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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934

For the Month of June, 2020

Commission File Number: 001-37668

FERROGLOBE PLC
(Name of Registrant)

2nd Floor West Wing, Lansdowne House
57 Berkeley Square
London, W1J 6ER
(Address of Principal Executive Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F    ý

  Form 40-F    o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):    o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):    o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes    o

  No    ý

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

   


2020 Annual General Meeting of Ferroglobe PLC

        On June 6, 2020, Ferroglobe PLC ("Ferroglobe" or the "Company") released its Notice of 2020 Annual General Meeting ("2020 AGM") and Annual Report and Accounts for the fiscal year ended December 31, 2019. The 2020 AGM will be held at 14:00 British Summer Time (BST) on Tuesday June 30, 2020 at Ferroglobe PLC, 2nd Floor, Lansdowne House, 57 Berkeley Square, Mayfair, London, W1J 6ER, United Kingdom.

Exhibits

        Reference is made to the Exhibit Index included hereto.



EXHIBIT INDEX

Exhibit
No.
  Description
  99.1   Notice of Annual General Meeting dated June 5, 2020

 

99.2

 

Ferroglobe PLC Annual Report and Accounts for the fiscal year ended December 31, 2019

 

99.3

 

Extracts from the 2019 Form 20-F

 

99.4

 

Form of Proxy Card for 2020 Annual General Meeting


SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: June 8, 2020

  FERROGLOBE PLC

 

By:

 

/s/ MARCO LEVI


      Name:   Marci Levi

      Title:   Chief Executive Officer



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EXHIBIT INDEX
SIGNATURES

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Exhibit 99.1

LOGO

FERROGLOBE PLC

(a public limited company having its registered office at 5 Fleet Place, London, EC4M 7RD, United
Kingdom and incorporated in England and Wales with company number 09425113)

5 June 2020

Dear Shareholder

2020 Annual General Meeting of Shareholders of Ferroglobe Plc ("Ferroglobe" or the "Company")

I am pleased to enclose the notice of Ferroglobe's annual general meeting of its shareholders (the "Annual General Meeting" or "AGM"), to be held at 14:00 (British Summer Time) on Tuesday, 30 June 2020 at the Company's offices at 2nd Floor, West Wing, Lansdowne House, Berkeley Square, London, W1J 6ER, United Kingdom. The accompanying notice of Annual General Meeting ("Notice") describes the meeting, the resolutions you will be asked to consider and vote upon and related matters.

In response to the COVID-19 pandemic, the U.K. government has introduced new 'stay at home' measures which restrict public gatherings of more than two people, save in very limited circumstances which do not include the holding of an AGM. In light of these measures and because the safety and well-being of our directors, employees and shareholders is paramount, we expect that, unless the situation in the U.K. changes prior to 19 June 2020 such that gatherings are permitted by law and appropriate arrangements may be made for them to be held safely, this year's AGM will be run as a closed meeting. This means that shareholders will not be able to attend the meeting in person and anyone who attempts to do so will be turned away. We will continue to monitor the situation closely and, if public health guidance changes and it is appropriate to do so, will provide any updates on our AGM on our website at: https://investor.ferroglobe.com/annual-general-meetings. In case the situation changes, we have included in this Notice details of how to attend the AGM and how to vote in person, as usual. Please note that if the situation in the U.K. does not change, it will not be possible for you to do so.

Your vote is important, regardless of the number of shares you own. We therefore strongly encourage you to place your vote by proxy on the resolutions in the Notice. You may vote via the internet, by phone or by mail by signing, dating and returning your proxy card in the envelope provided. Given the restrictions on attendance, please appoint the "Chairman of the Meeting" as your proxy, rather than another person who will not be permitted to attend. To ensure your vote is counted, please ensure that your proxy vote is submitted through the relevant channels by not later than 14:01 BST on Sunday, 28 June 2020.

If you have questions on any matter which you would otherwise put to the Company at the AGM, please email them to the Company using the 'Contact Us' form on the Company's corporate website at https://investor.ferroglobe.com/contact-us and we will respond to you directly.


Recommendation

We consider all resolutions proposed to shareholders at the Annual General Meeting to be standard business. You will find an explanation of each resolution within the Explanatory Notes on pages 3 to 7 of this pack. The Company's board of directors (the "Board") considers that all the resolutions to be put to the Annual General Meeting are in the best interests of the Company and its shareholders as a whole and are most likely to promote the success of the Company. The Board unanimously recommends that you vote in favour of each of the proposed resolutions, as the members of the Board intend to do in respect of their beneficial holdings.

Thank you for your continued support of Ferroglobe.

Yours sincerely,

Javier López Madrid
Executive Chairman


LOGO

FERROGLOBE PLC

(a public limited company having its registered office at 5 Fleet Place, London, EC4M 7RD, United
Kingdom and incorporated in England and Wales with company number 9425113)

NOTICE OF 2020 ANNUAL GENERAL MEETING OF SHAREHOLDERS

To the holders of ordinary shares of Ferroglobe Plc ("Ferroglobe" or the "Company"):

Notice is hereby given that Ferroglobe's Annual General Meeting of shareholders will be held on Tuesday, 30 June 2020 at 14:00 (British Summer Time), at the offices of the Company at the 2 Floor, West Wing, Lansdowne House, Berkeley Square, London, W1J 6ER, United Kingdom ("U.K.").

The business of the Annual General Meeting will be to consider and, if thought fit, pass the resolutions below. All resolutions will be proposed as ordinary resolutions. Explanations of the resolutions are given in the explanatory notes on pages 3 to 7 of this Annual General Meeting notice and additional information on voting at the Annual General Meeting can be found on pages 8 to 11. All resolutions will be put to vote on a poll, where each shareholder has one vote for each share held.

Certain of the resolutions that shareholders of the Company will be asked to consider may not be familiar to them because, unlike many companies with shares traded on the NASDAQ Global Select Market ("NASDAQ"), the Company is incorporated under the laws of England and Wales and is therefore subject to the U.K. Companies Act 2006 (the "Companies Act"). The Companies Act obliges the Company to propose certain matters to shareholders for approval that would generally not be subject to periodic approval by shareholders of companies incorporated in the United States but would be considered routine items for approval by shareholders of companies incorporated in England and Wales.

ORDINARY RESOLUTIONS:

U.K. annual report and accounts 2019

1.
THAT the directors' and auditor's reports and the accounts of the Company for the financial year ended 31 December 2019 (the "U.K. Annual Report and Accounts") be received.

Directors' 2019 Remuneration Report

2.
THAT the directors' annual report on remuneration for the year ended 31 December 2019 (excluding, for the avoidance of doubt, any part of the Directors' remuneration report

1


Director's election

3
THAT Marco Levi be elected as a director.

4
THAT Marta Amusategui be elected as a director.

Directors' re-election

5.
THAT Javier López Madrid be re-elected as a director.

6.
THAT José María Alapont be re-elected as a director.

7.
THAT Bruce L. Crockett be re-elected as a director.

8.
THAT Stuart E. Eizenstat be re-elected as a director.

9.
THAT Manuel Garrido y Ruano be re-elected as a director.

10.
THAT Juan Villar-Mir de Fuentes be re-elected as a director.

Appointment of Auditor

11.
THAT Deloitte LLP be appointed as auditor of the Company to hold office from the conclusion of the Annual General Meeting until the conclusion of the next general meeting at which accounts are laid before the Company.

Remuneration of auditor

12.
THAT the Audit Committee of the Board be authorised to determine the auditor's remuneration.

Dorcas Murray
Company Secretary

5 June 2020

2


Explanatory notes to the resolutions

Resolution 1 (U.K. Annual Report and Accounts 2019)

The Board is required to present at the Annual General Meeting the U.K. Annual Report and Accounts for the financial year ended 31 December 2019, including the Directors' Report, the Auditor's Report on the U.K. Annual Report and Accounts and those parts of the Directors' Remuneration Report which have been audited.

Resolution 1 is an advisory vote. In the event that the AGM proceeds as a closed meeting as currently envisaged, shareholders may pose relevant and appropriate questions on the U.K. Annual Report and Accounts (whether addressed to the Board or its auditors) by email to the Company Secretary in advance of the meeting as set out in the letter under cover of which this Notice is sent.

Resolution 2 (directors' annual remuneration report)

Resolution 2 is an advisory vote to approve the directors' annual remuneration report for the year ended 31 December 2019. The directors' remuneration report is set out on pages 30 to 32 and 47 to 59 of the U.K. Annual Report and Accounts. It provides information on the remuneration of the directors for 2019 and that proposed for 2020; it includes a statement by the Chairman of the Compensation Committee but excludes the directors' remuneration policy which was approved by shareholders at the AGM in 2019.

Resolutions 3 to 10 (directors seeking election or re-election)

In line with best practice in corporate governance, all our directors retire annually and, if agreed with them that they will continue in office, they offer themselves for re-election by the shareholders. Any director appointed by the Board since the last Annual General Meeting must stand for election at the next Annual General Meeting.

There are two candidates put forward for election at the meeting:

The biographies of the directors standing for election or re-election at the Annual General Meeting are set out below to enable shareholders to make an informed decision on their election or re-election. The biographies give the date of appointment of each director to the Board or Committees of Ferroglobe, as appropriate. Several of our directors have also held roles at Grupo FerroAtlántica S.A.U. ("FerroAtlántica") or Globe Speciality Metals, Inc. ("Globe"). On 23 December 2015 FerroAtlántica merged with Globe through corporate transactions (the "Business Combination") to form the Ferroglobe group of companies under Ferroglobe's ownership.

Javier López Madrid has been Executive Chairman of the Company since 31 December 2016 and Chairman of our Nominations Committee since 1 January 2018. He was first appointed to the Board on 5 February 2015 and was the Company's Executive Vice-Chairman from 23 December 2015 until 31 December 2016.

3


He has been Chief Executive Officer of Grupo VM since 2008, is a member of the World Economic Forum, Group of Fifty and a member of the Board of several non profit organizations. He is the founder and largest shareholder of Financiera Siacapital and founded Tressis, Spain's largest independent private bank.

Mr. López Madrid holds a Masters in law and business from ICADE University.

Marco Levi was appointed Chief Executive Officer of the Company on 10 January 2020 and appointed to its Board of Directors on 15 January 2020. Dr. Levi previously served as President and CEO of Alhstrom-Munksjö Oyj, a global fiber materials company listed in Finland, where he led a successful transformation of the business by refocusing its product portfolio towards value-added specialty products. Prior to that, Dr. Levi was Senior Vice President and Business President of the $3 billion emulsion polymers division of chemicals manufacturer Styron, including during the period in which Styron was acquired by Bain Capital from Dow Chemical Company. Dr. Levi previously had spent over twenty-two years at Dow in various departments and roles, ultimately serving as general manager of the emulsion polymers business.

Dr. Levi is also a Non-Executive Director of Schweitzer-Mauduit International, Inc, the leading global performance materials company, listed on the New York Stock Exchange. Dr Levi holds a doctorate in industrial chemistry from the Università degli Studi di Milano, Statale,in Italy.

José María Alapont was appointed to our Board of Directors as a Non-Executive Director on 24 January 2018 and to our Audit Committee and Compensation Committee on 16 May 2018. Mr. Alapont was appointed on 16 January 2019 as our Senior Independent Director and Chairman of our Corporate Governance Committee.

Mr. Alapont holds a number of other Board appointments. Since 2017, he has been a member of the Board of Directors of Ashok Leyland Ltd and is also a member of its Investment and Technology Committee Since 2018, he has been a member of its Nomination and Remuneration Committee and joined its Audit Committee in 2019. Mr Alapont has also been a Board Director of Navistar Inc. and a member of its Finance Committee since 2016 and Chair of its Nomination and Governance Committee since 2018. He has been a member of the Board of Directors of Hinduja Investments and Project Services Ltd since 2016 and of Hinduja Automotive Ltd since 2014.

Mr. Alapont was formerly President and Chief Executive Officer of Federal-Mogul Corporation, the automotive powertrain and safety components supplier, from March 2005 to 2012, Chairman of its Board from 2005 to 2007 and Board director from 2005 to 2013. Prior to that, he was Chief Executive and a Board Director of Fiat Iveco, S.p.A., a leading global manufacturer of commercial trucks, buses, defense and other specialized vehicles from 2003 to 2005. Prior to 2003, he held Executive, Vice President and President positions for more than 30 years at other leading global vehicle manufacturers and suppliers, such as Ford Motor Company, Delphi Corporation and Valeo S.A. His non-executive experience also includes being member of the Board of Directors of the Manitowoc Company Inc. from 2016 to 2018 and a Board Director of Mentor Graphics Corp. from 2011 to 2012. He was a member of the Davos World Economic Forum from 2000 to 2011.

Mr. Alapont holds an Industrial Engineering degree from the Technical School of Valencia and a Philology degree from the University of Valencia in Spain.

4


Marta Amusategui has been appointed to our Board of Directors as a Non-Executive Director with effect from 12 June 2020, when she will also join the Company's Audit Committee.

Ms. Amusategui has substantial experience in executive and non-executive roles, with a background in business strategy, banking and finance. She is founder and partner of Abrego Capital S.L, providing strategic and financial advisory services, and co-founder and member of the Board of Observatorio Industria 4.0, the professional forum leveraging knowledge and experience to assist businesses, specifically those in the secondary sector, in their digital transformation. She began her career in management consulting and investment banking, serving as Country Executive Officer and General Manager with Bank of America in Spain from 2003 to 2008.

Ms Amusategui has been a member of the Board of Eland Private Equity, S.G.E.L.C., S.A., a private equity management company specializing in renewable energies, since 2009. She has also held other Board positions in the past, including that of Telvent GIT S.A. (NASDAQ:TLVT), the global IT solutions and business information services provider, where she became an independent director from early 2010 until its de-listing following acquisition in December 2011. She is currently a member of the McKinsey Alumni Council in Spain.

Ms Amusategui holds an Industrial Engineering degree (MSc equivalent) from Universidad Pontificia de Comillas, Madrid, Spain, and an MBA from INSEAD, Fontainebleau, France. She holds a number of academic appointments, lecturing on Managerial Competencies at CUNEF, Madrid, Spain, Startup Financing at the Three Points Digital Business School, Grupo Planeta in Barcelona, Spain and Risk Management on the Non-Executive Directors Program at ICADE Business School, Madrid.

Bruce L. Crockett was appointed to our Board of Directors as a Non-Executive Director on 23 December 2015. He has been a member of our Audit Committee from that date and has served on our Compensation Committee since 1 January 2018. On 4 June 2020 he was appointed Chairman of the Audit Committee.

Mr. Crockett holds a number of other Board and governance roles. He has been Chairman of the Invesco Mutual Funds Group Board of Directors and a member of its Audit, Investment and Governance Committees, serving on the board since 1991, as Chair since 2003 and on the Board of predecessor companies from 1978. Since 2013, he has been a member of the Board of Directors and, since 2014, Chair of the Audit Committee of ALPS Property & Casualty Insurance Company. He has been Chairman of, and a private investor in, Crockett Technologies Associates since 1996. He is a life trustee of the University of Rochester.

Mr. Crockett was a member of the Board of Directors of Globe from April 2014 until the closing of the Business Combination, as well as a member of Globe's Audit Committee. He was formerly President and Chief Executive Officer of COMSAT Corporation from 1992 until 1996 and its President and Chief Operating Officer from 1991 to 1992, holding a number of other operational and financial positions at COMSAT from 1980, including that of Vice President and Chief Financial Officer. He was a member of the Board of Directors of Ace Limited from 1995 until 2012 and of Captaris, Inc. from 2001 until its acquisition in 2008 and its Chairman from 2003 to 2008.

Mr. Crockett holds an A.B. degree from the University of Rochester, B.S. degree from the University of Maryland, an MBA from Columbia University and an Honorary Doctor of Law degree from the University of Maryland.

5


Stuart E. Eizenstat was appointed to our Board of Directors as a Non-Executive Director on 23 December 2015. He has been a member of the Company's Corporate Governance Committee since January 1, 2018 and was appointed to our Nominations Committee on 16 May 2018. On 4 June 2020, Mr. Eizenstat was appointed to the Company's Audit Committee.

Mr. Eizenstat has been a Senior Counsel at Covington & Burling LLP in Washington, D.C. and Head of its international practice since 2001. He has served as a member of the Advisory Boards of GML Ltd. since 2003 and of the Office of Cherifien de Phosphates since 2010. He was a trustee of BlackRock Funds from 2001 until 2018.

Mr. Eizenstat was a member of Board of Directors of Globe from 2008 until the closing of the Business Combination and Chair of its Nominating Committee. He was a member of the Board of Directors of Alcatel-Lucent from 2008 to 2016 and of United Parcel Service from 2005 to 2015. He has had an illustrious political and advisory career, including serving as Special Adviser to Secretary of State Kerry on Holocaust-Era Issues from 2009 to 2017 and Special Representative of the President and Secretary of State on Holocaust Issues during the Clinton administration from 1993 to 2001. He was Deputy Secretary of the United States Department of the Treasury from July 1999 to January 2001, Under Secretary of State for Economic, Business and Agricultural Affairs from 1997 to 1999, Under Secretary of Commerce for International Trade from 1996 to 1997, U.S. Ambassador to the European Union from 1993 to 1996 and Chief Domestic Policy Advisor in the White House to President Carter from 1977 to 1981. He is the author of "Imperfect Justice: Looted Assets, Slave Labor, and the Unfinished Business of World War II"; "The Future of the Jews: How Global Forces are Impacting the Jewish People, Israel, and its Relationship with the United States" and "President Carter: The White House Years."

Mr. Eizenstat holds a B.A. in Political Science, cum laude and Phi Beta Kappa, from the University of North Carolina at Chapel Hill, a J.D. from Harvard Law School and nine honorary doctorate degrees and awards from the United States, French, German, Austrian, Belgian and Israeli governments.

Manuel Garrido y Ruano was appointed to our Board of Directors as a Non-Executive Director on 30 May 2017. He was a member of our Nominating and Corporate Governance Committee from 30 May 2017 until 31 December 2017, when he was appointed to our Corporate Governance Committee.

Mr. Garrido y Ruano has been Chief Financial Officer of Grupo Villar Mir since 2003 and a member of the Board or on the steering committee of a number of its subsidiaries in the energy, financial, construction and real estate sectors. He is Professor of Communication and Leadership of the Graduate Management Program at CUNEF in Spain. Mr. Garrido y Ruano was a member of the steering committee of FerroAtlántica until 2015, having previously served as its Chief Financial Officer from 1996 to 2003. He worked with McKinsey & Company from 1991 to 1996, specializing in restructuring, business development and turnaround and cost efficiency projects globally.

Mr. Garrido y Ruano holds a Masters in Civil Engineering with honors from the Universidad Politecnica de Madrid and an MBA from INSEAD.

Juan Villar-Mir de Fuentes was appointed to our Board of Directors as a Non-Executive Director on 23 December 2015.

Mr. Villar-Mir de Fuentes has been Vice Chairman of Inmobiliaria Espacio, S.A since 1996 and Vice Chairman of Grupo Villar Mir, S.A.U. since 1999. He has been a member of the Board of Directors of

6


Obrascon Huarte Lain, S.A. since 1996, a member of the Audit Committee and, later, its Compensation Committee and its Chairman since 2016. He was a Board director and member of the Compensation Committee of Inmobiliaria Colonial, S.A from June 2014 to May 2017. He also was a member of the Board of Directors and of the Compensation Committee of Abertis Infraestructuras, S.A. between 2013 and 2016.

Mr. Villar-Mir de Fuentes is Patron and member of the Patronage Council of Fundación Nantik Lum and Fundación Princesa de Gerona.

Mr. Villar-Mir holds a Bachelor's Degree in Business Administration and Economics and Business Management.

Resolution 11 (appointment of auditor)

At each general meeting at which accounts are laid before the shareholders, the Company is required to appoint an auditor to serve until the next such meeting. Deloitte LLP has served as the Company's U.K. statutory auditor since 3 February 2016.

If this resolution does not receive the affirmative vote of a majority of the shares entitled to vote and represented by proxy or – where appropriate in light of the 'stay at home' measures in place in the U.K. – present in person at the Annual General Meeting, the Board may appoint an auditor to fill the vacancy.

Resolution 12 (remuneration of auditor)

Under the Companies Act, the remuneration of the Company's U.K. statutory auditor must be fixed in a general meeting or in such manner as may be determined in a general meeting. The Company asks its shareholders to authorise the Audit Committee to determine the remuneration of Deloitte LLP in its capacity as the Company's U.K. statutory auditor under the Companies Act.

7


Further notes:

1.
Some of the resolutions are items that are required to be approved by shareholders periodically under the Companies Act and generally do not have an analogous requirement under United States laws and regulations. As such, while these resolutions may be familiar and routine to shareholders accustomed to being shareholders of companies incorporated in England and Wales, other shareholders may be less familiar with these routine resolutions and should review and consider each resolution carefully.

2.
In accordance with the Articles, all resolutions will be taken on a poll. Voting on a poll will mean that each Ordinary Share represented in person or by proxy will be counted in the vote.

3.
All resolutions will be proposed as ordinary resolutions, which means that such resolutions must be passed by a simple majority of the total voting rights of shareholders who vote on such resolutions, whether in person or by proxy. The results of the shareholders' vote on resolutions 1 and 2 regarding receipt of the U.K. Annual Report and Accounts and approval of the Directors' Annual Remuneration Report will not require the Board or any Committee thereof to take (or refrain from taking) any action. The Board values the opinion of shareholders as expressed through such resolutions and will carefully consider the outcome of the votes on resolutions 1 and 2.

4.
"Shareholders of record" are those persons registered in the register of members of the Company in respect of Ordinary Shares at 14:00 (British Summer Time) on 4 May 2020. If, however, Ordinary Shares are held for you in a stock brokerage account or by a broker, bank or other nominee, you are considered the "beneficial owner" of those Ordinary Shares.

5.
Beneficial owners of Ordinary Shares as at 14:00 (British Summer Time) on 4 May 2020 have the right to direct their broker or other agent on how to vote the Ordinary Shares in their account and, subject as set out on in the Chairman's letter on page 1 on the holding of a closed meeting, are also invited to attend the Annual General Meeting. However, as beneficial owners are not Shareholders of record of the relevant Ordinary Shares, they may not vote their Ordinary Shares at the Annual General Meeting unless they request and obtain a legal proxy from their broker or agent.

6.
Any Shareholder of record attending the Annual General Meeting has the right to ask questions. The Company must cause to be answered any questions put by a Shareholder of record attending the meeting relating to the business being dealt with at the Annual General Meeting unless to do so would interfere unduly with the business of the meeting, be undesirable in the interests of the Company or the good order of the meeting, involve the disclosure of confidential information or if the information has already been given on the Company's website. Please note that such attendance may not be permissible if the meeting is held as a closed meeting. In this case, questions may be posed using the contact email address set out in the Chairman's letter on page 1.

7.
In accordance with the provisions of the Companies Act, and in accordance with the Articles, a Shareholder of record who is entitled to attend and vote at the Annual General Meeting is entitled to appoint another person as his or her proxy to exercise all or any of his or her rights to attend and to speak and vote at the Annual General Meeting and to appoint more than one

8


8.
Pursuant to section 527 of the Companies Act 2006, shareholders meeting the threshold requirements set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to:

(a)
the audit of the Company's accounts (including the auditor's report and the conduct of the audit) that are to be laid before the AGM; or

(b)
any circumstance connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance with section 437 of the Companies Act 2006.

The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with sections 527 or 528 of the Companies Act 2006. Where the Company is required to place a statement on a website under section 527 of the Companies Act 2006, it must forward the statement to the Company's auditor no later than the time when it makes the statement available on the website. The business which may be dealt with at the AGM includes any statement that the Company has been required under section 527 of the Companies Act 2006 to publish on a website.

9.
The results of the polls taken on the resolutions at the Annual General Meeting and any other information required by the Companies Act will be made available on the Company's website as soon as reasonably practicable following the AGM and for a period of two years thereafter.

10.
A copy of this Annual General Meeting notice can be found at the Company's website, www.ferroglobe.com.

11.
Recipients of this notice and the accompanying materials may not use any electronic address provided in this notice or such materials to communicate with the Company for any purposes other than those expressly stated.

12.
In the event that the Annual General Meeting is not held as a closed meeting (as to which see the Chairman's letter in page 1):

12.1
To be admitted to the Annual General Meeting, please bring the Admission Ticket that you will have received through the post. You will need to be able to provide your photo identification at the registration desk.

12.2
On arrival at the Annual General Meeting venue, all those entitled to vote will be required to register and collect a poll card. In order to facilitate these arrangements, please arrive at the Annual General Meeting venue in good time. You will be given instructions on how to complete your poll card at the Annual General Meeting.

9


VOTING PROCESS AND REVOCATION OF PROXIES

If you are a Shareholder of record, there are three ways to vote by proxy:

Telephone and Internet voting facilities for Shareholders of record will be available 24 hours a day and will close at 14:01 a.m. (British Summer Time) on Sunday, 28 June 2020. Submitting your proxy by any of these methods will not affect your ability to attend the Annual General Meeting in-person and vote at the Annual General Meeting.

If your shares are held in "street name", meaning you are a beneficial owner with your shares held through a bank or brokerage firm, you will receive instructions from your bank or brokerage firm, which is the Shareholder of record of your shares. You must follow the instructions of the Shareholder of record in order for your shares to be voted. Telephone and Internet voting may also be offered to shareholders owning shares through certain banks and brokers, according to their individual policies.

The Company has retained Computershare to receive and tabulate the proxies.

If you submit proxy voting instructions and direct how your shares will be voted, the individuals named as proxies must vote your shares in the manner you indicate. As noted above, you are recommended to appoint the "Chairman of the Meeting" as your proxy, rather than another person who may not be permitted to attend in current circumstances.

A shareholder who has given a proxy may revoke it at any time before it is exercised at the Annual General Meeting by:

10


You should send any written notice or new proxy card to Proxy Services, c/o Computershare Investor Services, PO Box 30202 College Station, TX 77842-9909, USA.

If you are a registered shareholder you may request a new proxy card by calling Computershare at 1-866-490-6057 if calling from the United States, or +1-781-575-2780 from outside the United States, or you may also send a request via email to web.queries@computershare.com.

ANY SHAREHOLDER OWNING SHARES IN STREET NAME MAY CHANGE OR REVOKE PREVIOUSLY GIVEN VOTING INSTRUCTIONS BY CONTACTING THE BANK OR BROKERAGE FIRM HOLDING THE SHARES OR BY OBTAINING A LEGAL PROXY FROM SUCH BANK OR BROKERAGE FIRM AND – provided that the meeting is not held as a closed meeting, as to which see the Chairman's letter on page 1 – VOTING IN PERSON AT THE ANNUAL GENERAL MEETING. YOUR LAST VOTE, PRIOR TO OR AT THE ANNUAL GENERAL MEETING, IS THE VOTE THAT WILL BE COUNTED.


Location of Annual General Meeting:

GRAPHIC

11


DOCUMENTS AVAILABLE FOR INSPECTION

Forms of appointment of the Non-Executive Directors, as well as a memorandum setting out the terms of the Executive Director's contracts, will be available for inspection at the Company's registered office during normal business hours and at the place of the Annual General Meeting from at least 15 minutes prior to the start of the meeting until the end of the Annual General Meeting.

By order of the Board,

Dorcas Murray
Company Secretary

5 June 2020

12




QuickLinks

Location of Annual General Meeting

Table of Contents


Exhibit 99.2

LOGO


Ferroglobe PLC

Annual Report and Accounts 2019


Table of Contents


Company Registration No. 09425113

Ferroglobe PLC

Annual Report and Financial Statements

Year ended 31 December 2019


Table of Contents

Ferroglobe PLC

Annual report and financial statements 2019

Contents

    Page No.
 

Glossary and definitions

    1  

Officers and professional advisers

   
5
 

Introduction

   
6
 

Chairman's letter to shareholders

   
7
 

Strategic report (including section 172 statement)

   
11
 

Directors' report

   
18
 

The Board of Directors

   
25
 

Directors' remuneration report

   
30
 

Independent auditor's report to the members of Ferroglobe PLC

   
60
 

Consolidated financial statements

   
73
 

Notes to the consolidated financial statements

   
79
 

Parent company financial statements

   
192
 

Notes to the parent company financial statements

   
194
 

Appendix 1 — Non-IFRS financial metrics

   
202
 

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Ferroglobe PLC

GLOSSARY AND DEFINITIONS

          Unless the context requires otherwise, the following definitions apply throughout this U.K. Annual Report (including the Appendix, save as set out below):

"2019"

  the financial year ended 31 December 2019;

"2018"

 

the financial year ended 31 December 2018;

"2020 AGM"

 

the Annual General Meeting of the Company, to be held in 2020;

"2019 Form 20-F"

 

the Company's Form 20-F for the fiscal year ended 31 December 2019;

"ABL RCF"

 

The Credit and Security Agreement for a new $100 million North American asset-based revolving credit facility dated as of 11 October, 2019, entered into between Globe and QSIP Canada ULC, as borrowers, and PNC Bank, N.A., as lender;

"ABL Revolver"

 

credit available under the ABL RCF;

"Adjusted EBITDA"

 

earnings before interest, tax, depreciation and amortisation, adjusted in accordance with Company's adjustments announced as part of its earnings reports. Alternative Performance Measures are reconciled at Appendix 1;

"Alternative Performance Measures"

 

the non-IFRS financial metrics reconciled at Appendix 1;

"Aon"

 

Aon Plc;

"ARA"

 

these annual report and accounts for the financial year ended 31 December 2019;

"Articles"

 

the Articles of Association of the Company, from time to time;

"Auditor"

 

Deloitte LLP, the Company's independent U.K. statutory auditor;

"Aurinka"

 

Aurinka Photovoltaic Group, S.L.;

"Blue Power"

 

Blue Power Corporation, S.L.;

"Board"

 

the Company's board of directors;

"Business Combination"

 

the business combination of Globe and FerroAtlántica as the Company's wholly owned subsidiaries on 23 December 2015;

"Business Combination Agreement"

 

the definitive transaction agreement entered into on 23 February 2015 (as amended and restated on 5 May 2015) by, among others, the Company, Grupo VM, FerroAtlántica and Globe;

"Capital"

 

net debt plus total equity. Alternative Performance Measures are reconciled at Appendix 1;

"CEO", "Chief Executive Officer" or "Chief Executive"

 

the Chief Executive Officer of the Company, or where the context requires, of the relevant company or organization;

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"Companies Act"

 

the U.K. Companies Act 2006;

"Company" or "Ferroglobe"

 

Ferroglobe PLC, a company incorporated in England and Wales with registered number 09425113 and whose registered office is at 5 Fleet Place, London EC4M 7RD, United Kingdom or, where the context requires, the Group;

"Consolidated Financial Statements"

 

(save in the supplemental attachment when it will have the meaning given below) these consolidated financial statements for the year ended 31 December 2019

"Compensation Committee"

 

the compensation committee of the Company;

"EBITDA"

 

earnings before interest, tax, depreciation and amortisation;

"EIP"

 

the Ferroglobe PLC Equity Incentive Plan, adopted by the Board on 29 May 2016 and approved by shareholders on 29 June 2016;

"EU"

 

the European Union;

"Exchange Act"

 

the U.S. Securities Exchange Act of 1934 (as amended);

"Executive Chairman"

 

the executive chairman of the Company;

"Executive Directors" or "Executives"

 

the executive directors of the Company;

"FerroAtlántica" or "Grupo FerroAtlántica" or "Predecessor"

 

Grupo FerroAtlántica, S.A.U. a joint stock company organised under the laws of Spain, including (where the context so requires), its subsidiaries and subsidiary undertakings;

"Free cash-flow"

 

operating cash-flow less property, plant and equipment cash flows. Alternative Performance Measures are reconciled at Appendix 1;

"Globe" or "GSM"

 

Globe Specialty Metals, Inc., a Delaware corporation, including (whether the context requires) its subsidiaries and subsidiary undertakings;

"Group"

 

the Company and its subsidiaries;

"Grupo VM"

 

Grupo Villar Mir, S.A.U.;

"IASB"

 

International Accounting Standards Board;

"IFRS"

 

International Financial Reporting Standards;

"Indenture"

 

the indenture, dated as of 15 February 2017, among Ferroglobe and Globe as co-issuers, certain subsidiaries of Ferroglobe as guarantors, and Wilmington Trust, National Association as trustee, registrar, transfer agent and paying agent;

"KPI"

 

key performance indicator;

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"LIBOR"

 

the basic rate of interest payable in respect of the drawn amount of the ABL Revolver, interest under which is to be paid at the rate of LIBOR plus the applicable margin;

"NASDAQ"

 

the NASDAQ Global Select Market;

"NASDAQ Rules"

 

the NASDAQ Stock Market Rules;

"Net debt"

 

bank borrowings, debt instruments, obligations under finance leases, and other financial liabilities, less cash and cash equivalents. Alternative Performance Measures are reconciled at Appendix 1;

"Non-Executive Directors" or "NEDs"

 

the non-executive directors of the Company;

"Notes"

 

$350,000,000 aggregate principal amount of Senior Notes due 2022;

"Note"

 

A note to the Consolidated Financial Statements;

"Ordinary Shares"

 

the ordinary shares of $0.01 each in the capital of the Company;

"Policy"

 

the directors' remuneration policy in force from time to time;

"Revolving Credit Facility Agreement" or "RCF"

 

the credit agreement, dated 27 February 2018, as amended on or about 31 October 2018 and 22 February 2019 among Ferroglobe PLC, as Borrower, certain subsidiaries of Ferroglobe PLC from time to time party thereto as guarantors, the financial institutions from time to time party thereto as lenders, PNC Bank, National Association, as administrative agent, issuing lender and swing loan lender, PNC Capital Markets LLC, Citizens Bank, National Association and BMO Capital Markets Corp., as joint legal arrangers and bookrunners, Citizens Bank, National Association, as syndication agent, and BMO Capital Markets Corp., as documentation agent, as amended from time to time;

"Revolving Credit Facility"

 

borrowings available under the RCF;

"SHA"

 

the amended and restated shareholders agreement between Group VM and the Company dated 22 November 2017, as amended on 23 January 2018;

"SEC"

 

the U.S. Securities and Exchange Commission;

"SOX"

 

the U.S. Sarbanes-Oxley Act of 2002;

"SPE"

 

Ferrous Receivables DAC, a special purpose entity domiciled and incorporated in Ireland to which trade receivables generated by the Company's subsidiaries in the United States, Canada, Spain and France were sold;

"U.K."

 

the United Kingdom of Great Britain and Northern Ireland;

"U.S."

 

the United States of America;

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"Working capital"

 

inventories and trade and other receivables, less trade and other payables. Alternative Performance Measures are reconciled at Appendix 1;

"$"

 

U.S. dollars.

In the separate attachment hereto only (and for the avoidance of doubt, not in the remainder of this U.K. Annual Report), the following phrase has the meaning given below:

"Consolidated Financial Statements"

 

the audited consolidated financial statements of Ferroglobe and its subsidiaries as of 31 December 2019, 2018 and 2017 and for each of the years ended 31 December 2019, 2018 and 2017, including the related notes thereto, prepared in accordance with IFRS, as filed annually on SEC Form 20-F.

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Ferroglobe PLC

Report and financial statements 2019
Officers and professional advisers

 
   
Directors    
J López Madrid    
J M Alapont    
D G Barger    
B L Crockett    
S E Eizenstat    
M Garrido y Ruano    
G Hamilton   (resigned 31 May 2020)
M Levi   (appointed 15 January 2020)
P Larrea Paguaga   (resigned 10 January 2020)
J Monzón   (resigned 13 May 2019)
P Vareille   (resigned 14 May 2019)
J Villar-Mir de Fuentes    

Company Secretary

 

 
Dorcas Murray    

Registered Address

 

 
5 Fleet Place    
London    
EC4M 7RD    

Auditor

 

 
Deloitte LLP    
Statutory Auditor    
London    

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Ferroglobe PLC

Introduction

          Ferroglobe PLC is a public limited company incorporated under the laws of England and Wales under Company Number: 09425113. With its operational headquarters in Madrid, Spain, Ferroglobe (encompassing its subsidiaries Globe and FerroAtlántica) is a global, leading producer of silicon metals and silicon and manganese based alloys, with a geographical reach building on Globe's footprint in North America and FerroAtlántica's footprint in Europe.

          The Company was incorporated in 2015 and its Ordinary Shares are listed for trading on the NASDAQ in U.S. dollars under the symbol "GSM".

          The Company is subject to disclosure obligations in the U.S. and the U.K. While some of these disclosure requirements overlap or are otherwise similar, some differ and require distinct disclosures. Pursuant to the requirements of the Companies Act, this document includes our directors' strategic report, directors' report, remuneration report and required financial information (including our statutory accounts and statutory auditor's report for the reporting period commencing 1 January 2019 and ending 31 December 2019), which together comprise our U.K. annual reports and accounts for the period ended 31 December 2019 (the "U.K. Annual Report").

          We are also subject to the information and reporting requirements of the Exchange Act, regulations and other guidance issued by the SEC and the NASDAQ listing standards applicable to foreign private issuers. In accordance with the Exchange Act, we are required to file annual and periodic reports and other information with the SEC, including, without limitation, our 2019 Form 20-F. Certain other announcements made by the Company are furnished to the SEC on Form 6-K. Our status as a foreign private issuer requires the Company to comply with various corporate governance practices under the SOX, as well as related rules subsequently implemented by the SEC. In addition, NASDAQ Rules permit foreign private issuers to follow home country practice in lieu of the NASDAQ corporate governance standards, subject to certain exemptions and except to the extent that such exemptions would be contrary to U.S. federal securities law.

          We have provided as a separate attachment to the U.K. Annual Report extracts from the 2019 Form 20-F to assist shareholders in assessing the Group's performance and results. This attachment does not form part of the financial statements. Investors may obtain the full 2019 Form 20-F, without charge, from the SEC at the SEC's website at www.sec.gov or from our website at www.ferroglobe.com. Unless expressly stated otherwise, the information on our website is not part of this U.K. Annual Report and is not incorporated by reference herein.

          The capitalised terms used throughout the U.K. Annual Report are defined in the Glossary and Definitions section of this U.K. Annual Report unless otherwise indicated. In the following text, the terms "we," "our," "the Company", "our Company" and "us" may refer, as the context requires, to Ferroglobe or collectively to Ferroglobe and its subsidiaries. Throughout the U.K. Annual Report, rounding has been applied and numbers given and totals aggregated may differ in consequence.

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Chairman's Letter to Shareholders

Dear shareholders

          2019 was a very challenging year for the Company. The significant market downturn which commenced in the second half of 2018 continued throughout 2019, resulting in sales of $1.6 billion and adjusted EBITDA of $(37.0) million. Disappointingly, the early signs of recovery across our end markets we saw at the beginning of 2019 failed to materialize in the second half of the year, leaving a prolonged reduction in demand, particularly in end markets such as chemicals. The rate of diminution in demand across all our product groups outpaced industry-wide supply curtailments, leading to a steady decline in prices throughout 2019. Concurrently, we were faced with relatively high input costs, increasing further the pressure on our margin.

          In response to this difficult market environment, we applied our focus to mitigating the financial impact to the Company through a combination of operational adjustments and cash generating initiatives. We successfully concluded a number of key actions to strengthen our balance sheet and bolster liquidity including right-sizing of our operating platform, refinancings, non-core divestitures and accelerating working capital improvements. We ended the year with gross debt at $481 million, compared with $428.7 million at the end of 2018, and a cash balance (including current and non-current cash and cash equivalents) of $123.2 million, compared to $217 million as at 31 December 2018. For the year as a whole, we reported an operating loss of $355.6 million and a net loss of $285.6 million.

          Given the continued headwinds and their impact on our business, we commenced work in early 2020 on the development of a new strategic plan aimed at returning the Company to profitability. Over the past eighteen months we have been faced with a number of difficult market dynamics. We must now re-assess our commercial strategy and operating footprint against the broader competitive environment to determine how best to drive sustainable profitability and recover value for our shareholders. We were delighted to welcome Marco Levi as our new Chief Executive Officer in January 2020. Marco has considerable experience of turning around multinational companies and transforming businesses and he has been leading this strategic initiative.

          We now face a new challenge in the form of the novel coronavirus and its impact on our markets globally. Our focus first and foremost has been on ensuring the well-being of our employees and we have adapted the way we operate to ensure their safety.

          In these uncertain times we were pleased to announce on 29 May 2020 that our 2019 Form 20-F had been filed with an unqualified audit opinion. The auditor's opinion in this ARA is similarly unqualified. Both opinions include a going concern explanatory paragraph attributable in part to the uncertainties arising from the COVID-19 pandemic and the limited visibility we have of its possible effect on our business and in part due to the potential of a call for redemption of the Notes on a change of control of our Company or its major shareholder, Grupo VM.

          To date, the pandemic has not had a material effect on the Company's liquidity or financial position but there is considerable uncertainity as to its effects on our markets, industry and business. We continue to monitor the situation closely, including with daily management calls, to assess its impact on our business and industries and on the geographies in which we operate. We have carried out stress testing to model the potential effects of the pandemic on our business and the extent of any mitigating actions we may need to take, including reducing our operating costs and capital expenditure. Developing a reliable estimate of the potential impact on the results of operations and cash flow has been challenging as markets and industries react to the pandemic and we have limited visibility as to its likely effects. Based on current visibility and scenario

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modelling, we expect the Company to have sufficient cash to continue to operate for the next twelve months even in our downside scenario.

Health and Safety

          Throughout 2019, improvements in our health and safety performance remained a priority, embedded as such in our management incentive plans. We measure our lost time injuries and their frequency rate (LTIFR) across our facilities and report our performance against these metrics at each board meeting. We aspire to meet industry benchmarks of low single figures for our LTIFR. Despite our efforts, we did not achieve the standards we strive for and this was reflected in the bonus outturn for senior management. We remain dissatisfied with our efforts and have applied new focus to improving our policies and processes in 2020, working to share best practice across our sites of operation and unifying the initiative under the newly created role of Corporate Health and Safety Manager with global responsibility and reporting directly to the Chief Operating Officer.

Performance in 2019

          The cyclical downturn experienced at the end of 2018 continued into 2019. Over the year as a whole, we saw a drop in revenue of 28%, from $2,242 million in 2018 to $1,615 million in 2019, while operating profit fell from $99 million in 2018 to an operating loss of $(355.6) million in 2019, including impairment charges of $174.0 million related to the value of goodwill with respect to the Company's U.S. and Canadian operations. There is more on the Company's performance in respect of its key performance indicators in 2019 at page 12. In the first quarter of 2019 input costs remained at high levels while volumes declined and prices and margins came under pressure in most markets. In the first quarter alone we saw a drop in revenues to $456 million from $603.5 million in the last quarter of 2018. We reacted quickly, focusing on operational adjustments and cash generating initiatives and implementing a costs savings plan across the organization. This included reductions in corporate overheads, a key technical metrics (KTM) programme to drive plant-level improvements and decreases in plant-level fixed costs. By year end we had achieved $36.6 million in savings.

          To adapt our operating footprint to the evolving market, we implemented further capacity curtailments. In the first quarter of 2019 we idled two silicon metal furnaces at our Niagara Falls, U.S. plant and one at Sabon, Spain; by the third quarter of the year, we had temporarily shut down our plant at Polokwane in South Africa and annual production capacity had been managed down from 328, 000 tonnes at the end of 2018 to 242,000 tonnes. In the third quarter we extended or brought forward further planned outages at Chateau Feuillet, Montricher and Laudun in France, at Bridgeport, Alabama, U.S. and at our joint venture facility at Becancour, Quebec, Canada. These curtailments are never easy and bring with them their own costs but were necessary.

          In the second half of the year, our focus was on the release of working capital and the continued generation of cash. In June 2019, we entered into a definitive agreement to sell FerroAtlantica S.A.U, our subsidiary in Spain which owned and operated our non-core hydro-electric operations in Galicia, Spain as well as our Cee-Dumbría ferroalloys plant. That transaction was consummated in August 2019, resulting in gross cash proceeds for the Company of $177.62 million after customary adjustments. Simultaneously with the completion of the sale, we entered into a long-term tolling agreement with FerroAtlantica under which the Company was appointed exclusive off-taker of the finished goods from the Cee-Dumbría plant. The divestiture was complex and, at a valuation multiple of around thirteen times cycle average EBITDA, represented an important milestone in our efforts to strengthen our balance sheet. Other non-core divestitures followed, including the sale of our remaining timber farms in South Africa for $8.58 million and our cored wire subsidiary in Poland, Ultracore Polska ZOO for net proceeds of $2.2 million.

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          In September 2019, we announced that our operational headquarters would re-locate from London, U.K. to Madrid, Spain. This move was undertaken to reduce overhead costs but also to optimize operations, improving efficiencies by having management and key functions in a single location. The move was largely completed by the year end and the transition has been effected smoothly. As part of our cash generating initiatives, we conducted a concerted programme to release working capital, reducing inventory by $120 million in the fourth quarter.

          During the year, we completed two important refinancings that support our goal of increasing liquidity and maintaining financial flexibility. We entered into a new North American asset-based revolving credit facility of up to $100m million in October 2019, the proceeds of which were used to repay our then existing revolving credit facility. Unlike its predecessor, the new North American asset-based revolver has no leverage-based or financial ratio-based covenants and has a minimum liquidity requirement of $32.5 million, compared with $150 million under our previous facility. In December 2019, we completed a new European accounts receivable securitization facility of $150 million, of which $104 million was utilized at closing. This facility provided an additional $23.4 million of liquidity at closing and a further $31.5 million in February 2020 when we added an intermediate special purpose vehicle to the structure. As noted above, we have assessed that we have sufficient albeit limited cash to operate for the next twelve months. This is something we continue to monitor, particularly in light of the COVID-19 pandemic, and we continue to pursue additional sources of financing to increase our liquidity to fund our operations.

Board and senior management changes

          In October 2019, we announced the strengthening of our senior management team through the creation of the new role of Chief Operating Officer and the appointment of Benoist Ollivier to that position. Benoist has a profound knowledge of our business, with over twenty-five years of experience in the industry and fifteen years in senior management with the Company and its predecessors. His new role has been created to ensure greater oversight of our global platform and involves working closely with our divisional managers to set, implement and adapt our operational strategy. Benoist's expertise is deeply respected by our regional and divisional teams.

          In October 2019, we were also delighted when Beatriz García-Cos agreed to join us as our Chief Financial Officer. Beatriz's background as a senior financial professional in multinational companies, with the past seven years spent as the CFO of companies in the metals and mining sector, make her ideally placed to lead the Company's finance strategy, oversee its financial operations and provide leadership on many of the key initiatives currently underway, including those to optimize our cost structure.

          In January 2020, Marco Levi joined us as our new CEO. Marco is an exceptional leader, with over 30 years' experience in process manufacturing industries, including chemicals, plastics, rubber and paper. He has a proven track record of successful business transformations and demonstrable talent in leading global, asset-rich, materials technology companies through cyclical downturns to sustainable growth and profitability. With Marco as the latest and key addition to our C-suite, I am confident we have the leadership team we need to address the challenges and opportunities we face in the months and years ahead.

          As CEO, Marco succeeded Pedro Larrea Paguaga who stepped down in January 2020 to pursue other opportunities. The Board and I are grateful to Pedro for his commitment to the Company during his four-year tenure and the four prior years with its predecessor.

          On 2 June 2020 we announced the resignation of Greger Hamilton from our Board of Directors on 31 May 2020 and that Don Barger would not stand for re-election at the Company's 2020 AGM. Both Don and Greger have been on the Board since the Company was formed in 2015. Greger has been a key driver of the significant improvements we have seen to our control

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environment and Don has overseen a number of key remuneration initiatives, including the appointment of Marco Levi and Beatriz García-Cos as CEO and CFO respectively. Don also oversaw the revision of our directors' remuneration policy approved at the annual general meeting in 2019, which gained the support of over 90% of the shareholders who voted at that meeting. The Board and I are very grateful to Greger and Don for their respective contributions and wish both well for the future.

          On 4 June 2020, Bruce Crockett was appointed as Chairman of the Audit Committee, having been a member of that Committee since 2015. Bruce brings a strong financial and commercial background and significant experience of audit maters to the role. Stu Eizenstat was also appointed to the Committee on this date.

Looking Ahead

          We have set out on our journey to re-define the strategic vision and plan for the Company. The COVID-19 pandemic raises new uncertainties and risks but also possible opportunities as the global markets flex and settle. We will continue to monitor the situation closely and remain focussed on our priority of recovering value for shareholders: strengthening our balance sheet, continuing to drive down cost and generate cash, with a firm belief in the underlying value of our business and asset base, the strength of our refreshed leadership team and the unique flexibility that our global production platform provides to take advantage of market recovery as it emerges.

          I would like to finish by expressing my thanks to our loyal and hard-working employees across the Group and to our customers, suppliers and other partners for their valued contribution. I would also like to thank you, our shareholders, for your continued support.

Javier López Madrid

Executive Chairman

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Strategic report

          This strategic report for the financial year to 31 December 2019 has been prepared in compliance with Section 414C of the Companies Act to provide an overview of the Group's business and strategy. It contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

          For a supplementary description of our business (including our model, strategy and competitive strengths), risks associated with our business and our results of operations, see the following sections of the 2019 Form 20-F: Part I, Item 3, Section D, Risk factors; Item 4, Information on the Company; Item 5, Operating and Financial Review and Prospects; Item 7, Major Shareholders and Related Party Transactions and Item 11, Quantitative and Qualitative Disclosures About Market Risk. These sections are set out in a separate attachment to this U.K. Annual Report and do not form part of the financial statements.

Nature of the business

          Ferroglobe is a global leader in the growing silicon and specialty metals industry with an expansive geographical reach. It is one of the world's largest producers of silicon metal, silicon-based alloys and manganese-based alloys and has quartz mining activities, low-ash metallurgical quality coal mining activities and interests in hydroelectric power across the globe, with operating units in 9 countries across 5 continents.

          The Group sells its products to a diverse base of customers worldwide, including manufacturers of aluminium, silicone compounds used in the chemical industry, ductile iron, automotive parts, photovoltaic (solar) cells, electronic semiconductors and steel and are key elements in the manufacture of a wide range of industrial and consumer products. Supplies to customers are made from our production centres in North America, Europe, South America, Africa and Asia. The Group's manufacturing platform is flexible, enabling it to switch production between plants and products to enhance profitability and meet customer requirements. The Group's ownership of sources of critical raw materials also contributes to reduced operating costs. Ferroglobe recycles and sells most of the by-products generated in its production processes.

Business model and strategy

          We believe our vertically integrated business model and ownership of raw materials provides us with a cost advantage over our competitors. We are not reliant on any single supplier for our raw materials and currently own sources of these materials, which provides us with stable, long-term access to critical raw materials for our production processes and, therefore, enhances operational and financial stability.

          As part of the strategy for delivering the objectives of the Company, the Group develops new products or new specifications on a continual basis. As a consequence of these efforts, investments may be made in facilities that allow the production of new products, such as higher-grade silicon metal, solar grade silicon metal or new foundry products.

          The Group is continually pursuing growth opportunities by the acquisition of industrial facilities or companies that operate in the same sector and products and which are deemed to be potentially valuable for the Group.

          There is more information on the Group's business and organizational structure in Part I, Item 4, Information on the Company of the 2019 Form 20-F (as set out in the separate attachment

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to this U.K. Annual Report and not forming part of our financial statements). This, together with the information in this Strategic Report, and the Operating and Financial Review and Prospects section of the 2019 Form 20-F included in the separate attachment provides a fair review of the Company's business and its development and performance during 2019.

Key Performance Indicators ("KPIs")

          The Board considered that the most important KPIs during 2019 were those set out below. Certain of these KPIs will also be a core area of focus during 2020.

          At the corporate level, the principal KPIs that we use for measuring the overall performance of our business are:

Adjusted EBITDA
Adjusted EBITDA margin
Working capital improvement
Free cash-flow
Net Debt to Total Assets
Net Debt to Capital; and
Net Income.

          Some of these measures are also part of our compensation structure for the key executives, as follows:

          The following table sets out the Company's performance in respect of these financial measures in 2019.

  Adjusted
EBITDA
  Adjusted
EBITDA
Margin
  Working
Capital
Improvement
  Free Cash-
Flow
  ($m)       ($m)   ($m)
  (29.2)   (1.8)%   (117.8)   (63.6)
  (2018: 253.00   (2018: 11.1)   (2018: (76.3))   (2018: (32.4))

 

  Net
Income
  Net Debt to
Total Assets
  Net Debt to
Capital
  (280.6)   20.7%   37.3%
  (2018: 43.7)   (2018: 20.2%)   (2018: 32.7%)

          In addition to these financial KPIs, there are a number of non-financial performance measures which the Company uses to gauge its success. Some of these are reflected in the annual bonus objectives for senior management and are reviewed each year to ensure their continued relevance. In the financial year ended 31 December 2019, the annual bonus was subject to an underpin related to improvements in the Group's health and safety performance and a further condition relating to the Company's financial performance or condition. Further information on performance in respect of these performance measures is in the Directors Remuneration Report at page 51.

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          Details of the Group's anti-bribery and corruption and environmental policies are below and details of its employment policies and greenhouse gas emissions are set out below and in the Directors' Report.

Principal risks and uncertainties

          The Company is exposed to a number of operational risks which are monitored on an ongoing basis and which are summarised in the supplementary attachment. The key financial risks related to credit risk and liquidity risk are highlighted in Note 27.

Employees

          As at 31 December 2019, the Group had:

Environment and other social matters

          Ferroglobe is committed to conducting its business in compliance with all applicable laws and regulations in a manner that has the highest regard for human rights, the environment and the health and safety and well-being of employees and the general public. During the year under review the Group's employees were each asked to re-confirm in writing their commitment to the Company's Code of Conduct which emphasizes the Group's commitment to the highest standards of integrity, ethical behavior, transparency, safety and corporate citizenship. The Code of Conduct incorporates the Group's key policies on matters including whistleblowing, anti-bribery and corruption, environmental impacts, health and safety and respect in the workplace and the conduct of national and international trade.

Section 172 (1) Statement

          This section of the U.K. Companies Act sets out a number of matters to which directors of a U.K. company must have regard in discharging their duty to promote the success of the Company. As of this year, the strategic report must include a statement which describes how the directors have had regard to those matters when performing their duties. The Board welcomes this opportunity to throw more light on its governance structures and on how input from its stakeholders has informed and shaped its decision-making. In 2019 the Board exercised all their duties with regard to these and other factors as they reviewed and considered proposals from senior management and governed the Company through the Board and its Committees.

          The factors which the directors must take account of can be summarised as:

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          In order to take account of these factors, the Board must be informed as to them. This takes place directly and indirectly, through collaborative working with management and direct and indirect feedback, as illustrated below. The Company's internal control framework, including the Company's Sarbanes Oxley controls, and the work of the Internal Audit team assists in providing assurance to the Board on the information made available to it.

The consequences of any decision in the long-term

          The governance structures of the Company include delegation of certain responsibilities of the Board to its key Committee and delegation of the Board's authority for the executive management of the Company to its executive team, subject to clearly defined limits and regular monitoring by the Board and subject also to the reservation to the Board of any matter not expressly delegated in this way.

          The Executives bring their annual plan to the Board for approval each year. This includes forecasts, expected revenues, costs and major expenditure and projects for the year ahead. Each year the Board also takes a day out of its board calendar to consider, with the majority of the management team, the Company's strategic plan. In 2019 this strategy day was held in June. Throughout the year, the Board has received a number of reports on the Company's capital structure and financing arrangements. Reports were made regularly to the Board by the EVPs and VPs of each function and region on their area of responsibility, their performance, priorities and key decisions and risks for the immediate future and medium term, giving assurance that proper consideration is made to the longer-term in decision making throughout the business.

          One example of the way in which the consequences of a decision for the longer term have been taken into account by the Board is in relation to the relocation of the Company's management headquarters to Madrid in 2019. Several analyses were presented by management during the course of the year, detailing the implications for the Company and for its key stakeholders, including its employees in London, where the headquarters were then based, and in Madrid. Factors taken into account by the Board included the operational and organisational benefits of having the majority of the Company's senior managers and key functions in one location, the relative costs of employment and premises in London and Madrid, the potential loss of key employees, the availability of talent in each location with the necessary skills and experience to serve the Company's needs in the short, medium and longer term, investor reaction, the tax consequences of moving location, ensuring a seamless transition and the potential complexity of headquartering a U.K. plc listed in the U.S.A. in a third country, Spain. Ultimately the Board decided that the long-term interests of the Company were best served through prioritisation of operational and organisational efficiency and embedding a strong and consistent culture within the organisation. This was seen as key to secure the success of the Company for the longer term and in the best interests of the Company's stakeholders. The Board therefore determined to re-locate management to Madrid but declined, at present, to move the Company's residency in order to minimise complexity. The Board will keep this aspect of its decision under review.

Staying informed on employee, customer, supplier, investor and other key stakeholders' views

          Our relationships with those who work for the Company and with the Company are key to our success. The Board stays up to date with views of our employees through a number of means: key members of the management team, including the VP Human Resources, usually attend the management presentation made at each Board meeting when their input is regularly solicited. They are also normally invited to dinners with the Board to allow the dialogue to continue in a less formal setting. Directors have to date had an annual schedule of visits to our facilities which enable them to spend time with our people on the ground and receive their direct feedback. In 2019 one output of these site visits has led to an increased focus at Board level on the importance of driving a

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unified brand and culture for Ferroglobe. In November 2019 we held one of our scheduled Board meetings in Chambéry, France which gave the Board and our French plant managers an opportunity to meet, get to know one another and exchange views. There are other channels through which the Board or its Committees receives reports on employee views: these include the VP Human Resources' normal attendance at Compensation Committee meetings and his annual report on pay and conditions across the Group; and the confidential whistleblowing hotline, reports to which are in turn reported to the Audit Committee at its scheduled meetings. In 2020 the CEO commenced town hall meetings, face to face and virtually, with employees across the Group to keep them updated on our financial and operational performance and employees are encouraged to raise questions as part of those sessions.

          We build strong relationships with our customer and suppliers, including our joint venture partners, spending a lot of time with them to best understand their goals and how to develop our business in our respective interests. The Board is aware that many of our relationships are long-term and depend on mutual trust and collaboration. The Board gets feedback on customer and supplier issues on a regular basis: through the input of the EVP Sales and Marketing and VP Supply Chain Management who normally attend management presentations in the scheduled Board meetings and through presentations each has made to the Board in late 2018 and 2019 on their areas of responsibility, priorities and challenges.

          The Board is aware that the Company relies on the support of its shareholders and their views are important to it. The Board's interactions with these stakeholders take place through a variety of channels. The Company's major shareholder, Grupo VM, has three representative directors on the Board through whom views and input can be provided or sought. The Board receives feedback from other shareholders and the investment community through the Company's quarterly results presentations and one to one meetings of the Executive Directors. The EVP Investor Relations is a regular attendee at Board meetings and shares themes or commentary made to the Executives and management by the Company's investors and certain other stakeholders. Shareholders have the opportunity to attend the general meetings of the Company, including the AGM, and put questions to directors formally at the meeting and in a more relaxed environment before and afterwards. The Company also maintains an investor relations email address on its corporate website, questions posed to which are directed to its EVP Investor Relations and Company Secretary and, where relevant, would then be raised by them with the Executive Directors or the Board.

Engaging with community and the environment

          We engage with communities, government and regulators in the areas and countries in which we operate through a range of industry consultations, trade or industry bodies, conferences, forums and meetings. In 2019, examples of matters discussed included the proposed divestiture of FerroAtlantica S. A.U. on which we held a regular dialogue with the local authorities in Galicia, Spain. In prior years we have engaged with local charities and community groups. In 2019 we held an open day at our plant at Mo I Rana in Norway to allow local residents to view the facility and, in South Africa, the Mahale Community Forum visited our plant at Polokwane to see how quartz mined on their tribal lands is used in our production processes. We would also routinely consult with the local, regional and sometimes central governments and their agencies on the proposed idling of our production facilities. These matters are reported to the Board, which is kept updated on the status of these discussions and their progress.

          We recognise that our business has an impact on the environment and work with relevant authorities and industry experts to manage and minimise that impact. The Audit Committee of the Board receives regular updates on any allegations of non-compliance by the business with environmental laws and regulations, such as the allegations of violations of clean air legislation in

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the U.S.A. made by the U.S. Department of Justice in relation to the operations and construction of our Beverly facility. There is more on this in Note 24.

          There is more on our environmental impact on pages 19 to 21.

Maintaining a high standard of business conduct

          On behalf of the Company, the Board has adopted a number of policies which articulate the Company and the Board's commitment to the highest standards of integrity, ethical behaviour, transparency, safety and corporate citizenship. These include, as their mainstay, the Company's code of conduct which sets out the Company's policies on bribery and corruption, whistleblowing, conflicts of interest and political and charitable contributions, as well as the importance of safeguarding the wellbeing of its employees and protecting its resources. The Code of Conduct is supported by further policies on whistleblowing, data protection and statements on trade compliance, tax and modern slavery. The Board has also adopted a corporate governance policy to protect the interests of minority shareholders (on which there is more on page 16 below).

          The Code of Conduct is reviewed regularly and every employee of the Company and all of its Board members are asked to confirm their personal commitment to the Code on joining the Company and to re-confirm it annually thereafter. Employees have the opportunity to report suspected breaches of the Code, for which purpose a secure and confidential hotline has been established run by an independent third party. Allegations of breaches of the Code are normally reported to the Audit Committee at each of its scheduled meetings and regular updates on the status of follow-up actions and outcomes given. As stated above, the Audit Committee also receives regular updates on any allegations of non-compliance of the business with environmental and other laws and regulations.

Acting fairly between members

          A significant number of the Company's shares are held by Grupo VM, its major shareholder. The Company has a number of checks and balances in place throughout the Company's governance framework to ensure that the interests of the majority and the minority shareholders are respected and the Board is very cognisant of its duties in this regard. These checks and balances include:

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          The Group Company Secretary has primary responsibility — with the Chief Legal Officer — for advising the Board on its duties and on the Company's governance framework and normally attends all meetings of the Board and its Committees.

          The Strategic Report for the financial period ended 31 December 2019 has been reviewed and approved by the Board on 5 June 2020.

Dr. Marco Levi

Director

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Directors' report

          The Directors present their report and the audited financial statements of the Group and Company for the year ended 31 December 2019.

          The Directors' Report comprises these pages 18 to 24 and the other sections and pages of the Annual Report cross-referred below which are incorporated by reference.

          As permitted by legislation, certain disclosures normally included in the Directors' Report have instead been integrated into the Strategic Report (pages 11 to 17). These disclosures include information relating to the Group's principal risks and uncertainties.

Directors

          The directors of the Company, who held office at any time during the year to 31 December 2019, were as follows:

Javier López Madrid   Director and Executive Chairman
José María Alapont   Non-Executive Director
Donald G. Barger, Jr.    Non-Executive Director
Bruce L. Crockett   Non-Executive Director
Stuart E. Eizenstat   Non-Executive Director
Manuel Garrido y Ruano   Non-Executive Director
Greger Hamilton   Non-Executive Director
Pedro Larrea Paguaga   Director and Chief Executive Officer
Javier Monzón   Non-Executive Director
Pierre Vareille   Non-Executive Director
Juan Villar-Mir de Fuentes   Non-Executive Director

          Messrs Javier Monzón and Pierre Vareille resigned from the Board on 13 and 14 May 2019, respectively.

          On 10 January 2020, Mr Pedro Larrea Paguaga left the employment of the Company and its Board. On the same date, Dr. Marco Levi was appointed as CEO of the Company and on 15 January 2020 he was appointed to the Board.

          On 31 May 2020 Greger Hamilton resigned from the Board. Donald Barger has announced his intention to step down from the Board at the conclusion of the 2020 AGM.

          The biographies of our directors as at the date of this report are set out on pages 25 to 28. Details of the directors standing for election or re-election at our 2020 AGM will be set out in the notice of that meeting.

Directors' indemnities

          As required by the Articles, each director is indemnified in connection with his role as a director, to the extent permitted by law. As permitted by the Articles, the Company has purchased and maintained throughout the year under review directors' and officers' liability insurance.

Share repurchases

          The Company has not acquired any of its own shares during the year ended 31 December 2019.

          During the year under review the Company disposed of 8,040 shares held by it in treasury. These shares were transferred to employees in satisfaction of the Company's obligations on the

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vesting of two conditional share awards granted in 2016 under the EIP and vesting on 5 December 2019. No further consideration was received for the transfer of these shares.

Dividends

          The Company has not declared any dividends during the year under review.

Political donations

          During the year under review the Company has not made any political donations, incurred any political expenditure or made any contributions to an EU or non-EU political party.

Employee policies

          Ferroglobe has a culture of continuous improvement through investment in people at all levels within the organisation. Its Code of Conduct ("Code"), which applies to all directors and to employees of the Group, sets out Ferroglobe's commitment to protecting, respecting and supporting its workforce. The Code was revised in 2017 to bring together Ferroglobe's policies on key ethical, behavioural and compliance matters. Its roll-out across the Group globally was initiated in autumn 2017, supported by mandatory training for all employees. In 2018 and 2019, Group personnel were requested to re-certify their knowledge of and continued compliance with the Code. The adoption and further promulgation of the Code is consistent with our evolution to an organization with an integrated approach to human relations policies across the five continents in which the Group operates.

          Those key policies include:

          Ferroglobe is committed to providing equal opportunities for all Group personnel and to creating an inclusive workforce by promoting employment equality. This includes pursuing equality and diversity in all its employment activities, including recruitment, training, career development and promotion and ensuring there is no bias or discrimination in the treatment of people. Ferroglobe opposes all forms of unlawful or unfair discrimination on the grounds of race, age, nationality, religion, ethnic or national origin, sexual orientation, gender or gender reassignment, marital status or disability. Wherever possible, vacancies are filled from within Ferroglobe and efforts are made to create opportunities for internal promotion.

Greenhouse gas emissions

          The UK Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013 requires UK-based quoted companies to report global greenhouse gas ("GHG") emissions data in the Annual Report and Accounts. Comparison year data for 2017, 2018 and 2019 is included in Table 2 in this report. As in 2017-2018, the 2019 GHG inventory was prepared in accordance with

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the Ferroglobe PLC Greenhouse Gas Inventory Management Plan (2017), prepared in consultation with ERM Group, Inc. and its UK affiliate (the "IMP").

          The Company has selected the Operational Control approach and criteria as the basis for reporting GHG emissions data, defining "Operational Control" to encompass facilities the Group owns and operates, facilities it leases and operates, and joint venture facilities it operates. All facilities within Ferroglobe's Operational Control that are material to its Group-wide GHG emission inventory are included in reported figures. This approach means that the operations for which emissions are reported are substantially coextensive with operations comprised by Ferroglobe's consolidated financial reporting. The Company does not have responsibility for any emission sources that are not included in its financial reporting.

          Table 1 sets forth the Company's consolidated greenhouse gas emissions expressed in metric tonnes of carbon dioxide equivalent (CO2e). The figures reported below include all material direct (Scope 1) and indirect (Scope 2) emission sources for facilities within the Company's Operational Control. Principal sources of Scope 1 emissions from operations at, or Scope 2 emissions imputed to, Ferroglobe-controlled facilities include:

          Global GHG emissions data for period 1 January 2018 to 31 December 2019

Emissions From:

    Tonnes of CO2e
 

Combustion of fuel and operation of facilities

    2,490,210 *

Electricity, heat, steam and cooling purchased for own use

    1,929,965  

Company's chosen intensity measurement:

       

Emissions reported above normalized to per tonne of product output

    4.99  

*
In line with DEFRA Guidance, 944.997 tonnes of CO2e are not included in the above table, due to being biogenic in nature.

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          Global GHG emissions data for period 1 January to 31 December 2017-2018

Emissions From:

    2017
Tonnes of CO2e
    2018
Tonnes of CO2e
    2019
Tonnes of CO2e
 

Combustion of fuel and operation of facilities

    2,810,610 *   3,248,196 **   2,490,210 ***

Electricity, heat, steam and cooling purchased for own use

    2,305,089     2,479,290     1,929,965  

Company's chosen intensity measurement:

                   

Emissions reported above normalized to per tonne of product output

    5.6     5.01     4.99  

*
In line with DEFRA Guidance, 1.2 million tonnes of CO2e are not included in the above table, due to being biogenic in nature.

**
In line with DEFRA Guidance, 1.5 million tonnes of CO2e are not included in the above table, due to being biogenic in nature.

***
In line with DEFRA Guidance, 944,997 tonnes of CO2e are not included in the above table, due to being biogenic in nature.

Methodology

          In preparing the IMP and this report, the Company has adhered to the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard — Revised Edition (2004) (the "GHG Protocol") and the UK DEFRA's Environmental Reporting Guidelines: Including mandatory greenhouse gas emissions reporting guidance (June 2013) ("DEFRA Guidance"). The Company reports material emissions of three out of the six Kyoto GHGs, viz. carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O). A fourth, sulfur hexafluoride (SF6), is present in electrical breakers at some Company facilities, but no emission of SF6 of have been observed. The two remaining Kyoto gases, perfluorocarbons (PFCs) and hydroflurocarbons (HFCs), are not reported since Company facilities do not emit or use materials containing them.

Financial risk management objectives/policies and hedging arrangements

          Please see Part I, Item 11 (Quantitative and Qualitative Disclosures About Market Risk) of the 2019 Form 20-F (as set out in the separate attachment to this U.K. Annual Report) for information on Ferroglobe's financial risk management objectives/policies and hedging arrangements. The separate attachment does not form part of these financial statements.

Post year-end events

          On 6 February 2020, the Company entered into an amended and restated accounts receivables securitization program (the "Amended Programme") where trade receivables held by certain of the Company's subsidiaries in Spain and France (the "Originators") are financed, either directly or indirectly (through a French fonds commun de titrisation named "FCT Ferro" (the "FCT")), by a special purpose "designated activity company" domiciled and incorporated in Ireland (the "SPE"). The incorporation of the FCT into the Amended Programme allowed for the sale of certain EUR denominated receivables that were not eligible under the previous structure and increased the funding available from the SPE to the Originators.

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          Subsequent to entering into the Amended Programme, the Company has repaid $34.5 million of senior loans in order to optimise the level of borrowings of the SPE with the level of receivables in the securitization.

          In early 2020, the outbreak of coronavirus disease in China spread to other jurisdictions, including locations where the Company conducts business. As of the date of the issuance of the consolidated financial statements, the COVID-19 pandemic has not had a material effect on the Company's liquidity or financial position. The Company continues to monitor the impact that the COVID-19 pandemic is having on the Company, the specialty chemical industry and the economies in which the Company operates. Given the speed and frequency of continuously evolving developments with respect to this pandemic and the uncertainties this may bring for the Company and the demand for its products it is difficult to forecast the level of trading activities and hence cash flow in the next twelve months. The Company has developed an impact assessment to stress test and assess potential responses to a downside scenario. This assessment involves application of key assumptions around market demand and prices, including the extent of the decrease that might be experienced in summer 2020 and the subsequent timing and level of recovery. Additionally, judgment is required around the level and extent of mitigating actions such as reductions in operating costs and capital expenditure. Developing a reliable estimate of the potential impact on the results of operations and cash flow at this time is difficult as markets and industries react to the pandemic and the measures implemented in response to it, but the Company's downside scenario analysis supports an expectation that the Company will have cash headroom to continue to operate throughout the next twelve months. The key assumption underlying this assessment is a recovery in forecast trading activity in the latter part of 2020.

          In March 2020, the Company closed out the cross-currency swap (see Note 28) resulting in the receipt of cash proceeds of $3.608 million.

Future developments

          As part of its strategy to serve customers better, the Group develops new products or new specifications on a continuous basis. As a consequence of these efforts, investments have been made in facilities that allow the production of new products, such as higher-grade silicon metal, solar grade silicon metal, electrodes for use in silicon metals furnaces, high-value powders for use in Li-on batteries or new foundry products. Please see the details of the Elsa electrode, solar grade silicon and high-value powders projects at Part I, Item 4, Information on the Company of the 2019 Form 20-F as examples of how the Group has developed proprietary technologies and has pursued innovation in the development of new products.

Research and development

          Please refer to Part I, Item 4, Information on the Company of the 2019 Form 20-F (as set out in the separate attachment to this U.K. Annual Report) for information on Ferroglobe's research and development activities and opportunities.

Overseas branches

          The Company has no overseas branches.

Share capital structure and change of control provisions

          The Company's share capital comprises ordinary shares of $0.01 each, all of which bear the same rights and obligations. The Company's issued share capital at 31 December 2019 is set out at Note 13.

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          The rights attaching to the Ordinary Shares are set out in the Articles, a copy of which can be obtained from the Company Secretary on request. Each Ordinary Share has one vote attaching to it for voting purposes and all holders of Ordinary Shares are entitled to receive notice of and attend and vote at the Company's general meetings. The Articles vest power in the directors to refuse to register transfers of Ordinary Shares in certain circumstances including where the instrument of transfer is not stamped or is in favour of more than 4 transferees. There are also restrictions in the Articles affecting the terms of tender offers and any scheme of arrangement, consolidation, merger or business combination designed to protect minority shareholders while Grupo VM and its associates hold ten percent or more of the Ordinary Shares. The SHA contains restrictions on the transfer of shares by Grupo VM.

Significant agreements affected by a takeover

          There are no agreements between the Group and any of its employees or any director of the Company that provide for compensation to be paid to the employee or director for termination of employment or for loss of office as a consequence of a takeover of the Company, other than provisions that would apply on any termination of employment.

          The Notes and the ABL RCF are subject to provisions allowing the lenders to terminate the facilities and demand repayment following a change of control, including the requirement to offer redemption of the Notes at 101% of par value in the event of a change of control. Grupo VM, the Company's principal shareholder, has pledged its holding to secure its obligations to its lenders. The Company may experience a change of control and be required to offer redemption of the Notes at a cash purchase price equal to 101% of par value were this pledge to be enforced and more than 35% of the Ordinary Shares were acquired by a beneficial owner (or group acting together as beneficial owner) in circumstances where Grupo VM (and certain other 'Permitted Holders' as defined in the Notes) held a lesser percentage. Grupo VM's percentage holding in the Company is currently approximately 54%. While Grupo VM maintains its current shareholding, a change of control cannot occur. On this basis, a change of control as defined in the Incentive is unlikely to occur but the matter it is beyond the Company's control. If a change of control were to occur, the Company may not have sufficient financial resources available to satisfy all of its obligations.

Going concern

          The Company acknowledges that the material uncertainties described in this ARA, including the possible impact of the COVID-19 pandemic and the potential repayment of the outstanding balance of the Notes should there be a change of control, raise substantial doubt as to the ability of the Company to continue as a going concern for a period of twelve months following the date of this ARA. Nevertheless, based on the assessments undertaken by the Company, the directors have a reasonable expectation that the Company has the resources necessary to continue in operational existence for the period of twelve months following the date of this report and have therefore prepared the financial statements in this ARA on a going concern basis. There is more information on the material uncertainties and the basis of this assessment in Note 3.1.

Statement of disclosure to the Company's U.K. statutory auditor

          In accordance with section 418 of the Companies Act, each director at the date of this Directors' Report confirms that:

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          This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act. Deloitte LLP has indicated its willingness to continue in office, and a resolution that it be re-appointed will be proposed at the 2020 AGM.

By order of the Board on 5 June 2020

Dr. Marco Levi

Director

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The Board of Directors

          Details of the members of the Board as at the date of this ARA are below.

Javier López Madrid

          Javier López Madrid has been Executive Chairman of the Company since 31 December 2016 and Chairman of our Nominations Committee since 1 January 2018. He was first appointed to the Board on 5 February 2015 and was the Company's Executive Vice-Chairman from 23 December 2015 until 31 December 2016.

          He has been Chief Executive Officer of Grupo VM since 2008, is a member of the World Economic Forum, Group of Fifty and a member of the Board of several non profit organizations. He is the founder and largest shareholder of Financiera Siacapital S.L. and founded Tressis, Spain's largest independent private bank.

          Mr. López Madrid holds a Masters in law and business from ICADE University.

Marco Levi

          Marco Levi was appointed Chief Executive Officer of the Company on 13 January 2020 and appointed to its Board of Directors on 15 January 2020. Dr. Levi previously served as President and CEO of Alhstrom-Munksjö Oyj, a global fiber materials company listed in Finland, where he led a successful transformation of the business by refocusing its product portfolio towards value-added specialty products. Prior to that, Dr. Levi was Senior Vice President and Business President of the $3 billion emulsion polymers division of chemicals manufacturer Styron, including during the period in which Styron was acquired by Bain Capital from Dow Chemical Company. Dr. Levi previously had spent over twenty-two years at Dow in various departments and roles, ultimately serving as general manager of the emulsion polymers business.

          Dr. Levi is also a Non-Executive Director of Schweitzer-Mauduit International, Inc, the leading global performance materials company, listed on the New York Stock Exchange. Dr Levi holds a doctorate in industrial chemistry from the Università degli Studi di Milano, Statale,in Italy.

José María Alapont

          José María Alapont was appointed to our Board of Directors as a Non-Executive Director on 24 January 2018 and to our Audit Committee and Compensation Committee on 16 May 2018. Mr. Alapont was appointed on 16 January 2019 as our Senior Independent Director and Chairman of our Corporate Governance Committee.

          Mr. Alapont holds a number of other Board appointments. Since 2017, he has been a member of the Board of Directors of Ashok Leyland Ltd and is also a member of its Investment and Technology Committee Since 2018, he has been a member of its Nomination and Remuneration Committee and joined its Audit Committee in 2019. Mr Alapont has also been a Board Director of Navistar Inc. and a member of its Finance Committee since 2016 and Chair of its Nomination and Governance Committee since 2018. He has been a member of the Board of Directors of Hinduja Investments and Project Services Ltd since 2016 and of Hinduja Automotive Ltd since 2014.

          Mr. Alapont was formerly President and Chief Executive Officer of Federal-Mogul Corporation, the automotive powertrain and safety components supplier, from March 2005 to 2012, Chairman of its Board from 2005 to 2007 and Board director from 2005 to 2013. Prior to that, he was Chief Executive and a Board Director of Fiat Iveco, S.p.A., a leading global manufacturer of commercial trucks, buses, defense and other specialized vehicles from 2003 to 2005. Prior to 2003, he held Executive, Vice President and President positions for more than 30 years at other leading global

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vehicle manufacturers and suppliers, such as Ford Motor Company, Delphi Corporation and Valeo S.A. His non-executive experience also includes being member of the Board of Directors of the Manitowoc Company Inc. from 2016 to 2018 and a Board Director of Mentor Graphics Corp. from 2011 to 2012. He was a member of the Davos World Economic Forum from 2000 to 2011.

          Mr. Alapont holds an Industrial Engineering degree from the Technical School of Valencia and a Philology degree from the University of Valencia in Spain.

Donald G. Barger Jr.

          Donald G. Barger, Jr, was appointed to our Board of Directors as a Non-Executive Director on December 23, 2015. He has served as the Chairman of our Compensation Committee and a member of our Nominations Committee since January 1, 2018. From December 23, 2015 to December 31, 2017, he was the Chair of our Nominating and Corporate Governance Committee and a member of our Compensation Committee.

          Mr Barger was a member of the Board of Directors of Globe from December 2008 until the closing of the Business Combination and Chairman of Globe's Audit Committee and Compensation Committee. He had a successful 36-year business career in manufacturing and services companies, including as Vice President and Chief Financial Officer of YRC Worldwide Inc. (formerly Yellow Roadway Corporation) from 2000 to 2007 and as advisor to the CEO from 2007 until his retirement in 2008. He was Vice President and Chief Financial Officer of Hillenbrand Industries, a provider of services and products for the health care and funeral services industries, from 1998 to 2000. He was Vice President of Finance and Chief Financial Officer of Worthington Industries, Inc., a diversified steel processor, from 1993 to 1998 and a member of the Board of Directors of Gardner Denver, Inc. and a member on its Audit Committee for his entire 19-year tenure until the company's sale in July 2013, serving as chair of the Audit Committee for 17 of those years. He served on the Board of Directors of Quanex Building Products Corporation for sixteen years, retiring in February 2012. He served on its Audit Committee for 14 years and was its Chair for most of that time.

          Mr. Barger has a Bachelor of Science degree from the U.S. Naval Academy and an MBA from the University of Pennsylvania.

Bruce L. Crockett

          Bruce L. Crockett was appointed to our Board of Directors as a Non-Executive Director on 23 December 2015. He has been a member of our Audit Committee from that date and has served on our Compensation Committee since 1 January 2018. He was appointed Chairman of the Audit Committee on 4 June 2020.

          Mr. Crockett holds a number of other Board and governance roles. He has been Chairman of the Invesco Mutual Funds Group Board of Directors and a member of its Audit, Investment and Governance Committees, serving on the board since 1991, as Chair since 2003 and on the Board of predecessor companies from 1978. Since 2013, he has been a member of the Board of Directors and, since 2014, Chair of the Audit Committee of ALPS Property & Casualty Insurance Company. He has been Chairman of, and a private investor in, Crockett Technologies Associates since 1996. He is a life trustee of the University of Rochester.

          Mr. Crockett was a member of the Board of Directors of Globe from April 2014 until the closing of the Business Combination, as well as a member of Globe's Audit Committee. He was formerly President and Chief Executive Officer of COMSAT Corporation from 1992 until 1996 and its President and Chief Operating Officer from 1991 to 1992, holding a number of other operational and financial positions at COMSAT from 1980, including that of Vice President and Chief Financial

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Officer. He was a member of the Board of Directors of Ace Limited from 1995 until 2012 and of Captaris, Inc. from 2001 until its acquisition in 2008 and its Chairman from 2003 to 2008.

          Mr. Crockett holds an A.B. degree from the University of Rochester, B.S. degree from the University of Maryland, an MBA from Columbia University and an Honorary Doctor of Law degree from the University of Maryland.

Stuart E. Eizenstat

          Stuart E. Eizenstat was appointed to our Board of Directors as a Non-Executive Director on 23 December 2015. He has been a member of the Company's Corporate Governance Committee since January 1, 2018 and was appointed to our Nominations Committee on 16 May 2018 and our Audit Committee on 4 June 2020.

          Mr. Eizenstat has been a Senior Counsel at Covington & Burling LLP in Washington, D.C. and Head of its international practice since 2001. He has served as a member of the Advisory Boards of GML Ltd. since 2003 and of the Office of Cherifien de Phosphates since 2010. He was a trustee of BlackRock Funds from 2001 until 2018.

          Mr. Eizenstat was a member of Board of Directors of Globe from 2008 until the closing of the Business Combination and Chair of its Nominating Committee. He was a member of the Board of Directors of Alcatel-Lucent from 2008 to 2016 and of United Parcel Service from 2005 to 2015. He has had an illustrious political and advisory career, including serving as Special Adviser to Secretary of State Kerry on Holocaust-Era Issues from 2009 to 2017 and Special Representative of the President and Secretary of State on Holocaust Issues during the Clinton administration from 1993 to 2001. He was Deputy Secretary of the United States Department of the Treasury from July 1999 to January 2001, Under Secretary of State for Economic, Business and Agricultural Affairs from 1997 to 1999, Under Secretary of Commerce for International Trade from 1996 to 1997, U.S. Ambassador to the European Union from 1993 to 1996 and Chief Domestic Policy Advisor in the White House to President Carter from 1977 to 1981. He is the author of "Imperfect Justice: Looted Assets, Slave Labor, and the Unfinished Business of World War II"; "The Future of the Jews: How Global Forces are Impacting the Jewish People, Israel, and its Relationship with the United States" and "President Carter: The White House Years."

          Mr. Eizenstat holds a B.A. in Political Science, cum laude and Phi Beta Kappa, from the University of North Carolina at Chapel Hill, a J.D. from Harvard Law School and nine honorary doctorate degrees and awards from the United States, French, German, Austrian, Belgian and Israeli governments.

Manuel Garrido y Ruano

          Manuel Garrido y Ruano was appointed to our Board of Directors as a Non-Executive Director on 30 May 2017. He was a member of our Nominating and Corporate Governance Committee from 30 May 2017 until 31 December 2017, when he was appointed to our Corporate Governance Committee.

          Mr. Garrido y Ruano has been Chief Financial Officer of Grupo VM since 2003 and a member of the Board or on the steering committee of a number of its subsidiaries in the energy, financial, construction and real estate sectors. He is Professor of Communication and Leadership of the Graduate Management Program at CUNEF in Spain. Mr. Garrido y Ruano was a member of the steering committee of FerroAtlántica until 2015, having previously served as its Chief Financial Officer from 1996 to 2003. He worked with McKinsey & Company from 1991 to 1996, specializing in restructuring, business development and turnaround and cost efficiency projects globally.

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          Mr. Garrido y Ruano holds a Masters in Civil Engineering with honors from the Universidad Politecnica de Madrid and an MBA from INSEAD.

Juan Villar-Mir de Fuentes

          Juan Villar-Mir de Fuentes was appointed to our Board of Directors as a Non-Executive Director on 23 December 2015.

          Mr. Villar-Mir de Fuentes has been Vice Chairman of Inmobiliaria Espacio, S.A since 1996 and Vice Chairman of Grupo Villar Mir, S.A.U. since 1999. He has been a member of the Board of Directors of Obrascon Huarte Lain, S.A. since 1996, a member of the Audit Committee and, later, its Compensation Committee and its Chairman since 2016. He was a Board director and member of the Compensation Committee of Inmobiliaria Colonial, S.A from June 2014 to May 2017. He also was a member of the Board of Directors and of the Compensation Committee of Abertis Infraestructuras, S.A. between 2013 and 2016.

          Mr. Villar-Mir de Fuentes is Patron and member of the Patronage Council of Fundación Nantik Lum and Fundación Princesa de Gerona.

          Mr. Villar-Mir holds a Bachelor's Degree in Business Administration and Economics and Business Management.

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Directors' responsibilities

          The directors are responsible for preparing the Company's annual reports and financial statements in accordance with applicable law and regulations.

          Company law requires the directors to prepare financial statements for each financial period. Under that law the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards ("IFRSs") as issued by the International Accounting Standards Board ("IASB") and have elected to prepare the parent company financial statements in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period. In preparing these financial statements, International Accounting Standard 1 requires that directors:

          The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements and the directors' remuneration report comply with the Companies Act. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

          The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website.

          Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' responsibility statement

The responsibility statement was approved by the Board and signed on its behalf.

By order of the Board on 5 June 2020

Dr. Marco Levi
Director

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Directors' Remuneration Report

Introduction

Dear Shareholder

          As Chairman of the Compensation Committee (the Committee), and on behalf of the Board, I present the Directors' Remuneration Report for the period ended 31 December 2019.

          This report sets out both the Company's annual report on remuneration (the ARR) for 2019 and the directors' remuneration policy (the 2019 Policy or the Policy), which was put to shareholders at the 2019 AGM and approved by over 91% of the shareholders who voted on it. Thank you for your support. The 2019 Policy is included on pages 33 to 46 for your information and ease of reference.

The Policy

          Under English law, a directors' remuneration policy requires shareholder approval not less than once in every three years. The Committee concluded its review of the policy first approved in 2016 in early 2019 and determined, as the deterioration in market conditions in the second half of 2018 continued into 2019, that the then current remuneration framework achieved an appropriate balance of performance and reward. The few changes as between the version of the 2019 Policy included in last year's U.K. Annual Report and Accounts and that in this report reflect the differences between the Policy's implementation in relation to our new CEO, appointed in January 2020, and to his predecessor, Pedro Larrea Paguaga, who left the Company at the same time.

Management Changes

          We welcomed Marco Levi as our new CEO in January 2020. The Committee reviewed his proposed terms of employment and compensation package prior to his appointment to determine that they met the objectives of and complied with the Policy and, following some changes proposed by the Committee, recommended their approval to the Board. Consequent on the relocation of management to Spain in 2019, Marco is employed in Spain under a contract of employment governed by Spanish law. This has necessitated some changes to the manner in which we have implemented the Policy, as detailed in this report. Marco Levi's base salary is slightly higher than his predecessor but, taking account of base salary and benefits, both his overall fixed compensation and his total remuneration are lower, reflecting, among other things, the lower market capitalization of the Company, its financial performance at the date of appointment and the relocation of the Company's head office to Madrid. A similar approach was taken in relation to the remuneration of the new CFO, Beatriz García-Cos, appointed in October 2019. Starting in 2020, we expect the roll-out of this review and re-alignment of executive compensation to continue in respect of senior managers below Board level.

          The relocation of our operational headquarters to Madrid also implies some changes to our executive remuneration framework in 2020. Some of these have already been implemented, as illustrated in relation to Marco Levi's service contract detailed in this report. We also expect that, as management relocates to be based permanently in Madrid, any expatriate allowances awarded to employees relocating to their home country to work will be phased out during the year ahead.

          The Committee also evaluated the terms of settlement proposed with Pedro Larrea Paguaga as former CEO on his leaving the Company in January 2020. Pedro Larrea Paguaga's service contract and the rules of the Company's EIP and Annual Bonus Plan included express provision on the compensation payable and the treatment of Pedro Larrea Paguaga's awards on leaving. Following evaluation by the Committee and recommendation to the Board, it was agreed with Pedro

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Larrea Paguaga that some reductions to this compensation would be made. Details of the compensation paid or payable to Pedro Larrea Paguaga are set out on page 48.

          There were no increases in Executive Directors' salaries in 2019 and, save for that implicit in the rebalancing of elements of the fixed remuneration payable to Marco Levi as compared with the former CEO, none to date or expected for 2020.

Annual Bonus awards for 2019

          The annual bonus objectives for the Executives in 2019 were adjusted EBITDA in relation to 33.3% of the award and free cash-flow in relation to 66.7%. Bonuses were also subject to an underpin requiring measurable improvement in the Group's health and safety record in 2019, with potential to reduce the overall award by 20%, if not met, and a further condition related to the Company's financial performance or condition, failing which the bonus would be reduced to zero.

          The threshold performance target for adjusted EBITDA and the level of improvements on health and safety were not met. The Company achieved 122% performance in respect of free cash-flow but did not satisfy the health and safety underpin nor the financial performance condition. As a result and notwithstanding the achievement of the free cash-flow target, the Executive Chairman recommended to the Committee that no annual bonus be paid for 2019. The Committee approved this recommendation for sign-off by the Board and this outcome was duly approved. See the ARR for more on the 2019 annual bonus outturn.

LTIPs in 2019

          Awards granted to our Executive Directors in 2017 under the EIP came to the end of their performance period on 31 December 2018, the Committee assessed their performance at 35.74% of target and, on conclusion of our closed period in early December 2019, the awards vested and became exercisable. To date, the awards to our Executives have not been exercised.

          Awards granted under the EIP to Javier López Madrid and to Pedro Larrea Paguaga in March 2019 were made at 115% and 100% respectively of salary, discounted by 50% from their 'normal' target award levels. This exceptional adjustment was made in light of the significant fall in the Company's share price in 2018 and 2019. The vesting of these awards is also subject to a cap set at eight times the value at grant of the number of shares awarded, to mitigate the risk of an unjustified gain arising solely from share price appreciation. The performance conditions remain stretching and were unchanged from 2018, save for necessary adjustments to the make-up of the comparator group. See page 53 of the ARR for more information.

Non-Executives and their remuneration

          2019 was a challenging year for the Company and the Board met more frequently than anticipated in its usual annual calendar. Due to these exceptional requirements, the Board met nineteen times in 2019, rather than the seven times normally scheduled. No additional fees were paid to its Non-Executive Directors for the time and attention in preparing for and attending these meetings.

          The Committee reviewed the structure of NED fees as part of its overall review of the Policy in 2019 and decided not to recommend any adjustment to the level or principles underlying NED fees, which remained unchanged in quantum from 2016. Any increases in amount reflect the fact that a Non-Executive Director has taken on additional responsibilities, as José María Alapont did on assuming the roles of Senior Independent Director and Chair of the Corporate Governance Committee in January 2019 and which Mr. Alapont and Greger Hamilton did when they took on a liaison and communication role as 'Designated Directors' in connection with a specific strategic

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project for a brief time in 2019. The value which they added through their contribution and leadership in relation to this project were invaluable to the Company and the Board. The Committee recommended that, in recognition of their additional duties and the considerable time and effort spent in discharging them, they be paid a fee commensurate with that due to the Senior Independent Director which the Board approved. These fees were paid for the period that they fulfilled these supplementary roles and ceased when the relevant project came to an end and they stood down from those responsibilities.

          In late 2019, the Committee undertook its annual review of its terms of reference and worked with the Corporate Governance Committee and the Board in considering whether responsibility for the oversight of NED fees should more properly sit with the Corporate Governance Committee to make recommendations to the Board. While this might be unusual in the U.K. it is more common in the U.S.A. where the Company is listed. It was decided that this change was appropriate in light of the overall governance regime to which the Company is subject by virtue of its listing on the Nasdaq Global Select Market. Going forward, the Corporate Governance Committee will review and make recommendations to the full Board on the amount and type of compensation to be paid to the Company's Non-Executive Directors. This change was effected in November 2019. To meet the requirements of U.K. corporate law, this report continues to advise on NED remuneration policy and practice in the relevant period and the Corporate Governance Committee has therefore reviewed and signed off on any aspect of NED remuneration disclosed in this report since the date its assumed oversight.

Looking forward to 2020

          2019 will have been my final full year as Chairman of the Committee. I will step down when I retire from the Board at the AGM in June 2020. I was appointed to this position in January 2018 and have thoroughly enjoyed my responsibilities. It has been challenging, particularly in light of the performance of the Company and the markets, and I am deeply grateful to my colleagues, José María Alapont and Bruce Crockett, as well as to the rest of the Board and to management, for their support.

          We anticipated continued market challenges for our industry and business in early 2020 and the level of uncertainty has significantly increased as a result of the COVID-19 pandemic. As a result, we have decided in these exceptional times to delay the determination of the terms of our annual bonus awards and the level of award and performance conditions for our EIP until economic conditions are clarified. We will release details of the implementation of the annual bonus plan and awards under the EIP once determined.

          I would like to thank you, our shareholders, for your support for the Company and throughout my tenure. I hope that you will continue to be supportive of the Company in 2020.

Signed on behalf of the Board.

Donald G. Barger, Jr

Chairman of the Compensation Committee

5 June 2020

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The Policy

          The following sections on pages 33 to 46 set out the directors' remuneration policy that was approved at the 2019 Annual General Meeting. The approved Policy can be found in the Company's U.K. Annual Report and Accounts for the period ended 31 December 2018 and on the Company's website. The Policy is set out below for information only.

          The following changes have been made to this section as compared with the same section in the U.K. Annual Report and Accounts 2018 to reflect application of the Policy in period from 1 Janaury 2019 to date:

          Following the re-allocation of oversight of Non-Executive Directors' remuneration to the Board's Corporate Governance Committee in late 2019 referred to in the Chairman's statement on remuneration, that committee makes recommendations to the Board on matters relating to Non-Executive Director remuneration in accordance with the Policy and the Board makes final determination on such matters.

          Following Marco Levi's appointment as CEO on 10 January 2020 and to the Board on 15 January 2020, references to the application of the Policy to the CEO have been updated throughout to refer to the Policy as applied to Marco Levi. Marco is based at the Company's operational headquarters in Madrid, Spain and his service contract is accordingly governed by Spanish law. The section below on Operation of the Policy has been updated to reflect the CEO's terms of employment and to remove references to the terms of employment of Pedro Larrea Paguaga, as former CEO.

Aim of the Policy

          The overall aim of the Policy is to provide appropriate incentives that reflect the Company's high-performance culture and values to maximise returns for shareholders.

          In summary, our aim as regards Executive Directors is to provide remuneration which:

          There are no material differences in the Policy for Executive Directors compared to that of senior management other than in terms of quantum and levels of participation in incentive plans reflecting the higher weighting to variable pay and ability to influence performance outcomes. For the wider employee population, the Company aims to provide remuneration structures and levels that reflect market norms for the location at which they are based.

Operation of the Policy

          Throughout the Policy, reference is made to the authority, powers and discretions vested in the Committee. It is the Committee's practice that, in relation to any significant decision in relation to

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the compensation of the Company's Executive Directors or the second tier of executive management below them, the Committee makes recommendations to the Board which determines the final decision of the Company on such matters.

          The following table summarizes the Policy as applied to Executive Director remuneration:

Components of remuneration for Executive Directors

Element

  Purpose and link
to strategy
  Operation and maximum
opportunity
  Performance
framework and recovery

Salary

  A fixed salary commensurate with the individual's role, responsibilities and experience, having regard to broader market rates.   Reviewed annually, taking account of Group performance, individual performance, changes in responsibility, levels of increase for the broader employee population and market salary levels.   Not applicable.

Pension and retirement benefits

 

Attraction and retention of top talent; providing mechanism for the accumulation of retirement benefits.

 

Executive Directors may be paid a cash allowance in lieu of pension.

The maximum cash allowance is 20% of base salary. This includes contributions to the U.S. tax-qualified defined contribution 401(k) plan.

 

Not applicable.

Benefits

 

Attraction and retention of top talent.

 

Benefits may include but are not limited to medical cover, life assurance and income protection insurance.

 

Not applicable.

     

Relocation allowances may take into account a housing allowance, school fees, adviser fees for assistance with tax affairs and an expatriate allowance to cover additional expenditure incurred as a result of the relocation. Payment of such relocation allowances will be reviewed by the Committee on an annual basis

   

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Element

  Purpose and link
to strategy
  Operation and maximum
opportunity
  Performance
framework and recovery

     

Benefits may include tax equalization provisions applicable if an Executive moves between jurisdictions with differing tax regimes at the Company's request. If the Executive moves to an area of higher taxation, the Company may agree to make an annual or other regular payment in cash to compensate him or her for any additional tax burden. Where the Executive moves to a jurisdiction where his or her effective tax burden is lower than that to which he or she was subject prior to such move, the Executive's compensation may be commensurately reduced to ensure that his or her net pay remains unaffected.

   

     

Benefits will be provided as the Committee deems necessary including to take into account perquisites or benefits received from a prior employer or as is customary in the country in which an executive resides or is relocated from.

   

     

Benefits provided by the Company are subject to market rates and therefore there is no prescribed monetary maximum. The Company and the Committee keep the cost of the benefits under review.

   

     

The Company provides all Executive Directors with directors' and officers' liability insurance and will provide an indemnity to the fullest extent permitted by the Companies Act.

   

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Element

  Purpose and link
to strategy
  Operation and maximum
opportunity
  Performance
framework and recovery

Annual and other bonuses

 

Short-term performance-based incentive to reward achievement of annual performance objectives.

 

The annual bonus plan and all payments and awards under it are at the discretion of the Committee. Subject as aforesaid, the Committee will determine an Executive Director's actual bonus amount, subject to the achievement of quantitative and qualitative performance criteria.

At least two-thirds of the bonus will be based on financial metrics with any balance based on non-financial metrics.

The maximum annual bonus opportunity that may be awarded to an Executive Director is normally 200% of salary. If the Committee provides higher annual bonus opportunities in any year its rationale will be clearly explained in the Annual Report on Remuneration for the relevant year. In these and other exceptional circumstances the limit will be 500% of salary.

No more than 25% of the maximum annual bonus payable for each performance condition will be payable for threshold performance.

 

The Committee will select the most appropriate performance measures for the annual bonus for each performance period and will set appropriately demanding targets.

Normally any bonus earned in excess of the target amount will be deferred for three years into shares in the Company. An Executive Director may be granted an additional long-term incentive award as described below of equal value (at maximum) to the amount of annual bonus deferred.

Recovery and recoupment will apply to all bonus awards for misstatement, error or gross misconduct.

     

In addition or in place of an annual bonus, the Company may pay a retention bonus where it considers it necessary to retain key Executives in situations where the relevant Executive would otherwise leave the Company and his or her retention is critical to the Company's performance and/or the achievement of strategic goals or key projects. The grant, terms and payment of any retention bonus are at the discretion of the Committee.

   

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Element

  Purpose and link
to strategy
  Operation and maximum
opportunity
  Performance
framework and recovery

     

A retention bonus may be payable in cash or in shares and subject to such conditions as the Committee sees fit, including the Executive remaining with the Company for a defined period of time and/or meeting set performance criteria. The Committee would normally count any retention bonus awarded towards the 500% of salary limit.

   

Long-term incentive awards

 

Focus Executive Directors' efforts on sustainable strong long-term performance of the Company as a whole, and to aid in retention with multi-year vesting provision. Improves alignment of Executive Directors' interests with those of the Company and shareholders.

 

Executive Directors are eligible for awards to be granted as decided by the Committee under the Company's long-term incentive plan. All awards are subject to performance targets as determined by the Committee for each grant, performance against which is normally measured over a three-year period. Awards usually vest three years from the date of their grant.

 

The Committee will select the most appropriate performance measures for long-term incentive awards for each performance period and will set appropriately demanding targets.

Recovery and recoupment will apply to all long-term incentive awards for misstatement, error or gross misconduct.

     

The annual target award limit will not normally be higher than 300% of salary (based on the face value of shares at date of grant).

   

     

Maximum vesting is normally 200% of target (based on the face value of shares at date of grant).

   

     

There is an exceptional annual target award limit in recruitment, appointment and retention situations of 500% of salary.

   

Share ownership guidelines

 

Increases alignment between the Executive Directors and shareholders.

 

Executive Directors are strongly encouraged to hold a percentage of their salary in shares. This holding guideline could be achieved through the retention of shares on vesting/exercise of share awards and may also (but is not required to) be through the direct purchase of shares by the Executive Directors.

 

Not applicable.

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Performance Criteria and Discretions

Selection of Criteria

          The Committee annually assesses at the beginning of the relevant performance period which corporate performance measures, or combination and weighting of performance measures, are most appropriate for both annual bonus and long-term incentive awards to reflect the Company's strategic initiatives for the performance period. The Committee has the discretion to change the performance measures for awards granted in future years based upon the strategic plans of the Company. The Committee sets demanding targets for variable pay in the context of the Company's trading environment and strategic objectives and taking into account the Company's internal financial planning and market forecasts. Any non-financial goals will be well defined and measurable.

Discretions retained by the Committee in operating its incentive plans

          The Committee operates the Group's various plans according to their respective rules. In administering these plans, the Committee may apply certain operational discretions. These include the following:

          The Committee, acting fairly and reasonably, and after consulting plan participants, may adjust the targets and/or set different measures and alter weightings for the variable pay awards already granted (in a way that the alterations are intended to create an equivalent outcome for plan participants) only if (i) an unexpected event (whether a corporate or outside event) occurs which causes the Committee to reasonably consider that the performance conditions would not achieve their original purpose without alteration and (ii) the varied conditions are materially no more or less difficult to satisfy than the original conditions. Any changes and the rationale for those changes will be set out clearly in the Annual Report on Remuneration in respect of the year in which they are made.

Remuneration scenarios for the Executive Directors

          The charts below show the level of remuneration potentially payable to each of Javier López Madrid as Executive Chairman and Marco Levi as CEO under different performance scenarios for the 2020 financial year.

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          In respect of the remuneration of the Executive Chairman:

GRAPHIC

          In respect of the remuneration of the CEO:

GRAPHIC

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Assumptions

1.
Fixed pay comprises base salary for 2020, benefits and a pension contribution of 20% of base salary for each of Javier López Madrid and Marco Levi. Benefits comprise private health, income protection and life insurance arrangements at an estimated level of 5.02% of base salary for Javier Lopez Madrid and 4.06% of base salary for Marco Levi salary (excluding the one-off contribution towards relocation costs incurred in 2019) and an expatriate allowance of 20% of base salary in the case of Javier López Madrid.

2.
On-target performance comprises fixed pay plus annual bonus of 100% of base salary and long-term incentives of 115% of base salary for the Executive Chairman and fixed pay plus annual bonus of 75% of base salary and long-term incentives of 100% of base salary for the CEO. Annual bonus awards and long-term incentive award levels have not yet been determined for 2020 and so are illustrated at the levels awarded in 2019.

3.
Maximum performance comprises fixed pay plus annual bonus of 200% of base salary for the Executive Chairman and 100% of base salary for the CEO and long-term incentives of 200% of target for each. Annual bonus awards and long-term inventive award levels have not yet been determined for 2020 and are illustrated at the levels awarded in 2019.

4.
Maximum performance plus share price growth comprises the maximum performance scenario described above plus an assumed 50% share price growth over the performance period of the LTIP.

5.
As described in the Policy, an additional long-term incentive award may be granted if part of the annual bonus is deferred, with the maximum value of such award equal to the amount of bonus deferred. As at 31 December 2019 no such awards have been made to the Executive Directors and none is to be made in respect of 2019.

6.
The exchange rate used in these charts and throughout this report, save where stated otherwise, is the Group's average GBP: USD exchange rate for the year to 31 December 2019 of GBP1=USD1.2768.

Approach to Recruitment Remuneration

          The Committee expects any new Executive Directors to be engaged on terms that are consistent with the Policy as set out above.

          The Committee recognises that it cannot always predict accurately the circumstances in which any new directors may be recruited. The Committee may determine that it is in the interests of the Company and shareholders to secure the services of a particular individual which may require the Committee to take account of the terms of that individual's existing employment and/or their personal circumstances. Examples of circumstances in which the Committee expects it might need to do this are:

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          In making any decision on any aspect of the remuneration package for a new recruit, the Committee would balance shareholder expectations, current best practice and the requirements of any new recruit and would strive not to pay more than is necessary to achieve the recruitment. The Committee would give full details of the terms of the package of any new recruit in the next remuneration report. Award levels under the Company's variable incentive plans would not exceed those set out in the policy table, but their proportions can be altered for the first three years of employment.

Executive Directors' Service Contracts and Policy on Cessation

          In order to motivate and retain the Executive Directors and other senior executives, most of whose backgrounds are in the United States and Europe, the Committee has taken account of market practices in those countries in formulating the Policy, including (a) determining the treatment of annual and retention bonuses and long-term incentive awards in case of termination of their employment by the Company without cause, (b) referencing past annual bonuses in calculating the amount of payment in lieu of notice, (c) determining the extent of vesting of long-term incentive awards in the event of a takeover or change of control and (d) determining that all long-term incentive awards granted to an executive in any financial year will be subject to achievement of performance targets.

Service contracts

          Subject to the Approach to Recruitment Remuneration above, all Executive Directors have rolling service contracts for an indefinite term but a fixed period of notice of termination which would normally be 12 months. With respect to newly appointed directors, the Committee may, if it considers it necessary, agree a notice period in excess of 12 months (but not exceeding 24 months), provided it reduces to 12 months within a specified transition period of not exceeding 36 months. The service contract for Javier López Madrid is in accordance with this policy and his fixed period of notice of termination is 12 months. See below for more on Marco Levi's service contract.

          The Executive Chairman's service contract may be terminated without notice and without further payment or compensation, except for sums accrued to the date of termination, for cause. In other circumstances, the Company may terminate his employment with immediate effect and make a payment in lieu of notice in the amount equivalent to the aggregate of (i) base salary, (ii) the average of annual bonuses in the last three years prior to termination, (iii) pension allowance plus (iv) cost of benefits, for the notice period (or if a notice has been served, for the unserved notice period). He would be entitled to an equivalent payment in the event of his resignation for good reason (as defined in the service contract). Similar provisions may apply in the event that he leaves following a change of control of the Company, but no additional entitlements would be expected to be set out in the Executive Director's service contract beyond those described above. An Executive Director may also be entitled to certain amounts with respect to annual or retention bonuses and long-term incentive awards, as described below.

          Marco Levi is employed under a service contract made under Spanish law (and in particular, the provisions of the Royal Decree 1382/1985 1st of August regarding senior management ("Alta

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Dirección")). Spanish employment law imposes a number of mandatory requirements, including in relation to termination. The CEO's service contract may be terminated without notice and without further payment or compensation, except for sums accrued to the date of termination, for cause (as defined in the service contract by reference to Spanish statutory law). If the dismissal is declared null or unfair by a definitive court or labour tribunal ruling, the CEO is entitled to receive a severance payment equal to six (6) months' salary plus a payment equal to the Company's costs in such six month period corresponding to the insurance and pension benefits in force at the time of termination. This severance compensation includes and absorbs the compensation and any statutory notice to which the Executive may otherwise be entitled by operation of law. In the event that the CEO is dismissed without cause, the CEO will similarly be entitled to receive a severance payment equal to 6 months' salary plus an amount equal to the costs the Company would have incurred in providing pension, health insurance, income protection and life assurance benefits for the period of notice, in lieu of any statutory notice to which the CEO would otherwise be entitled. In addition, in accordance with Spanish law and as contemplated in the section Generally below, the CEO has enhanced post termination restrictive covenants. Under these provisions, the Company may be required to make an additional payment to ensure the enforceability of certain post-employment restrictions on competition for a period of six months from termination on terms which are customary in senior management employment relationships. The amount payable is 30% of the CEO's salary at the date of termination and is deemed discharged at the rate of 15% of salary per annum throughout the employment relationship, such that on termination no further sums will be payable if an amount equal to 30% of salary has already been paid. The total amount payable on termination of the CEO's service contract other than for cause is therefore less than 12 months' salary and benefits.

          Where an Executive Director's service contract is terminated for "cause" or "good reason" as defined in the relevant director's service contract, the provisions outlined below in relation to annual bonus awards and long-term incentive awards as described below will apply. Executive Directors' service contracts (or a memorandum of the terms where the contract is unwritten) are available for inspection at the Group's office at 2nd Floor West, Lansdowne House, 57 Berkeley Square, London, W1J 6ER during normal business hours and at the Annual General Meeting.

Generally

          As circumstances may require, the Committee may approve compensation payments in consideration of statutory entitlements, for a release of claims, enhanced post-termination restrictive covenants (for example, as outlined above) or transitional assistance, such as outplacement services and payment of legal fees in connection with termination, the costs of short term accommodation or leasing arrangements, home relocation expenses including tax related expenses and other ancillary payments thereto.

Annual bonus awards (including retention awards)

          In the event that an Executive Director's employment is terminated without cause, by resignation by the Executive Director for good reason, or by reason of death, injury, disability or his employing company or the business for which he works being sold out of the Group, the Company will pay an annual bonus amount in respect of the financial year in which termination occurs subject to performance conditions being met at the end of the period and with pro-rating of the award determined on the basis of the period of time served in employment during the normal vesting period but with the Committee retaining the discretion in exceptional circumstances to increase the level of vesting within the maximum annual bonus amount as determined by the performance conditions. The Committee may, if it considers it appropriate in exceptional circumstances, measure performance to the date of cessation. In other circumstances, payment will

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be at the Committee's discretion. The Committee will consider the period of the year worked and the performance of the Executive Director during that period when considering how to exercise its discretion.

          The terms of any retention bonus agreed to be paid to an Executive Director may provide for such bonus to be payable on that Executive Director's employment being terminated without cause, by resignation by the Executive Director for good reason, or by reason of death, injury, disability or his employing company or the business for which he works being sold out of the Group. In any such case, the retention bonus will become payable in such circumstances.

Long-term incentive awards

          As a general rule, any unvested long-term incentive award (except deferred bonus awards see below) will lapse upon an Executive Director ceasing to be an employee or director in the case of voluntary resignation or dismissal for cause. However, if the cessation is without cause, by resignation by the Executive Director for good reason, or because of his death, injury, disability or his employing company or the business for which he works being sold out of the Group or in other circumstances at the discretion of the Committee, then the award will normally vest in full on the date when it would have ordinarily vested subject to the performance conditions being met. Where an award vests at the discretion of the Committee that award may be pro-rated taking into account the period of time served in employment during the normal vesting period of the award. The Committee can for any cessation measure performance up to the date of cessation and permit awards to vest early.

          Deferred bonus awards vest in full upon cessation, other than in case of voluntary resignation by an Executive Director without good reason or dismissal for cause. Vested but unexercised awards held on cessation will remain capable of exercise for a limited period save in the case of dismissal for cause.

          In the event of a takeover all awards will vest early to the extent that the performance conditions are determined as satisfied at that time on such basis as the Committee considers appropriate.

External appointments

          Executive Directors may retain fees paid for external director appointments. These appointments are subject to disclosure to and approval by the Board and must be compatible with their duties as Executive Directors.

Matters taken into consideration in determining policy and differences in the remuneration policy of the Executive Directors and employees

          It is not the Committee's practice to consult with employees on matters relating to executive pay. However, the Committee will consider pay structures, practices and principles across the Group on a regular basis and take these into account in any review of the Executive Directors' current Policy or implementation thereof.

          The Committee will consider feedback from shareholders and take into account the results of both advisory and binding votes concerning executive pay at the Annual General Meeting as well as ensuring it engages with shareholders on executive pay matters. The 2019 Policy has been formulated taking into account the Company's understanding of current shareholder views on the Company's remuneration policy and practices.

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Directors' Remuneration Policy for Non-Executive Directors

          The following table summarizes the 2019 Policy as proposed to be applied to Non-Executive Director remuneration, subject to its approval:

Element

  Purpose and link
to strategy
  Operation and
maximum opportunity
  Performance framework
and recovery

Non-Executive Directors fees including Non-Executive Chairman

  To appropriately remunerate the Non-Executive Directors   The Non-Executive Directors are paid a basic fee. Supplemental fees may be paid for additional responsibilities and activities, such as for the committee chairmen and other members of the main Board committees (e.g. audit, compensation, nominations and corporate governance) and the Senior Independent Director, to reflect the additional responsibilities as well as travel fees to reflect additional time incurred in travelling to meetings.   Not applicable

     

These fee levels are reviewed periodically, with reference to time commitment, knowledge, experience and responsibilities of the role as well as market levels in comparable companies both in terms of size and sector.

   

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Element

  Purpose and link
to strategy
  Operation and
maximum opportunity
  Performance framework
and recovery

     

The Company does not currently have a Non-Executive Chairman. If one were appointed his fee would be set at a level with reference to time commitment, knowledge, experience and responsibilities of the role as well as market levels in comparable companies both in terms of size and sector.

   

     

There is no maximum fee level or prescribed annual increase.

   

Payment of expenses and benefits

 

To support the Non-Executive Directors in the fulfilment of their duties

 

Reasonable expenses incurred by the Non-Executive Directors in carrying out their duties may be reimbursed by the Company including any personal tax payable by the Non-Executive Directive as a result of reimbursement of those expenses. The Company may also pay an allowance in lieu of expenses and may arrange and pay for the provision of advice or assistance in relation to personal taxes for which the Non-Executive Director may be liable in connection with his or her appointment to the Board, if it deems this appropriate.

 

Not applicable

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Element

  Purpose and link
to strategy
  Operation and
maximum opportunity
  Performance framework
and recovery

     

The Company provides Non-Executive Directors with directors' and officers' liability insurance and an indemnity to the fullest extent permitted by the Companies Act.

   

Legacy Arrangements with Certain Non-Executive Directors

          Prior to the Business Combination, in keeping with many other NASDAQ listed companies, Globe granted restricted stock units and share appreciation rights to its Non-Executive directors. Outstanding awards as at 31 December 2019 held by the Non-Executive Directors, who were previously Globe's Non-Executive directors, are set out in the ARR.

          It is noted that those Non-Executive Directors with restricted stock units and share appreciation rights may be regarded as not being independent by U.K. based proxy voting agencies although the Board considers them to be fully independent. It is a provision of this Policy that the Company may accelerate the vesting of or repurchase of these awards based on an independent valuation, if it deems it to be appropriate.

Letters of Appointment with Non-Executive Directors

          The Company does not enter into service contracts with its Non-Executive Directors, rather the Company enters into letters of appointment for a rolling period of 12 months with each annual renewal being subject to re-election at each annual general meeting of the Company. No compensation for loss of office is payable in the event a Non-Executive Director is not re-elected. The Company may request that Non-Executive Directors resign with immediate effect in certain circumstances (including material breach of their obligations) in which case their appointment would terminate without compensation to the Non-Executive Director for such termination but with accrued fees and expenses payable up to the date of termination.

Appointment of Non-Executive Directors

          For the appointment of a Non-Executive Chairman or other Non-Executive Directors, the fee arrangement would be in accordance with the approved Directors' Remuneration Policy in place at that time.

Minor amendments

          The Committee may make minor changes to the Policy, which do not have a material advantage or disadvantage overall to directors, to aid in its operation or implementation (including to take account of any change in legislative or regulatory requirements applicable to the Company) without seeking shareholder approval for a revised version of the Policy.

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Annual Report on Remuneration

Implementation of the Directors' Remuneration Policy for the year ending 31 December 2020

          This section sets out how the Committee intends to implement the Policy for the year ending 31 December 2020.

Base salary

          Javier López Madrid was appointed as Executive Chairman with effect from 31 December 2016. Javier López Madrid's salary was reviewed on his appointment and remains unchanged at £555,000 ($708,624) per annum.

          Marco Levi was appointed as Chief Executive Officer on 10 January 2020 and to the Board of Directors on 15 January 2020. Marco Levi's base salary as CEO is €600,000 ($671,760) per annum.

          Neither Javier López Madrid nor Marco Levi receive any additional fees or compensation for their respective roles on the Board.

Pension and benefits

          In accordance with the Policy, both Executive Directors receive a pension contribution at the rate of 20% of base salary, payable as a cash allowance, and health insurance, income protection and life assurance benefits to the value of approximately 5.02% of salary for the Executive Chairman and 4.06% for the CEO. The Executive Chairman also receives an expatriate benefits allowance equal to 20% of base salary. The exceptional additional expatriate allowance of a further 20% of salary awarded to the Executive Chairman for a period of up to three years to 31 December 2019 ceased to be paid from 1 January 2019. Expatriate allowances are reviewed by the Committee on an annual basis. In the first year of his employment only, the CEO will receive a further allowance of up to €30,000 ($33,588) in respect of temporary housing and relocation costs.

          The Company provides directors' and officers' liability insurance and an indemnity to the fullest extent permitted by the Companies Act.

Variable Remuneration

          In light of the current level of uncertainty resulting from the COVID-19 pandemic referred to in the Chairman's letter on page 7 and, in the case of the Company's long term incentive awards, the effect which the pandemic has had on share prices, the Committee has decided to delay the implementation of its variable compensation plans for 2020 until such time as it is feasible to set relevant and stretching targets, appropriately aligned to the Company's strategic priorities and key financial performance indicators for 2020. As at the date of this report, the objectives for the Annual Bonus plan for 2020 and the performance conditions for any grant under the Company's Equity Incentive Plan in 2020 remain to be determined.

Annual bonuses

          In light of the uncertainties resulting from the COVID-19 pandemic, the bonus opportunity and performance measures for the annual bonus in 2020 will be determined later in the year, when we expect to have more clarity

Long-term incentives

          In light of the uncertainties resulting from the COVID-19 pandemic and its impact on share prices in recent months, the level of long-term incentive award as a percentage of base salary and

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the performance conditions to be applied to awards in 2020 will be determined later in the year when we expect to have more clarity.

Payments on Termination of Executive Director's Employment

          Pedro Larrea Paguaga left the Company on 10 January 2020 and resigned from the Company's Board on the same day. In accordance with the Policy and his service agreement with the Company dated 28 June 2017, Pedro Larrea Paguaga has received or will receive during 2020 a payment in lieu of notice (PILON) totaling £843,375 (before deductions for tax and social security contributions) payable:

          The PILON comprises:

          As a term of the settlement reached with Mr. Larrea Paguaga and as is customary in the U.K. to protect the interests of the Company, the Company contributed £25,000 excluding VAT in respect of the costs of Mr. Larrea Paguaga's solicitor on advising on his termination of employment and has agreed to assist with the reasonable costs of the provision of UK and Spanish tax advice to Mr. Larrea Paguaga for tax years falling in financial years ending 31 December 2018 and 2019, subject to that advice being provided by the Company's usual tax adviser. It was agreed that no annual bonus for 2019 and no retention bonus would be payable to Mr. Larrea Paguaga, notwithstanding any prior commitment of the Company to do so.

          In accordance with the rules of the Equity Incentive Plan, Mr Larrea Paguaga will be treated as a good leaver in respect of his outstanding share awards. These are detailed on page 56.

Non-Executive Director share ownership guidelines

          In 2018, the Non-Executive Directors reviewed the guidelines under which they had voluntarily agreed to apply on a cumulative basis at least a quarter of their normal annual gross fees to acquire shares under arrangements designed to ensure that shares can be purchased on a regular basis over a period of eight years and agreed several points of clarification, including that:

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          In light of the fall in the share price in 2018 and 2019 and the impact on the Company's share price of the uncertainties arising from the COVID-19 pandemic in early 2020, a further review of the Non-Executive Director share ownership guidelines may be undertaken in 2020.

          The holdings for Executive and Non-Executive Directors as at 31 December 2019 are set out below.

Fees for the Non-Executive Directors

          The fee structure and levels were set following the Business Combination. Fees are set and payable in Pounds sterling and are reviewed — but not necessarily increased — annually, with changes normally effective from 1 January in each year. The fees for 2020 are the same as those for 2019 and have not changed since 2016:

Non-Executive Director base fee

  £70,000 ($89,376)

Senior Independent Director

  £35,000 ($44,688)

Member of Audit Committee

  £17,500 ($22,344)

Member of Compensation Committee

  £15,500 ($19,790)

Member of Corporate Governance Committee

  £12,000 ($15,322)

Member of Nominations Committee

  £1,500 ($1,915 per meeting, subject to an annual cap of £10,000 ($12,768))(1)

Committee Chairman

  Two times membership fee

Travel fee (per meeting)

   

Intercontinental travel

  £3,500 ($4,469)

Continental travel

  £1,500 ($1,915)

Notes:

(1)
No fees are payable to the Chair of the Nominations Committee while the individual in that role is also an Executive Director

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Remuneration paid in respect of the year to 31 December 2019

Single Figure of Remuneration for the period — Audited

          The table below shows the aggregate emoluments earned by the Executive Directors of the Company who served at any point in 2019 for the years ended 31 December 2019 and 31 December 2018. The emoluments shown for 2019 have been converted to USD at the Group's average rate for year to 31 December 2019 of GBP1:USD1.2768. Those for 2018 were converted at the rate of GBP1:USD1.3356 in accordance with the 2018 U.K. Annual Report. Numbers given in Euros in any part of the Directors Remuneration Report are converted to USD at the Group's rate of €1:USD1.1196 and to GBP at the Group's rate of €1:GBP0.8773.

          Marco Levi was appointed as CEO in January 2020. He did not serve during — and therefore received no remuneration in respect of — the year ended 31 December 2019.

    Salary(1)
(USD 000s)
    Benefits(2)
(USD 000s)
    Pension(3)
(USD 000s)
    Annual Bonus(4)
(USD 000s)
    Long-term
incentives(5)
(USD 000s)
    Total
(USD 000s)
 

Executive Director

    2019     2018     2019     2018     2019     2018     2019     2018     2019     2018     2019     2018
 

Javier López Madrid

    709     741     175     329     142     148             52     23     1078     1241  

Pedro Larrea Paguaga

    606     634     200     298     121     127             39     17     966     1067  

(1)
No change in salary has been made year on year, any difference resulting in changes in the GBP: USD exchange rate.

(2)
For Javier López Madrid, benefits include an expatriate allowance of 20% of salary (£111,000 ($141,725) in 2019), and medical insurance and life assurance coverage.

For Pedro Larrea Paguaga, benefits include an expatriate allowance of 20% of salary (£95,000 ($121,296) in 2019), medical insurance and life assurance coverage and relocation costs on his returning to work from our new headquarters in Madrid.

In 2018, the Executive Directors received the same benefits as in 2019, together with an additional expatriate allowance of 20% of salary which ceased to be payable on 31 December 2019.

(3)
For 2019 the pension for Javier López Madrid and Pedro Larrea Paguaga is 20% of base salary payable as a cash supplement.

(4)
No annual bonus was awarded in respect of 2019 and no amounts were deferred into shares.

(5)
The performance period of the 2017 long-term incentive awards ended on 31 December 2019. As outlined below, the 2017 awards are expected to vest as to 38.80% in June 2020. The value shown in the table is an estimate using the average share price over the last three months of the financial year 2019 and includes the value of dividend equivalents. The performance period of the 2016 long-term incentive awards ended on 31 December 2018 and the awards vested as to 35.74% in December 2019. The value shown in the table reflects the share price as at the date of vesting and includes the value of dividend equivalents. It differs from the figures given in the 2018 U.K. Annual Report where an estimate using the average share price over the last three months of the financial year 2018 was used and dividend equivalents not included.

          The table below shows the aggregate emoluments earned by the Non-Executive Directors of the Company who served at any time during 2019 for the years ended 31 December 2019 and 31 December 2018. The emoluments shown for 2019 have been converted to USD at the Group's

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average yearly rate of GBP1: USD1.2768. Those for 2018 were converted at the rate of GBP1: USD1.3356 in accordance with the 2018 U.K. Annual Report.

    Fees
($'000)
    Benefits
($'000)(1)
    Total
($'000)
 

Non-Executive Directors

    2019     2018     2019     2018     2019     2018
 

José María Alapont(2)

    215.4     128.8     9.6     8.0     224.9     136.8  

Donald G Barger Jr

    130.8     140.9     26.8     18.7     157.7     159.6  

Bruce L Crockett

    131.5     137.5     31.3     28     162.8     165.6  

Stuart E Eizenstat

    106.6     109.5     17.9     16     124.5     125.5  

Manuel Garrido y Ruano

    104.7     109.5     13.4     12     118.1     121.5  

Greger Hamilton(3)

    161.1     156.3     1.9     0     162.9     156.3  

Javier Monzón(4)

    36.2     178.3     3.8     14     39.9     192.3  

Pierre Vareille(5)

    48.9     137.6     5.7     12     54.6     149.6  

Juan Villar Mir de Fuentes

    89.4     93.5     7.6     8     97.0     101.5  

(1)
Benefits comprise travel allowances.

(2)
José María Alapont was appointed to the Board on 24 January 2018 and his fees and benefits for 2018 reflects the period from his appointment to 31 December 2018. He was appointed as Senior Independent Director and Chairman of the Corporate Governance Committee in January 2019. He undertook additional duties in 2019 as a designated director of the Board for which he was paid additional fees totaling £9,139 ($11,669) (2018: none).

(3)
Greger Hamilton undertook additional duties in 2019 as a designated director of the Board for which he was paid additional fees totaling £9,139 ($11,669) (2018: none).

(4)
Javier Monzon resigned from the Board on 13 May 2019 and his fees and benefits for 2019 reflect the period to the date of his resignation.

(5)
Pierre Vareille resigned from the Board on 14 May 2019 and his fees and benefits for 2019 reflect the period to the date of his resignation.

Annual bonus for the financial year to 31 December 2019 for the Executive Directors — audited

          The target annual bonus opportunity for each of the Executive Directors was 100% of salary, with a maximum opportunity of two times target, and the performance measures for 2019 for each are detailed in the tables below. In addition to these measures, the annual bonus in 2019 was subject to two underpins. One was based on a 20% improvement in the Group's lost time injury frequency rate compared with 2018 and there being no fatal accidents resulting from the Company's acts or omissions during the year under review; if this underpin was not met, the annual bonus otherwise payable would be reduced by 20%. The second was based on the Company meeting certain criteria relating to its financing arrangements; if these were not met, the annual bonus otherwise payable would be reduced by 100%.

          Performance in respect of the performance metrics for 2019 is detailed in the table below. Although the target for free cash-flow was achieved, the Company was dissatisfied with its performance on health and safety notwithstanding improvements made and on the criteria in relation to Company's financing arrangements. The Executive Chairman therefore proposed to the Committee that no annual bonus be payable to him in respect of 2019 and the Committee agreed to this proposal as the appropriate outcome. No annual bonus was payable to the former CEO following his departure in January 2020.

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          Performance targets and performance for the Executive Directors in 2019 were:

Measure

    Weighting
(target %
of award)
  Threshold
performance
(0% of target
paid)
  Target
performance
(100% of
target paid)
  Stretch
performance
(200% of target
paid)
  Actual
Performance
    Bonus
outcome
(as a
percentage
of target)
    Weighted
bonus
outcome(1)
 

Adjusted EBITDA

    33.3 % $60 million   $100 million   $180 million   $(42) million     0 %   0 %

Free cash-flow(2)

    66.7 % $0 million   $75 million   $150 million   $91.68 million     122 %   81.34 %

(1)
Prior to application of the underpins.

(2)
Including the proceeds of divestitures.

Long term incentive awards for the financial year ended 31 December 2019 — Audited

Awards vesting/ performance period ending in financial year 2019

          The performance period of the 2017 LTIP awards ended on 31 December 2019. 60% of each award was determined by Ferroglobe's Total Shareholder Return (TSR) performance. 50% of the TSR part of the award was calculated relative to a bespoke group of peers, and the other 50% relative to the S&P Global 1200 Metals and Mining Index in line with last year's award. Vesting of the remaining 40% of each award related to the Company's return on invested capital (ROIC) over the performance period as compared with the bespoke comparator group of the Company's peers and the Company's net operating profit after tax (NOPAT) growth as compared to the same bespoke comparator group of the Company's peers. Vesting of these awards was calculated as follows:

    Weighting   Threshold (0%)   Target (100%)   Maximum (200%)   Actual     Vesting %
 

Total shareholder return relative to a bespoke group(1)

    30 % Less than median (50th percentile)   50th percentile   90th percentile   Below lowest ranked     0 %

TSR relative to the S&P 1200 Metals and Mining Index(2)

    30 % Less than Index TSR   Equal to Index TSR   Equal to Index TSR + 25 percentage points   –92.8%     0 %

Relative return on invested capital ("ROIC")(3)

    20 % Below percentile 25 (1.46%)   Median (2.48%)   Percentile 75 and above (4.30%)   0.69%     0 %

Relative net operating profit after tax ("NOPAT") growth(3)

    20 % Below percentile 25 (–88.1%)   Median (–70.2%)   Percentile 75 and above (72.9%)   65.2%     193.99 %

Weighted average (max 200%)

                          38.80 %

(1)
Between the 50th and 75th percentile, proportionate vesting of between target (100%) and 150% of target. Between 75th percentile and 90th percentile, proportionate vesting of between 150% and 200% of target

(2)
Equal to Index TSR + 15 percentage points, vesting of 150% of target. Straight line vesting between Index TSR and Index TSR +15 percentage points and between Index TSR+15 percentage points and Index TSR +25 percentage points

(3)
Percentile 25, vesting of 50% of target

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          As a result, the following awards are expected to vest in the normal course in 2020:

  Type of
award
    Grant date     Vesting date     Number of
shares
awarded
    Percentage of
target award
vesting
(0% - 200%)
    Number of
shares to
vest(1)
    Estimated
value to
of award
to vest
(USD)(2)
 

Javier López Madrid

  LTIP Nil-cost option     1 June 2017     1 June 2020     154,703     38.80 %   60,025     51,792  

Pedro Larrea Paguaga(3)

  LTIP Nil-cost option     1 June 2017     1 June 2020     115,134     38.80 %   44,672     38,545  

(1)
The number of shares shown excludes dividend equivalents to be awarded in the form of shares.

(2)
The value shown in the table is an estimate using the average share price over the last three months of the financial year and includes dividend equivalents.

(3)
Pedro Larrea Paguaga is a 'good leaver' under the rules of the Equity Incentive Plan.

Deferred share bonus awards granted in financial year 2019

          Under the terms of the Company's annual bonus plan, where the annual bonus payable in any year exceeds 100% of the relevant Executive's salary, the bonus is divided into 100% of salary paid in cash and the balance deferred into shares for a period of three years. As no annual bonuses were awarded or paid in respect of the financial year ended 31 December 2019, no amounts were deferrable into shares and no deferred share bonus plan awards were granted in 2019.

Long-term incentive awards granted in financial year 2019

          On 14 March 2019, Javier López Madrid and Pedro Larrea Paguaga were granted long-term incentive awards as set out in the table below. These awards were discounted by 50% compared with the target level of awards made in prior years to take account of the fall in the share price in 2018 and 2019 and are subject to a cap on vesting at eight times the value of the target number of shares at the share price at grant.

  Type of
award(1)
  Basis of award
(at target)(2)
    Share price
at date of
grant(3)
    Number of
shares at
target
    Face value
of shares
at target(4)
    Face value
of shares at
maximum(5)
    Vesting at
threshold
  Performance
period(6)

Javier López Madrid

  Nil-cost option   115% of salary of $728,715   $ 2.448     342,329   $ 838,031   $ 1,676,043     40 % 3 years to 31 December 2021

Pedro Larrea Paguaga

  Nil-cost option   100% of salary of $623,675   $ 2.448     254,769   $ 623,675   $ 1,247,349     40 % 3 years to 31 December 2021

(1)
No price is normally payable on the exercise of the nil-cost option although the Company reserves the right to require the payment of the nominal cost of the shares as a condition of exercise if required to enable the issue or transfer of the shares.

(2)
Converted at GBP1:USD1.313, being the exchange rate on the date of grant.

(3)
This figure represents the average closing share price for the five days prior to the date of grant.

(4)
The value shown in this column has been calculated by multiplying the number of shares that would vest at target by the average closing share price for the five days prior to the date of grant.

(5)
The value shown in this column has been calculated by multiplying the number of shares that would vest at maximum (being 200% of target) by the average closing share price for the five days prior to the date of grant.

(6)
See below for details of the performance conditions applicable to the awards.

          Vesting of 60% of the award will be determined by Ferroglobe's TSR. Performance will be measured over three years commencing 1 January 2019 with vesting as set out below. 50% of the

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TSR part of the award will be determined by Ferroglobe's TSR relative to the following bespoke group of peer companies:

Commercial Metals Company

  Boliden

Allegheny Technologies, Inc

  Morgan Advanced Material

Materion Corporation

  Minerals Technologies

Steel Dynamics Inc

  Kaiser Aluminium

Antofagasta plc

  Vallourec

Schnitzer Steel Industries

  Worthington Industries

Eramet

  Salzgitter AG

  Norsk Hydro

  AMG Advanced Metallurgical Group

 

TSR Performance
 
Vesting scale

Less than median (50th percentile)

  No vesting of awards

Between the 50th and 75th percentile

  Proportionate vesting of between target (100%) and 150% of target

Between 75th percentile and 90th percentile

  Proportionate vesting of between 150% and 200% of target

90th percentile

  200% of target

          The other 50% of the TSR part of the award will be determined by Ferroglobe's TSR relative to the S&P Global 1200 Metals and Mining Index.

TSR Performance
 
Vesting scale

Less than Index TSR

  No vesting of awards

Equal to Index TSR

  Target (100%)

Equal to Index TSR + 15 percentage points

  150% of target

Equal to Index TSR + 25 percentage points

  200% of target

          With straight line vesting between Index TSR and Index TSR +15 percentage points and between Index TSR+15 percentage points and Index TSR +25 percentage points.

          The Committee determined that the measures applicable to the long-term incentive awards granted in 2018 remained appropriate, comparing (i) the Company's return on invested capital (ROIC) over the three-year period with that of a bespoke comparator group of the Company's peers using a quarterly average for the calculation of Invested Capital and (ii) the Company's net operating profit after tax (NOPAT) growth with that of the same bespoke comparator group of the Company's peers set out above. Performance will be measured over three years with vesting as set out below.

ROIC over the performance period
   
Vesting scale
 

Below percentile 25

    0 %

Percentile 25

    50 %

Median

    100 %

Percentile 75 and above

    200 %

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NOPAT growth over the Performance Period
   
Vesting scale
 

Below percentile 25

    0 %

Percentile 25

    50 %

Median

    100 %

Percentile 75 and above

    200 %

          No portion of the ROIC component shall vest unless the Company's ROIC over the performance period is at least equal to the percentile 25 average ROIC for the members of the comparator group over the performance period. No portion of the NOPAT component shall vest unless the ratio between the Company's NOPAT for the twelve-month period ending 31 December 2021 against the Company's NOPAT for the twelve-month period ending 31 December 2018 is at least equal to the Lower Quartile NOPAT growth ratio for the members of the comparator group over the same period. There is straight line vesting between each vesting point (percentile 25, median and percentile 75).

Directors' shareholding and share interests — Audited

          The table below sets out the number of shares held or potentially held by directors (including their connected persons where relevant) as at 31 December 2019.

Director

    Beneficially
owned
shares
    Number of
shares under
long term
incentive
awards without
performance
conditions(1)
    Number of
shares under
long term
incentive
awards with
performance
conditions(2)
    Target
shareholding
guideline (as
a % of salary
or average
gross annual
fees as
applicable)
    Percentage
of Executive
Director's
salary held
as shares as at
31 December
2019(3)
 

Javier López Madrid

    42,500     22,829     634,650 (4)   200 %   5.64 %

Pedro Larrea Paguaga

    35,000     19,538     472,321 (5)   200 %   5.42 %

José María Alapont

    15,000                    

Donald G. Barger Jr

    20,636     26,044         200 %      

Bruce L. Crockett

    6,000     29,830         200 %      

Stuart E. Eizenstat

    24,972     2,303         200 %      

Manuel Garrido y Ruano

    870             200 %      

Greger Hamilton

    5425             200 %      

Juan Villar Mir de Fuentes

                200 %      

(1)
See page 56 for details.

(2)
At target vesting. See page 56 for details.

(3)
Measured by reference to beneficially owned shares only and using the closing share price at 31 December 2019 of $0.94 and the annual salaries of the Executive Directors in USD as disclosed in this U.K. Annual Report and Accounts.

(4)
Including 24,497 shares awarded under the Equity Incentive Plan in 2016 which vested on 5 December 2019. See page 56 for details.

(5)
Including 18,231 shares awarded under the Equity Incentive Plan in 2016 which vested on 5 December 2019. See page 56 for details.

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          The Directors' outstanding share awards as at 31 December 2019 were as detailed below:

Director

  Award type   Grant
date
    Outstanding(1)   Subject to
performance
conditions(2)
    Exercisable
as of
31 December
2019
    Exercised
during the
year to
31 December
2019
    Future
vesting
    Vesting
date
 

Javier López Madrid

  LTIP Nil cost option   24.11.16     24,497       Yes             5.12.19  

  LTIP Nil cost option   01.06.17     154,703   Yes             60,025 (2)   01.06.20  

  LTIP Nil cost option   21.03.18     113,121   Yes             113,121     21.03.21  

  Deferred Bonus Award: Nil cost option   14.06.18     22,829   No             22,829     14.06.21  

  LTIP Nil cost option   14.03.19     342,239   Yes             342,239     14.03.21  

Pedro Larrea Paguaga

  LTIP Nil cost option   24.11.16     18,231               18,231     5.12.19  

  LTIP Nil cost option   01.06.17     115,134   Yes             44,672 (2)   01.06.20  

  LTIP Nil cost option   21.03.18     84,187   Yes             84,187     21.03.21  

  Deferred Share Bonus Award   14.06.18     19,538   No             19,538     14.06.18  

  LTIP Nil cost option   14.03.19     254,679   Yes             254,679     14.03.21  

Donald G. Barger(3)

  SAR   Various     2,303   No     Yes              

  RSU/C   Various     23,741   No     Yes              

Bruce L. Crockett(3)

 

NQ

 

Various

   
25,000
 

No

   
Yes
   
             

  RSU/C   Various     2,527   No     Yes              

  SAR   Various     2,303   No     Yes              

Stuart E. Eizenstat(3)

 

SAR

 

Various

   
2,303
 

No

   
Yes
   
   
   
 

(1)
Deferred share bonus awards at target granted to the Executive Directors only. Vested awards are shown without dividend equivalents.

(2)
Subject to performance conditions and continued employment in the case of awards to the Executive Directors. See page 54 for performance conditions applicable to the awards granted in 2019. As outlined earlier in this ARR, the 2017 awards are expected to vest as to 38.80% of target in June 2020.

(3)
These incentive awards are legacy awards which the Company is authorised to honour following shareholder approval of the Policy in June 2019.

Total pension entitlements — Audited

          Details of the value of pension contributions are provided in the Pensions column of the Single Figure of Remuneration table. Pension contributions are by way of a cash allowance or contribution to a 401(k) plan. There are therefore no specified retirement ages to disclose or consequences of early retirement.

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Performance graph

          The graph below illustrates the Company's TSR performance relative to the constituents of the S&P 1200 Metals & Mining index from the start of the first day of listing of Ferroglobe's shares on 24 December 2015 to 31 December 2019. The graph shows performance of a hypothetical $100 invested and its performance over that period. The index has been chosen for this table as the most appropriate comparator for the Company in this period as the Company is a constituent of this index and uses the constituents of this index for one of the TSR comparator groups for the long-term incentive awards.

GRAPHIC

Executive Chairman remuneration table

  2019   2018(1)   2017(2)   2016(3)   2015(3)(4)

  Javier López
Madrid
  Javier López
Madrid
  Javier López
Madrid
  Alan
Kestenbaum
  Alan
Kestenbaum

Executive Chairman's remuneration(5)

  $1,086,784   $1,336,250   $2,106,244   $1,870,120   $225,551

Annual variable pay (including as a % of maximum)(6)

  $0 (0%)   $0 (0%)   $935,423 (65.5%)   $738,886 (17.5%)   $201,783

LTIP awards where vesting is determined by performance in the relevant year(7)

  19.40%   17.87%   N/A   N/A   N/A

(1)
At the exchange rate of 1 GBP: 1.3356 USD used in the FY18 Report

(2)
At the exchange rate of 1 GBP: 1.2886 USD used in the FY17 Report.

(3)
At the exchange rate of 1 GBP: 1.3507 USD used in the FY16 Report.

(4)
Reflecting the formation of the Company on completion of the Business Combination, the figures for 2015 are in respect of the period from 23 December 2015 to 31 December 2015 only.

(5)
Remuneration comprises total remuneration as shown in the single figure table in the ARA for 2019, in the 2018 U.K. Annual Report and Accounts for 2018, in the 2017 U.K. Annual Report and Accounts for 2017 and the 2016 U.K.

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(6)
Annual variable pay is the bonus amounts in respect of 2019 and 2018 shown in the single figure table on page 50 and, for each of those years, the percentage of maximum award it represents. Figures elsewhere in this report show bonus as a percentage of target.

(7)
The number of shares subject to long term incentive awards where final vesting is determined by reference to performance ending in the year under review is shown as a percentage of maximum opportunity. No long-term incentive awards awarded to the relevant Executive Chairman vested in 2017, 2016 or 2015, save for those vesting on Alan Kestenbaum's leaving the Company on 31 December 2016.

Percentage increase or reduction in the remuneration of the Executive Chairman

          The following table shows the percentage reduction in 2019 in the Executive Chairman's pay(1) compared with 2018 and the average percentage change in the same period in amounts paid to European employees of the Group as a whole. European employees have been chosen as an appropriate group against which to make the comparison as our Executive Chairman as at 31 December 2019 is based in Europe.

Executive Chairman's
pay(1)
 
  Average employee
pay
 
2018 to 2019   2018 to 2019
(13.45)%   2.94%
(1)
The components of pay for these purposes includes salary, taxable benefits and annual variable pay

Relative importance of the spend on pay

          The following table shows the Company's actual spend on pay for all employees compared to distributions to shareholders in the financial year.

    1 January 2019 to
31 December 2019
    1 January 2018 to
31 December 2018
 

Employee costs

  $ 285,029,000   $ 341,064,000 (1)

Average number of employees

    3,736     4,471 (2)

Distributions to shareholders

      $ 40,569,322  

(1)
Including the costs of employees employed in FerroAtlantica SAU, whose shares were sold by the Company in 2019, resulting in an adjustment to the staff costs to $338,862,000 for 2018.

(2)
Including employees employed in FerroAtlantica SAU, as above.

External directorships during financial year 2019

Javier López Madrid

          The Board was satisfied that under these arrangements the Executive Chairman had the necessary time to carry out his duties effectively during 2019.

          Under the Policy, Executive Directors may retain fees paid for external director appointments. These appointments are subject to approval by the Board and must be compatible with their duties as Executive Directors.

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Membership of the Committee

          During the year to 31 December 2019, the Committee comprised Donald G. Barger, Jr as chairman and members José María Alapont and Bruce L. Crockett.

          The Executive Chairman, Chief Executive Officer and other members of the management team may be invited to attend meetings to assist the Committee. Other Non-Executive Directors are normally invited to attend meetings to assist the Committee in its deliberations as appropriate. No Executive, however, is present during any decision making in relation to their own remuneration.

External advisors

          Aon provides independent advice to the Committee and was appointed by the Committee in early 2016. The Committee seeks advice relating to Executive remuneration and Non-Executive Director remuneration and the wider senior management population from Aon. Aon also provided advice to management, to enable their support of the Committee, primarily in relation to remuneration reporting and the operation of incentive plans but does not provide any other services to the Company except for insurance broking services.

          The Committee is satisfied that the advice received from Aon in relation to executive remuneration matters is objective and independent. Aon is a member of the UK Remuneration Consultants Group and abides by the Remuneration Consultants Group Code of Conduct, which requires its advice to be objective and impartial. The fees paid to Aon for advice provided directly to the Committee in 2019 were £40,706 ($51,973) (2018: £168,499 ($225,047)) (excluding VAT).

Statement of shareholder voting

          The following table shows the results of:

    For     % of votes
cast
    Against     % of votes
cast
    Withheld
 

Directors' Remuneration Policy

    125,949,908     91.07     12,268,746     8.87     83,069  

Remuneration Report

    137,699,211     99.57     569,454     0.41     33,058  

Approval

          This Directors' Remuneration Report, including both the Policy and Annual Report on Remuneration has been approved by the Board.

Signed on behalf of the Board.

Chairman of the Compensation Committee
5 June 2020

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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FERROGLOBE PLC

Report on the audit of the financial statements

1.      Opinion

In our opinion:

We have audited the financial statements which comprise:

The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and IFRSs as issued by the International Accounting Standards Board (IASB). The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 "Reduced Disclosure Framework" (United Kingdom Generally Accepted Accounting Practice).

2.      Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report.

We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council's (the 'FRC's') Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

3.      Material uncertainty relating to going concern

We draw attention to the Accounting Policies on note 3.1 in the financial statements and the detailed information on note 3.1, regarding the Group's ability to operate as a going concern; the Group is dependent on generating sufficient cash flow from trading activities to fund day to day operations, making scheduled interest and principal repayments and continuing to operate within the terms and conditions of the established debt facilities.

As discussed in note 3.1, the market for ferrometals is variable, and both price and volume can fluctuate significantly. Given the speed and frequency of continuously evolving developments with respect to the COVID-19 pandemic and the uncertainties this may bring for the Company and the demand for its products, it is difficult to forecast the level of trading activities and hence cash flow in the next twelve months and therefore there is a more than remote probability that the Group does not have sufficient cash and/or debt facilities to meet its obligations during this period.

The Group is forecast to have limited cash headroom through the 12 months from the date of this report and shortfalls from forecast would increase the pressure on that headroom. The Group continues to closely monitor operating cash flows, and are pursuing additional sources of financing to increase liquidity to fund operations. At this time, however, additional finance has not been secured.

Additionally, as described in note 3.1, there is a more than remote risk that early settlement of the $350million of Senior Notes due 1 March 2022, could be requested in the event of a change of control of Ferroglobe or Grupo Villar Mir, Ferroglobe´s main shareholder. The indenture governing the Senior Notes contains and defines change of control provisions which provide the noteholders the option to require the Company to redeem the notes in cash at 101% of the principal amount plus accrued interest.

In response to this, we obtained, challenged and assessed management's going concern forecasts, and performed procedures, including:

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As stated in note 3.1, these events or conditions indicate that material uncertainties exist that may cast significant doubt on the Group's and the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

4.      Summary of our audit approach

    Key audit matters       The key audit matters that we identified in the current year were:    

 

         

Going concern (see material uncertainty relating to going concern section)   GRAPHIC

   

 

         

Impairment of property, plant and equipment ('PP&E') and goodwill   GRAPHIC ;

   

 

         

Appropriateness of the consolidation of the SPE undertaking the securitization program   GRAPHIC ; and

   

 

         

Impairment of the parent company's investment in its two subsidiaries   GRAPHIC

   

 

 

 

 

 

 

Within this report, key audit matters are identified as follows:

 

 

 

 

 

 

 

 

GRAPHIC     Newly identified

 

 

 

 

 

 

 

 

GRAPHIC     Increased level of risk

 

 

 

 

 

 

 

 

GRAPHIC     Similar level of risk

 

 

 

 

 

 

 

 

GRAPHIC     Decreased level of risk

 

 

 

 

Materiality

 

 

 

The materiality that we used for the group financial statements was $17.1m, determined primarily by reference to revenue. The assessed materiality represents approximately one per cent of revenue and one per cent of total assets.

 

 

 

 

Scoping

 

 

 

As in the prior year, we focused our group audit scope primarily on the components in the following countries:

 

 

 

         

United Kingdom;

   

 

         

United States of America ('USA');

   

 

         

Spain;

   

 

         

France; and

   

 

         

Canada

   

 

 

 

 

 

 

The components subject either to full scope audits or audits of specified balances represent 89% of the group's revenue. FerroPem SAS in France, Grupo Ferroatlantica SAU in Spain and the parent company in the UK were all subject to full scope audit.

 

 

 

 

 

 

 

 

Lower materialities were applied to the procedures performed on components, ranging from $3.4m to $10.3m.

 

 

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    Significant changes in our approach       Our audit approach is broadly consistent with the previous year, however:
  

We identified a new key audit matter in relation to going concern due to the existence of limited cash headroom, the vulnerability of future trading performance to fluctuations in market demand on the volume and pricing of the group's products and also the potential risk of an early repayment of the Senior Loan notes being required. Additionally, subsequent to the period end, the uncertainties involved in forecasting trading and cash flows through the forthcoming twelve months have increased as a result of the COVID-19 pandemic;

   

 

         

Last year our audit report included a key audit matter in relation to impairment of goodwill. We have included Property, plant and equipment ('PP&E') as part of this key audit matter because of the significant judgements and assumptions in the forecasts made by management to evaluate their respective recoverable amounts, in light of the losses made by the company during the year.

   

 

         

We identified a new key audit matter in relation to the accounting treatment of receivables in the securitisation programme due to the significant judgments and assumptions made by management, which requires the analysis of control over the 'SPE' (Ferrous Receivables DAC, a special purpose entity) and the consideration of the SPE's consolidation process.

   

 

         

We identified a new key audit matter in relation to the impairment of the investments held by the parent company, Ferroglobe PLC, due to the losses made during the year.

   

5.      Key audit matters

          Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.

          These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the material uncertainty relating to going concern

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section, we have determined the matters described below to be the key audit matters to be communicated in our report.

5.1.   Impairment of property, plant and equipment ('PP&E') and goodwill   GRAPHIC

        As described in Notes 4.4, 7, and 9 to the financial statement, the Company's evaluation of property, plant and equipment and goodwill for impairment involves the comparison of their carrying amounts with their recoverable amount at the end of the reporting period, or more frequently if there are indicators that the assets might have become impaired.

The recoverable amount is the higher of the fair value and the value in use. If the asset itself does not generate cash flows that are independent from other assets, the company estimates the recoverable amount for the assets' cash-generating unit ("CGU")

The value in use of CGUs are developed by estimating the net present value of the future cash flows expected to be derived, discounted at a rate which reflects the time value of money and the risks specific to the CGU. The assets involved in this analysis are located in the US, Canada, most of the European business and certain assets in South Africa. The estimation of recoverable value of individual CGUs requires significant judgment in developing and applying key underlying assumptions concerning future market conditions, trading performance (sale prices, volumes, cost structure or "capex") as well as application of an appropriate discount rates (weighted average cost of capital or "WACC") and other factors (long-term growth rate). These inputs are estimated based on management's business plans, which are subject to change as business conditions change, and therefore, could affect the fair values in the future.

As of December 31, 2019, the book value of the above-mentioned CGUs was $821,875 thousand, including goodwill and property, plant and equipment. The US CGU is the only CGU with a carrying value attributable to goodwill of $29,702 thousand. As described in Note 25 to the financial statements an impairment charge of $175,899 thousand has been recognised in the year ended 31 December 2019.

We identified impairment of property, plant and equipment, and goodwill as a key audit matter because of the significant judgments involved in the assessment. A high degree of auditor judgment and an increased extent of audit effort, including the involvement of appropriate specialist support, was required to consider management's estimates and assumptions related to forecast of future cash flows, discount rates (WACC) and other factors (long-term growth rate).

   

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    How the scope of our audit responded to the key audit matter   Our audit procedures related to management's estimates and assumptions in developing future cash flows (mainly sale prices, volumes, cost structure and capex), discount rates (WACC) and other factors (long-term growth) included the following, among others:

We assessed the design and implementation and tested the operating effectiveness of relevant controls over the development of the impairment assessment of long-lived assets;

We considered the accuracy of past forecasts developed by management to aid assessment of the reliability of the forecasting process;

We considered key assumptions applied in the development of the discounted future cashflows, including their consistency with the forecasts used in the assessment of the carrying value of the individual CGUs, as discussed above. We confirmed the cashflow forecasts were consistent with the most recent forecasts approved by the Board of Directors;

We discussed and challenged management on key assumptions underlying the forecast, including evaluation of management's forecasts by reference to prior year and 2020 year to date results, current order book, comparison with the approved budget and changes in the regulatory environment;

We evaluated the volumes and prices projected for the period 2021-2024 using independent sources of information (such as analyst and industry reports or prices reports, when available) and considered information that could be potentially contradictory to management's forecast;

With the assistance of our fair value specialists, we evaluated the discount rates (WACC), the long-term growth rates and the underlying source information. Our fair value specialists also assisted in testing the mathematical accuracy of the calculations and developing a range of independent estimates and comparing those to management's discount rates (WACC) and the long term growth rate; and

We have evaluated the sensitivity analysis disclosed by the Company over the US CGU by comparing the results of the impairment test with significant changes and modifications (10% variances) to the underlying inputs such as the net cash flows, the discount rates (WACC) and the long-term growth rates.

   
    Key observations   We are satisfied that the impairment of the group's property, plant and equipment ('PP&E') and goodwill as at 31 December 2019 is appropriate.    

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5.2.   Appropriateness of the consolidation of the SPE undertaking the securitization program   GRAPHIC

    Key audit matter description   As described in Notes 10 and 16 to the financial statements, on July 31, 2017, the Company entered into an accounts receivable securitization program (the "Program") where trade receivables held by the Company's subsidiaries in the US, Canada, Spain and France were sold to Ferrous Receivables DAC, a special purpose entity domiciled and incorporated in Ireland (the "SPE"). On December 10, 2019, the Company refinanced the Program and amended and restated its terms, maintaining the Company's European subsidiaries as senior subordinated and junior subordinated lenders and creating a new interest in the senior and intermediate subordinated loan tranches. On September 5, 2019 as a consequence of certain amendments to the contract, Management determined, after considering the risk exposure for each lender, that Ferroglobe became exposed to variable returns and had the ability to affect those returns through its power over the investee. As such from this date it was concluded that Ferroglobe has control over the SPE and therefore that the SPE should be consolidated. This conclusion was maintained under the Program amended and restated on December 10, 2019. The new senior lender's commitments under the amended and restated securitization program are $150,000 thousand, of which $104,130 thousand was drawn at December 31, 2019.

We identified the appropriateness of the consolidation of the SPE undertaking the securitization program as a key audit matter because of the significant judgment involved in evaluating the analysis of control over the SPE. This required a high degree of the auditor judgment and an increased extent of audit effort, including the need to involve our IFRS technical specialists, when performing audit procedures to evaluate the reasonableness of management's estimates and assumptions related to the consolidation of the SPE.

   
    How the scope of our audit responded to the key audit matter   Our audit procedures related to the consolidation of the SPE undertaking the securitisation program and the consolidation of the SPE included the following, among others:

We assessed the design and implementation and tested the operating effectiveness of relevant controls governing the assessment;

We performed procedures , including inquiry to management and review of relevant documentation, to obtain an understanding of the business purpose and economic substance of the transaction.

We evaluated the control of the Company over the SPE, considered whether the consolidation of the entity is required by the applicable accounting standards and assessed the appropriateness of the accounting treatment.

We used internal specialists to evaluate the assumptions used to assess the variable returns and the ability of Ferroglobe PLC to affect those returns through its power over the investee, which determine the control over the SPE, its risk exposure and therefore if its consolidation is required.

We performed audit procedures over the account receivables sold to the SPE, including the reconciliation of balances, verification with third-party reports and external confirmations.

We performed audit procedures over the consolidation process, including the review of the journal entries and the subsequent consolidation eliminations and adjustments.

   
    Key observations   We have concluded that the accounting treatment adopted is reasonable.    

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5.3.   Carrying values of the parent company's investments in its two subsidiaries   GRAPHIC

    Key audit matter description   The total carrying value of the Parent Company's investment in its two subsidiaries, Globe Specialty Metals Inc and Grupo Ferroatlantica SAU, as at 31 December 2019 is $611 million (2018: $1,068 million, as detailed at note 3 to the parent company financial statements.

Net assets of the subsidiaries were lower than their carrying values in the balance sheet of Ferroglobe PLC and the subsidiaries. This was considered to be an indicator of impairment in the carrying values of the investments.

Management conducted an impairment assessment by preparing discounted future cashflows which reflected their estimates of future cash flows expected to be generated by each of the subsidiary undertakings.

The assumptions used in developing the future cashflows were consistent with those applied in the group impairment assessment, discussed above and only including information related to events or conditions existing at 31 December 2019.

The value in use assessment identified a total recoverable amount lower than the carrying value of the investments in subsidiaries. Therefore, the company recognised an impairment of $438 million as at 31 December 2019.

The applied accounting policy and key sources of estimation uncertainty are discussed at note 1 to the Parent Company financial statements.

   
    How the scope of our audit responded to the key audit matter   Our audit procedures related to management's estimates and assumptions considered to determine future cash flows of the subsidiary undertakings included the following, among others:

We assessed the design, implementation and operating effectiveness of relevant controls relating to the preparation of the discounted future cash flows;

We considered key assumptions applied in the development of the discounted future cashflows, including their consistency with the forecasts used in the assessment of the carrying value of the individual CGUs, as discussed above. We assessed that the cashflow forecasts were consistent with the most recent forecasts approved by the Board of Directors;

We considered the accuracy of past forecasts developed by management to aid assessment of the reliability of the forecasting process;

We discussed and challenged management on key assumptions underlying the valuation, through review of the forecast revenues, growth rates and the pre-tax discount rate applied; and

Working with our valuation specialists, we assessed the methodology applied in the valuation and the reasonableness of the applied discount rate.

   
    Key observations   The carrying value of the investments in subsidiaries at 31 December 2019 is appropriate.    

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6.      Our application of materiality

6.1.   Materiality

          We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work.

          Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

 
   
   
  Group financial statements
   
  Parent company financial statements
   
    Materiality       $17.1m (2018: $18.5m)       $11.9m (2018: $13.9m)    

 

 

Basis for determining materiality

 

 

 

Revenue.

 

 

 

Total assets, capped at 70% of group materiality (2018:75%)

 

 

 

 

Rationale for the benchmark applied

 

 

 

We determined materiality using revenue. This is considered a more appropriate and stable benchmark, rather than profit based measures (profit before tax) particularly as the group was loss making in the year.

 

 

 

As the parent company is a non-trading entity, it is considered appropriate to use total assets for determining materiality.

 

 

GRAPHIC

6.2.   Performance materiality

          We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole. Group performance materiality was set at 70% of group materiality for the 2019 audit (2018: 75%). In determining performance materiality, we considered the following factors:

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6.3.   Error reporting threshold

          We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of $0.85m (2018: $0.92m), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.

7.      An overview of the scope of our audit

7.1.   Identification and scoping of components

          The group comprises three reportable segments (North America, Europe and South Africa) and the corporate business unit, each of which were included in our assessment of the risks of material misstatement.

          As in the prior year, we focused our group audit scope primarily on the components in the following countries:

          Full scope audits were performed on those components audited by the Group team and by the component teams on Grupo Ferroatlantica S.A. in Spain, FerroPem SAS France and the parent company in the UK. Specified audit procedures were performed at the group's other locations in USA and Canada. The materialities applied to components ranged from $10.2 million to $3.4 million (2018: $11.1 million to $3.7 million). The coverage of our audit work is shown below in section 7.2. of this audit report.

7.2.   Working with other auditors

          The UK group audit team worked on an integrated basis with Deloitte Spain, directly performing and overseeing audit work performed in the UK and Spain, and overseeing the work of component auditors.

          The integrated UK and Spanish audit team planned, supervised and reviewed work performed by component auditors in France, USA and Canada; the level of direct involvement varied by location and included, a review of the reports provided on the results of the work undertaken by the component audit teams, attendance to meetings with local engagement teams and detailed review of their audit work documentation.

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          The coverage of our audit work across the group is shown below:

GRAPHIC

8.      Other information

          The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon.

          Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

          In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

          If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 that fact.

          We have nothing to report in respect of these matters.

9.      Responsibilities of directors

          As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

          In preparing the financial statements, the directors are responsible for assessing the group's and the parent company'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 directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

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10.    Auditor's responsibilities for the audit of the financial statements

          Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) 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 influence the economic decisions of users taken on the basis of these financial statements.

          A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Report on other legal and regulatory requirements

11.    Opinions on other matters prescribed by the Companies Act 2006

          In our opinion the part of the directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

          In our opinion, based on the work undertaken in the course of the audit:

          In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified any material misstatements in the strategic report or the directors' report.

12.    Matters on which we are required to report by exception

12.1. Adequacy of explanations received and accounting records

          Under the Companies Act 2006 we are required to report to you if, in our opinion:

          We have nothing to report in respect of these matters.

12.2. Directors' remuneration

          Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors' remuneration have not been made or the part of the directors' remuneration report to be audited is not in agreement with the accounting records and returns.

          We have nothing to report in respect of these matters.

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13.    Use of our report

          This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Graeme Sheils, CA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, UK
5 June 2020

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FERROGLOBE PLC

FINANCIAL STATEMENTS CONTENTS

Consolidated Statement of Financial Position as of December 31, 2019 and 2018

  74  

Consolidated Income Statement for the years ended December 31, 2019, 2018 and 2017

  75  

Consolidated Statement of Comprehensive Income (Loss) for the years ended December 31, 2019, 2018 and 2017

  76  

Consolidated Statement of Changes in Equity for the years ended December 31, 2019, 2018 and 2017

  77  

Consolidated Statement of Cash Flows for the years ended December 31, 2019, 2018 and 2017

  78  

Notes to the Consolidated Financial Statements

  79  

Parent Company Balance Sheet as of December 31, 2019 and 2018

  192  

Parent Company Statement of Changes in Equity for the years ended December 31, 2019 and 2018

  193  

Notes to the Parent Company Financial Statements

  194  

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FERROGLOBE PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2019 AND 2018

Thousands of U.S. Dollars

  Notes     2019
$'000
    2018
$'000
 

ASSETS

                 

Non-current assets

                 

Goodwill

  Note 7     29,702     202,848  

Other intangible assets

  Note 8     51,267     51,822  

Property, plant and equipment

  Note 9     740,906     888,862  

Other non-current financial assets

  Note 10     2,618     70,343  

Deferred tax assets

  Note 22     59,551     14,589  

Non-current receivables from related parties

  Note 23     2,247     2,288  

Other non-current assets

  Note 12     1,597     10,486  

Non-current restricted cash and cash equivalents

  Note 10     28,323      

Total non-current assets

        916,211     1,241,238  

Current assets

                 

Inventories

  Note 11     354,121     456,970  

Trade and other receivables

  Note 10     309,064     155,996  

Current receivables from related parties

  Note 23     2,955     14,226  

Current income tax assets

  Note 22     27,930     27,404  

Other current financial assets

  Note 10     5,544     2,523  

Other current assets

  Note 12     23,676     8,813  

Cash and cash equivalents

  Note 10     94,852     216,647  

Total current assets

        818,142     882,579  

Total assets

        1,734,353     2,123,817  

EQUITY AND LIABILITIES

                 

Equity

                 

Share capital

        1,784     1,784  

Reserves

        975,358     941,707  

Translation differences

        (210,152 )   (207,366 )

Valuation adjustments

        (2,169 )   (11,559 )

Result attributable to the Parent

        (280,601 )   43,661  

Non-controlling interests

        118,077     116,145  

Total equity

  Note 13     602,297     884,372  

Non-current liabilities

                 

Deferred income

        1,253     1,434  

Provisions

  Note 15     84,852     75,787  

Bank borrowings

  Note 16     144,388     132,821  

Lease liabilities

  Note 17     16,972     53,472  

Debt instruments

  Note 18     344,014     341,657  

Other financial liabilities

  Note 19     43,157     32,788  

Other non-current liabilities

  Note 21     25,906     25,030  

Deferred tax liabilities

  Note 22     74,057     77,379  

Total non-current liabilities

        734,599     740,368  

Current liabilities

                 

Provisions

  Note 15     46,091     40,570  

Bank borrowings

  Note 16     14,611     8,191  

Lease liabilities

  Note 17     8,900     12,999  

Debt instruments

  Note 18     10,937     10,937  

Other financial liabilities

  Note 19     23,382     52,524  

Payables to related parties

  Note 23     4,830     11,128  

Trade and other payables

  Note 20     189,229     256,823  

Current income tax liabilities

  Note 22     3,048     2,335  

Other current liabilities

  Note 21     96,429     103,570  

Total current liabilities

        397,457     499,077  

Total equity and liabilities

        1,734,353     2,123,817  

Notes 1 to 30 are an integral part of the consolidated financial statements

          The financial statements were approved by the Board and authorized for issue on June 5, 2020.

Signed on behalf of the Board.

Dr. Marco Levi
Director

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FERROGLOBE PLC AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENT FOR 2019, 2018 AND 2017

Thousands of U.S. Dollars

 
  Notes
  2019
$'000

  2018(*)
$'000

  2017(*)
$'000

 

Sales

  Note 25.1     1,615,222     2,242,002     1,732,276  

Cost of sales

        (1,214,397 )   (1,446,677 )   (1,043,275 )

Other operating income

        54,213     45,844     18,100  

Staff costs

  Note 25.2     (285,029 )   (338,862 )   (300,035 )

Other operating expense

        (225,705 )   (277,560 )   (234,399 )

Depreciation and amortization charges, operating allowances and write-downs

  Note 25.3     (120,194 )   (113,837 )   (100,402 )

Impairment losses

  Note 25.5     (175,899 )   (58,919 )   (31,641 )

Net (loss) gain due to changes in the value of assets

  Note 25.5     (1,574 )   (7,623 )   7,504  

(Loss) gain on disposal of non-current assets

  Note 25.6     (2,223 )   14,564     (4,316 )

Bargain purchase gain

  Note 5         40,142      

Other losses

  Note 29             (2,613 )

Operating (loss) profit

        (355,586 )   99,074     41,199  

Finance income

  Note 25.4     1,380     4,858     2,409  

Finance costs

  Note 25.4     (63,225 )   (57,066 )   (59,969 )

Financial derivative gain (loss)

  Note 19     2,729     2,838     (6,850 )

Exchange differences

        2,884     (14,136 )   8,214  

(Loss) profit before tax

        (411,818 )   35,568     (14,997 )

Income tax benefit (expense)

  Note 22     41,541     (20,459 )   14,225  

(Loss) profit for the year from continuing operations

        (370,277 )   15,109     (772 )

(Loss) profit for the year from discontinued operations

  Note 29     84,637     9,464     (5,050 )

(Loss) profit for the year

        (285,640 )   24,573     (5,822 )

Loss attributable to non-controlling interests

  Note 13     5,039     19,088     5,144  

(Loss) profit attributable to the Parent

        (280,601 )   43,661     (678 )

Earnings per share

                       


 
   
  2019
  2018(*)
  2017(*)
 

(Loss) profit attributable to the Parent ($'000)

        (280,601 )   43,661     (678 )

Weighted average basic shares outstanding

        169,152,905     171,406,272     171,949,128  

Basic (loss) earnings per ordinary share ($)

  Note 14     (1.66 )   0.25     (0.00 )

Weighted average basic shares outstanding

        169,152,905     171,406,272     171,949,128  

Effect of dilutive securities

            123,340.00      

Weighted average dilutive shares outstanding

        169,152,905     171,529,612     171,949,128  

Diluted (loss) earnings per ordinary share ($)

  Note 14     (1.66 )   0.25     (0.00 )

(*)
The amounts for prior periods have been restated to reclassify the results of the Company´s Spanish hydroelectric assets within profit (loss) from discontinued operations.

   

Notes 1 to 30 are an integral part of the consolidated financial statements

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FERROGLOBE PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) INCOME
FOR 2019, 2018 AND 2017

Thousands of U.S. Dollars

    2019
$'000
    2018(*)
$'000
    2017(*)
$'000
 

(Loss) profit for the year

    (285,640 )   24,573     (5,822 )

Items that will not be reclassified subsequently to income or loss:

   
 
   
 
   
 
 

Defined benefit obligation

    (1,859 )   3,568     4,511  

Tax effect

        (296 )    

Total income and expense that will not be reclassified subsequently to income or loss

    (1,859 )   3,272     4,511  

Items that may be reclassified subsequently to income or loss:

   
 
   
 
   
 
 

Arising from cash flow hedges

    9,663     10,006     (24,171 )

Translation differences

    (8,698 )   (45,435 )   54,670  

Tax effect