interests
0
0
Annual Report 2021
Page 32
Consolidated statement of financial position as at 31 December
(in NOK 000) Note
2021
2020
ASSETS
Property, plant and equipment 8
2 356
839
Intangible assets 9
33 377
43 646
Right-of-use assets 19
4 778
964
Total non-current assets
40 511
45 448
Inventories 12
16 836
9 166
Trade and other receivables 11.1
22 078
6 040
Prepayments
1 456
3 897
Cash and cash equivalents 13
157 810
77 209
Total current assets
198 180
96 312
Total assets
238 691
141 761
EQUITY AND LIABILITIES
Share capital 14
2 077
1 810
Share premium 14
813 632
680 229
Reserves
1 035
1 040
Uncovered losses
-603 335
-554 238
Equity attributable to equity holders of the parent
213 409
128 840
Non-controlling interests
0
0
Total equity
213 409
128 840
Lease liabilities 19
3 934
0
Total non-current liabilities
3 934
0
Trade and other payables 11.2
19 906
10 684
Current lease liabilities 19
942
1 048
Provisions 15
500
1 189
Total current liabilities
21 349
12 921
Total liabilities
25 282
12 921
Total equity and liabilities
238 691
141 761
Annual Report 2021
Page 33
Consolidated statement of changes in equity for the year ended 31 December
Attributable to equity holders of the parent
(in NOK 000) Note
Share
capital
Share
premium
Retained
earnings
Translation
reserve
Total
Non-
controlling
interest
Total
equity
As at 1 January 2020
1 623
632 682
-
506 755
827
128 378
0
128 378
Profit / loss (-) for the year
-51 155
-51 155
0
-51 155
Other comprehensive income
212
212
0
212
Total comprehensive income
0
0
-51 155
212
-50 943
0
-50 943
Issue of ordinary shares
14
182
49 818
50 000
0
50 000
Share options exercised 14
5
734
738
738
Transaction costs 14
-3 005
-3 005
-3 005
Equity-settled share-based
payments 5.3,18
3 672
3 672
3 672
At 31 December 2020
1 810
680 229
-554 238
1 040
128 840
0
128 840
Profit / loss (-) for the year
-
53 481
-
53 481
0
-
53 481
Other comprehensive income
-5
-5
0
-5
Total comprehensive income
0
0
-53 481
-5
-53 486
0
-53 486
Issue of ordinary shares 14
251
137 553
137 803
0
137 803
Share options exercised 14
17
3 380
3 397
0
3 397
Transaction costs 14
-7 530
-7 530
0
-7 530
Equity-settled share-based
payments 5.3,18
4 385
4 385
0
4 385
At 31 December 2021
2 077
813 632
-603 335
1 035
213 409
0
213 409
Annual Report 2021
Page 34
Consolidated statement of cash flows for the year ended 31 December
(in NOK 000) Note
2021
2020
Operating activities
Profit / loss (-) for the period
-53 388
-50 952
Adjustments for:
Depreciation and impairment of property, plant and equipment and right-of-
use assets
8
1 654
1 842
Amortisation and impairment of intangible assets
9
10 269
10 290
Net finance income
5.2
-
944
-
417
Equity-settled share-based payments
18
4 385
3 672
Other non-cash items
937
-610
Changes in unrealised net foreign exchange rate differences/fluctuations
21
221
Changes in working capital:
Increase (-) in trade and other receivables and prepayments
-11 332
-2 902
Increase (-) in inventories
12
-7 669
-1 439
Increase (+) in trade and other payables
9 223
1 655
Changes in provisions and government grants
15,16
-
2 954
-
4 718
Interest received 5.2
585
851
Interest paid 5.2
-203
68
Income tax paid
-129
-196
Net cash flows used in operating activities
-
49 546
-
42 633
Investing activities
Purchase of property, plant and equipment 8, 9
-2 142
-226
Net cash flows used in investing activities
-2 142
-226
Financing activities
Proceeds from issuance of ordinary shares 14
137 803
50 000
Proceeds from exercise of share options
14
3 397
738
Transaction costs on issu
ance
of shares
14
-
7 530
-
3 005
Payment of lease liabilities 19
-1 355
-1 119
Net cash flows from financing activities
132 315
46 614
Net increase in cash and cash equivalents
80 627
3 755
Effect of exchange rate changes on cash and cash equivalents
-26
-9
Cash and cash equivalents at 1 January 13
77 209
73 463
Cash and cash equivalents at 31 December 13
157 810
77 209
Annual Report 2021
Page 35
Notes to the Consolidated Financial statements
1 Corporate information
poLight ASA is a limited liability company, founded in 2005, which is incorporated and domiciled in Norway. The address of its
registered office is Innlaget 230, N-3185 Skoppum, Norway.
poLight offers a new autofocus lens which "replicates" the human eye for use in devices such as smartphones, wearables, barcode,
machine vision systems and various medical equipment. poLight's TLens® enables better system performance and new user
experiences due to benefits such as extremely fast focus, small footprint, no magnetic interference, low power consumption and
constant field of view. For more information, visit www.polight.com.
Information on the Group and related parties are presented in Note 20 Related parties.
The consolidated financial statements of poLight ASA and its subsidiaries (collectively, poLight or the Group) for the year ended 31
December 2021 were authorised for issue in accordance with a resolution of the Board of Directors on 27 April 2022, to be approved
by the annual general meeting on 25 May 2022.
2 Significant accounting policies
2.1 Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board (IASB) and adopted by the EU (IFRS).
The consolidated financial statements have been prepared on a historical cost basis. The consolidated financial statements are
presented in Norwegian kroner (NOK), and all values are rounded off to the nearest thousand (NOK 000), unless otherwise indicated.
2.2 Basis of consolidation
The consolidated financial statements comprise the financial statements of poLight ASA and its subsidiaries.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of
the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year, are included in the
consolidated financial statements from the date the Group gains control, until the date the Group ceases to control the subsidiary.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with
the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
2.3 Summary of significant accounting policies
The following are the significant accounting policies applied by the Group in preparing its consolidated financial statements:
Current versus non-current classification
The Group presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset
is current when it is:
 Expected to be realised or intended to be sold or consumed in the normal operating cycle
 Held primarily for the purpose of trading
 Expected to be realised within twelve months after the reporting period, or
 Cash or cash equivalent, unless restricted from being exchanged or used to settle a liability for at least twelve months after
the reporting period
All other assets are classified as non-current.
Annual Report 2021
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A liability is current when:
 Expected to be settled in the normal operating cycle
 Held primarily for the purpose of trading
 Expected to be settled within twelve months after the reporting period, or
 The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the
reporting period
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Revenue from contracts with customers
During 2021 the group had two revenue streams:
• Sales of TLenses and related driver ASICs.
The Group recognizes revenue from sale of TLenses and other components at the point in time when the control of goods is
transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in
exchange for those goods. Revenue is generally recognised on delivery of the goods.
• Services related to customer development projects.
In certain cases, when the counterparty to the contract is a customer or a potential customer, the Group will engage in
customer development projects financed by the customer. In general, income is recognised when the project is finalised
according to the contract and the customer can obtain the benefits from the project. Revenue may be recognised over time
when one of the following criteria are met:
 Customer consumes benefits as the Group performs the service
 Customer controls benefits as the Group performs the service
Earned revenue for the period is earned revenue at the balance sheet date, less earned revenue in prior periods. If the project
is ongoing, income will be recognized continuously in accordance with the agreement, based on actual deliveries.
The Group has for the periods presented limited sales and revenues. Further information on revenue recognition or disclosures
according to IFRS 15 is consequently not relevant for these financial statements.
Foreign currencies
The Group’s consolidated financial statements are presented in Norwegian kroner (NOK), which is also the parent company’s
functional currency. For each entity, the Group determines the functional currency, and items included in the financial statements of
each entity are measured using that functional currency. The Group uses the direct method of consolidation, and on disposal of a
foreign operation, the gain or loss that is reclassified to profit or loss reflects the amount that arises from using this method.
Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency spot rate, at the
date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are retranslated
at the functional currency spot rate of exchange at the reporting date.
Differences arising on settlement or translation of monetary items are recognised in profit or loss. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial
transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value is determined.
On consolidation, the assets and liabilities of foreign operations are translated into NOK at the rate of exchange prevailing at the
reporting date, and the statement of profit or loss are translated at average monthly exchange rates. The exchange differences arising
on the translation are recognised in OCI. Exchange differences arising from the translation of net investment in subsidiaries and
Annual Report 2021
Page 37
borrowings are included in OCI. At December 31, 2020 and 2021 an intercompany subordinated loan to poLight France SAS of EUR
2,750,000 was regarded as a part of the net investment in poLight France SAS.
Government grants
Government grants are recognised when there is reasonable assurance that the grant will be received, and that all attached
conditions will be complied with. When the grant relates to an expense item, it is deducted from the related expense on a systematic
basis over the periods that the costs, which it is intended to compensate, are expensed. Where the grant relates to an asset, it reduces
the carrying amount of the asset. The grant is then recognised as income over the useful life of the depreciable asset, by way of a
reduced depreciation charge.
Taxes
Current income tax
Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted, or substantively
enacted at the reporting date in the countries where the Group operates and generates taxable income.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations
are subject to interpretation, and it establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities, and their
carrying amounts, for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for: all deductible temporary differences: the carry forward of unused tax credits and unused tax
losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax
assets are reassessed at each reporting date, and are recognised, to the extent that it has become probable that future taxable profits
will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected
to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the end of the reporting period.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised
in correlation to the underlying transaction, either in other comprehensive income or directly in equity.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against
current income tax liabilities, and the deferred taxes relate to the same taxable entity and the same taxation authority.
Property, plant and equipment
Office/lab upgrades and equipment are stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if
any. Such cost includes the cost of replacing parts of the facility upgrades and equipment. Repair and maintenance costs are
recognised in the profit or loss as incurred. Refer to Significant accounting judgements, estimates and assumptions (Note 3).
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:
 Leased building: The duration of the lease agreement
 Equipment: 3 to 5 years
An item of office/lab upgrade and equipment is derecognised upon disposal, or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in the statement of profit or loss when the asset is derecognised.
Annual Report 2021
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The residual values, useful lives and methods of depreciation of office/lab upgrade and equipment are reviewed at each financial
year end, and adjusted prospectively, if appropriate.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control
the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value
assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the
underlying assets.
i) Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for
use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct
costs incurred, and lease payments made at or before the commencement date less any lease incentives received.
Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the
assets, as follows:
• Office & lab lease, headquarter
The right-of-use assets are also subject to an impairment assessment.
ii) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to
be made over the lease term. The lease payments include fixed payments (including in substance fixed payments).
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date
because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease
liabilities is reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change
in an index or rate used to determine such lease payments).
iii) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of office leases in Finland and China (i.e., those
leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also
applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease
payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term.
Intangible assets
Intangible assets acquired separately, are measured on initial recognition at cost. Following initial recognition, intangible assets are
carried at cost less accumulated amortisation and accumulated impairment losses, if any. Internally generated intangible assets,
excluding capitalised development costs, are not capitalised, and expenditure is recognised in the statement of profit or loss when it
is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over their useful lives, and assessed for impairment whenever there is an indication
that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite
useful life are reviewed at least at the end of each year. Changes in the expected useful life are accounted for by changing the
amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on
intangible assets with finite lives is recognised in the statement of profit or loss.
Annual Report 2021
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Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds
and the carrying amount of the asset, and are recognised in the statement of profit or loss when the asset is derecognised.
Development costs
Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset
when the Group can demonstrate:
 The technical feasibility of completing the intangible asset, so that it will be available for use or sale
 Its intention to complete and its ability to use or sell the asset
 How the asset will generate future economic benefits
 The availability of resources to complete the asset
 The ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the cost model is applied, requiring the asset to be carried
at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development
is complete, and the asset is available for use. It is amortised over the period of expected future benefit. During the period of
development, the asset is tested for impairment annually.
Software license
The Group made upfront payments to purchase software licenses. Licences for the use of intellectual property are granted for periods
ranging between three and five years, depending on the specific licence.
A summary of the policies applied to the Group’s intangible assets is as follows:
Software licence Development costs
Useful lives Finite (3-5 years) Finite (3-7 years)
Amortisation method used Amortised on a straight- line basis
over the lives of the licences
Amortised on a straight- line basis over
the period of expected consumption of
future economic benefits from the
related project
Internally generated or acquired Acquired Internally generated
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity, and a financial liability or equity instrument of
another entity.
i) Financial assets
The Group´s financial assets are trade receivables, government grant receivables, accruals and cash.
Trade receivables are measured at the transaction price determined under IFRS 15 Revenue from contracts with customers. The
other financial assets are measured initially at fair value plus transaction costs.
Subsequently the assets are measured at amortised cost. Gains and losses are recognised in profit or loss when the asset is
derecognised, modified or impaired.
ii) Financial liabilities
Financial liabilities are recognised initially at net of directly attributable transaction costs and subsequently measured at amortised
cost.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
Annual Report 2021
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Impairment of financial assets
For trade receivables and contract assets, the Group applies a simplified approach in calculating expected credit losses (ECLs).
Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each
reporting date.
A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition, are accounted for as follows:
Components:
 Purchase cost on a first-in, first-out basis
Finished goods and work in progress:
 Cost of direct materials and services from subcontractors
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the
estimated costs to sell.
Impairment of non-financial assets
Disclosures relating to impairment of non-financial assets are summarised in the following notes:
 Disclosures of significant assumptions Note 3
 Property, plant and equipment Note 8
 Intangible assets Note 9
 Research and development costs Note 10
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable
amount is the higher of an asset’s or Cash-Generating Unit (CGU)’s fair value less costs of disposal and its value in use. The recoverable
amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets, or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is
considered impaired, and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value, using a discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of
disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model
is used.
Value in use impairment calculation is based on detailed budgets and forecasts and with use of scenario analyses. These budgets and
forecast calculations are generally covering a period of five years. A long-term growth rate is calculated and applied to project future
cash flows after the fifth year.
Impairment losses are recognised in the consolidated statement of comprehensive income.
Cash and short-term deposits
Cash and short-term deposits in the statement of financial position comprise cash at banks and on hand, and short-term deposits
with a maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the consolidated statement cash flows, cash and cash equivalents consist of cash and short-term deposits as
defined above, as they are considered an integral part of the Group’s cash management.
Annual Report 2021
Page 41
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, when it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable
estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit or
loss.
If the effect of the time value of money is material, provisions are discounted, using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is
recognised as a finance cost.
Pensions and other post-employment benefits
The Group operates one defined contribution plan. Contributions are recognised in the statement of income in the period in which
the contribution amounts are earned by the employee.
Share option plans
Employees (including senior executives) of the Group have received remuneration in the form of share options in poLight ASA (equity-
settled transactions). The fair value of share options that are granted has been calculated using the Black-Scholes option pricing
model. The basis for the valuation comprises several factors that affect the calculated fair value of granted share options like the
share price at the date of the grant, exercise price (strike), the expected number of share options that will ultimately vest, risk-free
interest rate and the volatility that is deemed based on historic volatility of the poLight share.
The cost of equity-settled transactions is recognised in employee benefits expense (Note 5.3), together with a corresponding increase
in equity (other equity) over the period in which the service and, where applicable, the performance conditions are fulfilled (the
vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date,
reflects the extent to which the vesting period has expired, and the Group’s best estimate of the number of equity instruments that
will ultimately vest. The expense includes accrued social security expenses that are calculated based on the number of vested share
options multiplied by the difference between market price and exercise price at the end for the period. The expense in the
consolidated statement of income for a period, represents the movement in cumulative expense recognised as at the beginning and
end of that period.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share
(further details are given in Note 7).
3 Significant accounting judgements and key sources of estimation uncertainty
3.1 Significant judgements in applying the Group’s accounting policies
Development costs
Initial capitalisation of costs is based on management’s assessment that technological and economic feasibility is likely, usually when
a product development project has reached a defined milestone, according to an established project management model. Cost of
material used in manufacturing line until status of “mass production” is achieved is recognised as development costs to the extent
that it is not sellable parts. In determining the amounts to be capitalised, management makes assumptions regarding the expected
future cash generation of the project, discount rates to be applied, and the expected period of benefits.
3.2 Key sources of estimation uncertainty – significant accounting estimates
Impairment of non-financial assets
Cash-generating units are reviewed for impairment when indicators exists. Judgements are required to determine if impairment
indicators are present. If an impairment test is performed, changes in key assumptions may result in an impairment. See note 10 for
further details.
Annual Report 2021
Page 42
Share option plans
Estimating fair value for share option plans transactions requires determination of the most appropriate valuation model, which
depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the
valuation model, including the expected life of the share option, volatility and dividend yield, and assumptions about the inputs.
For determining the fair value of equity-settled transactions with employees at the grant date, the Group uses the Black-Scholes
option pricing model. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed
in Note 18 Share option plans (equity-settled).
3.3 Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and no
n
-
financial
assets and liabilities.
The Group has an established control framework with respect to the measurement of fair values. Significant valuation issues are reported
to the Group’s audit committee.
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are
categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value
measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the
entire measurement. IFRS 13.95 The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting
period during which the change has occurred. Further information about the assumptions made in measuring fair values is included in
the following notes:
Note 18 – Share option plans (equity-settled)
4 Segment information
The Group has only one operating segment – the TLens® technology platform, consistent with the reporting to the CEO and the
Board.
poLight’s product TLens® may be used in devices such as smartphones, wearables, barcode, machine vision systems and various
medical equipment. poLight's TLens® enables better system performance and new user experiences due to benefits such as extremely
fast focus, small footprint, no magnetic interference, low power consumption and constant field of view.
Annual Report 2021
Page 43
Geographical distribution Revenue
(in NOK 000)
2021
2020
America 2 618
291
Asia 6 026
1 815
Europe 1 388
912
Total
10 032
3 018
Geographical distribution
Right-of-use assets
Machinery & equipment
Development costs
(in NOK 000) 2021
2020
2021
2020
2021
2020
Norway 4 778
964
2 097
525
33 377
43 646
France 0
0
16
27
0
0
Finland 0
0
26
37
0
0
Taiwan 0
0
184
242
0
0
China 0
0
34
7
0
0
Total 4 778
964
2 356
839
33 377
43 646
All patents and most of the economic IP (intellectual property) is owned by parent company based in Norway. A sales office has been
established in China, with a parent holding company in Hong Kong.
5 Other income/expenses
5.1 Specification of operating expenses by nature
(in NOK 000) Note 2021
2020
Employee benefits expense
1)
5.3
46 866
36 190
Depreciation and amortisation 11 923
12 132
Other operating expenses 1 726
5 367
Total operating expenses
60 514
53 689
1) Including consultants engaged on long-term contracts
5.2 Financial items
(in NOK 000) 2021
2020
Foreign exchange gain 465
574
Interest income 585
782
Interest income VAT appeal case 780
0
Finance income 1 830
1 356
Foreign exchange losses
599
809
Interest expense on lease liabilities 203
69
Finance expenses 84
61
Finance cost
887
938
Annual Report 2021
Page 44
5.3 Employee benefits expense
(in NOK 000) 2021
2020
Included in Research and development expenses:
Wages and salaries
10 495
10 674
Consultants engaged on long
-
term contracts
3 979
0
Social security costs 2 190
1 814
Pension costs (note 17) 374
406
Other benefits and social costs 511
419
Share based compensation costs (note 18) 1 951
1 512
Grants -2 162
-2 525
Included in Sales and marketing expenses:
Wages and salaries 2 929
2 898
Consultants engaged on long-term contracts 1 509
0
Social
security costs
611
492
Pension costs (note 17) 104
110
Other benefits and social costs 143
114
Share based compensation costs (note 18) 880
316
Included in Operational / supply chain expenses:
Wages and salaries 1 940
4 331
Consultants engaged on long-term contracts 2 342
0
Social security costs 405
736
Pension costs (note 17)
69
165
Other benefits and social costs
95
170
Share based compensation costs (note 18) 1 530
656
Included in Administrative expenses:
Wages and salaries 7 808
8 554
Social security costs 1 630
1 453
Pension costs (note 17) 278
325
Other benefits and social costs 380
336
Share based compensation costs (note 18) 6 875
3 234
Total employee benefits expense 46 866
36 190
Average number of full-time equivalents, employees 21
22
Average number of full-time equivalents, total including long-term contracts
27
22
All employees are included in a bonus programme, with identical bonus criteria for all employees. The bonus is calculated based on
fixed salary, with maximum 50% for the CEO, 30% for management, 20% for department managers and 10% for other employees.
5.4 Research and development expenses
(in NOK 000) 2021
2020
Employee benefits expense (incl. consultants) 19 500
14 825
Other operating expenses 17 747
14 553
Grants
-
11 886
-
8 946
Capitalized 0
0
Total Research and development expenses 25 360
20 432
Annual Report 2021
Page 45
Research and development costs that are not eligible for capitalisation have been expensed in the period incurred and are recognised
as Research and development expenses. None of the development projects were eligible for capitalisation during 2020 and 2021.
R&D costs that are expensed, includes R&D management, patents, improvements of the TLens (see Note 16 Government grants),
feasibility study of new concepts, software applications and costs related to integration of TLens in new customer
applications/products.
5.5 Sales and marketing expenses
(in NOK 000)
2021
2020
Employee benefits expense (incl. consultants) 6 176
3 930
Other operating expenses 1 048
1 489
Total Sales and marketing expenses 7 224
5 419
5.6 Operational/supply chain expenses
(in NOK 000) 2021
2020
Employee benefits expense (incl. consultants) 6 381
6 058
Other operating expenses 2 758
1 914
Total Operational / supply chain expenses
9 139
7 972
5.7 Administrative expenses
(in NOK 000) 2021
2020
Employee benefits expense 16 971
13 902
VAT claim (Note 15) -11 624
-7 631
Other operating expenses 1 521
1 463
Total Administrative expenses 6 868
7 734
On 16 December 2021, the Tax Appeals Board issued a final decision and upheld the appeal, giving poLight full refund of the VAT
claim. NOK 12.4 million was recognised in the fourth quarter 2021, whereof NOK 11.6 million as a reduction of administrative
expenses and NOK 0.8 as financial income (see Note 15 Provisions).
5.8 Auditor's remuneration
(in NOK 000) 2021
2020
Audit fee 689
266
Audit related fee 55
84
Tax fee
30
34
Other service fee 41
0
Total Auditor's remuneration (excluding VAT) 814
384
Annual Report 2021
Page 46
6 Income tax
The significant components of income tax expense are:
(in NOK 000)
2021
2020
Consolidated statement of profit or loss
Current income tax expense
93
203
Deferred tax:
Relating to origination and reversal of temporary differences
0
0
Income tax expense reported in the statement of profit or loss
93
203
A reconciliation between tax expense and the product of accounting profit multiplied by Norway’s domestic tax rate, is as follows:
(in NOK 000) 2021
2020
Calculated income tax at
statutory rate of 22%
-11 746
-11 209
Government grants exempt from tax -1 045
-822
Tax effect of permanent differences 2 117
1 667
Transaction costs share issues -1 657
-661
Change in unrecognised deferred tax assets 12 374
11 216
Change in tax rate 398
0
Effect of different tax rates compared with Norwegian tax rate -65
13
Foreign currency effects 132
0
Adjustments previous year -415
0
Income tax expense 93
203
Effective tax rate 0.2 %
0.4 %
Movements in deferred tax balances
Balance at 31 December
2021
(in NOK 000)
Net balance
at 1 January
Recognised in
profit or loss
Recognised
in OCI
Net
Deferred
tax assets
Deferred tax
liabilities
Property, plant and equipment 501
-74
0
427
427
0
Intangible assets 5 436
-135
0
5 301
5 301
0
Inventories 2 788
116
0
2 903
2 903
0
Group loan -1 361
0
291
-1 070
0
-1 070
Provisions 102
8
0
110
110
0
Tax losses carried forward 133 283
12 168
0
145 452
145 452
0
Tax assets (liabilities) before set-off 140 749
12 083
291
153 123
154 193
-1 070
Set-off of tax
0
-1 070
1 070
Unrecognised deferred tax assets
-153 123
-153 123
Net tax assets (liabilities)
0
0
0
Annual Report 2021
Page 47
Balance at 31 December
2020
(in NOK 000)
Net balance
at 1 January
Recognised in
profit or loss
Recognised
in OCI Net
Deferred
tax assets
Deferred tax
liabilities
Property, plant and equipment 539
-39
0
501
501
0
Intangible assets
5 571
-
135
0
5 436
5 436
0
Inventories
2 771
17
0
2 788
2 788
0
Group loan -982
0
-379
-1 361
0
-1 361
Provisions 435
-333
0
102
102
0
Tax losses carried forward 121 200
12 084
0
133 283
133 283
0
Tax assets (liabilities) before set-off 129 533
11 594
-379
140 749
142 110
-1 361
Set-off of tax
0
-1 361
1 361
Unrecognised deferred tax assets
-140 749
-140 749
Net tax assets (liabilities)
0
0
0
Total unrecognised deferred tax assets net, relate to
(in NOK 000) 2021 2020
Norway (no expiry date)
146 746
13
2
861
France (no expiry date) 7 038 7 888
Total unrecognised deferred tax assets 153 784 140 749
7 Earnings per share
Basic earnings per share (EPS) is calculated by dividing the profit or loss for the year attributable to ordinary equity holders of the
parent, by the weighted average number of shares outstanding during the year.
The following table reflects the income and share data used in the basic and diluted EPS computations:
2021
2020
Weighted average number of ordinary shares for basic EPS
9 468 349
8 769 193
Effect of dilution:
Share options in-the-money (average)
501 475
314 949
Anti-dilutive for the periods presented
-501 475
-314 949
Weighted average number of shares adjusted for the effect of dilution
9 468 349
8 769 193
Fully vested and Exercisable share options have no dilution effect on EPS computations, because this would have decreased loss per
share.
There have been no other transactions involving ordinary shares, or potential ordinary shares, between the reporting date and the
date of authorisation of these financial statements.
(in NOK) 2021
2020
Profit / loss (-) attributable to ordinary equity holders of the parent -53 481
-51 155
Earnings per share for income attributable to equity holders of poLight:
Basic -5.65
-5.83
Diluted -5.65
-5.83
Annual Report 2021
Page 48
8 Property, plant and equipment
(in NOK 000) Building
Equipment
Total
Cost at 1 January 2020
287
11 896
12 183
Additions 0
226
226
Effect of changes in foreign exchange 0
146
146
Cost at 31 December 2020 287
12 268
12 554
Accumulated depreciation and impairment losses at 1 January 2020 -287
-10 661
-10 948
Depreciation 0
-646
-646
Effect of changes in foreign exchange 0
-121
-121
Accumulated depreciation and impairment losses at 31 December 2020 -287
-11 428
-11 715
Net book value at 31 December 2020 0
840
840
(in NOK 000)
Building
Equipment
Total
Cost at 1 January 2021
287
12 268
12 554
Additions 1 126
1 016
2 142
Disposals at cost
-
287
-
313
-
599
Effect of changes in foreign exchange 0
-110
-110
Cost at 31 December 2021 1 126
12 861
13 987
Accumulated depreciation and impairment losses at 1 January 2021 -287
-11 428
-11 715
Depreciation
-
113
-
512
-
625
Accumulated depreciation and impairment losses disposals 287
313
599
Effect of changes in foreign exchange 0
110
110
Accumulated depreciation and impairment losses at 31 December 2021 -113
-11 518
-11 631
Net book value at 31 December 2021 1 013
1 343
2 356
Estimated useful lives (years) 1)
3-7
1) Modifications and upgrades in leased premises are depreciated over the leasing period that is estimated to 5 years (including an
option to extend the lease with 2 years).
Annual Report 2021
Page 49
9 Intangible assets
(in NOK 000)
Development costs
and TLens patents
Software
license
Total
Cost at 1 January 2020
78 184
242
78 427
Additions
—
internal development
0
0
0
Additions
0
0
0
Cost at 31 December 2020
78 184
242
78 427
Accumulated amortisation and impairment losses at 1 January 2020
-24 270
-220
-24 490
Amortisation
-10 269
-21
-10 290
Impairment losses
0
0
0
Disposals
0
0
0
Accumulated amortisation and impairment losses at 31 December
2020
-34 539
-242
-34 780
Net book value at 31 December 2020
43 646
0
43 646
(in NOK 000)
Development costs
and TLens patents
Software
license
Total
Cost at 1 January 2021
78 184
242
78 427
Additions — internal development
0
0
0
Additions
0
0
0
Disposals
0
-61
-61
Cost at 31 December 2021
78 184
181
78 365
Accumulated amortisation and impairment losses at 1 January 2021
-34 539
-242
-34 780
Amortisation
-10 269
0
-10 269
Impairment losses
0
0
0
Disposals
0
61
61
Accumulated amortisation and impairment losses at 31 December
2021
-44 807
-181
-44 988
Net book value at 31 December 2021
33 377
0
33 377
Intangible assets with finite useful lives, are amortised systematically over their estimated economic lives, ranging between 3 and 7
years.
In 2008/2009, poLight acquired the core patents of the TLens® technology for NOK 5 million. The patents were granted in 10 different
countries in 2006. poLight has since invested substantial resources in research and product development of the TLens®.
poLight started amortising capitalised development costs for TLens Silver and the related ASIC driver in the second quarter of 2019
as they became ready for commercial shipments. The useful lives are deemed to be 7 years which correlates with the remaining
number of years of the first patent.
Research and development costs that are not eligible for capitalisation have been expensed in the period incurred and are recognised
in Research and development expenses net of government grants received.
Annual Report 2021
Page 50
10 Research and development costs
The part of poLight’s IP (intellectual property) that is recognised as an intangible asset, is the fundamental TLens® technology, which
can become a component in smartphones, wearables and augmented reality, as well as a wide range of industrial applications, such
as barcode readers and machine vision/sensor applications.
(in NOK 000)
Carrying amount
before
impairment
Carrying amount
after impairment
Accumulated net
impairment loss
CGU: TLens® technology platform
At 31 December 2020
61 926
43 646
18 280
At 31 December 2021
51 657
33 377
18 280
The TLens® technology platform is poLight’s major asset. In January 2020, the first product using TLens Silver was launched within
the consumer market segment. A smartwatch phone for children, with a main camera with an advanced autofocus (AF) function
delivered by poLight. Since then, additional 7 design-wins have been achieved. Additional two in consumer products like web cam
and a second smartwatch, but also several design wins in industrial products, augmented reality (AR) and medical.
The company has one major asset, the TLens® technology platform and the management has evaluated that the group as a whole is
one CGU for impairment testing. The remaining carrying value of development costs are NOK 33.4 million and are related to TLens®
technology platform, that includes the ASIC driver. Indicators of impairment of the TLens ® technology platform have been reviewed,
and none identified.
TLens® Platinum, that is a larger version of the TLens® is still under development. Engineering samples have been produced and have
already been tested by some potential customers. However, activity to prepare TLens® Platinum for mass production has been put
on hold until the product is closer to the anticipated market breakthrough. In December 2019 a management assessment was made
and an impairment charge of NOK 18.3 million was recognised related to this product. The recognition of impairment for accounting
purposes does not imply that the assets have no commercial value.
In addition, management has evaluated that the equity value of the company is an indication of the fair value of the CGU. The
company’s shares are listed on Oslo Stock exchange, and fair value is estimated based on the observed share price. The fair value
measurement is categorized within level 2 of the fair value hierarchy in accordance with IFRS 13. It is considerable headroom between
the carrying value and the fair value less cost of disposal.
11 Financial assets and financial liabilities
poLight’s principal financial liabilities comprise trade and other payables, lease liabilities and provisions. poLight’s principal financial
assets include trade and other receivables, and cash.
poLight is exposed to foreign currency risk, credit risk and liquidity risk.
Foreign currency risk
Trade receivables, trade payables and inventory; poLight’s contracts with the suppliers of the actuator and the assembly of the
TLens®, are in USD. Foreign currency risk will be mitigated by entering sales contracts in USD or using hedging instruments. The group
had not entered into any hedging instruments as at 31 December 2021.
Research and development (“R&D”); a significant part of the R&D expenses is in foreign currency. Services from subsidiaries are
invoiced in EUR and development programs at manufacturing partners are invoiced in USD. These activities have not been hedged
as of today.
The following tables demonstrate the sensitivity to a reasonably possible change in EUR and USD exchange rates, with all other
variables held constant. The impact on the profit before tax is due to changes in the value of monetary assets and liabilities measured
in NOK. The impact on the equity is due to the effect on operating activities.
Annual Report 2021
Page 51
Change in EUR
rate
Effect on profit
before tax Effect on equity
(in NOK 000)
(in NOK 000)
2021
+5% -800 -576
-5% 800 576
2020
+5% -469 -177
-5% 469 177
Change in USD
rate
Effect on profit
before tax Effect on equity
2021
+5% -893 -893
-5% 893 893
2020
+5% -505 -505
-
5%
505
505
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a
financial loss. poLight is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing
activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Historically, no bad debt has been recognised and since most receivables are current, no provision is made.
Credit quality of a customer is assessed based on D&B’s credit rating scorecard and are regularly monitored. As at 31 December 2021,
most of the receivables consisted of government grants with low credit risk.
Credit risk from balances with banks are mitigated using 10 different Norwegian banks with a deposit limit of NOK 40 million each.
Credit quality is assessed and regularly monitored.
Liquidity risk
At year-end, poLight had a significant cash reserve. There are no plans to raise more capital through a share issue for the next 12
months. Management and the Board of Directors are focused on the Group’s liquidity requirements and are evaluating issuance of
debt.
Annual Report 2021
Page 52
11.1 Financial assets
(in NOK 000) 2021
2020
Financial assets at amortised cost:
Trade receivables 2 506
317
Grants recognised, not received 7 280
5 014
VAT receivables, VAT claim (note 15)
11 215
0
Other receivables 1 078
709
Total financial assets 22 078
6 040
Total current 22 078
6 040
Total non-current 0
0
Trade receivables are non-interest bearing and generally on 30 day terms.
As at 31 December, the ageing analysis of the receivables is as follows:
Not past
due
Past due
(in NOK 000) Total
< 30 days
30–60 days
61–90 days
91–120 days
> 120 days
2021 22 078
21 721
322
35
0
0
0
2020 6 040
6 040
0
0
0
0
0
11.2 Financial liabilities
(in NOK 000) 2021
2020
Financial liabilities at amortised cost, other than interest-bearing loans and
borrowings:
Trade payables
4 518
1 442
Other payables 6 490
7 195
Accrued employer’s NICs on share option plan (note 18)
8 898
2 046
Provisions 500
1 189
Total 20 406
11 873
Total current
20 406
11 873
Total non-current 0
0
For all the financial liabilities the carry amounts represent a reasonable approximation of fair value.
Terms and conditions of the above financial liabilities
 Trade payables are non-interest bearing, and are settled on 15–45 day terms
 Other payables are non-interest bearing, and have an average term of 2.6 months
 Accrued employer’s NICs on exercisable share options with remaining contractual life of 2.29 years as at 31 December
2021. See Note 18 Share option plans (equity-settled) for additional information.
Annual Report 2021
Page 53
Maturity analysis
The maturity analysis below shows the remaining contractual maturity of financial liability. The analysis shows contractual
undiscounted cash-flows (i.e., includes interest), and thus differs from the amounts recognised in the statement of financial position.
(in NOK 000) < 3 months
3 to 12
months
1 to 5 years
> 5 years
Total
As at 31. December 2021
Lease liabilities
317
952
4 445
0
5 715
Trade and payables
18 256
1 650
0
0
19 906
18 574
2 603
4 445
0
25 621
(in NOK 000) < 3 months
3 to 12
months
1 to 5 years
> 5 years
Total
As at 31. December 2020
Lease liabilities
337
674
0
0
1 011
Trade and other payables
8 707
1 977
0
0
10 684
9 045
2 651
0
0
11 695
Capital Management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital
ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust
the capital structure, the Group may issue new shares and/or debt.
The Group monitors cash monthly towards 5-year budgets and forecasts.
(in NOK 000)
2021
2020
Trade and other payables 20 406
11 873
Less: cash and short-term deposits -157 810
-77 209
Net debt -137 403
-65 336
The Group's capital structure is primarily based on deposits.
12 Inventories
(in NOK 000) 2021
2020
Components; mainly wafers (at cost) 25 304
19 215
Finished goods; lenses and driver ASICs (at cost) 4 730
2 622
Obsolescence provision (expensed as cost of sales) -13 198
-12 671
Total inventories at the lower of cost and net realisable value 16 836
9 166
During 2022, NOK 0.5 million (2020: NOK 0.1 million) was recognised as an obsolescence expense for inventories carried at net
realisable value. This is recognised in cost of sales.
Annual Report 2021
Page 54
13 Cash and short-term deposits
(in NOK 000) 2021
2020
Cash at banks 156 365
76 335
Restricted cash, taxes withheld 1 263
692
Restricted cash, deposits 181
181
Cash and short
-
term deposits
157 810
77 209
Cash at banks earns interest at floating rates based on daily bank deposit rates.
14 Issued capital and reserves
2021
2020
Ordinary shares
10 385 096
9 048 822
The shareholders are presented in Note 16 Share capital and shareholder information, in the financial statement of the parent
company, poLight ASA.
Shares issued and fully paid Number of shares
Issued share capital
(in NOK 000)
At 1 January 2020 of NOK 0.20 each 8 116 592
1 623
Private placement on 16 April 2020 each with a par value of NOK 0.20
727 273
145
Subsequent offering on 28 May 2020 each with a par value of NOK 0.20 181 818
36
Exercise of share options on 26 June 2020 each with a par value of NOK 0.20 20 689
4
Exercise of share options on 1 September 2020 each with a par value of NOK 0.20 2 450
0
At 31 December 2020 9 048 822
1 810
Exercise of share options on 3 March 2021 each with a par value of NOK 0.20 79 378
16
Private placement on 13 September 2021 each with a par value of NOK 0.20
1 136 363
227
Exercise of share options on 29 September 2021 each with a par value of NOK 0.20 4 137
1
Subsequent offering on 21 October 2021 each with a par value of NOK 0.20 116 396
23
At 31 December 2021 10 385 096
2 077
Annual Report 2021
Page 55
(in NOK 000)
Share premium
At 1 January 2020 632 682
Private placement on 16 April 2020 of NOK 55 each 39 855
Subsequent offering on 28 May 2020 of NOK 55 each
9 964
Exercise of share options on 26 June 2020 average of NOK 33,11
681
Exercise of share options on 1 September 2020 average of NOK 21,81
53
Decrease due to transaction costs for issued share capital
-3 005
At 31 December 2020 680 229
Exercise of share options on 3 March 2021 average of NOK 40.36 3 188
Private placement on 13 September 2021 of NOK 110 each 124 773
Exercise of share options on 29 September 2021 average of NOK 46.57
192
Subsequent offering on 21 October 2021 of NOK 110 each
12 780
Decrease due to transaction costs for issued share capital
-7 530
At 31 December 2021
813 632
The board is authorised to increase the share capital issuing new shares up to a total nominal value of NOK 365 128 (1 825 640 shares
at par value of NOK 0.2) that is approximately 20 per cent of shares outstanding, in addition to shares through share option schemes.
Share option schemes
The board is authorised to issue shares through share option schemes up to a total nominal value of NOK 182 564 (912 820 shares at
par value of NOK 0.2), that is approximately 10 per cent of shares outstanding. The company’s share option schemes, with the
opportunity to subscribe for shares in poLight, have been offered all employees (Note 18 Share option plans (equity-settled)).
15 Provisions
(in NOK 000)
Warranty
provision
Liability
Claims
Total
At 1 January 2020
0
1 512
1 189
2 701
New or increased provisions
0
0
0
0
Utilised
0
-1 512
0
-1 512
At 31 December 2020
0
0
1 189
1 189
New or increased provisions
500
0
0
500
Utilised
0
0
0
0
Unused reversed as
administrative expenses
0
0
-1 189
-1 189
At 31 December 2021
500
0
0
500
Expected timing of cash flow
(
in NOK 000)
Warranty
provision
Liability
Claims
Total
Current, < 1 year
500
0
0
500
Non-current
0
0
0
0
At 31 December 2021
500
0
0
500
Warranty provision
Annual Report 2021
Page 56
A general provision to meet potential claims under the warranty clause was recognised in 2021.
Liability
A provision of NOK 1.5 million was recognised in the fourth quarter of 2019 related to severance packages for 6 FTE (full time
equivalent) employees, that was utilised in first half of 2020.
Claims
On 14 September 2018, the Norwegian Tax Administration for South Norway (Skatteetaten Sør-Norge) excluded poLight ASA from
the Norwegian VAT Register and claimed repayment of refunded VAT, with effect from 1 January 2013, totalling NOK 13.6 million.
The Norwegian Tax Administration claimed that the company was not capable of being profitable and did not therefore qualify as a
"business" pursuant to the Norwegian laws and regulations regarding VAT. In September 2018, the decision was appealed to the Tax
Appeals Board (Skatteklagenemda). The entire claim was paid in 2018, except the additional associated taxes of NOK 1.2 million.
On 28 August 2020, the tax authorities decided to re-register poLight ASA in the VAT Register with effect from July 2020 on ordinary
terms. The receivable of NOK 8.2 million was recognised in the third quarter 2020, whereof NOK 7.6 million as a reduction of
administrative expenses. The cash proceeds from this ruling were received in the fourth quarter 2020.
On 16 December 2021, Norway’s Tax Appeals Board issued a final decision and upheld the appeal filed by poLight giving full refund
of the VAT claim. NOK 12.4 million was recognised in the fourth quarter 2021, whereof NOK 11.6 million as a reduction of
administrative expenses and NOK 0.8 as financial income. The outstanding amount was received in January 2022.
16 Government grants
(in NOK 000) 2021
2020
Receivable at 1 January
5 014
1 809
Received during the year -9 621
-5 740
Grants recognised as reduction of research and development expenses in the consolidated
statement of income 11 886
8 946
Receivable at 31 December 7 280
5 014
The group have received grants for development of next generation optical components based on TLens® technology and analyses
and testing activities to understand better relations between micro failure in optical components and mechanical, physical and
electric testing. The group has in addition received Tax Refund grants related to project for application reference design enabled by
poLight technology, autofocus lens and ASIC projects.
(in NOK 000) 2021
2020
Current
7 280
5 014
Non-current 0
0
Total 7 280
5 014
17 Pensions
poLight ASA (the Group’s Norwegian company) is subject to the requirements of the Mandatory Occupational Pensions Act, and the
company’s pension scheme follows the requirements of the Act. As the subsidiaries in France, Finland and China are not subject to
mandatory pension schemes in addition to the national insurance schemes, no pension scheme has been established there.
Annual Report 2021
Page 57
The pension scheme in Norway is based on a defined contribution plan, and the premium is calculated on the basis of the employees’
income. In 2021 5.55% of the salary between 1G (1G=NOK 106,399) and 7.1G, and 8% of the salary between 7.1G and 12G was
calculated. The period’s contributions are recognised in the Consolidated statement of income as pension cost for the period.
(in NOK 000) 2021
2020
Defined contribution plan
734
861
Social security tax
104
121
Total pension cost
838
983
18 Share option plans (equity-settled)
Share options in the parent company are granted to all employees. The exercise price of the share options is equal to, or higher than,
the market price of the underlying shares on the date of grant. The share options in each agreement are vested in equal parts, with
1/36 each month over 3 years, at the expiry of each calendar month, starting at the date of grant, and are conditional on the
employee’s continued employment in poLight.
The share options can be exercised up to two years after the three-year vesting period. Exercisable share options may as a general
rule, be exercised and shares issued once per quarter each following the release of poLight ASA’s quarterly reports.
Share option expense
(in NOK 000) 2021
2020
Share based compensation costs 4 385
3 672
Accrued social security 6 852
2 046
Recognised as employee benefits expense
11 236
5 718
For additional details of the expense recognised in profit or loss, see Note 5.2 Employee benefits expense.
The board is authorised to issue additional shares - in share option scheme - up to total par value of NOK 182 564 (912 820 shares at
par value of NOK 0.2).
Outstanding share options at December 31, 2021
Year issued
Exercise
price
(NOK)
Outstanding no. of
share options
Exercisable no. of
share options
Remaining
contractual life
(years)
Total expensed
(in NOK 000)
Remaining
estimated expense
(in NOK 000)
2018
50,00
327 903
327 903
1,80
6 320
0
2019 18,90
40 442
40 442
2,47
375
0
2019 27,00
49 886
49 886
2,47
303
0
2019 33,75
67 275
39 175
2,47
259
3
2020
74,90
189 667
85 167
3,67
5 311
1 171
2021 114,00
134 000
4 250
4,45
1 413
7 581
Total 809 173
546 823
13 980
8 756
Annual Report 2021
Page 58
Reconciliation of outstanding share options
2021
2020
Number of
share options
WAEP
Number of
share options
WAEP
Outstanding at 1 January
764 132
50.5
590 826
41.6
Granted during the year
134 000
114.0
198 000
74.9
Forfeited during the year
-5 444
41.5
0
Exercised during the year
-83 515
40.7
-23 139
31.9
Expired during the year
0
-
1 555
45.6
Outstanding at 31 December
809 173
62.1
764 132
50.5
In % of outstanding shares
7.79 %
8.44 %
Exercisable at 31 December
546 823
48.8
402 902
44.9
The weighted average exercise price (WAEP) for the share options exercised during 2021 was NOK 40.7 (2020: NOK 31.9), and the
average market price at the exercise dates was NOK 132.1 (2020: NOK 60.9).
The weighted average exercise price for the share options outstanding as at 31 December 2021, was NOK 48.8 (2020: NOK 50.5) with
a range from NOK 18.90 to NOK 114. The weighted average remaining contractual life for the share options outstanding as at 31
December 2021 was 2.85 years (2020: 3.47 years).
At the end of the year, the weighted average exercise price was NOK 48.8 (2020: NOK 44.9) on exercisable options.
In the case of an offeror becomes the owner of at least 9/10 of the issued shares of poLight, all of the unvested share options becomes
immediately vested.
Share option valuation
The fair value of the options granted in 2021 has been calculated to NOK 5.8 million excluding social security expenses (2020: NOK
6.5 million), by using the Black-Scholes option pricing model.
The basis for the valuation comprises several factors that affect the calculated fair value of granted options. The assumptions used
in the calculation was:
2021
2020
Price at grant date NOK 114.4
NOK 75.7
Exercise price
NOK 114
.0
NOK 74.9
Maximum
1)
option life 5 years
5 years
Assumed option life 4 years
4 years
Risk-free interest rate 1.15%
0.4%
Volatility 80 %
60 %
Fair value per share option
NOK 67.1
NOK 34.7
1) The share options expire 5 years from the date of the grant, but any vested options shall be exercised no later than 6
months after last day of service
Expected vesting is estimated based on employee turnover, and volatility is deemed based on historic volatility.
Annual Report 2021
Page 59
Sensitivity analysis
The fair value of the share options granted in 2021 of NOK 5.8 million was determined based on an assumption of a volatility of 80%.
At a volatility of 90%, holding other assumptions constants, would have increased the fair value with NOK 0.5 million over the three-
year vesting period. A decrease in the assumed lifetime of the share options from 4 years to 3.5 years, would have decreased the fair
value with NOK 0.6 million over the vesting period.
19 Leases
poLight has entered into commercial leases with regards to premises and office equipment used in its operations. In Norway, the
company leases lab facilities, including a clean room, and offices are leased in Norway, Finland and China. The premises in Norway
comprises 852 square meters. The contract expires in July 2024 with an option to extend the lease agreement with additional 2 years.
The option is assumed to be utilised determining the lease period, increasing the lease assets and liabilities.
The office lease terms in Finland and China are terminable by both lessee and lessor with twelve months’ notice or less. The leases
of office equipment are with low value. The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition
exemptions for these leases.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
Building
(in NOK 000) 2021
2020
At
1 January
964
1 923
Additions 5 309
237
Termination of contract -465
0
Depreciation expense -1 029
-1 197
At 31 December 4 778
964
Set out below are the carrying amounts of lease liabilities and the movements during the period:
(in NOK 000) 2021
2020
At
1 January
1 048
2 007
Additions
5 309
160
Termination of contract -522
0
Interest expense 243
69
Payments
-1 202
-1 188
At 31 December 4 876
1 048
Current, < 1 year 942
1 048
Non-current 3 934
0
The maturity analysis of lease liabilities are disclosed in Note 11.2.
Annual Report 2021
Page 60
The following are the amounts recognised in profit or loss:
(in NOK 000) 2021
2020
Depreciation expense of right-of-use assets 1 029
1 197
Interest expense on lease liabilities 243
69
Expense relating to short-term leases (included in research and development expenses) 389
419
Expense relating to short
-
term leases (included in sales and marketing expenses)
202
121
Expense relating to leases of low-value assets (included in administrative expenses) 40
47
Total amount recognised in profit or loss
1
904
1 851
The Group had total cash outflows for leases of NOK 1 833 in 2021 (2020: NOK 1 774). The Group also had non-cash additions to
right-of-use assets and lease liabilities of NOK 5 309 in 2021 (2020: NOK 160). The addition is attributable to a new lease for the
company’s headquarters in Horten.
20 Related parties
The financial statements include the financial statements of the Group and the subsidiaries listed in the following table:
Name Principal activities
Country of
incorporation 2021
2020
poLight ASA
R&D, Sales and
management Norway 100 %
100 %
poLight France SAS R&D France 100 %
100 %
poLight Finland Oy R&D Finland 100 %
100 %
poLight Hong Kong Limited
Holding company
HK, China
100 %
100 %
poLight (Shenzhen) Technical
Service
Company Limited
Sales
China
100 %
100 %
poLight ASA is the ultimate parent. None of the shareholders of poLight ASA has control of the company. As of 31 December 2021,
the largest shareholder was Investinor Direkte AS, with an ownership of 17.14%.
Transactions between group companies
Intercompany agreements are entered with all the subsidiaries in the Group. All sales in the subsidiaries are made with parent
company. All transactions are considered to be on an arm’s length basis.
(in NOK 000) 2021
2020
Purcha
s
es from subsidiaries
1
1
532
12 043
Outstanding balances Currency
2021
2020
Subordinated loan agreement EUR 000
2 750
2 750
Trade and other payables NOK 000
511
1 163
A subordinated loan agreement was concluded on 29 December 2016, between poLight ASA and poLight France SAS. Only the part
that exceeds a prudent level, with regards to both equity and subordinated loan combined, shall be regarded as loan in respect to
Annual Report 2021
Page 61
interest accrual. For the financial year 2021, the entire principal is considered as equity, and not interest-bearing. Since the loan is
considered to be a part of the net investment in poLight France SAS, the currency translation effect is recognised in OCI. In the parent
company an impairment loss of NOK 26 469 200 related to the subordinated loan have been recognised, whereof NOK 1 324 125
recognised in 2021.
Transactions with other related parties
No transactions have been made with other related parties for the relevant financial years.
Compensation to management personnel and board of director’s
A separate remuneration report will be published on poLight's website as a part of the notification of the Annual General Meeting.
Management remuneration
In accordance with the Norwegian public Limited Companies Act §6-16 a, the board of directors prepares a separate statement
related to the determination of salary and other benefits for the corporate management. The statement shall be subject to an
advisory vote by the annual general meeting in accordance with §5-6 (3). The statement for 2021 will be submitted for approval in
the annual general meeting 25 May 2022 and will be available on poLight ASA’s website at the time the notice of the meeting is sent
to the shareholders.
The total remuneration to the management consists of fixed salary, bonus, benefits in-kind, share option program and pension
schemes. The fixed salary is subject to an annual evaluation, and any salary increases and other amendments to the employments
terms shall be based on a review by the CEO and the Board each year, taking into account trends in local labour markets, the results
achieved, and individual contributions to the development of the Company.
(in NOK 000) Salaries Bonus
Pension
costs
Other
benefits
Value
1)
share
options Total 2021
2020
Øyvind Isaksen - CEO 3 157
667
93
533
1 203
5 653
6 130
Pierre Craen - CTO
2)
2 120
292
15
0
321
2 747
2 617
Alf Henning Bekkevik - CFO 1 352
175
89
17
27
1 661
1 903
Marianne Sandal - COO 1 664
217
104
48
321
2 354
2 325
1) Fair value of the share options vested in 2021 are calculated using the Black-Scholes option pricing model at the date of the
grant. Gain on exercised share options in 2021 was:
a. Pierre Craen (CTO) NOK 1,288.1 thousand (2020: NOK 298.7 thousand)
b. Alf Henning Bekkevik (CFO) NOK 1,372.7 thousand
c. Marianne Sandal (COO) NOK 1,372.7 thousand
2) Pierre Craen has for the period 1.1.2021-31.12.2021 invoiced NOK 2,172 thousand of the remuneration through Tilia-Blue
SRL as a consultant, included in the above figure.
If the company terminates the CEO’s employment, the CEO is entitled to nine months’ salary, in addition to a three months’ notice
period.
Below is an overview of poLight management's and board members' granted share options:
Annual Report 2021
Page 62
Opening
balance
Forfeited
options
Exercised
options
Granted
options
Ending
balance
Exercisable
options
Øyvind Isaksen - CEO 336 750
0
0
0
336 750
281 426
Pierre Craen - CTO 76 833
0
-14 711
0
62 122
47 581
Alf Henning Bekkevik
-
CFO
63 000
0
-
12 778
0
50 222
47 028
Marianne Sandal - COO 84 500
0
-12 778
0
71 722
57 181
561 083
0
-
40 267
0
520 816
433 216
Pierre Craen has for the period 1.1.2021-31.12.2021 invoiced NOK 2,172.3 thousand of the remuneration through Tilia-Blue SRL as a
consultant.
The exercise price on exercisable share options at 31 December 2021 was NOK 47.8 per share in average. 40,267 share options were
exercised in 2021.
In the case of an offeror becoming the owner of at least 9/10 of the issued shares of poLight, all of the unvested share options
becomes immediately vested and exercisable.
Remuneration members of the board
(in NOK 000) 2021
2020
Ann-Tove Kongsnes - chair of the board
288
175
Eivind Bergsmyr - former chair of the board
1)
0
350
Grethe Viksaas
213
175
Svenn Tore Larsen
213
175
Juha Alakarhu
2)
213
175
Thomas Görling
3)
125
0
1) Resigned from the Board on May 26, 2021
2) In addition to the remuneration received, Juha Alakarhu has invoiced NOK 12.4 thousand through Spektro Oy as an
consultant.
3) Member from May 26, 2021
There are no loans from poLight to the management or members of the board.
Remuneration of the nomination committee
The members of the nomination committee, Thomas S. Wrede-Holm, Jan-Erik Hæreid and Anne E. H. Worsøe were each remunerated
with NOK 20,000.
Annual Report 2021
Page 63
21 Events after the end of the reporting period
No events have occurred after the end of the reporting period that requires disclosure. Since poLight does not have any operations,
customers or direct suppliers in Russia or Ukraine, except a consultant in Moscow, the war has so far not led to any consequences of
significance for the operations in poLight.
22 Standards issued, but not yet effective
Issued new standards and amendments are either not applicable for the Group or are not considered to have a significant impact on
the financial statements.
Annual Report 2021
Page 64
POLIGHT ASA FINANCIAL STATEMENTS
Statement of income poLight ASA – NGAAP for the year ended 31 December
(in NOK 000) Note
2021
2020
Sale of goods
2
8 683
2 590
Rendering of services
2
1 350
463
Revenue
10 032
3 053
Cost of sales
12
3 851
698
Gross profit
6 182
2 355
Research and development expenses
-26 142
-21 318
Sales and marketing expenses
-7 866
-5 525
Operational / supply chain expenses
-9 139
-7 972
Administrative expenses
-8 127
-8 999
Depreciation, amortisation and net impairment losses
9,10
-10 855
-10 882
Operating profit / loss (-)
-55 948
-52 342
Net financial items 7
1 728
2 491
Profit / loss (-) before tax
-54 220
-49 851
Income tax expense
8
0
0
Profit / loss (-) for the year
-54 220
-49 851
Allocated to/from:
Share premium
17
-49 836
-46 179
Retained earnings
17
-4 385
-3 672
Profit / loss (-) for the year
-54 220
-49 851
Annual Report 2021
Page 65
Balance sheet poLight ASA – NGAAP as at 31 December
(in NOK 000) Note
2021
2020
ASSETS
Property, plant and equipment 9
2 280
768
Intangible assets
10
33 377
43 646
Investments in subsidiaries
11
320
320
Subordinated loan to subsidiaries
13,20
1 000
1 000
Total non-current assets
36 977
45 733
Inventories
12
16 836
9 166
Trade receivables
13
2 506
317
Other receivables
13
20 325
9 514
Cash and cash equivalents
15
154 660
74 462
Total current assets
194 326
93 459
Total assets
231 303
139 193
EQUITY AND LIABILITIES
Share capital
16,17
2 077
1 810
Share premium
17
209 320
125 752
Total equity
211 397
127 562
Trade payables 13
4 932
2 558
Public duties payable
10 894
3 355
Other payables 13
4 080
5 718
Total current liabilities
19 906
11 631
Total liabilities
19 906
11 631
Total equity and liabilities
231 303
139 193
Horten, 27 April 2022
THE BOARD OF DIRECTORS OF POLIGHT ASA
Ann-Tove Kongsnes (sign)
Chair
Thomas Görling (sign)
Board member
Grethe Viksaas (sign)
Board member, Independent
Svenn-Tore Larsen (sign)
Board member, Independent
Juha Alakarhu (sign)
Board member, Independent
Øyvind Isaksen (sign)
Chief Executive Officer
Annual Report 2021
Page 66
Statement of cash flows poLight ASA – NGAAP for the year ended 31 December
(in NOK 000) Note
2021
2020
Operating activities
Profit before tax
-
54 220
-
49 851
Depreciation, amortisation and net impairment losses
9,10
10 855
10 882
Changes in inventories, accounts receivables and accounts payable
-7 483
-1 846
Changes in other accruals
-1 029
-4 788
Net cash flows from / (used in) operating activities
-51 877
-45 603
Investing activities
Purchase of property, plant and equipment 9
-2 099
-201
Dividend from subsidiaries 7
504
1 947
Net cash flows from / (used in) investing activities
-1 595
1 746
Financing activities
Proceeds from Issue of ordinary shares 17
137 803
50 000
Proceeds from exercise of share options 17
3 397
738
Transaction costs on issue of shares 17
-7 530
-3 005
Net cash flows from / (used in) financing activities
133 670
47 733
Net increase in cash and cash equivalents
80 198
3 876
Cash and cash equivalents at 1 January 15
74 462
70 586
Cash and cash equivalents at 31 December
15
154 660
74 462
Annual Report 2021
Page 67
Notes to the Financial statement poLight ASA
1 Significant accounting policies
The financial statements have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting
principles in Norway. 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 from the disclosures for the Group are shown below.
See notes to the consolidated financial statements.
Use of estimates
The management has used estimates and assumptions that have affected assets, liabilities, incomes, expenses and information about
potential liabilities in accordance with generally accepted accounting principles in Norway.
Foreign currency translation
Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary items in a foreign currency
are translated into NOK, using the exchange rate applicable on the balance sheet date. Non-monetary items that are measured at
their historical price expressed in a foreign currency are translated into NOK, using the exchange rate applicable on the transaction
date. Non-monetary items that are measured at their fair value expressed in a foreign currency are translated at the exchange rate
applicable on the balance sheet date. Changes to exchange rates are recognised in the income statement as they occur during the
accounting period.
Revenue recognition
Revenues from the sale of goods are recognised in the income statement, once delivery has taken place and most of the risk and
control has been transferred.
Government grants
Government grants are recognised when there is reasonable assurance that the grant will be received, and that all attached
conditions will be complied with. When the grant relates to an expense item, it is deducted in the related expense on a systematic
basis over the periods that the costs it is intended to compensate, are expensed. Where the grant relates to an asset, it reduces the
carrying amount of the asset. The grant is then recognised as income over the useful life of the depreciable asset by way of a reduced
depreciation charge.
Income tax
The tax expense comprises tax payable and changes to deferred tax. Deferred tax/tax assets are calculated on all differences between
the book value and tax value of assets and liabilities. Deferred tax is calculated as 22% of temporary differences and the tax effect of
tax losses carried forward. Deferred tax assets are recorded in the balance sheet when it is more likely than not that the tax assets
will be utilized. Taxes payable and deferred taxes are recognised directly in equity, to the extent that they relate to equity
transactions.
Classification and valuation of balance sheet items
Current assets and short-term liabilities consist of receivables and payables due within one year, and items related to the operating
cycle. Other balance sheet items are classified as fixed assets/long-term liabilities.
Current assets are valued at the lower of cost and fair value. Short-term liabilities are recognised at nominal value.
Fixed assets are valued at cost, less depreciation and impairment losses. Long-term liabilities are recognised at nominal value.
Research and development
Development costs are capitalised, providing that a future economic benefit associated with development of the intangible asset
can be established and costs can be measured reliably. Otherwise, the costs are expensed as incurred. Capitalised development
cost is amortised straight-line over its useful life. Research costs are expensed as incurred.
Annual Report 2021
Page 68
Fixed assets
Property, plant and equipment is capitalised and depreciated straight-line over the estimated useful life. Significant fixed assets which
consist of substantial components with dissimilar economic life, have been unbundled; depreciation of each component is based on
the economic life of the component. Costs for maintenance are expensed as incurred, whereas costs for improving and upgrading
property, plant and equipment are added to the acquisition cost and depreciated with the related asset. If carrying value of a non-
current asset exceeds the estimated recoverable amount, the asset is written down to the recoverable amount. The recoverable
amount is the greater of the net realisable value and value in use. In assessing value in use, the discounted estimated future cash
flows from the asset are discounted.
Investments in subsidiaries
The investments in subsidiaries are valued as cost less any impairment losses. An impairment loss is recognised if the impairment is
not considered temporary, in accordance with generally accepted accounting principles. Impairment losses are reversed if the reason
for the impairment loss disappears in a later period.
Dividends, group contributions and other distributions from subsidiaries are recognised in the same year as they are recognised in
the financial statement of the subsidiaries. If dividends/group contribution exceeds withheld profits after the acquisition date, the
excess amount represents repayment of invested capital, and the distribution will be deducted from the recorded value of the
acquisition in the balance sheet for the parent company.
Inventory
Inventories are recognised at the lowest of cost and net selling price. The net selling price is the estimated selling price in the case of
ordinary operations, minus the estimated completion, marketing and distribution costs. The cost is arrived at using the FIFO method,
and includes the costs incurred in acquiring the goods and the costs of bringing the goods to their current state and location.
Receivables
Accounts receivable and other current receivables are recorded in the balance sheet at nominal value less provisions for doubtful
accounts. Provisions for doubtful accounts are based on an individual assessment of the different receivables. For the remaining
receivables, a general provision is estimated, based on expected loss.
Cash flow statement
The cash flow statement is presented using the indirect method. Cash and cash equivalents include cash, bank deposits and other
short-term, highly liquid investments with maturities of three months or less.
2 Revenue
(in NOK 000)
2021
2020
By business area
TLens® 10 032
3 019
Group revenue 0
34
Total 10 032
3 053
Geographical distribution
America 2 618
291
Asia 6 026
1 815
Europe
1 388
946
Total 10 032
3 053
Annual Report 2021
Page 69
3 Specification of operating expenses by nature
(in NOK 000) Note 2021
2020
Employee benefits expense
1)
5,18
30 594
26 796
Depreciation, amortisation and net impairment losses 9,10 10 855
10 882
Other operating expenses 6,14 20 680
17 018
Total operating expenses
62 130
54 697
1) Including consultants engaged on long-term contract
4 Government grants
(in NOK 000)
2021
2020
At 1 January 5 014
1 809
Received during the year -9 621
-5 740
Released to the statement of comprehensive income 11 886
8 946
At 31 December 7 280
5 014
poLight ASA has received grants for reimbursement of expenses related to technology and product development and customer
product design.
5 Employee benefits expense
(in NOK 000) 2021
2020
Wages and salaries
16 512
18 956
Consultants engaged on long-term contract 7 830
0
Social security costs
3 245
2 951
Pension costs (note 18) 825
926
Other benefits and social costs
938
769
Share based compensation costs 11 236
5 718
Grants
-
2 162
-
2 525
Total employee benefits expense 38 424
26 796
Average number of
full
-
time equivalents
, employees
14
15
Average number of full-time equivalents, total including long-term contracts 19
15
All employees are included in a bonus programme, with identical bonus criteria for all. The bonus is calculated based on fixed salary,
with maximum 50% for the CEO, 30% for management, 20% for department managers and 10% for other employees.
All employees in the group are included in a share option programme. Details are presented in Note 18 Share option plans (equity-
settled), in the consolidated financial statement.
Management and board member’s remuneration are presented in Note 20 Related parties, in the consolidated financial statement.
Annual Report 2021
Page 70
6 Auditor's remuneration
(in NOK 000) 2021
2020
Audit fee
640
214
Audit related fee 55
84
Tax fee 30
34
Other service fee
41
0
Total (excluding VAT) 765
332
7 Financial items
Finance income
(in NOK 000) 2021
2020
Interest income from group companies *)
0
0
Other interest income 1 365
782
Currency gain on loan to group companies 0
1 668
Reversal of impairment on group loan 1 324
0
Dividend subsidiaries 504
1 947
Other financial income (currency gain)
465
574
Total finance income 3 659
4 970
*) According to the subordinated loan (see Note 13) only the part that exceeds a prudent level, both equity and subordinated loan
combined, shall be regarded as loan in respect to interest accrual.
Finance expenses
(in NOK 000)
2021
2020
Other interest expenses 1
1
Currency loss on loan to group companies 1 324
0
Impairment of group loan 0
1 668
Other financial expenses (currency loss) 606
810
Total finance expenses 1 931
2 480
8 Income tax
Income tax expense
(in NOK 000)
2021
2020
Current income tax
expense
0
0
Changes in deferred tax 0
0
Total income tax expense 0
0
Annual Report 2021
Page 71
Tax base calculation
(in NOK 000)
2021
2020
Profit before
income tax
-54 220
-49 851
Permanent differences 9 603
5 762
Transaction costs on issue of shares -7 530
-3 005
Government grants exempt from tax -4 750
-3 736
Temporary differences -390
-2 224
Adjustments previous year -1 888
0
Tax base
-59 175
-53 054
Temporary differences:
(in NOK 000)
2021
2020
Inventories
13 198
12 671
Fixed assets
1 940
2 276
Intangible assets 24 095
24 708
Group loan
21 606
21 606
Provisions
500
466
Tax losses carry forward 629 155
569 980
Net deferred tax assets/(liabilities)
690 493
631 708
22 % deferred tax asset/(liability) 151 908
138 976
Unrecognised deferred tax assets
-
151 908
-
138 976
Recognised net deferred tax assets 0
0
Reconciliation of nominal tax rate to effective tax rate:
(in NOK 000)
2021
Calculated income tax at statutory rate of
22%
-11 928
Tax effect of permanent differences
456
Government grants exempt from tax
-1 045
Change in unrecognised deferred tax assets
12 933
Adjustments previous year
-415
Income tax expense
0
Effective tax rate
0,0 %
Annual Report 2021
Page 72
9 Property, plant and equipment
(in NOK 000) Building
Equipment
Total
Cost at 1 January 2021
287
10 222
10 508
Additions 1 126
973
2 099
Disposals at cost
-
287
-
313
-
599
Cost at
31 December 2021
1 126
10 882
12 008
Accumulated depreciation
-
113
-
9 387
-
9 500
Accumulated impairment losses 0
-229
-229
Accumulated depreciation and impairment losses at 31 December 2021
-
113
-
9 616
-
9 728
Net book value at 31 December 2021 1 013
1 267
2 280
Depreciation for the year
113
474
587
Estimated useful lives (years) 1)
3-7
Amortisation plan
Linear
Linear
1) Modifications and upgrades in leased premises are depreciated over the leasing period.
10 Intangible assets
(in NOK 000)
Development
costs and
TLens patents
Software
license
Total
Cost at 1 January 2021 78 184
171
78 355
Disposals 0
-61
-61
Additions 0
0
0
Cost at 31 December 2021 78 184
110
78 294
Accumulated amortisation
-
26 527
-
110
-
26 637
Accumulated impairment losses
-
18 280
0
-
18 280
Accumulated amortisation and impairment losses at 31
December 2021 -44 807
-110
-44 917
Net book value at 31 December 2021 33 377
0
33 377
Amortisation for the year 10 269
0
10 269
Estimated useful lives (years) 3-7
3-7
Amortisation plan Linear
Linear
In 2008/2009, poLight acquired the core patents of the TLens® technology for NOK 5 million. The patents were granted in 10 different
countries in 2006. poLight has since invested substantial resources in research and product development of the TLens®.
poLight started amortising capitalised development investments for TLens Silver and the related ASIC driver in the second quarter of
2019 as they became ready for commercial shipments. The useful lives are deemed to be 7 years which correlates with the remaining
number of years of the first patent.
Research and development costs that are not eligible for capitalisation have been expensed in the period incurred and are recognised
in Research and development expenses.
Annual Report 2021
Page 73
11 Investment in subsidiaries
Company
Date of
foundation Location
Share
ownership
Voting
rights
poLight France SAS 19.08.2010 Lyon, France 100 % 100 %
poLight Finland Oy 15.09.2016 Tampere, Finland 100 % 100 %
poLight Hong Kong Limited 08.12.2016 HK, China 100 % 100 %
poLight (Shenzhen) Technical Service Company
Limited 24.04.2017 Shenzhen, China 100 % 100 %
Company Share capital
Number of
shares
Book value
Equity
Net profit
2021
NOK 000
NOK 000
NOK 000
NOK 000
poLight France SAS 80
10 000
0
-23 550
317
poLight Finland Oy
23
100
23
674
323
poLight Hong Kong Limited 202
200 000
202
202
0
poLight (Shenzhen) Technical Service Company
Limited 246
200 000
94
1 522
373
The entities in France and Finland provide R&D services to poLight ASA, Norway. In China a sales office is established with a parent
holding company in Hong Kong.
12 Inventories
(in NOK 000)
2021
2020
Work
in progress (at cost)
25 304
19 215
Finished goods (at cost)
4 730
2 622
Obsolescence provision (expensed as cost of sales)
-13 198
-12 671
Total inventories at the lower of cost and net realisable value
16 836
9 166
During 2022, NOK 0.5 million (2020: NOK 0.1 million) was recognised as an obsolescence expense for inventories carried at net
realisable value. This is recognised in cost of sales.
13 Intercompany balances with group companies
Receivables
(in NOK 000
)
202
1
20
20
Trade receivable
0
0
Other receivables 0 0
Total
0
0
Annual Report 2021
Page 74
Subordinated loan
(in NOK 000) 2021 2020
Non-current receivables
27 469 28 793
Impairment
-26 469 -27 793
Total 1 000 1 000
A subordinated loan agreement was concluded on 29 December 2016, replacing all intercompany balance. Because of limited activity
in France, a significant part of the loan has been subject to impairment.
Payables
(i
n NOK 000)
2021
2020
Trade payables 511 1 163
Other payables
0
0
Total
511
1 163
14 Operating lease commitments
poLight ASA has entered into commercial leases on premises and office equipment. The premises (lab facilities and offices) comprise
1,080 square meters, and the contract is renewed annually, with twelve months’ notice.
Future minimum rentals payable under non-cancellable operating leases are as follows:
(in NOK 000) 2021
2020
Within one year 1 273
1 047
After one year but not more than five years
4 445
0
More than five years 0
0
Total 5 718
1 047
15 Cash and short-term deposits
(in NOK 000) 2021
2020
Cash at banks and on hand 153 216
73 588
Restricted cash, taxes withheld 1 263
692
Restricted cash, deposits
181
181
Cash and short-term deposits 154 660
74 462
Annual Report 2021
Page 75
16 Share capital and shareholder information
Number of
shares
Par value
Book value
NOK
NOK 000
Ordinary shares
10 385 096
0.20
2 077
Shareholders of poLight ASA at December 31, 2021
Ordinary
shares
Share-
holding
Voting rights
%
%
Investinor Direkte AS
1 779 858
17.1 %
17.1 %
Stiftelsen Industrifonden
1 048 825
10.1 %
10.1 %
Nordnet
Bank AB (nominee)
449 476
4
.
3 %
4
.
3 %
Nordnet Livsforsikring AS
425 822
4.1 %
4.1 %
ABN AMRO Global Custody Services (nominee) 390 101
3.8 %
3.8 %
VPF Pareto Investment
157 109
1.5 %
1.5 %
VPF Nordea Avkastning
155 615
1.5 %
1.5 %
VPF Nordea Kapital
113 988
1.1 %
1.1 %
LHH AS
100 000
1.0 %
1.0 %
Wiseth Holding AS
89 500
0
.
9 %
0
.
9 %
J.P. Morgan Bank Luxembourg S.A. (nominee) 74 528
0.7 %
0.7 %
Danske Bank A/S (nominee)
73 654
0.7 %
0.7 %
VPF Nordea Norge Plus
72 507
0
.
7 %
0
.
7 %
Stefan Sveen
66 500
0.6 %
0.6 %
Saxo Bank A/S (nominee)
60 686
0.6 %
0.6 %
Fjellstuens Eftf. AS
59 500
0
.
6 %
0
.
6 %
Kjell Mossefin
57 358
0.6 %
0.6 %
Trond Andersen
55 960
0.5 %
0.5 %
Asbjørn John Buanes
55 731
0.5 %
0.5 %
Erik Schellhorn
53 801
0.5 %
0.5 %
Total number of shares owned by top 20 shareholders 5 340 519
51.4 %
51.4 %
Number of shares owned by other shareholders
5 044 577
48.6 %
48.6 %
Total number of shares
10 385 096
100.0 %
100.0 %
At 31 December 2021, Øyvind Isaksen, CEO, owned 24,856 shares (0.24%), through his company Oimacon AS.
17 Equity
(in NOK 000)
Share
capital
Share
premium
Retained
earnings
Total
Equity at 31 December 2020
1 810
125 752
0
127 562
Profit for the period
-
54 220
-
54 220
Issue of ordinary shares
251
137 553
0
137
803
Share options exercised
17
3 380
0
3 397
Transaction costs
-
7 530
0
-
7 530
Equity
-
settled share
-
based payment
4 385
4 385
Allocation to retained earnings
-
49 836
49 836
0
Equity at 31 December 2021 2 077
209 320
0
211 397
Annual Report 2021
Page 76
18 Pensions
PoLight ASA is subject to the requirements in the Mandatory Occupational Pensions Act, and the company’s pension scheme adheres
to the stipulations of the Act.
The pension scheme is based on a defined contribution plan, and the premium is calculated on the basis of the employee’s income.
5.5% of the income between 1 and 7.1G and 8% of the income between 7.1 and 12G is calculated. At 31 December 2021, 15 members
were covered by the plan.
(in NOK 000) 2021
2020
Defined contribution plan
734
861
Social security
104
121
Total pension cost
838
983
19 Provisions
(in NOK 000)
Warranty
provision
Claims
Total
At 1 January 2021
0
1 189
1 189
New or increased provisions
0
0
0
Utilised
500
0
500
Unused reversed as cost of sales
0
-1 189
-1 189
At
31 December 2021
500
0
500
Expected timing of cash flow
(in NOK 000)
Warranty
provision
Claims
Total
Current, < 1 year
500
0
500
Non-current
0
0
0
At 31 December 2021
500
0
500
Warranty provision
A general provision to meet potential claims under the warranty clause was recognised in 2021.
Claims
On 14 September 2018, the Norwegian Tax Administration for South Norway (Skatteetaten Sør-Norge) excluded poLight ASA from
the Norwegian VAT Register and claimed repayment of refunded VAT, with effect from 1 January 2013, totalling NOK 13.6 million.
The Norwegian Tax Administration claimed that the company was not capable of being profitable and did not therefore qualify as a
"business" pursuant to the Norwegian laws and regulations regarding VAT. In September 2018, the decision was appealed to the Tax
Appeals Board (Skatteklagenemda). The entire claim was paid in 2018, except the additional associated taxes of NOK 1.2 million.
On 28 August 2020, the tax authorities decided to re-register poLight ASA in the VAT Register with effect from July 2020 on ordinary
terms. The receivable of NOK 8.2 million was recognised in the third quarter 2020, whereof NOK 7.6 million as a reduction of
administrative expenses. The cash proceeds from this ruling were received in the fourth quarter 2020.
On 16 December 2021, Norway’s Tax Appeals Board issued a final decision and upheld the appeal filed by poLight giving full refund
of the VAT claim. NOK 12.4 million was recognised in the fourth quarter 2021, whereof NOK 11.6 million as a reduction of
administrative expenses and NOK 0.8 as financial income. The outstanding amount was received in January 2022.
Annual Report 2021
Page 77
20 Related parties
poLight ASA is the ultimate parent. None of the shareholders of poLight ASA has control of the company. As of 31 December 2021,
the largest shareholder is Investinor Direkte AS, with an ownership of 17.1%.
Transactions between group companies
Intercompany agreements are entered with all the subsidiaries in the group. All sales in the subsidiaries are made with the parent
company. All transactions are considered to be on an arm’s length basis.
A subordinated loan agreement (balance 31.12.2020: EUR 2,750,000) was concluded on 29 December 2016, between poLight ASA
and poLight France SAS. Only the part that exceeds a prudent level, with regards both to equity and subordinated loan combined,
shall be regarded as loan in respect to interest accrual. For the financial year 2020, the entire principal is considered as equity, and
not interest-bearing.
Transactions with other related parties
No transactions were made with other related parties for the relevant financial years.
21 Events after the balance sheet date
No events have occurred after the balance sheet date that have a material effect on the financial statements. Since poLight does not
have any operations, customers or direct suppliers in Russia or Ukraine, except a consultant in Moscow, the war has so far not led to
any consequences of significance for the operations in poLight.
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CONTACT DETAILS
Homepage www.polight.com
HQ address Innlaget 230, 3185 Skoppum, Norway
Investor relations contacts:
Øyvind Isaksen CEO +47 90876398, oyvind.isaksen@polight.com
Alf Henning Bekkevik +47 91630514, alf.henning.bekkevik@polight.com
Annual Report 2021
Page 84
poLight ASA
Innlaget 230
NO-3185 Skoppum, Norway
Tel: +47 33 07 12 60
E
-
mail: info@polight.com