METALCORP GROUP
ANNUAL REPORT
2021
METALCORP GROUP
CONTENT
METALCORP GROUP ANNUAL REPORT 2021 . 3
5 Who we are
6 At a glance
12 Global presence
14 Strategy
16 Sustainable business
18 Our operations
37 Business performance
39 Outlook
41 Risks & uncertainties
42 Corporate governance report
MANAGEMENT REPORT
46 Consolidatedstatementofprotorloss
47 Consolidated statement of other comprehensive income
48 Consolidatedstatementofnancialposition
49 Consolidatedstatementofcashows
50 Consolidated statement of changes in equity
51 Notestothenancialstatements
87 Signingofthenancialstatements
CONSOLIDATED FINANCIAL STATEMENTS
OTHER INFORMATION
87
INDEPENDENT AUDITOR'S REPORT
88
01
02
03
04
4 . METALCORP GROUP ANNUAL REPORT 2021
METALCORP GROUP
MANAGEMENT REPORT
Who we are
At a glance
Global presence
Strategy
Sustainable business
Our operations
Business performance
Outlook
Risks & uncertainties
Corporate governance report
01
01
MANAGEMENT REPORT
METALCORP GROUP ANNUAL REPORT 2021 . 5
METALCORP GROUP
WHO WE ARE
Established in 2006, Metalcorp Group combines both production and processing
units with trade and marketing operations to deliver cost-effective metals,
minerals and nished products to international customers. Headquartered in
Luxembourg, the Group operates in 15 countries and across 5 continents.
Metalcorp Group employs a sustainable business approach focused on
diversication, cost control and risk avoidance. With strong market knowledge,
our operations cover a variety of product categories enabling the Group to
operate in both established and niche sectors. As both producer and marketer,
we bring together the capabilities of the Group to provide value to our
international customers and suppliers.
We produce ferrous and non-ferrous products in strategically located production
sites and invest in energy-efcient facilities and technology enhancements. We
create value through cost-competitive production methods, by reducing stock
held and by minimising price and currency risks.
Our marketing operations specialise in physical supply of metals, minerals
and raw materials. We secure insured, back-to-back transactions, avoiding
price and currency risks. Working with long-term off-take partners through
a well-established marketing and distribution network, we enable access to
international markets.
With decades of production and marketing experience in the ferrous and non-
ferrous sectors we are able to consistently deliver value in changing market
conditions.
6 . METALCORP GROUP ANNUAL REPORT 2021
METALCORP GROUP
AT A GLANCE
MetalcorpGroupSAisaninternationalanddiversiedmetalsandminerals
group with production facilities and mining assets in Europe and Africa.
We market metals, minerals and ores derived from our own production
facilities as well as from long-term offtake partners through a well-
established distribution network.
The Group’s core business spans the sourcing, production, processing and
marketing of metals and raw materials.
Metalcorp Group is organised across three divisions:
Aluminium, Metals & Concentrates and Bulk & Ferrous
2
MINING ASSETS
6
PROCESSING PLANTS
15
COUNTRIES
KEY FIGURES
BUSINESS UNITS
01
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METALCORP GROUP ANNUAL REPORT 2021 . 7
ALUMINIUM
Our Aluminium Business Unit focuses on
Bauxite mining activities in the Republic
of Guinea and Aluminium scrap recycling
in Germany.
BAGR BERLINER ALUMINIUMWERK
Germany
+35
years
in operation
+90,000 mt
production
capacity p.a.
STOCKACH ALUMINIUM
Germany
+90
years
in operation
+75,000 mt
production
capacity p.a.
SOCIÉTÉ DES BAUXITES DE GUINÉE (SBG)
Republic of Guinea
350
million tonnes
of bauxite reserves
8
million tonnes
production capacity p.a.
TARESSA MINING LOGISTIC (TML)
Republic of Guinea
200
million tonnes
of bauxite reserves
10
million tonnes
production capacity p.a.
RECYCLING
MINING
8 . METALCORP GROUP ANNUAL REPORT 2021
METALS & CONCENTRATES
We process and market a range of metals
and minerals which includes scrap,
renedmetals,oresandconcentrates.
+10
years
in operation
+30,000 mt
production
capacity p.a.
CABLE RECYCLING INDUSTRIES
Spain, Greece
TENNANT METALS GROUP
Monaco, Australia, South Africa, Luxembourg.
+60
years
in operation
4 Oces
3 Continents
MARKETING
PRODUCTION
01
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METALCORP GROUP ANNUAL REPORT 2021 . 9
MARKETING
BULK & FERROUS
We manufacture high quality steel pipe
and coke as well as marketing a range of
steel products and raw materials.
STEELCOM GROUP
Luxembourg (HQ), Monaco, Germany, Austria, China,
UAE, Spain, and Switzerland.
+60
years
in operation
8 Oces
4 Continents
Producing since: 1897
Location: Savona Italy
Capacity: 450,000 mt/a
ITALIANA COKE
Italy
PRODUCTION
CAPITAL STAR STEEL
Mozambique
Producing since: 2008
Location: Mozambique
Capacity: 200,000 mt/a
10 . METALCORP GROUP ANNUAL REPORT 2021
REVENUES
601 M€
GROSS PROFIT
78 M€
EQUITY
219 M€
ADJUSTED
EBITDA
58 M€
METALCORP GROUP
KEY DATA
01
MANAGEMENT REPORT
METALCORP GROUP ANNUAL REPORT 2021 . 11
12 . METALCORP GROUP ANNUAL REPORT 2021
Australia
Austria
China
Germany
Greece
Republic of Guinea
Italia
Luxembourg, HQ
Monaco
Mozambique
South Africa
Spain
Switzerland
UAE - Dubai
UK
Metalcorp Group manages a strategic portfolio of assets across the world.
TRADING DESKS & ASSETS
METALCORP GROUP
GLOBAL PRESENCE
01
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METALCORP GROUP ANNUAL REPORT 2021 . 13
15
COUNTRIES
4
CONTINENTS
14 . METALCORP GROUP ANNUAL REPORT 2021
Ourstrategyisbasedonvekeysuccessfactors
We avoid risk within our business model. Operating
a risk averse trading strategy, we secure long-term
offtake agreements and avoid price and currency risks.
Our production programs are governed by customer-
led demand and we procure raw materials on orders,
minimising waste and enabling cost effective planning.
Our diversied model and wide product range reduce
our exposure to changes in demand or reliance on a
single service offering. We conduct business in both
large and niche markets and operate between large
groups and local small sized players.
METALCORP GROUP
STRATEGY
01
Risk Averse
02
Diversication
01
MANAGEMENT REPORT
METALCORP GROUP ANNUAL REPORT 2021 . 15
We maintain long term partnerships with
customers and suppliers. We offer services such
as logistics and transport and full the needs of
suppliers and customers who do not have the
equivalent internal capability, thereby making us a
preferred partner and strengthening our long-term
relationships.
We have a broad asset base including production,
processing and recycling facilities in strategic locations.
Our trading and marketing divisions benet from a
sophisticated logistics and distribution network.
We have signicant execution capabilities including
production facilities, sector knowledge and resources.
Leveraging our network enables us to take advantage
of changing demand and supply opportunities. Our scale
and global reach gives us insight into market ows that
yield competitive advantage.
03
Infrastructure
05
Know-how
04
Partnerships
16 . METALCORP GROUP ANNUAL REPORT 2021
Environmental, social and governance principles are at the heart of our
business. We believe that we are responsible for delivering products,
services and methods that respect the natural and social environment. We
invest in the latest equipment, technology, and our processing and recycling
plantsensureenergyefciencyandreducedimpactontheenvironment.
ENVIRONMENT
Metalcorp Group’s plants in Berlin, Bilbao and Stockach recycle scrap and
waste metal into high grade products that can be used for a wide variety of
applications.
Our approach saves on energy consumption, using less energy than primary
production methods and also plays a vital role in the conservation of raw
materials.
METALCORP GROUP
SUSTAINABLE BUSINESS
01
MANAGEMENT REPORT
METALCORP GROUP ANNUAL REPORT 2021 . 17
SOCIAL
HEALTH & SAFETY
We work with national and local governments to manage our corporate
social responsibility.
Weinvestsignicantlyinsupportingthecommunitiesnearouroperations
in different areas including:
• Health
• Infrastructure
• Education & Training
Metalcorp Group takes a proactive
approach to Health and Safety.
• Our production sites comply
with national and international
health and safety laws and
holdrelevantcertications.
• Our staff are trained to meet
specicrequirements.
• We focus on risk management
and share good practice across
the Group.
18 . METALCORP GROUP ANNUAL REPORT 2021
01
METALCORP GROUP
MANAGEMENT REPORT
METALCORP GROUP
OUR OPERATIONS
ALUMINIUM
01
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METALCORP GROUP ANNUAL REPORT 2021 . 19
20 . METALCORP GROUP ANNUAL REPORT 2021
ALUMINIUM
RECYCLING
BAGR is one of the leading independent
secondary aluminium slab producers in
Europe.
The plant is an integral partner for its
clients in the toll conversion of secondary
aluminium into alloyed slabs for rolling
mills and precision plate manufacturers.
Producing since:
1981
Location:
Germany
Capacity: 90,000 mts
BAGR BERLINER
ALUMINIUMWERK "BAGR"
01
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METALCORP GROUP ANNUAL REPORT 2021 . 21
Stockach Aluminium is a secondary
aluminium slab producer which history
begins in the early 1900s
Stockach Aluminium provides toll-
conversion services for various scrap
materials offering cost-efcient and
environmentally conscious solutions.
Producing since:
1921
Location:
Germany
Capacity: 75,000 mts
STOCKACH ALUMINIUM
22 . METALCORP GROUP ANNUAL REPORT 2021
BAUXITE AND ALUMINA
MINING
SBG holds a 25-year mining concession for
a bauxite deposit in the Republic of Guinea.
In 2018 SBG was awarded a convention
forbauxiteminingandaluminarening.
SBG has its own port facilities with a
capacity of exporting 5 million metric
tonnes of bauxite per annum.
The mine is fully operational since 2021.
Location:
Kindia Region - Republic of
Guinea
Mining Concession :
502 square km granted
for 25 years
SOCIÉTÉ DES BAUXITES DE GUINÉE "SBG"
01
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BAUXITE AND ALUMINA
MINING
As of 2020, Taressa Mining Logistic (TML)
holds a licence for bauxite mining in the
Republic of Guinea with a licence area that
incorporates 200 million metric tonnes of
high quality bauxite.
TML is currently in the process of
developing mining infrastructure with a
foreseen annual export capacity of 10
million metric tonnes per annum.
Location:
Boké Region - Republic of
Guinea
Production Capacity :
10 million metric tonnes per
annum
TARESSA MINING LOGISTIC "TML"
24 . METALCORP GROUP ANNUAL REPORT 2021
METALCORP GROUP
MANAGEMENT REPORT
01
METALCORP GROUP
OUR OPERATIONS
METALS & CONCENTRATES
01
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METALCORP GROUP ANNUAL REPORT 2021 . 25
26 . METALCORP GROUP ANNUAL REPORT 2021
COPPER
PRODUCTION
CRI is a copper scrap recycler with a strong
European customer base.
Theplantisanenergyefcientconvertor,
processing copper scrap into high quality
copper granulates, with an emphasis on
minimising waste.
Incorporated since:
2012
Location:
Spain
Capacity: 30,000 mts
CABLE RECYCLING INDUSTRIES "CRI"
01
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METALCORP GROUP ANNUAL REPORT 2021 . 27
CORE PRODUCTS
High quality copper granulates used in the production of copper cathodes, brass foundry
products, and copper-based alloys.
We are able to tailor both grain size and quality range according to customer requirements.
28 . METALCORP GROUP ANNUAL REPORT 2021
METALS & CONCENTRATES
MARKETING
Tennant Metals Group trades and markets
base metals, ores, concentrates and
ferroalloys.
Tennant Metals Group specialises in the
physical supply of non-ferrous products
in the form of rened metals, ores and
concentrates.
Together with the Group’s production
assets and long-standing off-take
agreements, Tennant Metals Group is
a strategic partner for its suppliers and
customers.
Tennant Metals Group also provides
nancialandlogisticssolutions.
Operating Since:
1955
Locations:
Monaco, Australia, South
Africa, Luxembourg, China.
TENNANT METALS GROUP
01
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METALCORP GROUP ANNUAL REPORT 2021 . 29
Tennant Metals Group markets a broad product portfolio from base metals, ores and
concentrates to ferroalloys.
We actively trade rened base metals with a particular
focus on zinc, copper, tin, aluminium and nickel.
We supply primar y as well as secondar y produced metals.
We market a range of non-ferrous ores and concentrates,
predominantly copper, lead, tin and zinc.
We mainly supply smelters and reners.
We trade and market ferro chrome, silicon manganese and
ferro manganese.
CORE PRODUCTS
BASE METALS
ORES & CONCENTRATES
FERROALLOYS
Platinum Group Metals (platinum, palladium, rhodium,
iridium, osmium, and gold) are used in a very diverse range
of applications and are highly valued materials. There
is signicant demand for PGMs, principally the use of
platinum, palladium and rhodium in auto catalysts which
can convert over 90% of hydrocarbons, carbon monoxide
and oxides of nitrogen from gasoline engines into less
harmful carbon dioxide, nitrogen and water vapour. Also
used in any number of industrial ways as well as new uses
in hydrogen fuel cells along with jewellery.
PLATINUM GROUP METALS
30 . METALCORP GROUP ANNUAL REPORT 2021
METALCORP GROUP
MANAGEMENT REPORT
01
METALCORP GROUP
OUR OPERATIONS
BULK & FERROUS
01
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METALCORP GROUP ANNUAL REPORT 2021 . 31
32 . METALCORP GROUP ANNUAL REPORT 2021
Italiana Coke is a European leader in
the production of coke for metallurgy,
siderurgy, and insulation products. The
on site cogeneration plant produces a
total of 150,000,000 KWh/year. The
plant produces electricity for the national
distribution grid and supplies electricity
and steam to the coke plant for internal
use. Generating energy economically and
efciently is even more important when
large amounts of energy, such as coke
gas, are available as a by-product of a
production process.
The company produces three different
types of coke, which vary according to their
n a l u s e : m e t a l l u r g i c a l c o k e , b l a s t f u r n a c e
coke, and foundry coke.
Founded in:
1897
Location:
Italia
ITALIANA COKE
COKE
PRODUCTION
01
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METALCORP GROUP ANNUAL REPORT 2021 . 33
Capital Star Steel SA, based in Mozambique,
manufactures high frequency welded steel
pipe and serves the international oil and
gas industry and the mining industry across
Africa, with sales and distributions centres
located globally.
Founded in:
2007
Location:
Mozambique
CAPITAL STAR STEEL
STEEL
PRODUCTION
34 . METALCORP GROUP ANNUAL REPORT 2021
STEEL
MARKETING
Steelcom Group is a steel service provider
benetting from an established global
presence, comprehensive product coverage
as well as extensive logistics capabilities.
The core business of Steelcom is trading
steel and steel-related raw materials and
supply chain management in the ferrous
sector.
Established since:
1958
Locations:
Luxembourg (Headquarters),
Monaco, Germany, Austria,
UAE, Spain and Switzerland.
STEELCOM GROUP
01
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METALCORP GROUP ANNUAL REPORT 2021 . 35
CORE PRODUCTS
• Merchant bars & proles
• Structural sections
• Reinforcement bars
• Wire rods
• Hot rolled plates
• Hot rolled coils, sheets & strips
• Cold rolled coils, sheets & strips
• Pre-painted & galvanised products
• Hot rolled coils, strips & plates
• Hot dipped galvanized sheets
• Cold rolled sheets
• Pipes
• Tubes
• Hollow sections
• Slabs
• Billets
LONG PRODUCTS
SEMI-FINISHED PRODUCTS
OIL & GAS INDUSTRY PRODUCTS
FLAT PRODUCTS
AUTOMOTIVE PRODUCTS
• Iron ore
• Hot briquetted iron
• Coking coal
RAW MATERIALS
36 . METALCORP GROUP ANNUAL REPORT 2021
METALCORP GROUP
BUSINESS PERFORMANCE
01
01
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METALCORP GROUP ANNUAL REPORT 2021 . 37
BUSINESS PERFORMANCE
ThetablebelowprovidesasegmentedoverviewoftheRevenueandGrossprot(“GM”)oftheCompany:
Revenue GM Result before taxation
EUR 1.000 2021 2020 2021 2020 2021 2020
- Aluminium 148.990 108.141 24.826 14.206 9.279 1.682
- Metals & Concentrates 197.082 170.803 28.659 24.870 3.630 1.773
- Bulk & Ferrous 254.810 123.745 24.476 3.786 5.355 1.433
Total 600.882 402.689 77.961 42.862 18.264 4.888
In2021,MetalcorprealizedarevenueofEUR601million(EUR403millionin2020),anOperatingProtofEUR
56 million (EUR 32,47 million 2020) and an adjusted EBITDA of EUR 57,8 million (EUR 34,57 million 2020). The
riskaversebusinessmodelthusprovedagaintobetherightstrategyinchallengingmarkets.Metalcorp’sliquidity
position is strong, with a cash position of EUR 89,5 million.
The business was impacted by the following:
• Strong performance from the Aluminium division + 20% increase in volume
• BulkandFerrousbenetingfromthenewphysicalandcontractualassetssecuredin2020withtonnageofraw
materials procured and volumes sold increasing more than 2.7x from 2020 to 2021
• Revenue increased 49%+ to 601M in 2021. Consistent EBITDA margin growth is 110bps higher than in 2020
• Sustainable growth, primarily driven by ramp up from new physical and contractual assets secured in 2020/2021,
procurement and marketing activities as well as a new 5 years supply agreement secured for Platinum Group
Metals
Despite various COVID-19 related challenges, all of
our assets have continued to operate and develop, with
ourrstprioritytoprotectthehealthandsafetyofall
our employees and communities.
In 2021, Metalcorp realized a revenue of EUR 601
million(up49%versus2020)andanoperatingprot
of EUR 56 million (up 73% versus 2020). Metalcorp’s
liquidity position is strong, with a cash position of EUR
89,5 million.
The diversied and risk averse business model thus
proved again to be the right strategy in challenging
markets.
After successfully operating through the challenges of
COVID-19 in 2021, Metalcorp Group achieved despite
the ongoing constraints of the pandemic, an increase of
volume in all its business segments.
In our key secondary aluminium businesses, production
met our guidance and is operating at three-shift-
capacity, while mining performed according to
expectations and large export will be realised from Q2
2022 onwards.
Our marketing business has again performed well, with
constructive market conditions allowing us to meet our
guidance range supported by our acquired production
assets.
Further activities in processing, mining and marketing
started and contributed to these results.
In the near term we remain alert to the continuing
challenges of Covid-19, and our operational teams
remain focussed on operating safely and responsibly to
create sustainable long-term value.
38 . METALCORP GROUP ANNUAL REPORT 2021
METALCORP GROUP
OUTLOOK
01
01
MANAGEMENT REPORT
METALCORP GROUP ANNUAL REPORT 2021 . 39
Uncertainmarketconditionscontinuetoprevail,butashasbeendemonstratedduringthersthalfofnancialyear
2021, as well as during previous economic and market dislocations, Metalcorp Group is a highly resilient company
that is providing goods and services that are reliable and vital for global markets. Those goods and services were
dominantinourrevenuesandprotsinthisreportingperiod,andwearecondentthatthiswillcontinuetobethe
case in 2022.
Thelong-termnancingandshort-termbankfacilitiesareinplaceandtherelationshipswiththesebankswillbe
maintained.Inordertofurthergrowthetradingactivities,additionaltradenancecapacityisbeingdevelopedwith
the Group’s current and new banking relationships.
Metalcorp Group S.A. has successfully completed the offering of its new secured 8.5% bond 2021/2026 (ISIN:
DE000A3KRAP3) with a volume of EUR 250 million. The new bond 2021/2026 is listed on the Open Market of the
Frankfurt Stock Exchange.
Nosignicantrepaymentwasduein2021.
As over the last years, the Group will ensure that the organization remains lean in terms of headcount. Key
management positions are occupied by personnel with the required experience, background, entrepreneurial spirit
and drive to contribute to growth and success. Additional personnel will only be employed when growth in activities
justiesadditionalheadcount.
The Group is an equal opportunities employer and welcomes applications from all sections of society and does not
discriminate on grounds of race, religion or belief, ethnic or national origin, disability, age, marital, domestic or civil
partnership status, sexual orientation, gender identity, or any other basis as protected by applicable law.
GENERAL
FINANCING
EMPLOYEES
OUTLOOK
40 . METALCORP GROUP ANNUAL REPORT 2021
METALCORP GROUP
RISKS & UNCERTAINTIES
01
01
MANAGEMENT REPORT
METALCORP GROUP ANNUAL REPORT 2021 . 41
Anouar BELLI
Director
RISKS & UNCERTAINTIES
FINANCING, CASH FLOWS AND LIQUIDITY
Thetradingactivitiesaredependentontradenancinglinesavailability.Wehavesignicantuncommittedtrade
lineswithmajorbanks.Thesetradenancinglinesareuncommittedbynatureand,therefore,noguaranteecanbe
giventhattradespresentedtothesebankswillbefunded.However,allpresenteddealsthusfararenancedby
the banks.
Themarketpricesforthevariousbasemetalsarevolatileandcannotbeinuencedneithercontrolled.Inventories
are therefore subject to valuation changes, which may have a material impact on the Group´s nancial results.
However,theGroupentersintoback-to-backdealswhichservesasanaturalhedgethat“locks”themarketprice,
sothattheGroupisnotexposedtopriceuctuations.IncaseswheretheGroupisnotcoveredbythisnaturalhedge,
thepriceriskismitigatedbyapplyingadequatenancialinstruments.
PRICE VOLATILITY
Themarketpricesforthevariousbasemetalsarevolatileandcannotbeinuencedneithercontrolled.Inventories
are therefore subject to valuation changes, which may have a material impact on the Group´s nancial results.
However,theGroupentersintoback-to-backdealswhichservesasanaturalhedgethat“locks”themarketprice,
sothattheGroupisnotexposedtopriceuctuations.IncaseswheretheGroupisnotcoveredbythisnaturalhedge,
thepriceriskismitigatedbyapplyingadequatenancialinstruments.
PRICE VOLATILITY
The Group’s operations and projects span numerous countries, some of which have more complex, less stable
political or social climates and consequently higher country risk. Political risks include changes in laws, taxes or
royalties, expropriation of assets, currency restrictions or renegotiation of, or changes to, mining leases and permits.
Similarly, communities in certain regions may oppose mining activities for various reasons. Any of these factors
couldhaveanadverseimpactontheCompany’sprotabilityinacertaingeographicregionoratcertainoperations.
ThemilitaryconictinUkrainesinceFebruary2022isclearlyleavingitsmarkontheglobaleconomy.TheEuropean
Union and its partners have imposed numerous sanctions against Russia - further sanctions cannot be ruled out
at present. Furthermore, risks are to be expected, especially in connection with supply chains, with a view to sales
markets or against the background of existing risks from cyber attacks.
COUNTRY RISKS, POLITICAL, COMMUNITY AND FISCAL INTERVENTION
Other risks facing the Group include performance risk on offtake agreements; quality of commodities traded and
produced,competition,environmentalandinsurancerisksanduncertaintyofadditionalnancing.Theserisksand
the mitigating measures are monitored and managed by the Group on a regular basis and appropriate action is taken
whenever this is required.
OTHER RISKS
The presentation of consolidated nancial statements requires the management to make estimations and
assumptions which affect the reported amounts of assets and liabilities, and the disclosure of contingent assets
andliabilitiesatthedateoftheconsolidatednancialstatementsandreportedamountsofrevenuesandexpenses
during the period. Actual results could differ from those estimates impacted by the following risks:
TheGroupnds itssuppliersand customers across theglobe,while operations andoperating costs arespread
across several different countries and currencies. Fluctuation in exchange rates, in particular, movements in US
dollarandAustraliandollaragainsttheeuro,mayhaveamaterialimpactontheGroup’snancialresults.Notethat
ourbusinessismainlyexecutedonadollarbasisonthepurchasing,sellingaswellasthenancingside.Ifcurrency
is not naturally hedged through back-to-back deals, the exposure is hedged through adequate instruments.
FLUCTUATION IN CURRENCY EXCHANGE RATES
Luxembourg, April 27
th
2022
Pascale MITRI YOUNES
Director
42 . METALCORP GROUP ANNUAL REPORT 2021
METALCORP GROUP
CORPORATE
GOVERNANCE
REPORT
01
01
MANAGEMENT REPORT
METALCORP GROUP ANNUAL REPORT 2021 . 43
CORPORATE GOVERNANCE REPORT
The Board monitors the integrity of the Group’s consolidated nancial statements and the effectiveness of the
Group’sinternalnancialcontrols.DuringthenancialyeartheBoardworkedwiththemanagement,theexternal
auditorsandothermembersoftheseniormanagementteaminfulllingtheseresponsibilities.
The Board report deals with the key areas in which the Board plays an active role and has responsibility. These
areas are as follows:
i. Financial Reporting;
ii. The External Audit process;
iii. Risk Management and Internal controls.
As at 31 December 2021, the Board is formed by Mrs. Pascale MITRI YOUNES as Chairwoman and Mr. Anouar
BELLI as member.
The Board has an appropriate and experienced blend of commercial, nancial, legal and industry expertise to
enableittofullitsduties,andthattheChairwoman,Mrs.PascaleMITRIYOUNES,hasappropriateandrelevant
experience.
ROLE AND RESPONSIBILITIES
COMMITTEE MEMBERSHIP
Aschairwomanofthemanagementboard(the“Chairwoman”),Iampleasedtopresentthecorporategovernance
report for the year ended 31 December 2021.
The Chairwoman notes that further to the regulation (EU) No 537/2014 of 16 April 2014, the management board (the
"Board") can perform the equivalent functions as those assigned to the audit committee.
This report details how the Board has met its responsibilities under the corporate governance standards generally
practised in Luxembourg in the year ended 31 December 2021.
TheBoardfocusedparticularlyontheappropriatenessoftheGroup’sconsolidatednancialstatements.TheBoard
conrmsthatthe2021AnnualReportandconsolidatednancialstatementsarefair,balancedandunderstandable,
and provide the information necessary for the sole shareholder to assess the Group’s performance, business model
andstrategy.ThesignicantissuesthattheBoardconsideredinrelationtotheconsolidatednancialstatementsand
how these issues were addressed are set out in this Report.
One of the Board’s key responsibilities is to review the Group’s risk management and internal controls systems,
includinginparticularinternalnancialcontrols.Duringthenancialyear,theBoardcarriedoutanassessmentofthe
principal risks facing the Group and monitored the risk management and internal control system on an on-going basis.
The Board also reviewed the effectiveness of the external audit process as part of the continuous improvement of
nancialreportingandriskmanagementacrosstheGroup.
PRESENTATION
44 . METALCORP GROUP ANNUAL REPORT 2021
MEETINGS
The Board met three times during the year ended 31 December 2021. The Chairwoman of the Board also met the
external auditor.
COMMITTEE EVALUATION
Anyrecommendationsraisedareacteduponinaformalandstructuredmanner.Noissueswereidentiedforthe
year ended 31 December 2021.
FINANCIAL REPORTING
TheBoardisresponsibleformonitoringtheintegrityoftheGroup’sconsolidatednancialstatementsandreviewing
thenancialreporting.Theconsolidatednancialstatementsarepreparedbyananceteamwiththeappropriate
qualicationsandexpertise.
TheBoardconrmsthattheannualreport,takenasawhole,isfair,balancedandunderstandableandprovidesthe
information necessary for the sole shareholder to assess the Group's position and performance, business model and
strategy.
EXTERNAL AUDIT PROCESS
The Board has responsibility for overseeing the Group’s relationship with the external auditor including reviewing
of their independence from the Group, their appointment and their audit fee proposals.
Duringthenancialyear,theChairwomanoftheBoardmettheexternalauditor.Thismeetingprovidedthe
opportunity for direct dialogue and feedback between the Chairwoman of the Board and the auditor.
EU Audit Reform EU legislation providing a new regulatory framework for statutory audit was adopted in April
2014 (comprising Directive 2014/56/EU and Regulation EU No. 537/2014). EU Audit reform legislation is applicable
intheMember Statesofthe European Union,includingIreland,and isapplicable forthe rstnancialyearthat
commences after 17 June 2016. Under this legislation, Metalcorp Group S.A. is considered as a Public Interest
Entity(“PIE”).
RISK MANAGEMENT AND INTERNAL CONTROLS
The Board monitors the Group’s risk management and internal control processes through detailed discussions with
the management, the review and approval of the external audit reports, which focus on the areas of greatest risk to
the Group, as part of both the year-end audit and the half year review process, all of which highlight the key areas
ofcontrolweaknessesintheGroup.AllweaknessesidentiedbyexternalauditarediscussedbytheBoardandan
implementation plan for the targeted improvements to these systems is put in place. The implementation plan is
being overseen by the Board.
METALCORP GROUP S.A.
Pascale MITRI YOUNES
Director
Anouar BELLI
Director
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 45
METALCORP GROUP
CONSOLIDATED
FINANCIAL STATEMENTS
02
Consolidated statement of income
Consolidated statement of other comprehensive income
Consolidatedstatementofnancialposition
Consolidatedstatementofcashows
Consolidated statement of changes in equity
Notestothenancialstatements
Signingofthenancialstatements
Please note that the use of rounded amounts and percentages may
result in rounding differences of one unit (KEUR, %, etc.).
46 . METALCORP GROUP ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(before appropriation of result)
EUR 1.000 Note 2021 2020
Continuing Operations
Revenue 2
Cost of sales
-522.922 -359.827
Gross prot 2
Operating income expenses
Selling expenses 3
-12.328 -5.599
Administrative expenses 3
-9.407 -4.681
-21.735 -10.280
Operating prot
Adjusted EBITDA
Depreciation and amortization 3
-10.964 -5.143
Non-operating expenses
Other non operating income and expenses 4
-4.455 -5.022
Financial income and expenses 4
-22.544 -17.530
Net nance cost
-26.998 -22.552
Prot before tax
Income tax expense 5
-3.723 -2.117
Prot from continuing operations
Prot
Prot attributable to:
Equity holders of Metalcorp Group S.A.
Non-controlling interests
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 47
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
EUR 1.000
Note
2021 2020
Prot 14.541 2.771
Other comprehensive income
Itemsthatcanberecycledtotheconsolidatedstatementofprotandloss
Translation differences foreign companies -10.406 4.577
Amortisation Offtake contracts -823 -1.006
Total comprehensive income 3.312 6.342
Total comprehensive income attributable to:
Equity holders of Metalcorp Group S.A. -777 3.791
Non-controlling interests 4.089 2.551
Total result 3.312 6.342
48 . METALCORP GROUP ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(before appropriation of result)
EUR 1.000 Note 31/12/2021 31/12/2020
Assets
Non-current assets
Property, plant and equipment 6 435.868 285.605
Intangiblexedassets 7 37.953 37.619
Financialxedassets 8 71.137 30.486
Total non-current assets 544.959 353.710
Current assets
Inventories 9 96.830 39.730
Receivables, prepayments and accrued income 10 117.834 114.208
Securities 11 5.300 5.300
Cash and cash equivalents 12 89.563 22.474
Total current assets 309.528 181.712
Total assets 854.487 535.422
Equity and liabilities
Equity
Share capital 70.000 70.000
Reserves and retained earnings 51.527 38.401
Equity attributable to the owners of the company 121.527 108.401
Non-controlling interest 96.741 51.272
Total equity 218.268 159.673
Non-current liabilities
Loans and borrowings 14 299.705 222.330
Provision 14 4.478 47
Deferred tax liabilities 5 29.610 4.069
Total non-current liabilities 333.793 226.446
Current liabilities
Current liabilities and accruals 14 302.426 149.304
Total current liabilities 302.426 149.304
Total equity and liabilities 854.487 535.422
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 49
CONSOLIDATED STATEMENT OF CASH FLOWS
(before appropriation of result)
EUR 1.000 31/12/2021 31/12/2020
Operating prot 56.225 32.583
Working capital changes
- Movements trade receivables 9.950 15.737
- Movements inventories -57.099 -2.455
- Movements on other receivables and assets -3.352 7.085
- Movements trade payables 97.895 -1.322
- Movements other payables and liabilities 4.310 12.569
-Movementstradenanceandothernancing -24.808 -4.960
Income tax paid -3.723 -2.308
-3.723 -2.308
Cash ow from operating activities 79.398 56.926
Investmentsinintangiblexedassets -2.883 -
Investments in property plant and equipment -72.933 -66.334
Disposals of property plant and equipment 174 -
Investmentsinnancialassets -7.000 -
Investmentsinothernancialassets - 1.970
Cash ow from investment activities -82.642 -64.364
Proceeds from borrowings and leasing liabilities 261.111 11.162
Repayment of borrowings and leasing liabilities -155.869 -9.536
Movements on loans receivable -4.969 4.133
Othernanceincome&expense -9.001 -5.022
Interest received/paid -22.544 -17.122
Cash ow from nancing activities 68.727 -16.385
Netcashow 65.483 -23.823
Exchange rate and translation differences on movements in cash 1.606 -750
Movements in cash 67.089 -24.573
Cash and cash equivalents at 1 January 22.474 47.047
Cash and cash equivalents at 31 December 89.563 22.474
50 . METALCORP GROUP ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(before appropriation of result)
EUR 1.000
Issued
share
capital
Share
premium
Revaluaon
reserve
Translaon
reserve
Other
reserves
Result for
the year
Legal enty
share in
group
equity
Third-party
share in
group
equity
Group
Equity
2020
Opening Balance
Total comprehensive income
and expense for the period
Prot/(loss) for the period
- - - - - 220 220 2.551 2.771
Revaluaon of xed assets
- - -1.006 - - - -1.006 - -1.006
Foreign currency translaon
dierences
- - - 4.577 - - 4.577 - 4.577
Total comprehensive income
and expense for the period
- - -1.006 4.577 - 220 3.791 2.551 6.342
Other movements in equity
Allocaon of prior year result
- - - - 9.709 -9.709 - - -
Other movements in equity
- - - - -21.314 - -21.314 19.080 -2.234
Acquisions
- - - - - - - - -
Total other movements in
equity
- - - - -11.605 -9.709 -21.314 19.080 -2.234
Total
The translation reserve is used to capture the cumulative impact of foreign currency translation adjustments arising from
the Group’s non-EUR denominated functional currency subsidiaries. The net revaluation reserve is used to accumulate
the gains and losses associated with the remeasurement of the Group’s investments carried at FVTOCI.
The third-party share and other reserve is used to capture equity movements arising from changes in the Group’s
ownership in its subsidiaries. Changes from capital increase result from the share increase in Societe des Bauxites de
Guinee S.A.R.L. and the increase of equity in Metalcorp Group S.A. (Note 13).
EUR 1.000
Issued
share
capital
Share
premium
Revaluaon
reserve
Translaon
reserve
Other
reserves
Result for
the year
Legal enty
share in
group
equity
Third-party
share in
group
equity
Group
Equity
2021
Opening Balance 70.000 9.628 12.189 6.039 10.324 220 108.400 51.272 159.673
Total comprehensive income
and expense for the period
Prot/(loss) for the period - - - - - 6.525 6.525 8.017 14.541
Foreign currency translaon
dierences
- - -823 -6.470
-
-8 -7.301 -3.928 -11.229
Total comprehensive income
and expense for the period
- - -823 -6.470 - 6.517 -777 4.089 3.312
Other movements in equity
Allocaon of prior year result - - - - 220 -220 - - -
Capital increase - 5.000 - 3.928 4.975 - 13.903 -12.992 911
Acquisons - - - - - - - 54.372 54.372
Total other movements in
equity
- 5.000 - 3.928 5.195 -220 13.903 41.380 55.283
Total
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 51
1.1 Corporate information
TheactivitiesofMetalcorp Group S.A. (“theGroup”
or“theCompany”)anditsgroupcompaniesprimarily
consist of the trading and production of metals, ores,
The Company was incorporated as a limited liability
company under the laws of the Netherlands on 14
April 2003 for the purpose of establishing an industrial
holding company in the Netherlands. Its shareholder is
is Cycorp First Investment Ltd.
Until October 31, 2018, the company was registered
under Metalcorp Group B.V., a limited liability company
incorporated under the laws of the Netherlands, having
its statutory seat in Amsterdam, the Netherlands. By
resolution of the shareholder´s meeting of 31 October
2018theCompanytransferreditsregisteredofceand
the place of central management from Amsterdam
to 8, rue Dicks, L-1417 Luxembourg , Grand Duchy of
Luxembourg, effective as of 1 November 2018, and
as a result changed the nationality of the Company of
Dutch nationality to Luxembourg nationality. Metalcorp
Group continues under the form of a public limited
“MetalcorpGroupS.A.”.
The Company has its corporate headquarters in
Register of the Chamber of Commerce under number
B229218.
Theconsolidatedannualaccountscomprisethenancial
information of the Company and of its investments
in which it exercises a controlling interest. These
investments are fully included in the consolidation.
1.2 Statement of compliance
The consolidated nancial statements have been
prepared in accordance with International Financial
Reporting Standards as adopted by the European
Union, and its interpretations adopted by the
International Accounting Standards Board (IASB), and
are in compliance with the provisions of the laws in
Luxembourg. The above Standards and Interpretations
arecollectivelyreferredtoas“IFRS”inthesenancial
statements.
The Company-onlynancial statements are prepared
in accordance with accounting principles applicable
in Luxembourg and are presented and published
separatelyfromtheconsolidatednancialstatements.
This statutory company-only annual report of the
Company prevails over this annual report from a legal
perspective. The objective of this report is to provide
an overview of the activities of the Company and its
subsidiaries.
TheconsolidatednancialstatementsoftheGroupare
prepared in accordance with IFRS as adopted by the
European Union.
1.3 Basis of preparation
The consolidated nancial statements have been
prepared on the historical cost basis except for certain
propertiesandnancialinstrumentsthataremeasured
at revalued amounts or fair values at the end of each
reporting period, as explained in the accounting policies
below.
Historical cost is generally based on the fair value of
the consideration given in exchange for goods and
services.
Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an
orderly transaction between market participants
at the measurement date, regardless of whether
that price is directly observable or estimated using
another valuation technique. In estimating the fair
value of an asset or a liability, the Group takes into
account the characteristics of the asset or liability if
market participants would take those characteristics
into account when pricing the asset or liability at the
measurement date. Fair value for measurement and/
ordisclosurepurposesintheseconsolidatednancial
statements is determined on such a basis, except for:
• measurements that have some similarities to fair
value but are not fair value, such as net realizable
value in IAS 2 or value in use in IAS 36.
Inaddition,fornancialreportingpurposes,fairvalue
measurements are categorized into Level 1, 2 or 3
based on the degree to which the inputs to the fair value
measurementsareobservableandthesignicanceof
the inputs to the fair value measurement in its entirety,
which are described as follows:
• Level 1 inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities that
the entity can access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices
included within Level 1, that are observable for the
asset or liability either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the
asset or liability.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. ACCOUNTING POLICIES
52 . METALCORP GROUP ANNUAL REPORT 2021
1.4 New and revised IFRSs
A number of amendments is effective for annual
periods that begin on or after 1 January 2021 and
have been adapted in preparing these consolidated
nancialstatements.Noneoftheseamendmentshada
signicanteffectonthenancialstatements:
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and
IFRS 16 Interest Rate Benchmark Reform – Phase 2
Amendment to IFRS 16 Leases: COVID-19-Related
Rent Concessions (applicable for annual periods
beginning on or after 1 June 2020)
Amendments to IFRS 4 Insurance Contracts – Extension
of the Temporary Exemption from Applying IFRS 9 to 1
January 2023 (applicable for annual periods beginning
on or after 1 January 2021)
The following new and revised IFRSs that are relevant
for the Company have been issued but are not yet
effective:
Amendment to IFRS 16 Leases: COVID-19-Related
Rent Concessions beyond 30 June 2021 (applicable
for annual periods beginning on or after 1 April
2021) Amendments to IAS 16 Property, Plant and
Equipment: Proceeds before Intended Use (applicable
for annual periods beginning on or after 1 January
2022) Amendments to IAS 37 Provisions, Contingent
Liabilities and Contingent Assets: Onerous Contracts
— Cost of Fullling a Contract(applicableforannual
periods beginning on or after 1 January 2022)
Amendments to IFRS 3 Business Combinations:
Reference to the Conceptual Framework (applicable for
annual periods beginning on or after 1 January 2022)
Annual Improvements to IFRS Standards 2018–2020
(applicable for annual periods beginning on or after 1
January 2022)
IFRS 17 Insurance Contracts (applicable for annual
periods beginning on or after 1 January 2023)
Amendments to IAS 1 Presentation of Financial
Statements: Classication of Liabilities as Current or
Non-current (applicable for annual periods beginning
on or after 1 January 2023, but not yet endorsed in the
EU)
Amendments to IAS 1 Presentation of Financial
Statements and IFRS Practice Statement 2: Disclosure
of Accounting Policies (applicable for annual periods
beginning on or after 1 January 2023, but not yet
endorsed in the EU)
Amendments to IAS 8 Accounting policies, Changes
in Accounting Estimates and Errors: Denition of
Accounting Estimates (applicable for annual periods
beginning on or after 1 January 2023, but not yet
endorsed in the EU)
Amendments to IAS 12 Income Taxes: Deferred Tax
related to Assets and Liabilities arising from a Single
Transaction (applicable for annual periods beginning
on or after 1 January 2023, but not yet endorsed in the
EU)
The Directors have evaluated the impact that these new
standards and interpretations and consider them as not
materialonthenancialstatementsoftheCompanyin
the current version of IFRS.
1.5 Basis of consolidation
The consolidated nancial statements incorporate
the nancial statements of theCompany and entities
(including structured entities) controlled by the
Company and its subsidiaries. Control is achieved
when the Company:
• has power over the investee;
• is exposed or has rights, to variable returns from its
involvement with the investee; and
• has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an
investee if facts and circumstances indicate that there
are changes to one or more of the three elements of
control listed above.
When the Company has less than a majority of the
voting rights of an investee, it has power over the
investeewhen the votingrights are sufcientto give
it the practical ability to direct the relevant activities of
the investee unilaterally. The Company considers all
relevant facts and circumstances in assessing whether
or not the Company’s voting rights in an investee are
sufcienttogiveitpower,including:
• the size of the Company’s holding of voting rights
relative to the size and dispersion of holdings of
the other vote holders;
• potential voting rights held by the Company, other
vote holders or other parties;
• rights arising from other contractual arrangements; and
• any additional facts and circumstances that
indicate that the Company has, or does not have,
the current ability to direct the relevant activities at
the time that decisions need to be made, including
voting patterns at previous shareholders’ meetings.
Consolidation of a subsidiary begins when the Company
obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary.
Specically, income and expenses of a subsidiary
acquired or disposed of during the year are included in
NOTE 1.
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 53
NOTE 1.
theconsolidatedstatementofprotorlossandother
comprehensive income from the date the Company
gains control until the date when the Company ceases
to control the subsidiary.
Prot or loss and each component of other
comprehensive income are attributed to the owners of
the Company and to the non-controlling interests even
if this results in the non-controlling interests having a
decitbalance.
Whennecessary,adjustmentsaremadetothenancial
statements of subsidiaries to bring their accounting
policies into line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income,
expenses and cash ows relating to transactions
between members of the group are eliminated in full
on consolidation.
Changes in the Group’s ownership interests in
subsidiaries that do not result in the Group losing
control over the subsidiaries are accounted for as equity
transactions. The carrying amounts of the Group’s
interests and the non-controlling interests are adjusted
toreectthechangesintheirrelativeinterestsinthe
subsidiaries. Any difference between the amount by
which the non-controlling interests are adjusted and
the fair value of the consideration paid or received is
recognized directly in equity and attributed to owners
of the Company.
When the Group loses control of a subsidiary, a gain
orlossisrecognizedinprotorlossandiscalculated
as the difference between (i) the aggregate of the fair
value of the consideration received and the fair value
of any retained interest and (ii) the previous carrying
amount of the assets (including goodwill), and liabilities
of the subsidiary and any non-controlling interests. All
amounts previously recognized in other comprehensive
income in relation to that subsidiary are accounted for
as if the Group had directly disposed of the related
assets or liabilities of the subsidiary (i.e. reclassied
toprotorlossortransferredtoanothercategory of
equityasspecied/permittedbyapplicableIFRSs).
The fair value of any investment retained in the former
subsidiary at the date when control is lost is regarded
as the fair value on initial recognition for subsequent
accounting under IAS 39, when applicable, the cost on
initial recognition of an investment in an associate or a
joint venture.
1.6 Business combinations
Acquisitions of businesses are accounted for using the
acquisition method. The consideration transferred in a
business combination is measured at fair value, which
is calculated as the sum of the acquisition-date fair
values of the assets transferred by the Group, liabilities
incurred by the Group to the former owners of the
acquiree and the equity interest issued by the Group
in exchange for control of the acquiree. Acquisition-
relatedcostsaregenerallyrecognizedinprotorloss
as incurred.
Attheacquisitiondatetheidentiableassetsacquired
and the liabilities assumed are recognized at their fair
value except that:
• deferred tax assets or liabilities, and assets or
liabilitiesrelatedtoemployeebenetarrangements
are recognized and measured in accordance with
IAS 12 Income Taxes and IAS 19 respectively;
• liabilities or equity instruments related to share-
based payment arrangements of the acquiree or
share-based payment arrangements of the Group
entered into to replace share-based payment
arrangements of the acquiree are measured in
accordance with IFRS 2 at the acquisition date; and
• assets (or disposal groups) that are classied as
held for sale in accordance with IFRS 5 Non-current
Assets Held for Sale and Discontinued Operations
are measured in accordance with that Standard.
Goodwill is measured as the excess of the sum of
the consideration transferred the amount of any non-
controlling interest in the acquiree and the fair value
of the acquirer’s previously held equity interest in the
acquiree (if any) over the net of the acquisition-date
amounts of the identiable assets acquired and the
liabilities assumed. If, after reassessment, the net of
theacquisition-dateamountsoftheidentiableassets
acquired and liabilities assumed exceeds the sum of
the consideration transferred, the amount of any non-
controlling interests in the acquiree and the fair value
of the acquirer’s previously held interest in the acquiree
(ifany),theexcessisrecognizedimmediatelyinprot
or loss as a bargain purchase gain.
Non-controlling interests that are present ownership
interests and entitle their holders to a proportionate
share of the entity’s net assets in the event of liquidation
may be initially measured either at fair value or at the
non-controlling interest proportionate share of the
recognized amounts of the acquiree’s identiable net
assets. The choice of measurement basis is made on a
transaction-by-transaction basis. Other types of non-
controlling interest are measured at fair value or, when
applicable,onthebasisspeciedinanotherIFRS.
When the consideration transferred by the Group in
a business combination includes assets or liabilities
resulting from a contingent consideration arrangement,
54 . METALCORP GROUP ANNUAL REPORT 2021
NOTE 1.
the contingent consideration is measured at its
acquisition-date fair value and included as part of the
consideration transferred in a business combination.
Changes in the fair value of the contingent consideration
that qualify as measurement period adjustments
are adjusted retrospectively, with corresponding
adjustments against goodwill. Measurement period
adjustments are adjustments that arise from additional
informationobtainedduringthe“measurementperiod”
(which cannot exceed one year from acquisition date)
about facts and circumstances that existed at the
acquisition date.
The subsequent accounting for changes in the fair
value of the contingent consideration that do not
qualify as measurement period adjustments depends
on how the contingent consideration is classied.
Contingentconsiderationthatisclassiedasequityis
not re-measured at subsequent reporting dates and its
subsequent settlement is accounted for within equity.
Contingentconsiderationthatisclassiedasanasset
or a liability is re-measured at subsequent reporting
dates in accordance with IAS 39, or IAS 37 Provisions,
Contingent Liabilities and Contingent Assets, as
appropriate, with the corresponding gain or loss being
recognizedinprotorloss.
When a business combination is achieved in stages, the
Group’s previously held equity interest in the acquiree
is re-measured to its acquisition-date fair value and
theresultinggainorloss,ifany,isrecognizedinprot
or loss. Amounts arising from interests in the acquiree
prior to the acquisition date that have previously
been recognized in other comprehensive income are
reclassied to prot or loss where such treatment
would be appropriate if that interest were disposed of.
If the initial accounting for a business combination
is incomplete by the end of the reporting period in
which the combination occurs, the Group reports
provisional amounts for the items for which the
accounting is incomplete. Those provisional amounts
are adjusted during the measurement period (see
above), or additional assets or liabilities are recognized
to reect new information obtained about facts and
circumstances that existed at the acquisition date that,
if known, would have affected the amounts recognized
at that date.
1.7 Goodwill
Goodwill arising on an acquisition of a business is
carried at cost as established at the date of acquisition
of the business (see note 1.6.) less accumulated
impairment losses, if any.
For the purposes of impairment testing, goodwill is
allocated to each of the Group’s cash-generating units
(or groups of cash-generating units) that is expected to
benetfromthesynergiesofthecombination.
A cash-generating unit to which goodwill has been
allocated is tested for impairment annually, or more
frequently when there is an indication that the unit
may be impaired. If the recoverable amount of the
cash-generating unit is less than its carrying amount,
the impairment loss is allocated rst to reduce the
carrying amount of any goodwill allocated to the unit
and then to the other assets of the unit pro rate based
on the carrying amount of each asset in the unit. Any
impairment loss for goodwill is recognized directly
in prot or loss. An impairment loss recognized for
goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the
attributable amount of goodwill is included in the
determinationoftheprotorlossondisposal.
1.8 Investments in associates and joint ventures
An associate is an entity over which the Group has
signicantinuence.Signicantinuenceisthepower
to participate in the nancial and operating policy
decisions of the investee but is not control or joint
control over those policies.
A joint venture is a joint arrangement whereby the
parties that have joint control of the arrangement have
rights to the net assets of the joint arrangement. Joint
control is the contractually agreed sharing of control
of an arrangement, which exists only when decision
about the relevant activities require unanimous
consent of the parties sharing control. The results and
assets and liabilities of associates or joint ventures are
incorporatedintheseconsolidatednancialstatements
using the equity method of accounting, except when
theinvestment,oraportionthereof,isclassiedasheld
for sale, in which case it is accounted for in accordance
with IFRS 5. Under the equity method, an investment in
an associate or a joint venture is initially recognized in
theconsolidatedstatementofnancialpositionatcost
and adjusted thereafter to recognize the Group’s share
oftheprotorlossandothercomprehensiveincomeof
the associate or joint venture. When the Group’s share
of losses of an associate or a joint venture exceeds the
Group’s interest in that associate or joint venture (which
includes any long-term interest that, in substance, form
part of the Group’s net investment in the associate or
joint venture), the Group discontinues recognizing its
share of further losses. Additional losses are recognized
only to the extent that the Group has incurred legal or
constructive obligations or made payments on behalf
of the associate or joint venture.
An investment in an associate or joint venture is
accounted for using the equity method from the date
on which the investee becomes an associate or a
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 55
joint venture. On acquisition of the investment in an
associate or a joint venture, any excess of the cost of the
investment over the Group’s share of the net fair value
oftheidentiableassetsandliabilitiesoftheinvestee
is recognized as goodwill, which is included within the
carrying amount of the investment. Any excess of the
Group’s share ofthe netfair value ofthe identiable
assets and liabilities over the cost of the investment,
afterreassessment,isrecognizedimmediatelyinprot
or loss in the period in which the investment is acquired.
The requirements of IFRS 9 are applied to determine
whether it is necessary to recognize an impairment loss
with respect to the Group’s investment in an associate
or a joint venture. When necessary, the entire carrying
amount of the investment (including goodwill) is tested
for impairment in accordance with IAS 36 Impairment
of Assets as a single asset by comparing its recoverable
amount (higher of value in use and fair value less costs
to sell) with its carrying amount. Any Impairment loss
recognized forms part of the carrying amount of the
investment.
Any reversal of that impairment loss is recognized
in accordance with IAS 36 to the extent that the
recoverable amount of the investment subsequently
increases.
The Group discontinues the use of the equity method
from the date when the investment ceases to be an
associate or a joint venture or when the investment tis
classiedasheldforsale.WhentheGroupretainsan
interest in the former associate or joint venture and the
retainedinterestisanancialasset,theGroupmeasures
the retained interest at fair value at that date and the fair
value is regarded as its fair value on initial recognition
in accordance with IFRS 9. The difference between the
carrying amount of the associate or joint venture at the
date the equity method was discontinued, and the fair
value of any retained interest and any proceeds from
disposing of a part interest in the associate or joint
venture is included in the determination of the gain
or loss on disposal of the associate or joint venture. In
addition, the Group accounts for all amounts previously
recognized in other comprehensive income in relation
to that associate or joint venture on the same basis
as would be required if that associate or joint venture
had directly disposed of the related assets or liabilities.
Therefore, if a gain or loss previously recognized in
other comprehensive income by that associate or joint
venturewouldbe reclassied to prot or lossonthe
disposal of the related assets or liabilities, the Group
reclassies the gain or loss from equity to prot or
loss(asareclassicationadjustment)whentheequity
method is discontinued.
The Group continues to use the equity method when
an investment in an associate becomes an investment
in a joint venture or an investment in a joint venture
becomes an investment in an associate. There is no
re-measurement to fair value upon such changes in
ownership interests.
When the Group reduces its ownership interest in an
associate or a joint venture but the Group continues
to use the equity method, the Group reclassies to
protorlosstheproportionofthegainorlossthathad
previously been recognized in other comprehensive
income relating to that reduction in ownership interest
ifthatgainorlosswouldbereclassiedtoprotorloss
on the disposal of the related assets or liabilities.
When a group entity transacts with an associate or a
jointventureoftheGroup,protsandlossesresulting
from the transactions with the associate or joint
venture are recognized in the Group’s consolidated
nancial statements only to the extent of interest in
the associate or joint venture that are not related to the
Group.
1.9 Revenue recognition
Revenue is measured at the fair value of the
consideration received or receivable. Revenue is
reduced for estimated customer returns rebates and
other similar allowances.
The majority of the Group's revenue is recognized
when the goods are delivered and titles have passed,
atwhichtimeallthefollowingconditionsaresatised:
• the Group has transferred to the buyer the
signicantrisksand rewardsof ownershipofthe
goods;
• the Group retains neither continuing managerial
involvement to the degree usually associated with
ownership nor effective control over the goods
sold;
• the amounts of revenue can be measured reliably;
• itisprobablythattheeconomicbenetsassociated
withthetransactionwillowtotheGroup;
• the costs incurred or to be incurred in respect of the
transaction can be measured reliably.
The Group has one type of revenues that derives from
arrangements with performance obligations satised
over time (contract based assets) in accordance with
IFRS15.Themethodofthisspecicrevenuerecognition
is described in note 2.2.
NOTE 1.
56 . METALCORP GROUP ANNUAL REPORT 2021
1.10 Leasing
For any new contracts entered into on or after 1
January 2021, the Group evaluates whether a contract
is,orcontainsalease.Aleaseisdenedasacontract,
or part of a contract, that contains the right to use an
asset for a period of time in exchange for consideration
to be paid.
To apply this denition the Group assesses whether
the contract meets three key evaluations of IFRS 16:
• the contract contains an identied asset, which
is either explicitly identied in the contract or
implicitlyspeciedbybeingidentiedatthetime
the asset is made available.
• the Group has the right to obtain substantially all
oftheeconomicbenetsfromuseoftheidentied
asset in the period of use, considering its rights
withinthedenedscopeofthecontracttheGroup
has the right to direct the use of the identied
asset throughout the period of use.
• the Group assess whether it has the right to direct
‘how and for what purpose’ the asset is used in the
period of use.
At lease commencement date, the Group recognises a
right-of-use asset and a lease liability on the balance
sheet. The right-of-use asset is measured at cost,
which is made up of the following costs:
• the initial measurement of the lease liability,
• any initial direct costs incurred by the Group,
• an estimate of any costs to dismantle and remove
the asset at the end of the lease, and
• any lease payments made in advance of the lease
commencement date net of incentives.
The Group depreciates the right-of-use assets on a
straight-line basis from the lease commencement date
to the earlier of the end of the useful life of the right-
of-use asset or the end of the lease term.
The Group also assesses the right-of-use asset for
impairment when such indicators exist.
At the beginning of leasing date, the Group measures
the lease liability at the present value of the lease
payments unpaid at that date, discounted using the
interest rate implicit in the lease. The Group uses an
incremental borrowing rate if the implicit rate is not
available.
Lease payments included in the measurement of the
lease liability are made up of the following:
• xedpayments
• variable payments based on an index or rate,
• amounts expected to be payable under a residual
value guarantee and
• payments arising from options reasonably certain
to be exercised.
Subsequent to initial measurement, the liability will
be reduced for payments made and increased for
interest.Itis remeasuredtoreectanyreassessment
ormodication,oriftherearechangesinin-substance
xedpayments.
When the lease liability is remeasured, the
correspondingadjustmentisreectedintheright-of-
useasset,orprotandlossiftheright-of-useassetis
already reduced to zero.
The Group has decided to choose for the possibility of
IFRS 16 to account for short-term leases and leases
of low-value assets using the practical expedients.
Instead of recognising a right-of-use asset and
lease liability, the payments in relation to these are
recognisedasanexpenseinprotorlossonastraight-
line basis over the lease term.
On the statement of nancial position, right-of-use
assets have been included in property, plant and
equipment and lease liabilities have been included in
loans and borrowings or current liabilities and accruals.
1.11 Foreign currencies
Inpreparingthenancialstatementsofeachindividual
group entity, transactions in currencies other than the
entity’s functional currency (foreign currencies) are
recognized at the rates of exchange prevailing at the
dates of the transactions. At the end of each reporting
period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at that
date. Non-monetary items carried at fair value that are
denominated in foreign currencies are retranslated at
the rates prevailing at the date when the fair value was
determined. Non-monetary items that are measured in
terms of historical costs in a foreign currency are not
retranslated.
Exchange differences on monetary items are recognized
inprotorlossintheperiodinwhichtheyariseexcept
for:
• Exchange differences on foreign currency
borrowings relating to assets under construction for
future reductive use which are included in the cost of
those assets when they are regarded as an adjustment
to interest costs on those foreign currency borrowings.
• Exchange differences on transactions entered into
in order to hedge foreign currency risks.
• Exchange differences on monetary items
receivable from or payable to a foreign operation for
which settlement is neither planned nor likely to occur
NOTE 1.
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 57
in the foreseeable future therefore forming part of the
net investment in the foreign operation), which are
recognized initially in other comprehensive income and
reclassiedfromequitytoprotorlossonrepayment
of the monetary items.
For the purposes of presenting these consolidated
nancial statements, the assets and liabilities of
the Group’s foreign operations are translated into
Euros using exchange rates prevailing at the end of
each reporting period. Income and expense items
are translated at the average exchange rates for the
period, unless exchange rates uctuate signicantly
during that period, in which case the exchange rates
at the dates of the transactions are used. Exchange
differences arising, if any, are recognized in other
comprehensive income and accumulated in equity (and
attributed to non-controlling interests as appropriate).
On the disposal of a foreign operation (i.e. disposal of
the Group’s entire interest in a foreign operation, or
a disposal involving loss of control over a subsidiary
that includes a foreign operation, or a partial disposal
of an interest in a joint arrangement or an associate
that includes a foreign operation of which the retained
interestbecomesanancialasset)alloftheexchange
differences accumulated in equity in respect of the
operation attributable to the owners of the Company
arereclassiedtoprotorloss.
In relation to a partial disposal of a subsidiary that
includes a foreign operation that does not result
in the Group losing control over the subsidiary,
the proportionate share of accumulated exchange
differences are re-attributed to non-controlling
interests and arenot recognized in prot or loss. For
all other partial disposals (i.e. partial disposals of
associates or joint arrangements that do not result in
theGrouplosingsignicantinuenceorjointcontrol),
the proportionate share of the accumulated exchange
differencesisreclassiedtoprotorloss.
Goodwill and fair value adjustments to identiable
assets acquired and liabilities assumed through
acquisition of a foreign operation are treated as assets
and liabilities of the foreign operation and translated
at the rate of exchange prevailing at the end of each
reporting period. Exchange differences arising are
recognized in other comprehensive income.
1.12 Retirement benet costs and termination
benets
Payments to dened contribution retirement
benet plans are recognized as an expense when
employees have rendered service entitling them to the
contributions.
1.13 Taxation
Income tax expense represents the sum of the tax
currently payable and deferred tax.
Thetaxcurrentlypayableisbasedontaxableprotfor
theyear.Taxableprotdiffersfrom“protbeforetax”
asreportedintheconsolidatedstatementofprotor
loss and other comprehensive income, because items
of income or expense that are taxable or deductible
in other years and items that are never taxable or
deductible. The Group’s current tax is calculated using
tax rates that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax is recognized on temporary differences
between the carrying amounts of assets and liabilities
in the consolidated nancial statements and the
corresponding tax based used in the computation of
taxable prot. Deferred tax liabilities are generally
recognized for all taxable temporary differences.
Deferred tax assets are generally recognized for all
deductible temporary differences to the extent that it is
probablethattaxableprotswillbeavailableagainst
which those deductible temporary differences can be
utilized. Such deferred tax assets and liabilities are not
recognized if the temporary difference arises from the
initial recognition (other than in a business combination)
of assets and liabilities in a transaction that affects
neitherthetaxableprotnortheaccountingprot.In
addition, deferred tax liabilities are not recognized if the
temporary difference arises from the initial recognition
of goodwill.
Deferred tax liabilities are recognized for taxable
temporary differences associated with investments
in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the
reversal of the temporary difference and it is probable
that the temporary differences will not reverse in the
foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such
investments and interests are only recognized to the
extent that it is probable that therewill be sufcient
taxableprotsagainstwhichtoutilizethebenetsof
the temporary differences and they are expected to
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed
NOTE 1.
58 . METALCORP GROUP ANNUAL REPORT 2021
at the end of each reporting period and reduced to
theextentthatitisnolongerprobablethatsufcient
taxableprotswillbeavailabletoallowallorpartof
the asset to be recovered.
Deferred tax liabilities and assets are measured at
the tax rates that are expected to apply in the period
in which the liability is settled or the asset realized.,
based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the
reporting period.
The measurement of deferred tax liabilities and assets
reects the consequences that would follow from
the manner in which the Group expects at the end of
the reporting period, to recover or settle the carrying
amount of its assets and liabilities.
Currentanddeferredtaxarerecognizedinprotorloss,
except when they relate to items that are recognized
in other comprehensive income or directly in equity,
in which case, the current and deferred tax are also
recognized in other comprehensive income or directly
in equity respectively. Where current tax or deferred
tax arises from the initial accounting for a business
combination the tax effect is included in the accounting
from the business combination.
1.14 Property, plant and equipment and Intangible
xed assets
Property, plant and equipment are stated at cost, being
the fair value of the consideration given to acquire or
construct the asset, including directly attributable
costs required to bring the asset to the location or to a
condition necessary for operation and the direct cost of
dismantling and removing the asset, less accumulated
depreciation and any accumulated impairment losses.
Intangible assets include goodwill and off-take
contracts. The offtake contracts as per 31 December
2021 were valued at cost. For the accounting policies
concerning mineral rights reference is made to note
1.15.
Property, plant and equipment (with the exception of
land and buildings) are depreciated to their estimated
residual value over the estimated useful life of the
specicassetconcerned.Identiableintangibleassets
withanitelifeareamortizedonastraight-linebasis
and/or in accordance with the unit-of-production
method (“UOP”) over their expected useful life.
Reference is made to note 1.23 for more details on
the application of the UOP method. Goodwill is not
amortized. Land and buildings are valued at Fair Value
in accordance with IFRS 13 and changes are accounted
for in other comprehensive income.
The major categories of property, plant and equipment
(with the exception of land and buildings) and
intangible assets are depreciated/amortized on a UOP
and/or straight-line basis as follows (per annum):
Land: Fair value model
Buildings: 0%
Plant and Equipment: 10% - 33%
Other operating assets: up to 10%
Assets under nance leases, where substantially all
the risks and rewards of ownership transfer to the
Group as lessee, are capitalized and depreciated over
their expected useful lives on the same basis as owned
assets or, where shorter, the term of the relevant lease.
Allotherleasesareclassiedasoperatingleases,the
expenditures for which are charged against income
over the accounting periods covered by the lease term.
1.15 Mineral rights
Mineral rights consist of exploration and evaluation
expenditure, mineral resources, mineral reserves, and
mineral rights.
Exploration and evaluation expenditure relates to
costs incurred on the exploration and evaluation of
potential mineral resources and includes costs such as
researching and analyzing historical exploration data,
exploratory drilling, trenching, sampling and the costs
of pre-feasibility studies.
Exploration and evaluation expenditure for each area
of interest, other than that acquired from the purchase
of another company, is charged to the statement of
income as incurred except when:
• the expenditure is expected to be recouped from
future exploitation or sale of the area of interest; and
it is planned to continue with active and signicant
operations in relation to the area;
• or at the reporting period end, the activity has not
reached a stage which permits a reasonable assessment
of the existence of commercially recoverable reserves,
in which case the expenditure is capitalized.
Purchased exploration and evaluation assets are
recognized at their fair value at acquisition.
Capitalized exploration and evaluation expenditure is
NOTE 1.
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 59
recorded as a component of mineral rights in property,
plant and equipment. All capitalized exploration and
evaluation expenditure is monitored for indications of
impairment. Where a potential impairment is indicated,
an assessment is performed for each area of interest
or at the cash generating unit level. To the extent that
capitalized expenditure is not expected to be recovered
it is charged to the statement of income.
Mineral reserves, resources and rights (together
Mineral Rights) which can be reasonably valued, are
recognized.
In the assessment of fair values on acquisition,
Mineral Rights for which values cannot be reasonably
determined are not recognized. Exploitable Mineral
Rights are amortized using the UOP over the
commercially recoverable reserves and, in certain
circumstances, other mineral resources. Mineral
resources are included in amortization calculations
where there is a high degreeof condencethat they
will be extracted in an economic manner.
1.16 Impairment
At the end of each reporting period the Group reviews
the carrying amounts of its tangible and intangible
assets to determine whether there is any indication
that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent
of the impairment loss (if any). When it is not possible
to estimate the recoverable amount of an individual
asset, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
When a reasonable and consistent basis can be
identied,Intangibleassetswithindeniteusefullives
and intangible assets not yet available for use are
tested for impairment at least annually and whenever
there is an indication that the asset may be impaired.
The recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in use
theestimatedfuturecashowsarediscountedtotheir
presentvalueusingapre-taxdiscountratethatreects
current market assessments of the time value of
moneyandtherisksspecictotheassetforwhichthe
estimatesoffuturecashowshavenotbeenadjusted.
If the recoverable amount of an asset (or cash-
generating unit) is estimated to be less than its carrying
amount the carrying amount of the asset (or cash
generating unit) is reduced to its recoverable amount.
Animpairmentlossisrecognizedimmediatelyinprot
or loss, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as
a revaluation decrease.
When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash generating unit)
is increased to the revised estimate of its recoverable
amount but so that the increased carrying amount, does
not exceed the carrying amount that would have been
determined had no impairment loss been recognized
for the asset (or cash-generating unit) in prior years.
A reversal of an impairment loss is recognized
immediatelyinprotorlossunlesstherelevantassetis
carried at a revalued amount, in which case the reversal
of the impairment loss is treated as a revaluation
increase.
1.17 Inventories
Production Inventories are stated at the lower of cost
and net realizable value. Costs of inventories are
determinedonarst-in-rst-outbasis.Netrealizable
value represents the estimated selling price for
inventories less all estimated costs of completion and
costs necessary to make the sale.
The Trading inventories are stated at Fair Value less
costs to sell.
1.18 Provisions
Provisions are recognized when the Group has a present
obligation as a result of a past event it is probable that
the Group will be required to settle the obligation, and
a reliable estimate can be made of the amount of the
obligation.
The amount recognized as a provision is the best
estimate of the consideration required to settle
the present obligation at the end of the reporting
period, taking into account the risks and uncertainties
surrounding the obligation.
When a provision is measured using the cash ows
estimated to settle the present obligation, its carrying
amountisthepresentvalueofthosecashows(when
the effect of the time value of money is material).
When some or all the economic benets required to
settle a provision are expected to be recovered from
a third party a receivable is recognized as an asset if it
is virtually certain that reimbursement will be received
and the amount of the receivable can be measured
reliably.
NOTE 1.
60 . METALCORP GROUP ANNUAL REPORT 2021
1.19 Financial instruments
Financialassetsandnancialliabilitiesarerecognized
when a group entity becomes a party to the contractual
provisions of the instruments.
Since1January2020theGroupclassiesitsnancial
instruments as either nancial assets at amortised
cost, at fair value through other comprehensive
income(FVTOCI)oratfairvaluethroughprotorloss
(FVTPL). The classication depends on the Group´s
businessmodelformanagingthenancialassetsand
contractualtermsofthecashows.
Amortised cost : Assets that are held for collection
of contractual cash ows represent solely payments
of principal and interest. Interest income from those
nancialisincludedinnanceincome.
FVTOCI : Assets that are held for collection of contractual
cashowsandforsellingthenancial assets,where
thecashowsoftheassetsrepresentsolelypayments
of principal and interest.Interest income from these
nancial assets is included in nance income using
the effective interest rate method. Unrealized gains or
losses are recorded as a fair value adjustment in the
consolidated statement of comprehensive income and
transfered to the consolidated income statement when
thisnancialassetissold.Exchangegainsandlosses
andimpairmentsrelatedtothesenancialassetsare
immediately recognized in the consolidated income
statement.
FVTPL : Assets that do not meet the criterias for
amortised cost or FVTOCI. Changes in fair value
of nancial instruments at FVPL are immediately
recognized in the consolidated income statement.
Listed redeemable notes held by the Group that are
tradedinanactivemarketareclassiedasFVTPLand
are stated at fair value at the end of each reporting
period. Changes in the carrying amount of FVTPL
monetary nancial assets relating to changes in
foreign currency rates, interest income calculated
using the effective interest method and dividends on
FVTPL equity investments are recognized in prot or
loss. Other changes in the carrying amount of FVTPL
nancialassetsarerecognizedinothercomprehensive
income and accumulated under the heading of
investments revaluation reserve. When the investment
is disposed of or is determined to be impaired, the
cumulative gain or loss previously accumulated in the
investment'srevaluationreserveisreclassiedtoprot
or loss.
Dividends on FVTPL equity instruments are recognized
inprotorlosswhentheGroup’srighttoreceivethe
dividends is established.
The fair value of FVTPL monetary nancial assets
denominated in a foreign currency is determined in
that foreign currency and translated at the spot rate
prevailing at the end of the reporting period. The foreign
exchangegainsandlossesthatarerecognizedinprot
or loss are determined based on the amortised cost of
the monetary asset. Other foreign exchange gains and
losses are recognized in other comprehensive income.
FVTPL equity investments that do not have a quoted
market price in an active market and whose fair
value cannot be reliably measured and derivatives
are linked to and must be settled by delivery of such
unquoted equity investments are measured at cost less
any identied impairment losses at the end of each
reporting period.
Financial assets are initially recognised at fair value on
the trade date, including, in the case of instruments not
recorded at fair value through prot or loss, directly
attributable costs. Other investments, provisionally
priced trade receivables and derivates are carried at
fair value. Trade receivables (without provisional price
features), loans and other receivables are carried at
amortised cost adjusted for any loss allowance.
Financial liabilities (except derivates and liabilities with
provisional price features) are initially recognised at fair
value of consideration received net of transaction costs
as appropriate and subsequently carried at amortised
cost. Derivates and nancial liabilities including
provisional price features are carried at FVTPL.
1.20 Impairment of nancial assets
Financial assets, other than those at FVTPL, are
assessed for indicators of impairment at the end of
each reporting period. Financial assets are considered
to be impaired when there is objective evidence that, as
a result of one or more events that occurred after the
initialrecognitionofthenancialasset,theestimated
futurecashowsoftheinvestmenthavebeenaffected.
For FVTPL equity investments, a signicant or
prolonged decline in the fair value of the security
below its cost is considered to be objective evidence
ofimpairment.Forallothernancialassets,objective
evidence of impairment could include:
• signicantnancialdifcultyoftheissueror
counterparty; or
• breach of contract, such as a default or delinquency
in interest or principal payments; or
• it becoming probable that the borrower will enter
bankruptcyornancialreorganization;or
• the disappearance of an active market for that
nancialassetbecauseofnancialdifculties.
NOTE 1.
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 61
Forcertaincategoriesofnancialassets,suchastrade
receivables assets are assessed for impairment on a
collective basis even if they were assessed not to be
impaired individually. Objective evidence of impairment
for a portfolio of receivables could include the Group’s
past experience of collecting payments, an increase
in the number of delayed payments in the portfolio
past the average credit period, as well as observable
changes in national or local economic conditions that
correlate with default on receivables.
A loss allowance for expected credit losses is determined
forallnancialassets,otherthanthoseatFVTPL, at
the end of each reporting period. The expected credit
loss recognised represents a probability-weighted
estimate of credit losses over the expected life of the
nancial instrument. Metalcorp Group applies the
simpliedapproachtomeasurethelossallowancefor
tradereceivablesclassiedasamortisedcostusingthe
lifetime expected loss provision. The expected credit
loss on trade receivables is estimated using a provision
matrix by reference to past default experience and
an equivalent credit rating, adjusted as appropriate
for current observable data and forward-looking
information.Forallothernancialassetsatamortised
cost the Group recognises lifetime expected credit
losses when there has been a signicant increase in
credit risk since initial recognition.
For nancial assets carried at amortised cost, the
amount of the impairment loss recognized is the
difference between the asset’s carrying amount and
the present value of estimated future cash ows,
discounted at the nancial asset’s original effective
interest rate.
Fornancialassetsthatarecarriedatcost,theamount
of the impairment loss is measured as the difference
between the asset’s carrying amount and the present
valueoftheestimatedfuturecashowsdiscountedat
thecurrentmarketrateofreturnforasimilarnancial
asset. Such impairment loss will not be reversed in
subsequent periods.
Thecarryingamountofthenancialassetisreducedby
theimpairmentlossdirectlyforallnancialassetswith
the exception of trade receivables, where the carrying
amount is reduced through the use of an allowance
account.
When a trade receivable is considered uncollectible, it is
written off against the allowance account. Subsequent
recoveries of amounts previously written off are
credited against the allowance account. Changes in
the carrying amount of the allowance account are
recognizedinprotorloss.
Fornancialassetsmeasuredatamortisedcost,if,ina
subsequent period, the amount of the impairment
loss decreases and the decrease can be related
objectively to an event occurring after the impairment
was recognized, the previously recognized impairment
loss is reversed through prot or loss to the extent
that the carrying amount of the investment at the date
the impairment is reversed does not exceed what the
amortised cost would have been had the impairment
not been recognized.
In respect of FVTPL equity securities, impairment
losses previously recognized in prot or loss are not
reversed through prot or loss. Any increase in fair
value subsequent to an impairment loss is recognized
in other comprehensive income and accumulated
under the heading of investments revaluation reserve.
In respect of FVTPL debt securities, impairment losses
are subsequently reversed through prot or loss
if an increase in the fair value of the investment can
be objectively related to an event occurring after the
recognition of the impairment loss.
1.21 De-recognition of nancial assets
and nancial liabilities
The Group derecognizes a nancial asset when the
contractual rights to the cash ows from the asset
expire, or when it transfers the nancial asset and
substantially all the risks and rewards of ownership of
the asset to another party.
If the Group neither transfers nor retains substantially
all the risks and rewards of ownership and continues to
control the transferred asset, the Group recognises its
retained interest in the asset and an associated liability
for amounts it may have to pay. If the Group retains
substantially all the risks and rewards of ownership
of a transferred nancial asset, the Group continues
torecognizethenancialassetandalsorecognisesa
collateralised borrowing for the proceeds received.
Onde-recognitionofanancialassetinitsentirety,the
difference between the asset’s carrying amount and the
sum of the consideration received and receivable and
the cumulative gain or loss that had been recognised
in other comprehensive income and accumulated in
equityisrecognizedinprotorloss.
On de-recognition of a nancial asset other than its
entirety (e.g. when the Group retains an option to
repurchase part of a transferred asset), the Group
NOTE 1.
62 . METALCORP GROUP ANNUAL REPORT 2021
allocatesthepreviouscarryingamountofthenancial
asset between the part it continues to recognise under
continuing involvement, and the part it no longer
recognises on the basis of the relative fair values of
those parts on the date of the transfer.
The difference between the carrying amount allocated
to the part that is no longer recognized and the sum
of the consideration received for the part no longer
recognized and any cumulative gain or losses allocated
to it that had been recognized in other comprehensive
incomeisrecognizedinprotorloss.Acumulativegain
or loss that had been recognized in other comprehensive
income is allocated between the part that continues to
be recognized and the part that is no longer recognized
on the basis of the relative fair values of those parts.
TheGroupderecognizesnancialliabilitieswhen,and
only when, the Group’s obligations are discharged,
cancelled or they expire. The difference between the
carryingamountofthenancialliabilityderecognized
and the consideration paid and payable is recognized
inprotorloss.
1.22 Derivatives and hedging activities
Derivative instruments, which mainly include contracts
to sell or purchase commodities that do not meet the
own use exemption, as well as FX derivatives to a minor
extend, are initially recognize at fair value when the
Company becomes a party to the contractual provisions
of the instrument and are subsequently re-measured
to fair value at the end of each reporting period. Fair
values are determined using quoted market prices,
dealer price quotations or using models and other
valuation techniques, the key inputs for which include
current market and contractual prices of the underlying
instrument, time to expiry, yield curves, volatility of the
underlying instrument and counterparty risk.
Gains and losses on derivative instruments for which
hedge accounting is not applied, other than the revenue
adjustment mechanism embedded within provisionally
priced sales, are recognised in cost of goods sold.
Those derivatives qualifying and designated as hedges
are either
(i) a Fair Value Hedge of the change in fair value of
a recognized asset or liability or an unreconised rm
commitment, or
(ii)aCashFlowHedgeofthechangeincashowsto
be received or paid relating to a recognized asset or
liability or a highly probably transaction.
A change in the fair value of derivatives designated as a
FairValueHedgeisreectedtogetherwiththechange
in the fair value of the hedged item in the statement of
income.
A change in the fair value of derivatives designated as a
CashFlowHedgeisinitiallyrecognizedasacashow
hedge reserve in shareholders’ equity. The deferred
amount is then released to the statement of income in
the same periods during which the hedged transaction
affects the statement of income. Hedge ineffectiveness
is recorded in the statement of income when it occurs.
When a hedging instrument expires or is sold, or
when a hedge no longer meets the criteria for hedge
accounting, any cumulative gain or loss existing in
equity at that time remains in shareholders’ equity
and is recognized in the statement of income when
the committed or forecast transaction is ultimately
recognized in the statement of income.
A derivative may be embedded in a “host contract”.
Such combinations are known as hybrid instruments
and at the date of issuance, the embedded derivative is
separated from the host contract and accounted for as
a stand-alone derivative if the criteria for separation are
met. The host contract is accounted for in accordance
with its relevant accounting policy.
1.23 Critical accounting policies, key judgments
and estimates
The preparation of the consolidated nancial
statements requires management to make estimates
and assumptions that affect the reported amounts
of assets and liabilities as well as the disclosure of
contingent assets and liabilities at the date of the
nancial statements and the reported amounts of
revenues and expenses during the reporting period.
The estimates and associated assumptions are based
on historical experience and other factors that are
considered to be relevant. Actual outcomes could differ
from those estimates.
The Company has identied the following areas as
beingcriticalofunderstandingtheCompany’snancial
position as they require management to make complex
and/or subjective judgments and estimates about
matters that are inherently uncertain:
Depreciation and amortization of property plant and
equipment and mineral rights
Mineral rights and certain plant and equipment are
depreciated / amortized using UOP rate of depreciation
/ amortization, and therefore the annual charge to
operations, can uctuate from initial estimates. This
NOTE 1.
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 63
could generally result when there are signicant
changes in any of the factors or assumptions used
in estimating mineral reserves, notably changes in
the geology of the reserves and assumptions used in
determining the economic feasibility of the reserves.
Such changes in reserves could similarly impact the
useful lives of assets depreciated on a straight line
basis, where those lives are limited to the life of the
project, which in turn is limited to the life of the proven
and probably mineral reserves. Estimates of proven
and probable reserves are prepared by experts in
extraction, geology and reserve determination.
Assessments of extraction, geology and reserve
determination, assessments of UOP rates against the
estimated reserve and resource base and the operating
and development plan are performed regularly.
Impairments
Investments in Associates and other investments,
advances, and loans and property, plant and equipment,
and intangible assets are reviewed for impairment
whenever events or changes in circumstances indicate
that the carrying value may not be fully recoverable or
atleastannuallyforgoodwillandotherindenitelife
intangible assets.
If an asset’s recoverable amount is less than the assets’
carrying amount, an impairment loss is recognized.
Futurecashowestimateswhichareusedtocalculate
the asset’s fair value are based on expectations about
future operations primarily comprising estimates about
production and sales volumes, commodity prices,
reserves and resources, operating rehabilitations and
restoration costs and capital expenditures. Changes
in such estimates could impact recoverable values of
these assets.
Estimates are reviewed regularly by management.
Valuation of derivative instruments
Derivative instruments are carried at fair value and the
company evaluates the quality and reliability of the
assumptions and data used to measure fair value in the
three hierarchy levels, Level 1, 2 and 3, as prescribed
by IFRS 7.
Fair values are determined in the following ways:
externally veried via comparison to quoted market
prices in active markets (Level 1); by using models
with externally veriably inputs (Level2 ); or using
alternative procedures such as comparison to
comparable instruments and/or using models with
unobservable market inputs requiring the Company to
make market based assumptions (Level 3).
Provisions
The amount recognized as a provision, including tax,
legal, restoration and rehabilitation, contractual and
other exposures or obligations is the best estimate
of the consideration required to settle the related
liability, including any related interest charges, taking
into account the risks and uncertainties surrounding
the obligation. The Group assesses its liabilities
and contingencies based upon the best information
available, relevant tax laws and other appropriate
requirements.
Fair Value measurements
In addition to recognizing derivative instruments at fair
value, as discussed above, an assessment of air value
of assets and liabilities is also require in accounting for
other transaction most notably, business combinations
and disclosures related to fair values of marketing
inventories, nancial assets and liabilities. In such
instances, fair value measurements are estimated based
on the amounts for which the assets and liabilities
could be exchanged at the relevant transaction
date or reporting period end, and are therefore not
necessarily reective of the likely cash ow upon
actual settlements. Where fair value measurements
cannot be derived from publicly available information,
they are estimated using models and other valuation
methods. To the extent possible, the assumptions and
inputs take into account externally veriable inputs.
However, such information is by nature subject to
uncertainty; particularly where comparable market
based transactions rarely exist.
Extension options for leases
When the Group has the option to extend a lease,
management uses its judgement to determine whether
or not an option would be reasonably certain to be
exercised. The Group’s Management considers all
facts and circumstances including their past practice,
experience and any cost that will be incurred in the
future to change the lease asset if an option to extend
is not taken. Based on these evaluation management
decides and determine the lease term. No potential
lease payments have been excluded in the lease
liabilities as management is reasonably certain that all
the extension options will be exercised.
NOTE 1.
64 . METALCORP GROUP ANNUAL REPORT 2021
2.1 General
The Company is organized in the following sub-
segments:
- Aluminium
- Metals & Concentrates
- Bulk & Ferrous
This structure is used by management to assess the
performance of the Company.
The Aluminium business unit is organised into Recycling
and Mining activities. Aluminium Recycling is headed
by BAGR Berliner Aluminiumwerk GmbH, which is the
leading independent secondary producer of aluminium
slabs. BAGR is located in Berlin, Germany and has a
highlyefcientteamofqualiedprofessionalswhoturn
aluminium scrap, alloy additives and small quantities of
primary aluminium into high-quality aluminium slabs.
These are then further processed by our customers
into strips, sheets, plates and cuttings. BAGR is 100%
owner of Stockach Aluminium GmbH, a secondary slab
manufacturer located in Southern Germany. The Group
has invested furthermore in Bauxite mining activities in
the Republic of Guinea, which is the raw material for
Alumina, and ultimately Aluminium production.
The Metals & Concentrates marketing activities
are managed by Tennant Metals Group – a global
commodity rm, specialising in the sourcing and
physical supply of base metals in the form of scrap,
renedmetals,oresandconcentrates.Thecompany’s
expert knowledge of the various components of the
commodity supply chain guarantees low-risk and
efcientresults.
Established in 1966, Tennant Metals is continuously
adapting to the global environment by adjusting its
market approach to secure new sources of supply and
providing world class service in various niche markets.
The main metals traded by Tennant Metals are
ferrochrome, aluminium, copper, lead, tin and zinc.
The production activities of the Metals & Concentrates
business unit consists of running a copper scrap
recycling business with a strong European customer
base. Using an energy efcient process to convert
copper scrap into high quality copper granulates, we
place an emphasis on minimising waste and the re-use
of existing resources. The group is currently running
two recycling and production sites in Bilbao, Spain and
Thessaloniki, Greece.
The Marketing activities of Bulk and Ferrous are headed
by Steelcom – an independent steel marketer with a
history spanning over 60 years in the steel industry.
Our global network and expertise enable us to offer
a complete and competitive value-added service by
providing both producers and consumers with secure
platformsintheeldoftradenance,riskmanagement,
and logistics solutions.
Steelcom is a leading steel service provider.
The Production activities of the Bulk & Ferrous
segment consists of Coke and steel pipe manufacturing
respectively by Italiana Coke and Capital Star Steel.
Metalcorp Group has secured a shareholding in
Italiana Coke based in Savona, Italy. As part of a group
originally founded in 1895, Italiana Coke manufactures
and markets reductants including metallurgical
coke, foundry coke and blast furnace coke. The
company emphasises eco-sustainability and multiple
investments have been made to implement state-of-
the-art infrastructure to control and reduce emissions
and protect the plant’s immediate environment.
Capital Star Steel is a leading manufacturer of high-
quality, electric resistance steel pipe. These products
are supplied to the fuel and energy, construction, mining
and utility industries across Africa and globally. The
company operates a 34,400m2 facility and 120,000m2
storage yard in Mozambique.
2.2 Segment Revenues and Results
ThefollowingisananalysisoftheGroup’srevenue,grossprot(“GM”)andresultsfromcontinuingoperationsby
reportable segment.
NOTE 2. SEGMENT INFORMATION
Revenue GM Result before taxation
EUR 1.000 2021 2020 2021 2020 2021 2020
- Aluminium 148.990 108.141 24.826 14.206 9.279 1.682
- Metals & Concentrates 197.082 170.803 28.659 24.870 3.630 1.773
- Bulk & Ferrous 254.810 123.745 24.476 3.786 5.355 1.433
Total 600.882 402.689 77.961 42.862 18.264 4.888
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CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 65
2.3 Segment Assets and Liabilities
The following is an analysis of the Group’s assets and liabilities by reportable segment.
NOTE 2.
Assets Liabilies
EUR 1.000 2021 2020 2021 2020
- Aluminium
323.352 301.891 63.558 56.022
- Metals & Concentrates
121.751 79.109
79.810
49.750
- Bulk & Ferrous
334.687 81.967 163.741 28.281
Holding Activities & other 74.697 72.455 329.110 241.697
Total 854.487 535.422 636.219 375.750
EUR 1.000
- Aluminium
- Metals & Concentrates
- Bulk & Ferrous
Total
Depreciation and amortization
2021 2020
8.400 4.593
203 176
2.361 374
10.964 5.143
Additions to non-current assets
2021 2020
12.164 61.044
- -
179.085 30.000
191.249 91.044
Segment revenue reported above represents revenue
generated from external customers. The revenues
from contract based assets derive from arrangements
with performance obligations over time in accordance
with IFRS 15. This relates to commissions that are
guaranteed by an Offtake agreement and payed/agreed
at the end of the Offtake period between parties, but
theseareearnedoneveryfullledservice(metalback-
to-back trade). As this is a distinct part of the contract
the group presents this as a contract based asset and
recognizes the share of total commission revenue.
TheamountofEUR823thousandreectsthedifference
of the contract based assets as per 31 December 2021
(EUR 10.749 thousand) and 31 December 2020 (EUR
11.475 thousand), see note 10. The Offtake contracts
are written off in the same amount so that the impact
on the income statement is balanced out, see note 7.
As a result, the group shows the correlation between
the Offtake contracts and the Contract based assets.
Apart from service fees charged between entities for
services provided, there were no inter-segment sales
in the current year.
The accounting policies of the reportable segments are
the same as the Group’s accounting policies described
innote1.Protrepresentstheprotaftertaxearned
by each segment.
Theadditionstonon-currentassets inthetradingdivisionalsoincludethe additionsofnancial instrumentsas
reported in Note 8 Financial Fixed Assets.
66 . METALCORP GROUP ANNUAL REPORT 2021
The allocation of Revenue and GM is based on the
country of incorporation of the sales counterparty. This
may not necessarily be the country of the counterparty’s
ultimateparentand/ornaldestinationofproduct.
Note that the Non-Current assets also contain the
nancial instruments as reported in Note 8 Financial
Fixed Assets, as this is a signicant position that is
reported to management on a regular basis.
None of the customers contribute over 10% of revenue.
NOTE 2.
The average number of employees of the Group during
the year, converted to full-time equivalents was 516
(2020: 296) of which 514 are employed outside of
Luxembourg (2020: 296 outside of Luxembourg). In the
personnel expenses an amount of EUR 2.444 thousand
related to social security premiums (2020: EUR 775
thousand) and an amount of EUR 149 thousand related
to pension premiums are included (2020: EUR 125
thousand).
NOTE 3. EXPENSES
2.4 Geographical Information
The Group operates globally and operations are managed by the following geographical analysis:
EUR 1.000 2021 2020
Selling expenses
Personnel 12.103 5.574
Sales and marketing expenses 226 25
Total selling expenses 12.328 5.599
Administrative expenses
Personnel 3.217 1.004
Professional services fees 1.751 1.284
Facilities and ofces 2.866 1.529
Other operating expenses 1.573 863
Total administrative expenses 9.407 4.681
Operating income & expenses 21.735 10.280
Breakdown: depreciation and amortization
Property Plant and Equipment 6.293 2.138
Intangible assets 1.822 1.238
Right-of-use asset 2.849 1.664
Impairment of stock - 103
Total depreciation and amortization
10.964 5.143
Allocated to production costs -
As included in administrative expenses 10.964 5.143
Revenue GM Non-Current assets
EUR 1.000 2021 2020 2021 2020 2021 2020
Region
Europe 493.849 369.670 69.945 40.521 310.522 133.960
Middle East - -
Asia-Pacic 17.979 2.045 510 624 6.109 6.224
Americas - -
Africa 89.054 30.974 7.506 1.709 228.328 213.526
Total 600.882 402.689 77.961 42.854 544.959 353.710
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CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 67
NOTE 4. FINANCIAL INCOME AND EXPENSES
Income taxes consist of the following:
NOTE 5. TAXATION
The increase in deferred tax liabilites relate to the acquisition of Italiana Coke reference is made to note 16.
The effective tax rate on the group results rate differs from the statutory Luxembourg income tax rate applicable
totheCompanymainlyduetoincreasedactivityinEuropeanregionssuchasGermanyandthebenecialdeferred
tax impact in Greece.
EUR 1.000 2021 2020
Financial income and expenses
Other interest income and similar income 1.411 732
Interest expenses and similar charges -21.491 -17.854
Interest expense for leasing arrangements -1.053 -408
Other non operating income and expense -7.472 -6.773
Total nancial income and expenses -28.605 -24.303
Income from foreign exchange
Forex gains 3.386 6.273
Forex losses -1.779 -4.522
Total income from foreign exchange 1.606 1.751
Total nancial income and expenses -26.998 -22.552
EUR 1.000 2021 2020
Current income tax expense 21.958 -2.308
Deferred income tax -25.680 191
Total income tax expense -3.723 -2.117
EUR 1.000
2021
2020
% EUR % EUR
Taxable result 18.219 4.888
Tax burden based on Luxembourg nominal rate
Application local, nominal rates
24,9% 4.537 24,9% 1.217
Tax rate differences. -4,5% -814 18,4% 900
Taxation on result on ordinary activities 20,4% 3.723 43,3% 2.117
EUR 1.000 2021 2020
Deferred tax liabilities 25.541 4.069
Total Deferred tax liabilities 25.541 4.069
In other non operating income and expense mEUR 1,9 of fees to MRG and kEUR 452 income to R-Logitech are
included (reference is made to note 18).
68 . METALCORP GROUP ANNUAL REPORT 2021
The movements in Property, plant and equipment are as follows:
NOTE 6. PROPERTY, PLANT AND EQUIPMENT
EUR 1.000
Land and
buildings
Plant and
machinery
Operating
assets
Construction
& development
Mineral
rights
Total
Gross carrying amount
1 January 2020 14.701 46.771 76.088 94.894 232.454
Additions 15.693 13.646 8.775 25.962 64.076
Disposals - - - 6.060 6.060
31 December 2020 30.394 60.417 84.863 126.916 302.590
Accumulated depreciation and impairments
1 January 2020 609 9.007 3.567 - 13.183
Depreciation 224 3.109 469 - 3.802
31 December 2020 833 12.116 4.036 - 16.985
Net book value at 31 December 2020 29.561 48.301 80.827 126.916 285.605
EUR 1.000
Land and
buildings
Plant and
machinery
Operating
assets
Construction
& development
Mineral
rights
Total
Gross carrying amount
1 January 2021 30.394 60.417 84.863 126.916 302.590
Additions 7.646 6.399 804 6.084 20.933
Acquisition 21.051 127.536 43 - 148.630
Internal Transfer - -7.000 - - -7.000
Exchange rate differences - - - -3.158 -3.158
31 December 2021 59.091 187.352 85.710 129.842 461.995
Accumulated depreciation and impairments
1 January 2021 833 12.116 4.036 - 16.985
Depreciation 293 8.453 396 - 9.142
31 December 2021 1.126 20.569 4.432 - 26.127
Net book value at 31 December 2021 57.965 166.783 81.278 129.842 435.868
Land and buildings, plant and machinery, operating assets and construction and development
The additions of 2021 are mainly related to expansion of the investments in the aluminum business at BAGR,
AluStockach, investments in the bauxite activities and some smaller investments. Furthermore maintenance
expense that extend the economic life of the production facilities were capitalised and will be written of in line with
the accounting principles as set out in Note 1.
Another major part results from IFRS 16 Right-of-use assets. A breakdown is given by table below and reference
is made to Note 15.
Acquisitions relate to the acquisition of Italiana Coke, reference is made to note 16.
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 69
Asummaryofthemovementsofintangiblexedassetsisgivenbelow:
NOTE 7. INTANGIBLE FIXED ASSETS
EUR 1.000 Offtake Contracts Goodwill
Other
intangible
assets
Total
Gross carrying amount
1 January 2020 14.608 25.838 3.707 44.153
Disposals - - -2.090 -2.090
Exchange rate differences -23 - - -23
31 December 2020 14.585 25.838 1.617 42.040
Accumulated amortization and impairments
1 January 2020 2.104 - 1.079 3.183
Amortization 1.006 - 232 1.238
31 December 2020 3.110 - 1.311 4.421
Net book value at 31 December 2020 11.475 25.838 306 37.620
EUR
Land and buildings 4.347
Plant & machinery 7.035
11.382
Included in the above line items are right-of-use assets over the following:
NOTE 6.
EUR 1.000 Offtake contracts Goodwill
Other
intangible
assets
Total
Gross carrying amount
1 January 2021
14.585 25.838 1.617 42.040
Additions - 16 2.867 2.883
Exchange rate differences 97 - - 97
31 December 2021 14.682 25.854 4.484 45.020
Accumulated amortization and impairments
1 January 2021
3.110 - 1.311 4.421
Amortization 823 - 1.822 2.645
31 December 2021 3.933 - 3.133 7.066
Net book value at 31 December 2021 10.749 25.854 1.351 37.953
Mineral rights
The mineral rights are related to the bauxite activities of the Group in development of Societe des Bauxites de
Guinee (SBG) and connected mining activities in Guinee. SBG has started in 2021 its mining operation in Guinea
hence the asset is operational.
The annual impairment test did not lead to any write-offs. For the accounting treatment of Mineral rights and the
impairments, reference is made to note 1.15 and note 1.16.
70 . METALCORP GROUP ANNUAL REPORT 2018
7.1 Offtake contracts
The offtake contracts as per 31 December 2021
relate to contracts obtained through past acquisitions
(referred to as contract based intangible assets before
2021).
Since adoption of IFRS 15 “Revenue from Contracts
withCustomers”theportfolioofOfftakescorrelatesto
the contract-base assets of the group.
The Group writes off the portfolio at the same value the
Group builds up contract-base asset, as the contract-
based asset is derived from the commission on offtakes
over the lifetime of the offtake until the offtake matures.
The portfolio includes Offtake contracts in South Africa,
Indonesia and Australia.
The production relate to these contracts has started.
The contracts are expected to produce over a period
between 10 and 16 years. Any potential impairment is
assessed by calculating the net present values of the
supply that will be provided over the contract-term
using long term price forecast for the metals provided
by third parties. As the contracts relate to operations
that are in development, the discount rates are set at
similar levels for project development applicable to the
regions on which the operations are located.
7.2 Goodwill
Goodwill is related to the investments in the production
activities (BAGR 2021: EUR 4.114 thousand; 2020:
EUR 4.114 thousand, CRI 2021: EUR 4.572 thousand;
2020: EUR 4.572 thousand, Steelcorp 2021: EUR
12.133 thousand; 2020: EUR 12.133 thousand,
AluStockach 2021: EUR 3.204 thousand; 2020: EUR
3.204 thousand) and the trading activities ( Steelcom
Group 2021: EUR 1.814 thousand; 2020: EUR 1.814
thousand).
The recoverable amount of each cash-generating
unit, used in the annual impairment tests performed
in the fourth quarter, is based on its value in use.
Key assumptions used in the impairment tests for
the cash-generated units were sales growth rates,
operating result and the rates used for discounting the
projectedcashows.Thesecashowprojectionswere
determined using management’s internal forecasts
thatcovera period of 5 years, based on the nancial
plans as approved by the Company’s management.
7.3 Impairment
The recoverable amount of each cash-generating
unit, used in the annual impairment tests performed
in the fourth quarter, is based on its value in use.
Key assumptions used in the impairment tests for
the cash-generated units were sales growth rates,
operating result and the rates used for discounting the
projectedcashows.Thesecashowprojectionswere
determined using management’s internal forecasts that
coveraperiodof5years,basedonthenancialplans.
The annual impairment test did not lead to any
impairments of goodwill. The present value of
estimated cash ows has been calculated using a
pre-tax discount rate of 5,5%. Moreover, the key
assumption used by the management in the value in
use calculations are a terminal growth rate of 1,8% and
an average EBITDA growth rate of 5%.
Other Intangibles Assets Software and Software
in progress. Deferred charges are depreciated over
the duration of the relevant debt and software is
depreciated in three years.
NOTE 7.
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CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 71
The“Otherreceivables”includesloansgiventovarious
companiestonancethestart-upofproductionfacilities
for which we will receive potential off-takes in return.
All these loans are secured by underlying assets of
those companies.
NOTE 8. FINANCIAL FIXED ASSETS
The inventories consist of nished products and raw
materials and consumables of BAGR, CRI, Nikolaïdis,
Italiana Coke and Stockach Aluminium, Tennant Metals
andSteelcom.Thenishedproductsarealreadysold
and in the course of delivery to the client.
The inventories resulting from marketing and
procurement are already sold, but still held by the
companies as they still retain the principal risks and
rewards of the product.
No impairment has been recorded for the inventories
during the year.
NOTE 9. INVENTORIES
EUR 1.000 31/12/2021 31/12/2020
Raw materials and consumables 48.010 6.375
Finished products 48.820 33.356
Total inventories 96.830 39.730
The“Associatedcompanies”mainlyreectsaparticipationofa30%stakeinamanufacturerofsteelpipes,which
serves the International Oil and Gas industry and the Mining Industry across Africa, with a globally based Sales and
Distribution.Additionsreecttheparticipationofa40%stakeinalowcarbonFerrochromeProducer,withglobal
sales activities, and shares and participations in deconsolidated subsidiaries are presented in this position.
The“Otherreceivables”aremainlyrelatedtodepositsthathavebeenprovidedtovariouscompanies.
EUR 1.000 Deferred tax assets Associated Other receivables Total
Book Value
Balance at 1 January 2020 126 17 2.282 2.425
Additions 191 30.031 - 30.222
Sales, redemptions and other - - -2.161 -2.161
Balance at 31 December 2020 317 30.048 121 30.486
Book Value
Balance at 1 January 2021 317 30.048 121 30.486
Additions - 31.659 2.131 33.790
Sales, redemptions and other -139 - - -139
Transfer from consolidating to non-consolidating - 7.000 - 7.000
Balance at 31 December 2021 178 68,707 2.252 71.137
72 . METALCORP GROUP ANNUAL REPORT 2018
The provision for doubtful receivables as at 31
December 2021 amounts to a total of EUR 2.064
thousand (2020: 549) and contains other doubtful
receivables with an amount of EUR 1.744 thousand.
The difference between the Credit loss allowance
as per 31 December 2020 and 31 December 2021
amounts to EUR 229 thousand and is recognized as
othernancialincome.
Part of the trade receivables are pledged as collateral
for trade nanced loans. The credit risk of the Trade
receivablesisinsuredatrenownedinsurancermsand
all related due trade receivables were collected in the
rstquarterof2021.
Trade receivables (Factoring)are valued at fair value
through prot and loss and show the value as per
31 December 2021. They correspond with the trade
payables (Factoring), see note 14.
The contract based assets correspond to the Offtake
contracts as described in note 7.
Prepayments and accrued income include prepayments
for material purchased and down payments received
from customers.
EUR 1.000
expected
default rate
Carrying amount Credit Loss
allowance(included)
Current 0,34% 52.461 178
1-30 days past due 5,76% 787 45
31-60 days past due 6,92% 151 10
61-90 days past due 6,18%
150 9
more than 90 days past due 6,95% 1.096 76
54.645 320
NOTE 10. RECEIVABLES, PREPAYMENTS AND ACCRUED INCOME
EUR 1.000 31/12/2021 31/12/2020
Trade receivables, prepayment and accrued income 54.645 64.595
Trade receivables (Factoring) 20.686 15.432
Contract based assets 14.928 14.928
Related parties 8.347 3.378
Other receivables 17.959 14.810
Taxation 1.269 1.066
Total receivables, prepayments and accrued income 117.834 114.208
Regarding the trade receivables the Group applies a
simpliedapproachtomeasurethelossallowancefor
tradereceivablesclassiedasamortisedcostusingthe
lifetime expected loss provision. The expected credit
loss on trade receivables is estimated using a provision
matrix by reference to past default experience and
credit rating, adjusted as appropriate for current
observable data. The following table details the risk
prole of trade receivables based on the Groups´s
provision matrix:
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 73
NOTE 11. SECURITIES
EUR 1.000 01/01/2020 Acquisition Disposal Revaluation 31/12/2020
Unlisted securities 6.059 - - -759 5.300
Listed securities - - - - -
Total 6.059 - - -759 5.300
EUR 1.000 01/01/2021 Acquisition Disposal Revaluation 31/12/2021
Unlisted securities 5.300 - - - 5.300
Listed securities - - - - -
Total 5.300 - - - 5.300
Less than EUR 5 million of the amount of EUR 89,56
million of the Cash and Cash Equivalents is restricted
as this cash is mainly deposited at multiple renowned
trade nance banks and serve as cash collateral for
tradenancetransactionsat31December2021.Trade
nancehas a self-liquidating character,which means
that the cash becomes unrestricted upon completion of
thetradenancetransaction.
NOTE 12. CASH AND CASH EQUIVALENTS
NOTE 13. SHARE CAPITAL AND RESERVES
The movement in Equity is provided in Consolidated statement of changes in equity.
Isued Share Capital
The issued share capital of the Company amounts to
EUR 70 million (2020: EUR 70 million) divided into 70
million ordinary shares of EUR 1 per share. The total
number of authorized shares is 110 million (2020: 110
million shares). All of the shares are owned by Lunala
Investments S.A. (Luxembourg).
The translation reserve comprises of all foreign
exchange differences arising from the translation
of the nancial statements of foreign operations as
well as from the translation of intercompany loans of
permanent nature.
Translation Reserve
The unlisted securities include a portfolio of shares of the Company’s parent company, which are held for trading in
relation with future business acquisitions (reference is made to note 19).
Managementseenosignicantchangeinvalue.
Share Premium
The share premium was increased by EUR 5 million
from EUR 9.628 million to EUR 14.628 million by
capital contribution without issue of shares.
74 . METALCORP GROUP ANNUAL REPORT 2021
NOTE 14. LIABILITIES
EUR 1.000 31/12/2021 31/12/2020
Long-term liabilities
Bonds 246.169 193.706
IFRS 16 Leasing Liability 17.159 17.523
Provision 4.478 47
Other Long-term Liabilities 36.375 11.100
304.182 222.376
Current liabilities and accruals
Bank loans and other nancing 59.373 84.181
Short term portion of bonds 76.277 -
Trade payables 122.549 24.654
Trade payables (Factoring) 20.686 15.432
Related parties payable - 7.505
Taxes and social security charges 1.315 462
Other current liabilities 5.237 1.780
Accrued liabilities and deferred income 16.989 15.291
302.427 149.305
Long-term
borrowings
Short-term
borrowings
Lease
liabilities
Total
1 January 2020
210.434 143.020 10.236 363.690
Cash-ows
-Repayment -5.580 -4.960 -3.956 -14.497
-Proceeds - 6.680 11.162 17.842
Non-cash
-Foreign exchange movements - - 81 81
-Movement in accruals - 4.566 - 4.566
31 December 2020
204.853 149.307 17.523 371.681
Long-term
borrowings
Short-term
borrowings
Lease
liabilities
Total
1 January 2021
204.853 149.307 17.523 371.681
Cash-ows
-Repayment - -32.313 - -32.313
-Proceeds 154.015 107.459 -364 261.111
Non-cash
-Reclass -76.277 76.277 - -
-Foreign exchange movements - - - -
-Movement in accruals 4.431 1.698 - 6.128
31 December 2021 287.022 302.428 17.158 606.609
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 75
Long Term Liabilities
The Long term liabilities are those bank loans and lease
obligations which are due in more than 1 year.
None of these are due in more than 5 years. Bonds
represent the bonds that were launched in 2021 on the
Frankfurt Exchange (EUR 250 million). The term of the
bonds is 5 years with an interest of 8,50% per annum.
The Fair value of the bond amount to EUR 242,5 million
at 31 December 2021. These placements have secured
the repayment of the German bond that expires on 02
October 2022 and the Norwegian Bond that expires
on 06 June 2022, which are reected under current
liabilitiesas“currentportionofbonds”(hereinafter:the
“2017-2022Bonds”).
With regards to long-term leasing, reference is made
to note 15.
Other long-term liabilities represent local bank loans
given to our production facility. The loans have terms of
5 years with interests of Euribor plus 2% - 3,5%.
All liabilities due in less than a year plus bank credit related to trade nance are classied as current liability.
Inventory and debtors have been pledged as collateral. The following rates with respective amounts apply to the
bank loans:
Current Liabilities and Accruals
EUR 1.000 Amount Amount
2021 2020
Trade nance 33.272 68.427
Working capital facilities
Euribor + markup 26.101 15.754
Total bank loans and other nancing 59.373 84.181
NOTE 14.
The trade payables (Factoring) are valued at fair value through prot and loss and show the value as per 31
December 2021. They correspond with the trade receivables (Factoring), see note 10.
76 . METALCORP GROUP ANNUAL REPORT 2021
The Group has leases for land and buildings, plant and
machinery, With the exception of short- term leases
and leases of low-value underlying assets, each lease
is reected on the bal-ance sheet as a right-of-use
asset and a lease liability. Leases of the Group do not
contain variable lease payments.
The Group classies its right-of-use assets in a
consistent manner to its property, plant and equipment
(see Note 6),
Leases of property generally have a lease term ranging
from 5 years to 12 years however most leases of
property are generally expected to be limited to 5 years
or less.
LeasepaymentsoftheGrouparegenerallyxed.
Each lease generally has restrictions that, unless there
is a contractual right for the Group to sub-rent the asset
to another party, the right-of-use asset can only be
used by the Group. Leases are either non-cancellable
or may only be cancelled by incurring a substantive
termination fee.
Most leases contain an option to purchase the
underlying asset at the end of the lease, or to ex-tend
the lease for a further term. The Group is prohibited
from selling or pledging the underlying leased assets
assecurity. Forleasesover ofceand other buildings
the Group must keep those properties in a good state
of repair and return the properties in their original
condition at the end of the lease. Further, the Group has
to insure items of property, plant and equipment and
incur maintenance fees on such items in accordance
with the lease contracts.
The table below describes the nature of the Group’s
leasing activities by type of right-of-use asset
recognised on balance sheet:
Right-of-use asset No. of right
of use assets
leased
Range of
remaining
term
Average
remaining
term
No. of
leases with
extension
options
No. of leases
with options to
purchase
Land and buildings 2 4-11 years 7,5 Years 2 0
Plant and machinery 68 3 - 6 years 4 years 62 62
NOTE 15. LEASING
Right-of-use assets
Additional information on the right-of-use assets by class of assets is as follows:
EUR Asset Carrying Amount Additions Depreciation
OfceBuilding 2 7.664 221 3.317
Plant and machinery 68 6.299 366 2.225
The right-of-use assets are included in the same line item as where the corresponding underlying assets would be
presented if they were owned.
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 77
Lease liabilities
Leaseliabilitiesarepresentedinthestatementofnancialpositionasfollows:
EUR 1.000 31/12/2021 31/12/2020
Non-current 17.159 17.523
The Group has no possible future lease termination options, therefore additional information on the lease liabilities
and amounts in respect of possible future lease termination options not recognised are given.
At 31 December 2021 the Group had not committed to leases which had not commenced.
The lease liabilities are secured by the related underlying assets. The undiscounted maturity analysis of lease
liabilities at 31 December 2021 is as follows:
NOTE 15.
Minimum lease payment due EUR
1.000
Within 1 year 1-5 years Over 5 years Total
31.12.2020
Lease
payments
5.006 8.694 1.174 14.874
Finance
charges
427 610 99 1.136
Net present
value
5.143 11.471 909 17.523
31.12.2021
Lease
payments
6.289 10.444 819 17.552
Finance
charges
1.053 2.361 69 3.483
Net present
value
6.187 10.338 635 17.160
78 . METALCORP GROUP ANNUAL REPORT 2021
Lease payments not recognised as a liability
The group has elected not to recognise a lease liability for short term leases (leases of expected term of 12 months
or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis.
In addition, certain variable lease payments are not permitted to be recognised as lease liabilities and are expensed
as incurred.
The expense relating to payments not included in the measurement of the lease liability is as follows:
EUR 1.000
Short-term leases 80
Leases of low value assets -
At 31 December 2021 the Group was committed to short term leases and the total commitment at that date was
EUR 0.
The Group has no leases with Variable lease payments
Additionalprotorlossandcashowinformation
TotalcashoutowinrespectofleasesintheyearEUR1.000 -5.006
Forinterestexpenseinrelationtoleasingliabilities,refertonancecosts(Note4)
NOTE 15.
NOTE 16. ACQUISITIONS OF SUBSIDIARIES
2021 Acquisitions
In2021,themostsignicanttransactionwasthatMetalcorpGroupacquiredastakeinItalianaCoke.Duetothe
generalproximityoftransactionstothereportingdate,thefairvaluesareprovisionalandexpectedtobenalised
within 12 months of the acquisition. It is expected that adjustments could be made to the allocation of value
between acquired current and non-current assets, deferred taxes and provisions. The bank loans (reference is made
to note 14 other long term liabilities) of the entity are secured by property and stock of the company and dividends
are limited.
The consideration of acquisition of subsidiaries and the provisional fair value of assets acquired and liabilities
assumed on the acquisition date are detailed below:
EUR 1 million Italiana Coke
Non-current assets 142
Current assets 105
Non-controlling interest 54
Non-current liabilities 33
Current liabilities 108
Total fair value of net assets acquired 52
Net consideration 52
Goodwill 0
Italiana Coke
Effective in July 2021, Metalcorp Group acquired a stake in Italiana Coke. The group is required to account for
Italiana Coke using the full consolidation method in accordance with IFRS 10 and ifrs 3.B64 d), o) and q).
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 79
NOTE 17. FINANCIAL INSTRUMENTS
ThetablebelowprovidesanoverviewofthenancialinstrumentsoftheGroupdividedintotheclassesamortised
costandfairvaluethroughprotandloss(“FVTPL”).Financialinstrumentsoftheclassfairvaluethroughother
comprehensiveincome(“FVTOCI”)arenotapplicable.
Fair Value Measurements
Fair values are primarily determined using quoted
market prices or standard pricing models using
observable market inputs where available and are
presentedtoreecttheexpectedgrossfuturecashin/
outows.TheCompanyclassiesthefairvaluesofits
nancial instruments intothreelevelhierarchybased
on the degree of the source and observability of the
inputs that are used to derive the fair value of the
nancialassetorliabilityasfollows:
• Level 1 – Inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities that
the Company can assess at the measurement date;
or
• Level 2 – Inputs other than quoted inputs included
in Level 1 that are observable for the assets or
liabilities, either directly or indirectly; or
• Level 3 – Unobservable inputs for the assets or
liabilities, requiring the Company to make market
based assumptions.
No instruments are valued at fair value.
2020
EUR 1.000
Note Amortised cost FVTPL Total
Financial xed assets (other receivables) 8 30.486 - 30.486
Trade receivables, prepayments and accrued income 10 79.523 - 79.523
Trade receivables (Factoring) 10 - 15.432 15.432
Other receivables 10 19.254 - 19.254
Securities 11 5.300 - 5.300
Cash and cash equivalents 12 22.474 - 22.474
Total nancial assets 157.037 15.432 172.468
Borrowings (> 1 year) 14 222.376 - 222.376
Trade payables 14 24.654 - 24.654
Trade payables (Factoring) 14 - 15.432 15.432
Trade nance 14 68.427 - 68.427
Current liabilities and accruals 14 40.793 - 40.793
Total nancial liabilities 356.250 15.432 371.681
2021
EUR 1.000
Note Amortised cost FVTPL Total
Financial xed assets (other receivables) 8 71.137 - 71.137
Trade receivables, prepayments and accrued income 10 69.573 - 69.573
Trade receivables (Factoring) 10 - 20.686 20.686
Other receivables 10 27.575 27.575
Securities 10 5.300 5.300
Cash and cash equivalents 11 89.563 89.563
Total nancial assets 263.149 20.686 283.835
Borrowings (> 1 year) 14 304.182 304.182
Trade payables 14 122.549 122.549
Trade payables (Factoring) 14 - 20.686 20.686
Tradenance 14 33.272 33.272
Current liabilities and accruals 14 125.920 125.920
Total nancial liabilities 585.923 20.686 606.609
80 . METALCORP GROUP ANNUAL REPORT 2021
The Fair Value hierarchy of these items are provided in the table below:
During the year no amounts were transferred between
Level 1, Level 2 and Level 3 of the fair value hierarchy.
As at 31 December 2021 no nancial assets and
liabilities were subject to offsetting.
The level 3 securities are mainly related to unlisted
shares. In circumstances where Metalcorp Group S.A.
cannot verify fair value with observable market inputs
(Level 3 fair values), it is possible that a different
valuation model could produce a materially different
estimate of fair value.
NOTE 17.
2021
EUR 1.000
Level 1 Level 2 Level 3 Total
Financialxedassets(otherreceivables) - - - -
Trade receivables - - - -
Trade receivables (Factoring) 20.686 - - 20.686
Receivables, prepayments and accrued income - - - -
Securities - - 5.300 5.300
Cash and cash equivalents - - - -
Total nancial assets 20.686 5.300 25.986
Borrowings (> 1 year) - - - -
Trade payables - - - -
Trade payables (Factoring) 20.686 - - 20.686
Tradenance - - - -
Current liabilities and accruals - - - -
Total nancial liabilities 20.686 - - 20.686
2020
EUR 1.000
Level 1 Level 2 Level 3 Total
Financialxedassets(otherreceivables) - - - -
Trade receivables - - - -
Trade receivables (Factoring) 15.432 - - 15.432
Receivables, prepayments and accrued income - - - -
Securities - - 5.300 5.300
Cash and cash equivalents - - - -
Total nancial assets 15.432 - 5.300 20.732
Borrowings (> 1 year) - - - -
Trade payables - - - -
Trade payables (Factoring) 15.432 - - 15.432
Tradenance - - - -
Current liabilities and accruals - - - -
Total nancial liabilities 15.432 - - 15.432
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 81
NOTE 17.
Financial and Capital Risk Management
The Group has exposure to the following risks arising
fromnancialinstruments:
Credit risk
Liquidity risk
Market risk
This note presents information about the Group’s
exposure to each of the above risks, the Group’s
objectives, policies and processes for measuring and
managing risk, and the Group’s management of capital.
Credit risk
Credit risk isthe risk ofnancial loss tothe Group if
a customer or counterparty to a nancial instrument
fails to meet its contractual obligations, and arises
principally from the Group’s receivables from customers
and loans related to raw materials:
• Thenancialxedassetsaresecuredbyunderlying
assets of those companies. Reference is made to
note 8.
• The receivables, prepayments and accrued income
mainly consists of trade receivables which is
secured by adequate credit insurance.
The Group’s exposure to credit risk is inuenced
mainly by the individual characteristics of each
customer. However, management also considers the
demographics of the Group’s customer base, including
the default risk of the industry and country in which
customers operate, as these factors may have an
inuenceoncreditrisk.During2021and2020noneof
the Group’s revenue attributable to sales transactions
with a single multinational customer exceeded 10% of
the total revenue.
The Group has established a credit policy under
which each new customer is analyzed individually
for creditworthiness before the Group’s payment and
delivery terms and conditions are offered. This is done
in close cooperation with the Trade Finance banks and
Credit insurance companies. Nevertheless, in principle
insurance coverage is obtained for all trade receivables.
Furthermore the Groupapplies a simplied approach
to measure the loss allowance for trade receivables
using the lifetime expected loss provision.
Liquidity risk
Liquidity risk is the risk that the Group will encounter
difcultiesin meeting the obligationsassociated with
its nancial liabilities that are settled by delivering
cashoranothernancialasset.TheGroup’sapproach
to managing liquidity is to ensure, as far as possible,
thatitwill alwayshavesufcientliquidityto meetits
liabilities when due, under both normal and stressed
conditions, without incurring unacceptable losses or
risking damage to the Group’s reputation. With regards
to its hedging activities, that primarily take place in
the trading activities, the Company implemented a
policy that hedging is only allowed under a tri-partite
agreement in order to avoid margin calls.
Market risk
Market risk is the risk that results out of changes in
market prices, such as foreign exchange rates, interest
rates, market prices and equity prices and will affect the
Group’sincomeorthevalueofitsholdingsofnancial
instruments. The objective of market risk management
is to manage and control market risk exposures within
acceptable parameters, while optimizing the return.
The Group buys and sells derivatives in order to
manage market risks. All such transactions are carried
out within the guidelines set by the Group. In principle
all derivatives are accounted at FVTPL; if required and
appropriate, the Group seeks to apply hedge accounting
inordertomanagevolatilityinprotorloss.
Currency risk
The Production facilities mainly enter into euro
agreements and therefore, the currency risk is
insignicant.
The Trading activities are mainly exposed to the USD/
EUR exchange rate, as the trades are predominantly in
USD and the reporting currency is in EUR. However,
the currency risk is limited as contract deals are
denominated in USD for both purchases and sales.
Purchases are nanced by means of trade nance in
USDaswell.Asthe purchase,saleandnancingare
all in USD, and as trading occurs in principle on a back-
to- back basis, the deals are naturally hedged.
Interest rates
To limit the interest rate risk, the Company decided to
onlygiveoutandobtainloanswithaxedinterestrate.
For overdraft facilities the risk is limited due to the short
term of these facilities.
Market price risk
The production facilities mainly produce on the basis of
tolling agreements. In these agreements the purchase
of material is related to the sale and the price risk is
mitigated.
The Group mainly enters into back-to-back deals, which
means that the market price risk is naturally hedged. In
case that a trade is subject to price risk, this is hedged
through adequate instruments. When instruments
are required, the Company prepares a sensitivity
analysis with regards to the impact of the changes
in commodity price and (if applicable) the changes
82 . METALCORP GROUP ANNUAL REPORT 2021
Equity price risk
The Company invested into listed and unlisted shares
of junior mining companies to secure its (future) off-
take contracts. These securities are presented in Note
11 Securities. The Company is closely involved in these
mining companies and monitors the progress on an
on-going basis. Management is of the opinion that, by
nature, the market index of junior mining companies
increases when production starts.
NOTE 18. REMUNERATION OF KEY MANAGEMENT
The remuneration of key management (director and CEO) of the legal entity is as follows:
The total loss in the consolidated statement of income
amounts to EUR 2 thousand (2020: EUR 4 thousand).
Allderivativesmaturewithintherstthreemonthsof
2021. The Company had instruments for a total of EUR
272 thousand at 31 December 2021 (2020: EUR 316
thousand).
NOTE 17.
2021 EUR 1.000
Commodity related contracts
Futures 272
Total Current liabilities FVTPL 272
EUR 1.000 2021 2020
Short-termemployeebenets 360 360
Total 360 360
in foreign currency risks. Based on this analysis an
adequate non speculative hedging strategy is applied.
At 31 December 2021, the Company has a limited
number of hedging instruments, which are presented
under Current liabilities and accruals. These instruments
are designated as FVTPL and include trade related
nancial and physical forward purchase and sale
commitments. Fair values are primarily determined
using quoted market prices or standard pricing models
using observable market inputs where available and
arepresentedtoreecttheexpectedgrossfuturecash
in/outows.
It is the Group’s policy that transactions and activities
intraderelatednancialinstrumentsarenetted.Note
that the Company only purchases futures and options.
In principle the Company does not write futures and
options.
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 83
EUR 1.000 Note 2021 2020
Shareholder <1yr 10 -
Related parties <1yr 10 8.347 3.378
Total Receivables 8.347 3.378
Shareholder >1yr 14 - -
Related parties <1yr 14 - 7.505
Total Liabilities - 7.505
Net receivable (-liability) 8.347 -4.127
NOTE 19. TRANSACTIONS AND BALANCES WITH RELATED PARTIES
NOTE 21. CONTINGENT ASSETS AND LIABILITIES
In 2021, the Company conducted various transactions with related parties.
In the course of business, the company is involved in
discussions with business partners from time to time.
These discussions may include the interpretation
and compliance with the terms and conditions of
agreements and may also include claims made by
the company, as well as against the company. At year
end, no claims against the company existed - if any -
that were assessed to be probable, nor possible to be
successful.
The related party transactions are related to minority
shareholders or parties related to minority shareholders
and logistic and construction activities of the projects
the group is currently realizing.
The Company has 848 shares in its parent company
(2020: 848 shares) that can be used in future
transactions and are included in the unlisted securities
(reference is made to note 11). Transactions can take
place between the Group and its related parties that
are part of the Monaco Resources Group. Reference is
made to Note 4.
The Company has provided several corporate
guarantees to subsidiaries and related parties and in
principletheseareallrelatedtotradenance.
The possibility of any cash outow with regards to
these guarantees is remote.
NOTE 20. GUARANTEES
NOTE 22. GROUP AUDITOR FEES AND SERVICES AND TOTAL AUDIT FEES
EUR 1.000 2021 2020
Group Auditor Component
Auditors
Group Auditor Component
Auditors
Auditofthenancialstatements 140 228 120 232
Other audit engagements - - - -
Tax fees - - - -
Other fees - - - -
Total professional service fees 140 228 120 232
PKFAUDIT&CONSEILS.àr.l.actedastheGroupAuditorforthescalyearendedDecember31,2021.
Set forth below is a breakdown of fees for services rendered in 2021.
84 . METALCORP GROUP ANNUAL REPORT 2021
NOTE 23. LIST OF PRINCIPAL OPERATING, FINANCIAL AND INDUSTRIAL
SUBSIDIARIES AND INVESTMENTS
Name Country of incorporation Ownership interest
2021 2020
Consolidated (direct)
BAGR Non-Ferrous Group GmbH Germany 100,00% 100,00%
C.S. Tetrano Limited Cyprus 100,00% 100,00%
Tennant Metals Group S.a.r.l. Luxembourg 100,00% 100,00%
Orlyplein Investment Sarl Luxembourg 100,00% 100,00%
Steelcom Group S.a.r.l. Luxembourg 100,00% 100,00%
Consolidated (indirect)
Steelcorp Industries S.a.r.l. Luxembourg 100,00% 100,00%
Norwich S.a.r.l. Luxembourg 94,00% 94,00%
BAGR Berliner Aluminiumwerk GmbH Germany 94,00% 94,00%
Stockach Aluminium GmbH Germany 94,00% 94,00%
Cable Recycling Industries S.L. Spain 94,00% 94,00%
IMP Invest S.A. Luxembourg 100,00% 100,00%
Italiana Coke Italy 38,71% 0,00%
NB Investments S.a.r.l. Luxembourg 100,00% 100,00%
Nikolaidis Th. Bros. S.A. Greece 78,32% 78,32%
Societe des Bauxites de Guinee S.A.R.L. Republic of Guinea 91,98% 73,76%
Steelcom Austria GesmbH Austria 100,00% 100,00%
Steelcom Iberica S.L. Spain 100,00% 100,00%
Steelcom Steel and Commodities GmbH Germany 100,00% 100,00%
Steelcom Australia (Pty) Ltd. Australia 100,00% 100,00%
Steelcom South Africa (Pty) Ltd. South Africa 100,00% 100,00%
Steelcom S.A.M. Monaco 100,00% 100,00%
Tennant Metals (Pty) Ltd. Australia 100,00% 100,00%
Tennant Metals S.A.M. Monaco 100,00% 100,00%
Tennant Metals South Africa (Pty) Ltd. South Africa 100,00% 100,00%
SBG Bauxite and Alumina S.A. Luxembourg 94,00% 94,00%
MCOM Ltd. United Kingdom 100,00% 100,00%
GB Mining Sarlu Republic of Guinea 100,00% 100,00%
Taressa Mining Logistic S.A.R.L. Republic of Guinea 80,00% 80,00%
In Metals Recycling I.K.E. Greece 100,00% 100,00%
Non-consolidated
Amava Alloys (PTY) Ltd South Africa 40,00% 0,00%
Capital Star Steel (PTY) Ltd. Mozambique 30,00% 30,00%
EME Invest S.A. Luxembourg 100,00% 100,00%
Metalcorp Services (Uk) Ltd. United Kingdom 100,00% 100,00%
TCC Coke Ltd. United Kingdom 100,00% 100,00%
AMI Invest Proprietary Ltd. South Africa 100,00% 0,00%
AM Mining Invest Ltd. Cyprus 100,00% 0,00%
Steelcom USA LLC USA 0,00% 100,00%
Metalcorp Group Asia PTE Ltd. Singapore 100,00% 0,00%
Tennant Metals AG Switzerland 100,00% 0,00%
02
CONSOLIDATED FINANCIAL STATEMENTS
METALCORP GROUP ANNUAL REPORT 2021 . 85
SIGNING OF THE FINANCIAL STATEMENTS
Luxembourg, April 27
th
2022
Pascale MITRI YOUNES
Director
Ioannis Zaimis
Chairman of the Supervisory Board
Sebastien Maurin
Member of the Supervisory Board
Christina Soteriou
Vice-Chairman of the Supervisory Board
Anouar BELLI
Director
86 . METALCORP GROUP ANNUAL REPORT 2021
METALCORP GROUP
OTHER
INFORMATION
03
03
OTHER INFORMATION
METALCORP GROUP ANNUAL REPORT 2021 . 87
INDEPENDENT AUDITOR’S REPORT
Reference is made to the independent auditor’s report on page 87.
SUBSEQUENT EVENTS
Theprot earnedinanancialyearisatthe disposal of the generalmeeting. The Companymaypaydividends
only insofar as its equity exceeds the paid-in and called-up capital plus the reserves the company is required by
law to maintain. Dividends are paid after adoption of the annual accounts, if the annual accounts demonstrate that
dividend payments are permissible. Dividends are due and payable immediately after they are declared, unless the
generalmeetingxesanotherdateintherelevantresolution.Ashareholder’sclaimtoadividendwilllapseve
years after the dividend becomes due and payable. The general meeting may resolve to pay interim dividends and to
pay dividends from a reserve that the Company is not required by law to maintain. The general meeting may resolve
to pay dividends in kind. The shares held by the Company in its own capital are to be disregarded in the calculation
of the amount of dividend to be paid on shares.
Inaccordancewiththeconditionsofthebonds(seeNote14totheconsolidatednancialstatements)thedividend
is limited to 50%.
APPROPRIATION OF RESULTS
The Company statutory annual report of 2020 was approved in the General Meeting of Shareholders. The General
Meeting of Shareholders has determined that the appropriation of result in accordance with the proposal being
made to add the result of 2020 to Other Reserves.
APPROPRIATION OF RESULT FOR THE FINANCIAL YEAR 2020
OTHER INFORMATION
TheBoardofDirectorsproposestotransfertheresultoverthenancialyear2021tootherreserves.Thenancial
statementsdonotyetreectthisproposal.
PROPOSED APPROPRIATION OF RESULT FOR THE FINANCIAL YEAR 2021
Nothing to report.
88 . METALCORP GROUP ANNUAL REPORT 2021
METALCORP GROUP
INDEPENDENT AUDITOR'S
REPORT
04
04
INDEPENDENT AUDITOR'S REPORT
METALCORP GROUP ANNUAL REPORT 2021 . 89
PKF Audit & Conseil
Independent Auditor’s Report
To the Shareholders of
Metalcorp Group S.A.
8, rue Dicks
L-1417 Luxembourg
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated nancial statements of Metalcorp Group S.A. and its subsidiaries (the
“Group”) which comprise the consolidated statement of nancial position as at 31 December 2021, the
consolidated statement of prot or loss, the consolidated statement of other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash ows for the year then
ended, and notes to the consolidated nancial statements, including a summary of signicant accounting
policies.
In our opinion, the accompanying consolidated nancial statements present fairly, in all material respects,
the consolidated nancial position of the Group as at 31 December 2021, and its consolidated nancial
performance and its consolidated cash ows for the year then ended in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union.
Basis for Opinion
We conducted our audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 on the
audit profession (“Law of 23 July 2016”) and with International Standards on Auditing (“ISAs”) as adopted
for Luxembourg by the “Commission de Surveillance du Secteur Financier” (“CSSF”). Our responsibilities
under the EU regulation N
o
537/2014, the Law of 23 July 2016 and ISAs as adopted for Luxembourg by
the CSSF are further described in the « Responsibilities of “Réviseur d’Entreprises Agréé” for the Audit of
the Financial Statements » section of our report. We are also independent of the Company in accordance
with the International Code of Ethics for Professional Accountants, including International Independence
Standards, issued by the International Ethics Standards Board for Accountants (IESBA Code) as adopted
for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the
nancial statements, and have fullled our other ethical responsibilities under those ethical requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most signicance in our
audit of the consolidated nancial statements of the current period. These matters were addressed in the
context of the audit of the consolidated nancial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
Key Audit Matter Description
The Group reported mineral rights of EUR 130 million shown under property plant and equipment.
Furthermore, the group reported intangible assets of EUR 38 million including goodwill of EUR 26 million
and offtake contracts of EUR 10,75 million. The valuation of these assets depends on management’s
estimates and assumptions regarding the evolution of commodity prices, volume of production as well as
foreign exchange rates.
PKF Audit & Conseil Sàrl
Cabinet de révision agréé - RC B222994
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+352 28 80 12
PKF Audit & Conseil is a member rm of the PKF International Limited family of legally independent rms and does not accept any responsibility or liability
for the actions or inactions of any individual member or correspondent rm or rms.
90 . METALCORP GROUP ANNUAL REPORT 2021
PKF Audit & Conseil
How the Key Audit Matter Was Addressed in the Audit
Our audit procedures related to the valuation of mineral rights, goodwill and offtake contracts included the
following, among others:
• We reviewed management's assessment of the indicators of any impairment and challenged signicant
underlying assumptions;
• We assessed the appropriateness of management's recoverable value models, which included the
inherent model inputs and signicant assumptions;
• We challenged the signicant inputs and assumptions used in impairment testing for intangible assets;
• We also assessed the adequacy and completeness of impairment related disclosures in the nancial
statements.
Other Information
The Board of Directors is responsible for the other information. The other information comprises the
information stated in the annual report including the management report and the Governance Statement
but does not include the nancial statements and our report of the “réviseur d’entreprises agréé” thereon.
Our opinion on the consolidated nancial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated nancial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent with
the consolidated nancial statements or our knowledge obtained in the audit or otherwise appears to
be materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report this fact. We have nothing to report in this
regard.
Responsibilities of the Board of Directors and Those Charged with Governance for the Consolidated
Financial Statements
The Board of Directors is responsible for the preparation and fair presentation of the consolidated nancial
statements in accordance with IFRSs as adopted by the European Union, and for such internal control as
the Board of Directors determines is necessary to enable the preparation of nancial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the consolidated nancial statements, the Board of Directors is responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Board of Directors either intends to liquidate
the Group or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is responsible for presenting and marking up the consolidated nancial statements
in compliance with the requirements set out in the Delegated Regulation 2019/815 on European Single
Electronic Format (“ESEF Regulation”).
Responsibilities of the “réviseur d’entreprises agréé” for the Audit of the Consolidated Financial
Statements
The objectives of our audit are to obtain reasonable assurance about whether the nancial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue a report of the
“réviseur d’entreprises agréé” that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with the EU Regulation N° 537/2014, the
Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to inuence the economic decisions of
users taken on the basis of these nancial statements.
04
INDEPENDENT AUDITOR'S REPORT
METALCORP GROUP ANNUAL REPORT 2021 . 91
PKF Audit & Conseil
As part of an audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs
as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the consolidated nancial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Board of Directors.
- Conclude on the appropriateness of Board of Directors use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast signicant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our report of the
“réviseur d’entreprises agréé” to the related disclosures in the consolidated nancial statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our report of the “réviseur d’entreprises agréé”. However, future
events or conditions may cause the Group to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the consolidated nancial statements,
including the disclosures, and whether the consolidated nancial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the nancial information of the entities and
business activities within the Group to express an opinion on the consolidated nancial statements. We
are responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and signicant audit ndings, including any signicant deciencies in internal control
that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate to them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, actions taken to
eliminate threats or safeguards applied.
We assess whether the consolidated nancial statements have been prepared, in all material respects, in
compliance with the requirements maid down in the ESEF Regulation.
Report on Other Legal and Regulatory Requirements
We have been reappointed as “réviseur d’entreprises agréé” by the General Meeting of the Shareholders
on 25 April 2021 and the duration of our uninterrupted engagement, including previous renewals and
reappointments, is 2 years.
The consolidated management report is consistent with the consolidated nancial statements and has been
prepared in accordance with applicable legal requirements.
92 . METALCORP GROUP ANNUAL REPORT 2021
PKF Audit & Conseil
The Corporate Governance Statement is included in the consolidated management report. The
information required by Article 68ter paragraph (1) letters c) and d) of the law of 19 December 2002
on the commercial and companies register and on the accounting records and annual accounts of
undertakings as amended, is consistent with the consolidated nancial statements and has been
prepared in accordance with applicable legal requirements.
We conrm that the audit opinion is consistent with the additional report to the audit committee or equivalent.
We conrm that the prohibited non-audit services referred to in the EU Regulation N° 537/2014 were not
provided and that we remained independent of the Group in conducting the audit.
We have checked the compliance of the consolidated nancial statements of the Group as at
31 December 2021 with relevant statutory requirements set out in the ESEF Regulation that are applicable
to consolidated nancial statements.
For the Group it relates to the requirements that:
• The consolidated nancial statements are prepared in a valid XHTML format;
• The XBRL mark-up of the consolidated nancial statements uses the core taxonomy and the
common rules on mark-ups specied in the ESEF Regulation.
In our opinion, the consolidated nancial statements of the Group as at 31 December 2021, identied as
“Metalcorp Group S.A. 2021 Annual report”, have been prepared, in all material respects, in compliance
with the requirements laid down in the ESEF Regulation.
Luxembourg, 27 April 2022
PKF Audit & Conseil Sàrl
Cabinet de révision agréé
Jean Medernach
METALCORP GROUP
CONTACT
HEADQUARTERS
METALCORP GROUP S.A.
8, rue DICKS
L-1417 Luxembourg-ville
LUXEMBOURG
www.metalcorpgroup.com
+ 352 27 99 01 45 52
info@metalcorpgroup.com