2 0 2 1  A N N U A L  R E P O R T

2021 ANNUAL REPORT
2
NEMAK
Nemak, S.A.B. de C.V. (“Nemak”) is a leading provider of 
innovative lightweighting solutions for the global automotive 
industry, specializing in the development and manufacturing 
of aluminum components for powertrain, e-mobility, and 
structural applications. In 2021, the Company employed 
approximately 21,000 people at 38 facilities worldwide and 
generated revenue of US$3.8 billion.
CONTENT
GRI Standards: 102-1, 102-7
For more information about Nemak, visit: 
https://www.nemak.com
3 Nemak at a Glance
4 Product Portfolio
5 Financial Highlights
6 Letter to Shareholders
9 Lightweighting Developments
12 Sustainability
58 Operating Summary
60 Board of Directors
62 Management Team
63 Corporate Governance
65 Financial Section

GRI Standards: 102-4, 102-6
Nemak at a glance
RUSSIA
CZECH REPUBLIC
SLOVAKIA
HUNGARY
INDIA
CHINA
TURKEY
SPAIN
GERMANY
POLAND
AUSTRIA
ARGENTINA
BRAZIL
UNITED STATES
MEXICO
INDIA
ARGENTINA
REVENUE 
51%
NORTH AMERICA
EUROPE
37%
12%
REST OF WORLD
SEGMENT REVENUE
46%
30%
10%
13%
GRI Standard: 102-4, 102-6
Nemak 
at a glance
Nemak’s manufacturing 
footprint spans 38 plants 
strategically located in 15 
countries
EV  & STRUCTURAL
TRANSMISSIONS
& OTHER
HEADS
BLOCKS
RUSSIA
CZECH REPUBLIC
SLOVAKIA
HUNGARY
CHINA
TURKEY
SPAIN
GERMANY
POLAND
AUSTRIA
BRAZIL
UNITED STATES
MEXICO
ARGENTINA
2021 ANNUAL REPORT
3
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
NEMAK AT
A GLANCE

PRODUCT
PORTFOLIO
GRI Standard: 102-2
VEHICLE STRUCTURES 
•	 Longitudinal Members
•	 Shock Towers
•	 Subframes
POWERTRAIN
•	 Cylinder Heads
•	 Engine Blocks
•	 Transmission Cases
E-MOBILITY COMPONENTS
•	 E-Motor Housings
•	 Battery Housings                                    
(Hybrid / Fully electric)
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
2021 ANNUAL REPORT
4
NEMAK
NEMAK AT
A GLANCE

MILLIONS OF US DOLLARS
2021
2020
CHANGE
Volume (M. Eq. Units)
35.7
35.1
1.8
Total revenues
3,798
3,151
20.5
Gross profit
471
389
21.1
Sales & administrative expenses
-247
-235
5.1
Other income (expense), net
5
-48
-110.4
Operating income
229
107
114.0
Interest expenses
-112
-81
38.3
Interest income
3
3
0.0
Foreign exchange (loss)
-20
-50
-60.0
Financing expenses, net
-129
-128
0.8
Participation in associates results
-1
-1
0.0
Income tax
-94
-12
683.3
Net income
5
-34
-114.7
EBITDA1
567
432
31.3
CAPEX
360
269
33.8
Net debt
1,306
1,227
6.4
GRI Standard: 201-1
Financial highlights 
(1) EBITDA = Operating income + depreciation and amortization + non-recurring items.
VOLUME 
(millions of equivalent units)
35.1
35.7
2020
2021
TOTAL REVENUES
(millions of US dollars)
3,151
3,798
2020
2021
EBITDA
(millions of US dollars)
432
567
2020
2021
2021 ANNUAL REPORT
5
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
NEMAK AT
A GLANCE

GRI Standard: 102-10, 102-11, 102-14, 102-15
Dear Shareholders
During 2021, Nemak harnessed its talent, footprint, 
productivity improvements, and technological capabilities 
to deliver improved results amidst extraordinary industry 
volatility, while simultaneously capitalizing on secular growth 
opportunities linked to the changing mobility landscape. 
The COVID-19 pandemic continued to figure 
prominently in 2021, requiring Nemak to maintain 
targeted measures to safeguard employee 
health in the workplace and ensure stable supply 
to customers. At the same time, challenges 
emerged on new fronts – in particular, the global 
semiconductor shortage, which weighed on light-
vehicle production among its customers, and 
therefore, demand for the parts it produces. In 
response, the Company implemented a variety 
of operational efficiency and flexibility initiatives, 
which helped it to mitigate the effects of these 
headwinds on its business.
Nemak also made further strides towards 
the implementation of its long-term strategy, 
including more than doubling revenue generation 
in its e-mobility and structural applications (EV/
SC) segment compared to the previous year, 
and surpassing its goal of securing business to 
produce these parts worth US$1 billion annually 
more than one year earlier than expected. 
For full-year 2021, light-vehicle sales and 
production in the Company’s markets were 
affected by the ongoing operational disruptions 
in the global semiconductor supply chain. Sales 
in the US were 3% higher, reflecting a gradual 
recovery vis-à-vis 2020, when the onset of the 
COVID-19 pandemic triggered a slowing of overall 
consumer activity. However, Europe saw a 2% 
decrease in sales for the full year, as a stronger 
first half nearly compensated for a softer 
second half. Turning to light-vehicle production, 
North America and Europe finished 1% and 5% 
lower, respectively. In China, light-vehicle sales 
and production showed a more positive trend, 
increasing by 3% and 1%, respectively, whereas 
in Brazil they finished the year 2% and 6% higher, 
in the same order, mainly on base effects.
Consolidated volume was 35.7 million equivalent 
units, up 2% from 2020, as the ramp-up of new 
product launches in Nemak’s EV/SC segment 
helped compensate for continued softness in 
light-vehicle production in its main regions. 
Revenue saw an even more pronounced uptick, 
as a combination of volume and aluminum 
prices drove a 21% increase, to US$3.8 billion. 
EBITDA finished at US$567 million, 31% higher 
than the previous year, supported mainly by 
the combination of an improved product mix 
and operational efficiencies. In turn, EBITDA 
per equivalent unit finished at US$15.9, a 29% 
y-o-y increase; it is worth highlighting that this 
represented a tie for the highest-ever such figure 
recorded in the Company’s history.  
Net income also showed improvement, finishing 
slightly positive for the year on the same factors 
benefiting EBITDA. 
Capital expenditures were US$360 million, as 
Nemak prioritized investment geared towards 
supporting its customers’ lightweighting and 
electrification plans. To this end, it allocated 
CAPEX primarily towards new product launches, 
with an increased focus on its EV/SC segment.
US$567
EBITDA finished at
million, 31% higher 
than the previous year
2021 ANNUAL REPORT
6
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
LETTER TO
SHAREHOLDERS

Nemak ended the year with Net Debt of 
US$1.3 billion, which was slightly higher 
than a year ago. Meanwhile, cash and cash 
equivalents amounted to US$282 million, 
which compared to US$437 million the 
previous year, as the Company repaid 
credit lines that had been used to support 
liquidity at the onset of the pandemic.
In September, the merger of Controladora 
Nemak into Nemak was concluded 
successfully, in the culmination of a multi-
step process to convert Nemak into a fully 
independent company trading under a 
single listed entity. The Company expects 
this transaction to have a positive effect on 
share liquidity. 
During the year, the main rating agencies 
reaffirmed their ratings on Nemak’s 
debt, while upgrading their respective 
outlooks from negative to stable, citing the 
Company’s business performance amidst a 
challenging industry environment, among 
other factors. Nemak is rated investment 
grade by Fitch, and one notch below 
investment grade by Moody’s and S&P.
Nemak also successfully placed two 
sustainability-linked bonds, which enabled 
it to reduce its cost of debt and extend its 
debt maturity profile under a standard 
investment grade structure. The first 
issuance comprised US$500 million with 
a 10-year maturity bearing a 3.625% coupon, and the second entailed a €500 million issuance 
with a 7-year maturity and a 2.25% coupon. Together, these transactions enabled the Company to 
reduce its financing cost by a total of approximately US$11 million annually.
The proceeds from the two issuances were allocated to refinance outstanding debt. Moreover, 
under the terms of the notes, Nemak committed to reduce Scope 1 and 2 greenhouse gas (GHG) 
emissions by 18% by 2026 relative to a 2019 baseline; this goal is aligned with its plans to achieve 
a 28% reduction by 2030, which were approved by the Science Based Targets initiative (SBTi) in 
2021.
These SBTi-approved targets are at the core of Nemak’s climate strategy, which focuses on 
Green Production, Green Products, and Green Sourcing. Nemak approaches energy use in 
its production processes on multiple fronts, simultaneously implementing energy efficiency 
initiatives while also striving to increase renewable energy use. Nemak’s development of new 
alloys, and increased use of recycled and end-of-life materials in its product portfolio also 
evidences its contributions to the automotive industry’s shift towards emission-free mobility. 
2021 ANNUAL REPORT
7
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
LETTER TO
SHAREHOLDERS

Moreover, as a substantial portion of the 
Company’s carbon footprint comes from its 
supply chain, Nemak has programs in place 
that facilitate supplier engagement in its 
emissions reduction efforts.
Nemak’s commitment to sustainability 
is evidenced by the inroads it has made 
towards assessing and mitigating its 
environmental impacts, all while continuing 
to advance efforts to foster employee health 
and safety, as well as social well-being in 
the communities where it operates. The 
Company’s prioritization of sustainability 
initiatives has earned it a place in several 
stock indices that include companies with 
leading economic, social, and environmental 
practices, such as the DJSI MILA Pacific 
Alliance, the S&P/BMV Total Mexico ESG 
Index, and the FTSE4Good Index Series. 
During 2021, Nemak’s commitment to 
innovation and cutting-edge technology was 
recognized in the form of several awards 
from OEM customers.
The main highlights included being recognized 
as a top-performing global supplier to Ford and 
General Motors, as well as receiving an award for 
best-in-class quality performance in support of 
Volkswagen Group in China.  
As Nemak and the automotive industry as a whole 
advance more decisively towards electrification 
and a future of sustainable mobility, the Company 
will continue to push the limits of technology and 
innovation, seeking to remain at the forefront of 
new ideas, new materials, new technologies, and 
operating excellence. 
On behalf of the Board of Directors, we would 
like to extend our gratitude to all of you—our 
customers, suppliers, employees, shareholders, 
and members of the communities where we 
operate—for your interest and support throughout 
the year. We look forward to continuing our 
efforts to deliver best-in-class performance in 
our business, while reinforcing our foundation for 
long-term value creation going forward. 
San Pedro Garza García, N.L. México  
January 31, 2022
Álvaro Fernández Garza	
 
Co-Chairman of the Board of Directors
Armando Garza Sada 
Co-Chairman of the Board of Directors
Armando Tamez Martínez 
Chief Executive Officer
2021 ANNUAL REPORT
8
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
LETTER TO
SHAREHOLDERS

GRI Standard: 201-2
Lightweighting 
Developments
~US$1.05
billion annually in 
contracts to produce 
EV/SC applications
Over the years, Nemak has made substantial contributions to global 
automakers’ efforts to make vehicles lighter and therefore more 
efficient. The Company began its leadership journey in traditional 
powertrain applications, such as cylinder heads and engine blocks, 
before diversifying its product portfolio further into growing 
addressable markets linked to its customers’ accelerating shift 
towards a more sustainable mobility.
2021 ANNUAL REPORT
9
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
LIGHTWEIGHTING
DEVELOPMENTS

Nemak’s track record of innovation 
and performance has helped it build 
customer trust, while giving it ample 
opportunity to deepen its R&D and 
product development capabilities around 
a variety of highly engineered automotive 
solutions, including e-mobility and 
structural applications (EV/SC).
Going forward, the Company seeks to continue 
to capitalize on electrification and lightweighting 
trends to drive growth and transformation in 
its business, by tapping into its technological 
capabilities, which span casting as well as joining 
and assembly processes.
Given the prospects for increased global 
penetration of electric vehicles, Nemak estimates 
that its EV/SC segment—including high value-
added components such as battery housings 
for fully electric and plug-in hybrid vehicles, 
e-motor components, and structural parts—
could represent close to 60% of its consolidated 
revenue by 2030.  
Nemak’s R&D processes are a key differentiator 
as it continues to adapt to meet market needs. In 
order to develop tailor-made solutions to support 
its customers’  plans, it draws on capabilities 
that include state-of-the-art, computer-aided 
engineering infrastructure and a global pool of 
talent with deep expertise in design and materials 
engineering. 
During 2021, key innovation highlights included: 
•	Development of aluminum alloys featuring up 
to 90% end-of-life material. With these alloys, 
Nemak aims to deliver advanced mechanical 
properties while helping its customers make 
greater use of recycled material, thereby 
reducing their CO2 footprint. 
•	Development of lightweighting solutions for 
chassis applications. Nemak assumed full 
design responsibility for safety parts in the 
vehicle of a German OEM customer, achieving 
a weight reduction of approximately 30%.
•	Development of proprietary welding process 
for battery housings.  Nemak developed a 
propriety welding process, which enables 
it to improve seam welding quality, thereby 
reducing the weight of extrusions used in 
battery housings for fully electric vehicles. 
•	Production launch of ultra-large, single-
piece battery housings.  Nemak leveraged 
its expertise in casting process design to 
successfully initiate series production of ultra-
large, single-piece battery housings for the 
electric vehicle market. 
Nemak is currently focusing most of its R&D 
efforts on EV/SC applications, and it expects that 
this will continue to be the case through the end 
of the decade. 
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
2021 ANNUAL REPORT
10
NEMAK
LIGHTWEIGHTING
DEVELOPMENTS

The Company’s offerings in its EV/SC segment 
target primarily body-in-white and chassis 
applications—which help OEMs minimize 
the weight of electric vehicles, and therefore 
improve their driving range—together with highly 
specialized solutions supporting the vehicle’s 
electric propulsion system, ranging from fully 
integrated e-motor components to casting, gluing, 
riveting, friction stir-welding, laser welding, 
and MIG and TIG welding processes for battery 
housings. 
Nemak currently produces components for an 
estimated 520 vehicle nameplates, including 100 
fully electric or plug-in hybrid vehicle nameplates. 
As of the date of this report, Nemak had been 
awarded contracts to produce EV/SC applications 
worth a total of approximately US$1.05 billion 
annually, representing a diverse set of customers, 
including Audi, BMW, Daimler, Ford, General 
Motors, Jaguar Land Rover, Porsche, Stellantis, 
Volkswagen, and Volvo, among others. 
Additional recent milestones in the implementation 
of its technology roadmap have included the 
launch of its Electric Mobility Center, where it is 
harnessing state-of-the-art joining and assembly 
processes to produce battery housings for fully 
electric vehicles such as the Ford Mustang Mach-E 
and Ford E-Transit. 
Nemak is currently producing and launching EV/
SC applications—including battery housings, 
e-motor components, and structural parts such 
as longitudinal members, shock towers, and 
subframes, among others—at a total of 12 plants 
spanning Europe, North America, and Asia.  
Producing components for 
~100 BEV and PHEV nameplates
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
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BOARD
OF DIRECTORS
MANAGEMENT
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2021 ANNUAL REPORT
11
NEMAK
LIGHTWEIGHTING
DEVELOPMENTS

In 2021, Nemak made significant progress in a variety of areas 
to support the  automotive industry’s ongoing shift towards 
sustainable mobility. As part of its efforts to contribute to the 
goals of the Paris Climate Agreement, it continued with initiatives 
to optimize resource consumption and decrease energy use. 
In parallel and in light of the global pandemic, the company 
implemented a series of extraordinary measures to continue 
protecting its employees and the communities where it operates.
~70%
of our products manufactured 
from recycled aluminum.
GRI Standard: 201-2
Sustainability
2021 ANNUAL REPORT
12
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
SUSTAINABILITY

Despite the challenges of 2021, Nemak made 
substantial progress in implementing its 
sustainability strategy, which resulted in improved 
performance in external ratings and assessments, 
including from the CDP, EcoVadis, and the CSA.
The Company also advanced its net-zero strategy and received 
validation of its Science-Based Targets. In addition, Nemak 
further developed its Sustainability Roadmap 2030, which lays 
out the Company’s plan to contribute to sustainable mobility 
while shaping the internal sustainability framework and defining 
the strategy’s future core objectives and targets. The following 
sections contain a general overview of the Company’s strategic 
approach to sustainability, and an overview of progress towards 
its Environmental, Social and Governance (ESG) goals.
Sustainability 
Strategy
REPORTING 
STRUCTURE  
GRI 102-12, 102-46, 102-54
Nemak strives to provide transparency to 
all stakeholders and continuously seeks to 
improve and expand the quality and scope 
of its data. The following report outlines 
Nemak’s key material topics and is aligned 
with the Core option of the GRI (Global 
Reporting Initiative). Furthermore, it also 
reflects the reporting recommendations 
of the Task Force on Climate-Related 
Financial Disclosure (TCFD). 
The report focuses on the following 
three key material topics. 
Environment & Climate Innovation
People & Communities
Value Chain Engagement & 
Business Integrity
E
S
G
2021 ANNUAL REPORT
13
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
SUSTAINABILITY

Climate Protection
Innovation and Products
Circularity
Supply Chain Management
Reducing emissions by improving 
energy efficiency, purchasing 
renewable electricity and preparing 
for long-term decarbonization by 
switching to alternative fuels.
Integrating circular economy 
principles throughout its business 
operations and increasing its use 
of recycled aluminium.
Developing and creating new 
products to establish a stronger 
market position while ensuring all 
products have exceptional quality 
and safety characteristics.
Actively supporting the Company’s 
supply chain and encouraging 
suppliers to align with Nemak’s 
sustainability strategy.
SUSTAINABILITY ROADMAP  
GRI 102-11, 102-16, 102-43
In the Company’s efforts to drive innovation and shape the 
future of automotive lightweighting, Nemak is committed to 
using its technology, operations and business practices to 
contribute to sustainable mobility. The increasing demand 
for e-mobility components is a key pillar in the Company’s 
overall sustainability strategy, and Nemak is well-positioned 
to continue growing its business with existing and new 
customers in e-mobility and structural applications (EV/SC). 
By 2030, Nemak estimates the total addressable market of 
its EV/SC segment will be worth approximately US$27 billion. 
This market includes high value-added components such as 
battery housings for fully electric and plug-in hybrid vehicles, 
e-motor housings and structural parts such as longitudinal 
members, shock towers and subframes. 
Nemak’s innovation capabilities—including 
its Research and Development (R&D) 
function—enable it to take a sustainable 
approach to developing new products for 
e-mobility. As a result, the Company is 
making significant advances in reducing 
emissions in its manufacturing processes 
and developing new and more sustainable 
alloys that increase the use of end-of-life 
materials and reduce the carbon footprint 
of its components.
Throughout the reporting period, Nemak continued to make substantial contributions to 
e-mobility by developing energy-efficient solutions such as cast and assembled battery 
housings and highly integrated e-motor housings. In addition, through its expertise in 
lightweight design, the Company offers its customers both primary alloys and secondary 
alloys (alloys made of recycled material) that significantly reduce their CO2e product 
carbon footprint (PCF). As circularity and recycling are key measures for Nemak, it 
manufactures approximately 70% of its products from recycled aluminum.
As part of its overall business strategy, 
Nemak strives to create greater value 
for its stakeholders by enhancing 
environmental, social, and economic 
well-being in line with its core values: 
customer focus, trust and collaboration, 
innovation, and respect and responsibility. 
While developing its sustainability strategy 
roadmap, Nemak identified four key focus 
areas that are critical to transforming and 
sustaining its operations based on the 
Company’s latest materiality assessment:
2021 ANNUAL REPORT
14
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
SUSTAINABILITY

Nemak’s sustainability framework
Nemak understands that its technological progress and 
contributions to electric mobility are only some of many 
aspects of the sustainability model; its strategies must 
also actively protect the environment, its employees and 
the communities where it operates.
To align Nemak’s strategic sustainability approach, the 
Company conducted an intensive stakeholder dialogue 
to proactively integrate emerging sustainability-related 
demands and pressures into its strategic framework. 
Nemak embraces its commitment to sustainable 
mobility by focusing on key material topics where 
Nemak has the potential to make a real difference both 
now and in the future.
Together, we make sustainable mobility 
possible. We are creating sustainable 
value for our stakeholders by integrating 
sustainability in our daily business 
practices. By doing so, Nemak can make 
a real difference today and in the future 
in sustainable mobility. 
•	 Climate protection
•	 Circularity
•	 Innovation & Products
•	 Occupational health & safety
•	 Diversity & Inclusion
•	 Talent development and  
Well-being
•	 Corporate Citizenship
•	 Responsible SCM
•	 Sustainable leadership
•	 Business ethics
Material Topics
E
S
G
Environment & 
Climate Innovation
People & 
Communities
Value Chain Engagement 
& Business Integrity
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
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2021 ANNUAL REPORT
15
NEMAK
SUSTAINABILITY

Within each pillar, Nemak has identified the topics that are most relevant to it, and it 
has defined targets aligned with its overall values as the basis for its 2030 strategy.
Nemak’s Sustainability Roadmap 2030:
UN SDG ALIGNMENT CORE OBJECTIVE
TARGET VALUE 2030
ENVIRONMENT 
AND CLIMATE 
(INNOVATION)
9.2 
9.4 
12.2 
13.1 
13.2
Climate protection
•	 Reduce Scopes 1 & 2 by 28% by 2030 based on 2019; Scope 3 by 14% 
•	 Energy efficiency: ISO 50001 (100% by 2022)
•	 Renewable energy percentages: 25% by 2025, 70% by 2030
Circularity
•	 Increase the recycled content quota of new product groups
•	 Reduce the volume of solid waste streams by implementing waste 
reduction and recycling programs
•	 Minimize water losses 
Innovation and products
•	 Conduct Life Cycle Assessments (LCA) for 
•	 products and technologies 
•	 60% of products for electrified portfolio by 2030
VALUE CHAIN AND 
BUSINESS INTEGRITY
12.6 
12.8 
13.2  
13.3
Business integrity
•	 Continuous improvement in governance and sustainability practices 
using external ratings as benchmarks and guiding principles
Responsible supply chain
•	 Critical supplier screening via EcoVadis
•	 Full implementation of Code of Conduct
•	 Aluminum Stewardship Initiative (ASI) as standard for aluminum 
suppliers
Sustainable leadership
•	 Achieve A Level at the Carbon Disclosure Project (CDP)
•	 Continuous inclusion in the Dow Jones Sustainability Indices (DJSI
•	 Expansion of the sustainability team 
PEOPLE AND 
COMMUNITIES
4.4 
4.5 
4.7 
8.5 
8.7 
8.8
Diversity, inclusion and 
talent development
•	 Create an inclusive culture that reflects the diversity of the 
communities in which Nemak operates
•	 Further development and introduction of talent KPIs
Occupational health and 
safety
•	 Reduce the frequency and severity of incidents measured by year-over-
year reduction in TRIR (20%)
•	 10% year-over-year reduction of incidents that result in temporary or 
permanent lost time or restrictions
Corporate citizenship
•	 Continuously strive to implement stakeholder tools and mechanisms of 
interaction and shared value-creating opportunities
Sustainability  
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
2021 ANNUAL REPORT
16
NEMAK
SUSTAINABILITY

Goal 4 Quality Education: Through 
several measures in the area of 
learning and development, Nemak 
enables its employees to continually 
advance their personal and 
professional development.
Goal 8 Decent Work and Economic 
Growth: Nemak pursues ambitious 
growth targets in parallel with good 
working conditions, a competitive 
pay scheme, and a key focus on its 
employees’ health and safety.
Goal 9 Industry, Innovation and 
Infrastructure: Innovation is the 
basis for future growth and the 
development of environmentally 
friendly products. Nemak therefore 
makes significant investments 
in innovation initiatives, and sets 
incentives inside as well as outside 
the organization to encourage the 
generation of new ideas.
Goal 12 Responsible Consumption 
and Production: Nemak seeks to 
reduce the consumption of natural 
resources in its production processes 
by implementing measures 
throughout its manufacturing 
facilities. Furthermore, the Company 
continues to integrate sustainability 
criteria into its purchasing 
procedures.
Goal 13 Climate Action: Nemak’s 
environmental strategy focuses on 
consistently reducing greenhouse 
gases. This applies to both its own 
production sites as well as the entire 
value chain.
Highlights 2021 
In 2021, Nemak made continued progress on 
its journey towards sustainable mobility. The 
Company’s key milestones included:
•	 Development of the Company’s climate strategy 2030 and beyond
•	 Approval of CO2 reduction targets by the Science Based Targets 
initiative (SBTi) in March 2021
•	 Successful launch of Sustainability-Linked Bonds (SLBs) along 
with Nemak’s SBTi-approved targets
•	 Update of Nemak’s materiality assessment and redefinition of the 
Company’s material topics
•	 Reinforcement of the Company’s commitment to the UN Global 
Compact and its ten principles
•	 Introduction of a Sustainability Capex Committee 
•	 B rating in the internationally recognized CDP Climate Change 
questionnaire and Leaderboard in the SER (Supplier Engagement 
Rating A) plus other relevant ratings 
•	 Introduction of the concept of Life Cycle Assessment (LCA) for key 
products
•	 Preparation and commitment to begin ASI certification starting in 
early 2022
•	 Implementation of global initiatives to reduce the environmental, 
health and safety impacts of the Company’s operations
•	 Continuous commitment to Nemak’s world-class COVID-19 
pandemic control plan to ensure employee safety 
Nemak’s contributions 
to the UN Sustainable 
Development Goals
In an effort to address global challenges in a 
united arena, Nemak has closely aligned its 
sustainability roadmap with the United Nation’s 
Sustainable Development Goals (SDGs). The 
Company focuses its efforts primarily on the 
following SDGs: Quality Education; Industry, 
Innovation and Infrastructure; Responsible 
Consumption and Production; Climate Action; 
and Decent Work and Economic Growth. As 
outlined in Nemak’s sustainability framework, 
the Company uses the specific points of 
the SDGs to guide the development of its 
sustainability strategy.
In line with the SDGs, Nemak 
is also a signatory member 
of the UN Global Compact 
and provided its first 
Communication on Progress 
(COP) in 2021. For more 
information, please visit:
https://unglobalcompact.org/
participation/report/cop/create-
and-submit/active/459188
Our targets matched to UN SDGs
2021 ANNUAL REPORT
17
NEMAK
NEMAK AT
A GLANCE
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17
NEMAK
SUSTAINABILITY

SUSTAINABLE LEADERSHIP 
Material aspect: Sustainable leadership
To Nemak, sustainable leadership means being a leader in 
the transition towards sustainable mobility by implementing 
stakeholder tools and mechanisms of interaction, and shared 
opportunities for value creation. Such leadership entails 
strengthening stakeholder relations, including customer 
relations, shareholder, investor, and bondholder relations, as well 
as clear, transparent communication and engagement with the 
entire value chain. 
In order to achieve and maintain its leading position within the 
industry, Nemak anchors related areas of responsibility in its 
internal organizational structure to the highest executive levels, 
Committees, and Task Forces. To improve global collaboration and 
multisite coordination, Nemak created a dedicated sustainability 
team in 2020, which expanded in 2021 and will continue to grow in 
2022. External ratings and rankings evaluate Nemak’s ambitions 
and efforts and demonstrate the Company’s progress.
Key roles and responsibilities 
GRI 102-18, 102-19, 102-20, 102-22, 102-29, 102-31
Chief Executive Officer
The CEO has ultimate operational control over sustainability-
related matters such as making long-term strategic decisions, 
setting Company priorities, aligning roles, and defining 
responsibilities relating to targets such as climate protection 
or water preservation. Nemak holds regular Executive Team 
meetings, in which the executives review, validate and discuss the 
Company’s strategic, operational and sustainability targets, and 
where necessary, they make decisions for improvements on a 
global scale. The CEO provides overall guidance on the Company’s 
long-term strategic goals and framework and consults with 
external stakeholders such as investors and shareholders to 
study trends in the mid- to long-term future. Additionally, the CEO 
oversees risks and opportunities related to climate change. 
CEO
VP OF PURCHASING AND SUSTAINABILITY
SUSTAINABILITY COMMITTEE
CLIMATE TASK FORCE
CAPEX COMMITTEE
GLOBAL SUSTAINABILITY MANAGER
GLOBAL HSE DIRECTOR
2021 ANNUAL REPORT
18
NEMAK
NEMAK AT
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SUSTAINABILITY

Vice President of Purchasing and Sustainability
The Vice President of Purchasing and Sustainability is a C-Suite officer 
who reports directly to the CEO and is responsible for overseeing and 
implementing Nemak’s sustainability strategy (including climate-related 
issues and targets) in consultation with the CEO and the Co-Chairmen of 
the Board. The VP guides the Company on key priorities in its sustainability 
strategy by breaking down long-term goals, such as its net-zero goal, into 
regional and functional targets as part of the sustainability roadmap. The VP 
also ensures senior leadership alignment on these priorities and ensures 
proper support and resource allocation. The strong connection to purchasing 
allows for leverage within supply chain sustainability-related topics, such as 
the ability to influence sourcing decision frameworks based on associated 
Scope 3 emissions. The VP is also responsible for externally communicating 
Nemak’s sustainability strategy, and is the leader of both the Sustainability 
Committee and the Climate Task Force, which comprises various members 
within Nemak’s core functions. The VP ultimately executes the outlined 
sustainability strategy by uniting the global effort and aligning Nemak’s 
processes with relevant KPIs for sustainability and climate protection. 
Global Sustainability Manager
The Global Sustainability Manager (GSM) is responsible for continuously 
developing and implementing the sustainability strategy by creating an 
executable roadmap and integrating issues such as climate protection 
and circularity into Nemak’s operations. The GSM is also responsible for 
developing and implementing Science-Based Targets, setting CO2 footprint 
targets for external suppliers, and overseeing Nemak’s participation in 
major sustainability programs such as the UN Global Compact and the 
Aluminum Stewardship Initiative. Additionally, the GSM oversees the tracking 
and achievement of each region’s progress in sustainability, including their 
CO2e-related goals. The GSM therefore works closely with the individual 
plants and regions to monitor their progress towards established targets in 
line with Nemak’s sustainability goals and climate roadmap. Furthermore, 
the GSM works together with the Global Communications Manager and 
Investor Relations Officer to draft and publish the sustainability section of 
the Company’s Annual Report, and leads the yearly contribution in the main 
sustainability ratings and rankings.
Global HSE Director 
The Global HSE Director is responsible for leading the Health, Safety 
and Environment (HSE) management team, taking an active role in the 
development and implementation of Nemak’s sustainability strategy, in 
addition to being a member of the Global Sustainability Committee and 
Climate Task Force. Together with the VP of Purchasing and Sustainability and 
the Global Sustainability Manager, the Global HSE Director defines and tracks 
progress on environmental and health and safety objectives. Additionally, 
the role is responsible for global performance standards such as audits and 
ASI and for leading and supervising major global energy efficiency projects 
to reduce the Company’s CO2 impact. For more details on the roles and 
responsibilities of the Global HSE team, please refer to the section “Climate 
and environment” and “People and communities”. 
NEMAK AT
A GLANCE
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2021 ANNUAL REPORT
19
NEMAK
SUSTAINABILITY

Sustainability Committee and Climate Task Force
Nemak’s Sustainability Committee meets every six to eight weeks 
and is directed by the VP of Sustainability and Purchasing and 
the GSM. It comprises members from the following areas: Global 
Health, Safety and Environment (HSE), Business Development, 
Manufacturing, Purchasing, Commercial, Governance, Human 
Resources, Communications and Finance & Investor Relations. The 
HSE department manages the environmental impacts of Nemak’s 
operations and supports the definition of global emission targets.
The Climate Task Force is part of the Sustainability Committee and 
is responsible for developing and implementing the Company’s 
climate strategy. Led by the VP of Purchasing and Sustainability, 
its responsibilities are divided into three areas: Global HSE, Global 
Purchasing, and Global R&D. Within the Task Force, Global HSE 
is responsible for measuring and tracking Nemak’s emissions 
progress, as well as implementing emissions management 
programs. Global Purchasing is responsible for driving Nemak’s 
purchasing behavior towards sustainability criteria, which 
has resulted in the integration of sustainability principles into 
most of the Company’s purchasing decisions. In addition, the 
Global Purchasing defines and executes the renewable energy 
strategy globally and communicates the Company’s sustainability 
commitments to suppliers to ensure they align with Nemak’s 
climate strategy. Global R&D provides the basis for continuous 
innovation in production processes by developing, among others, 
alternative production technologies, smart and efficient product 
designs and alternative fuels.
Capex Committee
Additionally, in 2021, Nemak founded the Capex Committee to achieve its climate targets 
through strategic investments. It comprises the VP of Purchasing and Sustainability, 
the VP of Manufacturing and the CFO. The Committee oversees the approval process 
for climate-related investments and primarily targets CO2-reduction efforts at the 
Company’s manufacturing sites. At the Committee’s recommendation, Nemak plans to 
spend between US$15 and US$20 million annually in sustainability-related capex.
External ratings and rankings
With the growing importance of sustainability in the global market, Nemak continued 
investing significant time and effort into developing its sustainability strategy in 2021, 
with focus areas such as Climate Protection, Diversity and Inclusion, Sustainable 
Leadership and many others. Each year, the Company participates in various rating 
schemes, including the S&P Global Corporate Sustainability Assessment (CSA), the CDP, 
the EcoVadis Assessment and other disclosure platforms listed in the following table. 
These assessments serve not only as valuable benchmarking tools for the Company and 
its major stakeholders but also help to identify key areas for improvement.
Rating provider
Rating 2021
Rating 2020
CDP Climate 
B
C
CDP Water
B-
B-
CDP Supplier Engagement 
A (Leaderboard)
A-
CSA
45 points, 79th percentile
41 points, 69th percentile 
EcoVadis
Silver
Bronze
FTSE4Good 
Member 
Member 
Nemak’s participation in the CDP and CSA began in 2016. Since then, the Company has 
significantly improved its scores across all ESG ratings, as well as in the three different 
CDP assessments (climate change, water, and supplier engagement). In 2021, The 
Company received an overall grade of “B” in its CDP rating, a considerable upgrade from 
the previous year’s result of “C”. The B rating represents the Management band, meaning 
Nemak is ranked higher than the North American regional average of C, and higher than 
its identified sector, Powered Machinery, which also has an average of C. In addition, 
the Company improved its EcoVadis rating from “bronze” in 2020 to “silver” in 2021. In 
recognition of the Company’s continuous efforts, Nemak has also been selected to be 
part of the Dow Jones Sustainability Indices for the third consecutive year, and it is the 
only automotive company included in the 2021 DJSI MILA Pacific Alliance. The results of 
these ratings are essential for Nemak’s customers, financial markets and the Company 
itself, as it uses the feedback to improve its sustainability performance.
GLOBAL
HSE
GLOBAL 
PURCHASING
GLOBAL 
R&D
NEMAK’S CLIMATE TASK FORCE
NEMAK AT
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20
NEMAK
SUSTAINABILITY

MATERIALITY ASSESSMENT AND 
STAKEHOLDER DIALOGUE
In 2021, Nemak performed a comprehensive materiality 
assessment to identify areas requiring increased focus and 
reviewed its long-term priorities to enhance its contributions 
toward a sustainable future. The Company gathered input 
from throughout the organization to ensure the assessment 
contained the most accurate information and reflected Nemak’s 
organizational priorities. In addition, the Company conducted 
interviews with external stakeholders in September 2021 to 
incorporate their expectations into its future sustainability 
management. These stakeholders included shareholders, 
employees, customers, suppliers, community members, media, 
and non-governmental organizations. 
Material topics 
GRI 102-46, 102-47
During the analysis, Nemak also updated its materiality matrix to include changing global 
social and economic scenarios and the requirements of ESG performance disclosure 
platforms. The matrix’s key inputs included the Sustainability Accounting Standards 
Board (SASB) Materiality Map for the automotive industry and the rapidly changing global 
legislation landscape regarding sustainability.
Nemak identified fourteen areas that underpin its sustainability model and strategy, and 
that guide its efforts to implement long-term targets and foster greater engagement, 
dialogue and trust with stakeholders. In order of relevance, these areas are as follows:
1) Climate protection 
2) Product quality and safety 
3) Supply chain management 
4) Innovation 
5) Occupational health and safety 
6) Circularity 
7) Sustainable leadership 
8) Business ethics 
9) Labor practices 
10) Diversity and inclusion 
11) Waste management and 
      hazardous materials 
12) Water management 
13) Training and development 
14) Corporate citizenship
ORGANIZATIONAL IMPACT
Environmental
Social
Governance
10
8
6
4
2
4	
6
8
10
2	
1
5
3
6
2
7
4
8
9
11
10
12
13 14
Business 
relevance
STAKEHOLDER RELEVANCE
NEMAK AT
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21
NEMAK
SUSTAINABILITY

Stakeholder engagement 
GRI 102-40, 102-42, 102-43, 102-44
Nemak defines its stakeholders as any individuals 
or organizations that directly impact or are 
impacted by the Company’s activities. Nemak 
identifies its stakeholders by investigating 
the entire value chain, from the mining of raw 
materials used in its production processes to the 
final end-users of its products. 
The stakeholders Nemak engages with are those 
perceived as either most impacted by Nemak’s 
choices or those that Nemak is most reliant on 
for sustainable business performance. These 
stakeholders include, but are not limited to: 
CUSTOMERS
INVESTORS
SUPPLIERS
EMPLOYEES
COMMUNITIES
Form of engagement 
(related to 
sustainability topics)  
Customer meetings
Customer requests
Materiality 
assessments
Annual Report 
Quarterly calls
Sustainability-Linked 
Bonds (SLBs)
Investor Day 
Materiality 
Assessment
EcoVadis assessments
Commitment letters
Supplier meetings 
(sustainability round 
tables) 
Materiality 
Assessment
Sustainability 
workshops (for 
example for sales) 
HSE Week
Materiality 
Assessment
Local Initiatives  
Refer to People and 
Communities section 
of Annual Report for 
more information 
Reasons for 
engagement
Improve customer 
confidence that 
Nemak will achieve its 
sustainability strategy 
Actively engage and 
align with customer 
expectations 
Increase confidence 
in Nemak and 
its sustainability 
commitments to 
encourage further 
investment
Raise awareness of 
Nemak’s initiatives 
and encourage 
suppliers to align 
with the Company’s 
sustainability 
objectives
Increase employee 
awareness and 
motivation to 
proactively engage 
with sustainability 
topics
Align Company 
and employee 
sustainability values
Support the 
communities in which 
Nemak operates 
Educate community 
members about the 
Company and its 
activities
Learn from 
communities and 
raise awareness about 
their local issues
Frequency of 
engagement
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing  
(depending on local 
initiatives)
COMMUNITIES 
where Nemak can provide 
support and create new 
opportunities
INVESTORS 
who provide capital that 
enables the Company to 
transform and succeed
CUSTOMERS 
are the primary source 
of Nemak’s business
SUPPLIERS 
that Nemak strongly relies 
on to guarantee a high 
level of quality in its own 
products
EMPLOYEES 
who drive business growth 
through their performance, 
engagement and collaboration
2021 ANNUAL REPORT
22
NEMAK
NEMAK AT
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SUSTAINABILITY

In 2021, the most frequently raised topics by 
Nemak’s stakeholders were related to climate 
protection and emissions reduction. The Company 
also received a growing number of requests for 
greater emissions transparency and evidence of 
its proactive climate strategy implementation. In 
addition, the issuance of the sustainability-linked 
bonds (SLBs) has magnified investor attention 
to Nemak’s emission reduction progress. In 
response to stakeholder requests, Nemak 
continues to evolve its climate strategy, including 
ongoing investments in energy efficiency projects 
and the purchase of renewable energy. 
Similarly, circularity and supply chain 
management are critical topics for Nemak and its 
customers, employees, and investors. Within this 
context, the Company is working to minimize the 
Continous engagement and dialogue 
with its stakeholders is important 
for Nemak. The Company conducted 
a full materiality assessment 
during 2021, outlining key material 
issues which guide Nemak’s overall 
sustainability strategy. 
environmental impacts of its upstream materials 
and end-of-life activities by using more recycled 
materials in its production processes.
In addition, as the global community began to 
recover from the COVID-19 outbreak, Nemak 
observed an unprecedented amount of supply 
chain disruptions. The Company has shown strong 
perseverance and reported no interruptions in 
2021. However, as Nemak’s production share of 
assembled goods increases, so does the pressure 
on its supply chain. Therefore, effective and 
efficient supply chain management is critical 
for the Company to continue providing high-
quality products to its customers. In response, 
Nemak continues to actively engage with its 
suppliers through commitment letters, EcoVadis 
assessments, events and supplier round tables.
NEMAK AT
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2021 ANNUAL REPORT
23
NEMAK
SUSTAINABILITY

As a leading manufacturer in the automotive 
industry, Nemak aims to maximize value for all 
its stakeholders, protecting the environment 
in the communities where it operates, while 
simultaneously implementing a broader vision of 
climate protection that aligns with principles of the 
United Nations Global Compact. 
Nemak believes it has a particular responsibility to reduce 
its climate impact thoughtfully and consistently, to conserve 
resources, and ultimately to protect nature. Based on its 
comprehensive understanding of the climate crisis, Nemak 
continuously evaluates potential risks and takes various 
measures to improve its environmental management, conducting 
analyses to prioritize the most pressing issues. 
During its 2021 materiality analysis, Nemak ranked the key risks 
and opportunities based on their relevance to its stakeholders, 
including investors, customers, suppliers, and communities. The 
results enable the Company to make more informed decisions, 
understanding its overall impact and potential for influence, and 
guiding Nemak towards an improved sustainability strategy. 
Based on the results of this comprehensive analysis, climate 
protection and innovative approaches to protecting the climate 
were identified as the Company’s predominant fields of action, 
representing growing priorities for its stakeholders. In effect, 
Nemak’s environmental management program focuses on 
reducing emissions and energy consumption, while implementing 
a circular economy approach towards the use of raw materials, 
water, and waste management in Nemak’s operations. 
Overall management 
approach
In its business operations, Nemak applies 
industry best practices, technology, and 
innovation to prevent environmental 
pollution, following numerous strict 
guidelines and regulatory requirements. 
The Company’s environmental 
management strategy sets clear targets to 
improve its performance based on various 
ISO frameworks, such as ISO 14001 and 
ISO 50001. With this strategy, Nemak aims 
to enhance its environmental performance 
beyond mere compliance, in effect setting 
an example as a company committed to 
improving its sustainability management 
year after year. Currently, 97% of Nemak’s 
sites are ISO 14001 certified, and the total 
number of certified locations continues to 
increase.
Organization and 
responsibilities
Nemak strives to integrate sustainability 
principles into all its functions, assigning 
responsibility for environmental 
management to various levels of 
management across multidisciplinary 
teams. At the upper management level, 
Nemak’s Vice President (VP) of Purchasing 
Environment and climate
and Sustainability is a C-Suite officer 
who regularly consults with the 
CEO and who is responsible for the 
Company’s sustainability strategy, 
as well as overseeing Global HSE. 
The Company’s global environmental 
management is led by the Health, 
Safety and Environment (HSE) 
Management team that collaborates 
with Nemak’s manufacturing 
operations, Global Sustainability, 
Human Resources, Finance, 
Procurement, Sales, and Engineering. 
The global HSE team is responsible for 
implementation of the environmental 
management system. Each operating 
site reports its relevant environmental 
management system activities to 
a regional HSE manager, who then 
reports to the Global HSE Director. 
The Company’s Sustainability Capex 
Committee, founded in 2021 and 
comprised of company executives 
– the CFO, the VP of Manufacturing 
and Product Development, and the 
VP of Purchasing and Sustainability 
– approves all sustainability projects 
and investments. These investments 
can include energy efficiency, emission 
control and reduction, green energy, and 
other related sustainability projects.
2021 ANNUAL REPORT
24
NEMAK
NEMAK AT
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SUSTAINABILITY

Combatting the impending climate crisis and 
achieving the target established in the Paris 
Climate Agreement of limiting the global 
temperature increase to 1.5 degrees Celsius is 
one of the key challenges facing society over the 
next decade. Due to the energy-intense nature 
of Nemak’s business, it has a responsibility to 
take meaningful actions to reduce carbon dioxide 
equivalent (CO2e) greenhouse gas (GHG) emissions. 
Emissions reduction and energy efficiency are 
therefore vital topics for innovation at Nemak, 
driving its focus on increasing the fuel efficiency 
of vehicles while also reducing its own emissions 
during the manufacturing process. As a key 
member of the global automotive supply chain, 
Nemak has a particular responsibility to reduce its 
direct Scope 1 and indirect Scope 2 emissions, as 
well as its Scope 3 emissions to decrease pollution 
along the entire value chain.
Nemak’s ambitions
Based on different projections of volume 
development, energy consumption and growth 
scenarios, Nemak has developed a holistic climate 
strategy that includes mid-term targets to 2030, 
and the ambition to become carbon neutral by 
2050 or earlier. In March 2021, the Science Based 
Targets Initiative (SBTi) officially validated Nemak’s 
targets, marking a significant milestone in the 
Company’s climate journey. 
Climate protection and 
climate innovation
SDG 13: Climate Action 
Material aspect: Climate protection 
GRI 302, GRI 305
* Scope 1 & 2 targets are in 
line with a well-below 2°C 
global warming scenario  
28%
14%
The Company has set the following 
targets for reducing its greenhouse 
gas emissions:
Reduce Scope 1 and 2 
emissions* by at least
by 2030 from a 
2019 baseline 
Reduce Scope 3 
emissions by at least 
by 2030 from a 
2019 baseline
In 2021, the most frequently 
raised topics by Nemak’s 
stakeholders were related 
to climate protection and 
emissions reduction.
NEMAK AT
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25
NEMAK
SUSTAINABILITY

Nemak’s method for calculating its 
Scope 1 and Scope 2 emissions will be 
independently verified by a third party 
in 2022*.  In the future, based on the 
verification results, the Company may 
consider committing to the more ambitious 
goals of the SBTi in line with limiting global 
warming to a 1.5-degree Celsius scenario. 
To reinforce its commitment and increase funding 
towards attaining these climate objectives, Nemak 
completed the issuance of two sustainability-
linked bonds (SLBs). The first was for US$500 
million with a ten-year maturity, and the second 
was for €500 million with a seven-year maturity. 
The issuance of these bonds enables the Company 
to gain additional access to capital, which it can 
invest in the execution of its climate-related 
initiatives as well as its broader strategy. As part of 
each issuance, Nemak has committed to specific 
environmental outcomes and targets by setting 
ambitious science-based timelines to achieve 
sustainability targets that are relevant, core and 
material to its business. This commitment linked 
to the SLBs comprises a 18% reduction in Scope 
1 and 2 emissions by 2026, based on 2019 levels. 
Additionally, under the terms of these transactions, 
if Nemak is unable to execute its strategy and 
meet its SBTi-aligned targets, a premium will 
be payable by Nemak in the form of a step-up in 
coupon margin.
To reach its targets, Nemak has developed a 
Decarbonization Maturity Model (DMM), which 
includes establishing specific objectives in the 
areas of life cycle assessment (LCA), amount 
of renewable energy purchased and generated, 
and several other measures. With the DMM, 
Nemak narrows down specific targets based on 
regional and local circumstances to ensure that 
implementation of the decarbonization strategy is 
successful on an aggregated global level. 
The Figure below shows Nemak’s path towards net-zero 
Scope 1 and Scope 2 emissions. 
PROJECT PATHWAY TO NET ZEO
Scope 1+2 in metric 
tons of CO2e
Important: offseting is not a measure for achieving climate targets according to SBTi
2030: 
1,028,759
2019: 
1,418,978
2030: 
1,500,000
2.000.000
1.500.000
1.000.000
500.000
2020
2025
2030
2035
2040
2045
2050
Business-as-usual
Energy efficiency
Fuel switch
Renewable electricity
Reduction path
Offsetting of unavoidable emissions
Own production of 
renewable energies
Nemak’s approach to meeting its  
climate targets: 
GREEN PRODUCTS 
Low carbon materials 
and solutions
GREEN PRODUCTION 
Energy efficiency 
Technical Innovation
GREEN SOURCING 
Renewable energy 
Low carbon materials
28%
Reduction in CO2e 
footprint in Scope 
1 & 2 by 2030
14%
Reduction in CO2e 
footprint in Scope 
3 by 2030
CARBON NEUTRAL 
LATEST BY 2050
* Verification of Scope 1 and Scope 2 emissions will be 
available by the end of 2022
2021 ANNUAL REPORT
26
NEMAK
NEMAK AT
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Climate-related risks 
and opportunities 
GRI 102-15, 201-2
In line with the results of Nemak’s materiality analysis and the 
growing importance of climate protection, the Company believes 
it is critical to assess, understand and evaluate the inherent risks 
of climate change and their associated financial implications. 
Nemak has begun implementing the recommendations of the 
Task Force on Climate-Related Financial Disclosures (TCFD) in its 
strategy to 2030, and is continuously evaluating how it can align 
its risk management and reporting with the requirements. These 
initiatives enable both Nemak and its stakeholders to incorporate 
climate-related risks and opportunities into their business 
management, strategic planning, and decision-making processes 
to provide greater value and transparency. 
Climate scenario modeling
Along with Nemak’s implementation of TCFD recommendations, 
the Company conducted a scenario analysis in 2021 using 
two cases – business as usual (BAU) and a 1.5-degree Celsius 
scenario – that it identified as the most likely and impactful based 
on its risk assessment process. 
The first emerging risk is associated with the automotive 
industry’s rapid and accelerating shift towards electrification. 
In 2021, around 90% of Nemak’s revenue came from vehicle 
applications with internal combustion engines (ICE). However, the 
increasing market penetration of electric vehicles (EV) presents 
Nemak with both risks and great opportunities. More information 
about the measures Nemak has already taken and its long-
term targets in the field of electromobility can be found in the 
Lightweighting Developments chapter.
The second risk relates to the rising costs associated with carbon 
pricing systems expected to be developed in the near future, such 
as carbon taxation and Emission Trading Systems (ETS). Nemak 
has assessed the potential impacts that carbon pricing will have 
on its future growth, as its core business involves purchasing 
significant volumes of electricity, natural gas, and fuel. Different 
carbon pricing schemes are already in place in several of Nemak’s 
markets. As the Company expects more ambitious climate 
policies to be implemented in the future, there is a growing risk of 
rising operating costs for energy and freight transport.
Based on the results of the aforementioned risk analysis, Nemak 
has updated its strategy to include various measures related 
to climate protection, the circular economy, and the supply 
chain. More information can be found in Nemak’s TCFD Index as 
outlined below.
NEMAK AT
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NEMAK
SUSTAINABILITY

TCFD INDEX
GRI Standards 201-2
PILLAR/RECOMMENDATION 
KEY POINTS 
GOVERNANCE
Describe the board’s oversight of climate-
related risks and opportunities.
The Board of Directors evaluates the overall performance of Nemak’s sustainability efforts at least once every two years, focusing specifically on climate-related issues as 
the topic becomes more material. In 2021, the Board discussed climate related topics, including topics such the impact of emerging environmental regulation on Nemak, 
changing market demands, and shifts in the Company’s product portfolio.  With the issuance of two sustainability-linked bonds (SLBs), vigilance over climate-related topics 
has increased, as the SLB framework is directly linked to Nemak’s-emission abatement performance. 
A dedicated member of the Board of Directors is responsible for oversight of strategic alignment and integration of the sustainability strategy with the overall business 
strategy. This individual’s responsibility is to support long-term plans and investment spending for Nemak’s transition towards becoming a climate neutral company. 
The Global HSE department actively monitors the company’s CO2 emissions on a global level and reports on progress against its science-based targets, which in turn is 
communicated to investors and the Board of Directors. 
Describe management’s role in assessing 
and managing climate-related risks and 
opportunities
Nemak’s CEO provides guidelines on the Company’s long-term strategic goals and framework, and consults with external stakeholders such as investors and other 
shareholders to study trends in the mid- to long-term future, including assessing climate-related risks and opportunities. The CEO establishes the Company’s vision, 
incorporating the results of the climate assessment. 
The VP of Purchasing and Sustainability is responsible for evaluating the identified climate -related risks and opportunities, in consultation with the CEO and the Co-Chairmen 
of the Board. The risk analysis is conducted by the Sustainability team in cooperation with Global Finance and Investor Relations, further presenting the results to the VP of 
Purchasing and Sustainability, the Sustainability Committee and Climate Task Force.  Based on the identification and confirmation of climate-related risks and opportunities as 
a collective, the VP is responsible for integrating the results into the sustainability vision, and for implementing sustainability principles into Nemak’s business strategy.  
The Global Sustainability Manager, Global Finance and Investor Relations Director, and HSE Director work together to identify and assess climate-related risks and 
opportunities, including preparing a financial assessment.
The Sustainability Committee and Climate Task Force, both led by the VP of Purchasing and Sustainability, oversee and assess the results of identified climate-related risks 
and opportunities, alongside overseeing Nemak’s climate strategy and emission reduction activities.  The Sustainability Steering Committee and the Task Force comprise 
internal environmental, social and governance leaders and experts. Specific inputs on Nemak’s Scope 1, 2 and 3 emissions are provided by the Energy Management 
Engineering Community and the Sustainability Investment Executive Steering Committee. The Global Sustainability Manager supports these processes and oversees the 
emission target setting, progress and implementation. In some cases, the Company includes other internal and external resources to support its environmental performance 
objectives.
For more details on the Company’s sustainability governance structure, please see Nemak’s Annual Report 2021, p. 20.
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NEMAK
SUSTAINABILITY

STRATEGY
Describe the climate-related risks and 
opportunities the organization has 
identified over the short, medium, and 
long term.
Time horizons are defined by Nemak as: 
1) Short, 1 – 3 years 
2) Medium, 3 – 5years 
3) Long, 5 – 10 years
Opportunities:
•	 (Medium – Long term) Dynamic market shift towards electrification, opening up new markets, new products, new customers, and new technologies  
•	 (Short term) Improvements in operational efficiency and performance
•	 (Short term) Use of financial instruments linked to sustainability (ex: sustainability-linked bonds) 
Risks:
•	 (Medium) Current and emerging regulations on carbon emissions, including implicit and explicit carbon -pricing schemes
•	 (Short – Medium) Market and reputation, stringent requirements from customers and stakeholders  
•	 (Short – Long) Acute and chronic physical changes, risks of impacts from extreme weather events and catastrophes, and long-term land changes 
Describe the impact of climate-related risks 
and opportunities on the organization’s 
businesses, strategy, and financial 
planning.
The outcome of Nemak’s climate-related assessment is discussed at all levels of upper management, including with the CEO, VP of Purchasing as well as the Sustainability 
Committee. The assessment results in integration and consideration of all identified climate risks and opportunities in strategic and financial planning.
Describe the resilience of the organization’s 
strategy, taking into consideration different 
climate-related scenarios, including a 2°C 
or lower scenario.
In 2021, Nemak conducted a scenario analysis in a business-as-usual scenario and a 1.5-degree Celsius IPCC scenario, based on assumptions from diverse sources, such as 
IEA, World Bank, NGFS climate scenario database. This analysis is in line with TCFD recommendations and helps to evaluate the financial risks and opportunities from the most 
pressing climate issues, including transitional market and regulatory risks, such as electrification and current and emerging carbon regulations. These results were integrated 
into short-, medium-, and long-term strategic, business, financial, and sustainability planning.
RISK MANAGEMENT
Describe the organization’s processes for 
identifying and assessing climate-related 
risks
Through consultation with internal management, including the VP of Purchasing and Sustainability, Global Sustainability Manager, HSE Director, and Global Finance and 
Investor Relations Director, Nemak has created an inventory with all relevant climate-related risks, which is updated on a yearly basis. Based on a quantitative evaluation by 
Nemak’s management, including the CFO and all VPs, climate-related risks are ranked by magnitude and financial impact. The most relevant and pressing climate-related 
risks are evaluated using a scenario analysis, in line with TCFD recommendations, yielding financial impact values. Additionally, Nemak maintains an ongoing dialogue with its 
stakeholders that is centered on listening and understanding expectations in relation to the Company’s sustainability activities, including any relevant information on climate-
related risks.  
To enrich the results of this process in 2021, Nemak supplemented the risk inventory analysis with the results of the materiality assessment, which had identified climate 
change as the key topic for all stakeholders. Through a series of internal and external interviews, participants identified specific key points of the climate change topic that 
they perceived as risks or opportunities for Nemak, the results of which were used to adjust the risk inventory accordingly. 
Describe the organization’s processes for 
managing climate-related risks.
The climate-related risk inventory, scenario analysis, and materiality analysis are presented and discussed with the CEO, VP of Purchasing and Sustainability, the Sustainability 
Committee, and the Climate Task Force. The ongoing dialogue with external stakeholders on climate-related topics further supports and reaffirms the outcomes of this 
process. Findings from this multi-dimensional assessment pinpoint the areas that need improvement, and those that will have the greatest impact on climate protection. The 
Company uses this information to determine the focus of Nemak’s climate strategy and goals. The results and impacts of this process, along with the defined climate change 
strategy, including Nemak’s commitment to SBTi, are further integrated into business, strategic, and financial decisions. 
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NEMAK
SUSTAINABILITY

RISK MANAGEMENT
Describe how processes for identifying, 
assessing, and managing climate-related 
risks are integrated into the organization’s 
overall risk management.
As ESG topics become more relevant, Nemak continuously adapts its business and sustainability strategy in response to market shifts and changing stakeholder expectations. 
With the results of the climate-related risk analysis as well as the scenario analysis,  Nemak actively considers  and takes appropriate actions based on the findings to 
mitigate the impacts of such risks. This includes the integration of climate-related topics, including emissions, water and waste, into the overall process of risk management 
and business planning. In addition, Nemak locations certified with ISO 14001, 45000 and 50001 have biannual third-party certification audits and surveillance audits in the 
years between certification. Overall, Nemak’s shifting focus and prioritization of sustainability topics is evident in the company’s significant improvement in 2021 in ESG 
ratings such as the CDP and EcoVadis.  
METRICS AND TARGETS 
Disclose the metrics used by the 
organization to assess climate-related risks 
and opportunities in line with its strategy 
and risk management process.
To achieve its ultimate objective of Net Zero emissions at least by 2050, Nemak has defined a strategy based on three pillars: Green Products, Green Production and Green 
Sourcing.  To achieve its net-zero target, Nemak has developed a Decarbonization Maturity Model (DMM), which includes establishing specific targets in the areas of life cycle 
assessment (LCA), renewable energy share and various others. With the DMM, Nemak strives to narrow down specific targets based on regional and local circumstances to 
ensure the decarbonization strategy’s implementation is successful on an aggregated global level. However, it important to take note that as part of Nemak’s material issues, 
the aspects of this strategy apply not only towards Climate Protection, but also to Circularity, and Waste and Water Management. As a result, Nemak established specific 
environmental targets in all of these areas, outlined in its Sustainability Roadmap 2030. 
As a fundamental pillar of Nemak’s Climate Strategy, the Company has committed to Science Based Targets (SBT) to reduce Scope 1 and 2 emissions by 28%, and Scope 3 
emissions by 14% by 2030, based on 2019 levels. To achieve these Scope 1 and 2 goals, Nemak tracks and focuses on environmental management, including energy efficiency 
under the ISO 50001 standard. Nemak is working towards having 100% of its facilities ISO 50001 certified by 2022. Additionally, the Company recognizes the potential of 
renewable energy in attaining its climate goals and mitigating the impacts of climate-related risks. Based on its Sustainability Roadmap 2030, Nemak aims to increase its 
global renewable energy use to 25% of total energy consumption by 2025, and 70% by 2030.
In reference to Scope 3 emissions, Nemak tracks the use of recycled material used in its products, which currently stands at approximately 70%. In line with circular 
economy principles, the Company aims to increase the recycled content quota of new product groups, especially those relevant to the rapidly expanding EV market. Additional 
investments are being made in R&D to ensure the usability and quality of Nemak products made from recycled alloys. Nemak maintains strong relationships with its suppliers 
through constant communication, supporting and encouraging them towards higher levels of transparency in ESG topics, including climate change. As a tactic towards 
attaining its Scope 3 reduction target, the Company secured 26 commitment letters from key suppliers, which are dedicated towards reaching net zero.  Additionally, Nemak 
requires key suppliers to take part in EcoVadis as a screening practice and establishes specific score thresholds for key suppliers to meet. EcoVadis is a comprehensive and 
globally recognized ESG assessment as a method increased transparency, as well as encouraging its suppliers toward more proactive action in sustainability topics. 
As a powerful tool, Nemak uses insights from the internationally recognized Life Cycle Assessment (LCA) methodology to help the Company understand where most of its 
global warming impacts originate from.. As Nemak’s product portfolio evolves, the Company continues to deepen its LCA approach, with the goal of completing LCAs for all 
product categories in the short term. 
Disclose Scope 1, Scope 2, and, if 
appropriate, Scope 3 greenhouse gas (GHG) 
emissions, and the related risks.
Please see p. 31 of the Annual Report for a detailed breakdown of Nemak’s Scope 1, 2 and 3 emissions, as well as the related risks.
NEMAK AT
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NEMAK
SUSTAINABILITY

Management approach
Electromobility plays a critical role in the transition 
towards a sustainable automotive industry and 
reducing greenhouse gas emissions worldwide. 
As an active player in this global transition, Nemak 
aims to become a leading producer and supplier of 
EV/SC components, including lightweight electric 
motor housings, battery housings, and structural 
components for electric vehicles. 
Thirty percent of Nemak’s total carbon footprint 
is generated by Scope 1 emissions from its on-
site use of natural gas and other fossil fuels, and 
indirect Scope 2 emissions emanate from selected 
electricity and district heating suppliers. While 
Nemak’s Scope 2 emissions increased by 1% in 
2021, its Scope 1 emissions were 8% higher than 
the previous year. This increase was in part a 
reflection of the exceptional circumstances of 2020 
including reduced fuel consumption, particularly 
natural gas, during the various shutdowns of 
the Company’s facilities worldwide and lower 
production between March and May.
More than 70% of Nemak’s CO2e emissions result 
from its supply chain. It is therefore critical for 
the Company to engage with suppliers to reduce 
its global carbon footprint and progress towards 
its net-zero goal. As 80% of those supply chain-
related emissions come from the main raw 
materials used for Nemak’s products — aluminum 
and aluminum alloys, which are 100% recyclable 
— circular economy principles are becoming 
an ever-more pressing topic, presenting huge 
opportunities for future improvement in material.  
* Emissions values are estimates
of supply chain-related 
emissions come from the 
main raw materials used for 
Nemak’s products
EMISSIONS IN TONS CO2E*
2021
2020
2019
Scope 1
648,628
598,629
719,659
Scope 2
568,291
563,095
699,319
Scope 3
3,878,933
3,150,516
3,384,960
Total
5,095,852
4,312,240
4,803,938
80%
Emissions 
GRI 305: 305-1, 305-2, 305-3, 305-5
2021 ANNUAL REPORT
31
NEMAK
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SUSTAINABILITY

Purchase goods and services
Fuel and energy related
Downstream transport
Capital goods
Upstream transport
Others
Scope 3 emissions main contributors are 
related to category 3.1, Purchased Goods 
and Services. Within 3.1, by far the biggest 
contributor are aluminum, alloys and scrap 
with an overall contribution of 75% of the 
total scope 3.1.
During 2021, scope 3 emissions increased 
by 23% in comparison to 2020. While 
the majority of the scope 3 categories 
stayed at a comparable level to 2020, the 
predominant contributor to the growth of 
scope 3 is related to scope 3.1 and more 
specific to Aluminum, alloys and scrap. 
Here a mixture of different effects leads 
to an increase of CO2 emissions: firstly, 
a higher volume of purchased metal 
(including aluminum, master alloys and 
scrap) of 4.1%  contributed negatively to 
the overall effect. Secondly, a rising share 
of primary metal used in Nemak’s products 
increased overall level of emissions. The 
share of primary material increased from 
25% to 30% in relation to all metal used, 
which represents an 24% increase on 
primary material.  The increased share 
of primary metal mainly resulted from 
more stringent technical specifications 
and requirements, related to the new 
product portfolio, which in turn requires 
more primary material. At the same time, 
high LME prices limited the availability of 
primary scrap material with a lower carbon 
footprint, which contributed negatively to 
the overall CO2 footprint. Specifically, in 
the North American region, the availability 
of primary raw aluminum (P1020) was 
restricted with limited options to purchase 
metal with optimized footprint. In order 
to secure the availability of low carbon 
primary material in future strategic supply 
contracts have been signed.
A key element in the reduction strategy of 
Nemak’s scope 3 footprint is a cohesive 
and long-term supplier engagement effort. 
During the reporting year, Nemak created 
different occasions of exchange and shared 
learning, while at the same time requesting 
its key supply base to take action. Due to 
the increased efforts, Nemak demands 
more concise data from its supply base 
and has consistently replaced the general 
emission factors through primary 
data and increased the accuracy and 
validity of the overall emission footprint 
calculation. As a result, in some cases, 
the emission factors per supplier deviate 
negatively from the standard factors 
provided from relevant databases. 
The weighted global average CO2e 
factors for Nemak’s primary material in 
2020 was 10.97% kg CO2e / kg material, 
while the global weighted average in 
2021 was 11.34% kg CO2e / kg material. 
This increase is driven by a higher 
share of primary emission data directly 
reported by Nemak’s suppliers.
83%
5%
5%
2%
2%
3%
75%
12%
8%
1%
4%
Aluminum Alloys and scrap
MRO
Manufacturing Services
Contracted Services
Production Material
Others
SCOPE 3.1
SCOPE 3
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NEMAK
SUSTAINABILITY

Organization and responsibilities 
While the global sustainability team provides the 
strategic roadmap for Nemak’s climate strategy, 
the HSE team’s responsibility is to measure 
and forecast the Company’s climate change 
performance for Scope 1 and 2 emissions. 
Nemak’s emission strategy is approved by the 
Company’s Sustainability Steering Committee and 
supported by the Global Climate Task Force. The 
Sustainability Steering Committee and the Task 
Force comprise internal environmental, social 
and governance leaders and experts. Specific 
inputs on Nemak’s Scope 1, 2 and 3 emissions 
are provided by the Energy Management 
Engineering Community and the Sustainability 
Investment Executive Steering Committee. The 
Global Sustainability Manager supports these 
processes and oversees the emission target-
setting, progress, and implementation. In some 
cases, the Company includes other internal and 
external resources to support its environmental 
performance objectives.
Progress and measures 
To achieve the target of reducing Scope 3 
emissions, 26 of Nemak’s critical suppliers have 
signed a commitment to measure and reduce their 
CO2 emissions in line with Nemak’s ambitions. In 
addition, the Company has introduced a bonus-
malus mechanism to evaluate the suppliers that 
share information about their climate strategy and 
CO2 emissions. For example, Nemak encourages 
its suppliers to  be evaluated by reputable 
third parties such as EcoVadis. In 2021, Nemak 
assessed 57 new suppliers in conjunction with 
EcoVadis, thus the Company now has a total of 88 
assessed suppliers with valid scores. In the future 
the Company plans to introduce engagement 
programs for suppliers of key inputs, particularly 
aluminum, to ensure they do not exceed the 
emission levels targeted by Nemak.
The Company also conducted two stakeholder 
roundtables in 2021, and one webinar with 
suppliers and guest speakers, including specialists 
from the Aluminum Stewardship Association, to 
discuss Nemak’s emissions reduction targets and 
commitments. In total, around 20 of the Company’s 
key suppliers participated in these roundtables, 
and approximately 100 joined the webinar. 
In 2021, Nemak invested US$5 million to reduce 
the amount of Significant Air Pollutants such 
as Hazardous Air Pollutants (HAP), Particulate 
Matter (PM) and Volatile Organic Compounds 
(VOC) released into the atmosphere. These 
investments included applying filters and hoods 
for casting areas, and improving filter systems and 
engineering control systems to reduce HAP and 
VOC emissions. 
Evaluation 
Nemak’s locations certified to ISO 14001, 45000 
and 50001 undergo third-party certification audits 
every two years, and surveillance audits in the 
years between certification. In 2021, as part of the 
ISO 50001 certification, gap assessments were 
conducted at some sites during the reporting 
year. In addition, during the reporting year, Nemak 
improved its ratings and scores from various 
sustainability rating agencies such as EcoVadis, 
DJSI and CDP.
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NEMAK
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Energy 
SDG 7: Affordable and Clean Energy 
GRI 302: 302-1, 302-4
Management approach
Under the Company’s climate strategy, Nemak is increasingly 
prioritizing energy efficiency and using renewable energy in 
production processes to foster greener and more sustainable 
operations. The Company’s energy management program, 
based on ISO 50001 guidelines, is structured with varying 
levels of responsibility, including the leadership team, which 
comprises members from the HSE department, Sustainability 
Committee, department managers and domain experts. The team 
is responsible for monitoring, controlling, and saving energy in 
manufacturing processes, and identifying energy-related risks and 
opportunities. The Company also develops strategies to improve 
energy efficiency and invests in new machinery, equipment, and 
processes, with a focus on transitioning to carbon-free energy 
sources. In addition, where possible, Nemak purchases renewable 
energy in the form of renewable energy certificates (RECs) to 
achieve its climate protection goals. Currently, 42% of Nemak’s 
locations are certified to ISO 50001 and the Company is aiming for 
100% of sites to be certified by 2023. 
Nemak’s ambition
Increasing the percentage of renewables in Nemak’s energy mix is a central pillar of 
its energy transition strategy in line with the overall climate strategy. The Company’s 
ambition is to supply at least 25% of its energy needs with renewable sources by 2025, 
and 70% by 2030.
Nemak’s locations in India and Poland currently receive a portion of their power 
directly from solar photovoltaic (PV) sources, and its Polish site uses a waste energy 
recuperation system. In Monterrey, Mexico, 15% of the site’s total energy comes from 
wind power. In addition, Nemak’s site in Dillingen, Germany, applies renewable energy 
credits to 40% of its energy use, Spain applies 60%, and its manufacturing facilities in 
Austria purchase renewable energy certificates for 100% of their energy use. Overall, 
Nemak’s total renewable energy contracts and ccertificates represent 443k GJ or 
approximately 10% of its overall electricity consumption. 
Progress and measures 
In 2021, the Company undertook a variety of measures to advance and improve its 
energy management program. In one example, Nemak contracted a global energy 
management consultant to enhance performance and reduce risk in its energy supply 
chain by monitoring energy inventories, assisting with energy contract negotiations, as 
well as forecasting and improving data management methods. The Company also formed 
a cross-functional energy management team, and in 2021, it conducted ISO 50001 
assessments and evaluations at all Mexican sites to identify any performance gaps prior 
to official certification.
ENERGY CONSUMPTION IN M GJ
Σ 17.51
Σ 15.61
2020
2019
Σ 14.55
2021
10.60
12.77
11.42
3.89
4.73
4.09
0.06
0.01
0.10
Fossil fuels
Electricity
District heating & cooling
Energy consumption data is part of the 
verification process and therefore values 
for 2019-2021 are estimates. 
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NEMAK
SUSTAINABILITY

CIRCULARITY 
SDG 12: Responsible Consumption and Production 
Material aspect: Circularity
The extraction and use of natural resources throughout the entire 
value chain significantly impact the health of local environments 
and influence global climate conditions. As a member of the 
resource-intensive automotive industry, Nemak believes it has a 
responsibility to design its innovation and production processes in 
a resource-friendly way. 
By applying circular economy principles, Nemak strives to 
design products that maximize the reuse of aluminum and other 
materials, minimize waste and pollution in its manufacturing 
processes, and help regenerate natural systems. The Company is 
contributing to circularity by improving resource efficiency, using 
secondary materials such as recycled aluminum, and producing 
lightweight EV/SC components that help reduce emissions during 
the product use phase.
Waste management and hazardous 
materials 
Material aspect: Waste management and hazardous materials 
GRI 301: 301-1, 301-2, 306: 306-3, 306-4, 306-5
Management approach 
Nemak strives to use materials sustainably and minimize its 
waste and environmental impact as much as possible. It develops 
its products with maximum material efficiency by using life 
cycle assessments to identify and minimize their environmental 
impact. Aluminum and sand, the materials most heavily used in 
the Company’s production processes, are recovered, recycled 
and/or reused as much as possible, thus conserving resources 
and lessening Nemak’s carbon footprint. Key measures towards 
this end include recycling aluminum scrap and facilitating dross 
treatment for aluminum alloys.   
Nemak also creates local solutions to reduce waste and improve 
operating efficiency. For example, recycled aluminum is used in 
approximately 70% of its products, and the Company is taking 
steps to increase use of recycled aluminum in new product groups. Additionally, the 
Company offers its customers alloys made from recycled material, which can reduce 
the product carbon footprint by up to 90%.
Furthermore, Nemak proactively engages with its supply chain and encourages 
similar environmental responsibility among its suppliers, while forming technical 
collaborations with its customers. For example, Nemak takes an active role in advising 
its customers on design and alloy composition in the development phase.
WASTE GENERATED IN K TONS
 
2021
2020
2019
Waste generated total
940
290
361
Sand-related
621*
108
183
Aluminium and metal
128
108
132
Water/ aquateous solutions or liquid
27
17
12
Oils/lubricants/emulsions
92
15
10
Industrial & Commercial wastes not other classified
72
42**
24**
Diverted from disposal: Waste that is diverted from disposal includes waste sent 
to any of the following recovery operations: preparation for reuse, recycling, other 
recovery operations
778
119
139
Directed to Disposal: Waste that is directed to any of the following disposal operations: 
incineration (with or without energy recovery), landfilling or other disposal methods
162
147
201
* In 2021, a new waste stream is disclosed related to sand. 
**In 2019 and 2020, waste treatment methods such as chemical treatments and other treatments were not disclosed in 
the waste treatment categories . 
Material risk management 
Nemak does not use or source any conflict minerals – defined by the OECD as tin, 
tungsten, gold, and tantalum – nor does it source its aluminum from conflict countries 
defined by the OECD and the EU. As part of its commitment, Nemak has implemented 
a risk management process focusing on how critical suppliers’ goods and services 
affect the Company’s end products. These critical materials and services include vehicle 
components, manufacturing services, aluminum, and alloys. More information can be 
found in the Value Chain Engagement and Business Integrity chapter of this report.
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NEMAK
SUSTAINABILITY

Progress and measures
To demonstrate its commitment to circularity, 
in 2021, Nemak started recycling metal from 
aluminum dross and reusing inorganic sand in its 
processes. In addition, the Company held its HSE 
Week for the fifth consecutive year, which included 
webinars on circular economy principles. Internal 
and external experts worked together in teams, 
discussing the topic of sustainability, and the 
importance and integration of resource circularity 
into Nemak’s operations. 
Water management 
Material aspect: Water management 
GRI 303: 303-1, 303-2, 303-3, 303-4, 303-5
Water management is an important part of 
Nemak’s environmental stewardship program. 
Even though the Company does not use water 
intensively in its production processes, it 
recognizes that water scarcity is one of the most 
significant global risks for the economy and 
society. Nemak is working to minimize its water 
consumption and maximize the potential for clean 
water discharge to help protect, restore, and 
enhance the natural environment.
Management approach
To address the issue of water scarcity, Nemak has 
developed a water management strategy pursuant 
to ISO 14001 requirements, and has implemented 
it on a location-specific basis. Within the strategy, 
each site sets targets based on its water 
consumption and local legal regulations, ensuring 
its wastewater discharge meets or exceeds local 
requirements for water purity. To meet their 
objectives, some sites have also implemented 
engineering controls to prevent water leakage, 
recover wastewater for internal reuse, and 
preserve green spaces to manage surface water. In 
addition, Nemak owns and operates 23 wastewater 
treatment plants that remove contaminants and 
purify wastewater prior to discharge into local 
systems. Untreated wastewater is sent to local 
treatment facilities. A small amount of water is 
included in other regulated waste, which is then 
collected and shipped to a third party for treatment 
and disposal. Furthermore, one of the Company’s 
sites substitutes material pollutants in processes 
by replacing neutralization water with another acid 
to enable direct discharge into the sewer system, 
thus avoiding disposal via a third party. 
Water is mainly used for cooling processes and 
sanitary facilities in Nemak’s manufacturing 
sites. At some sites, water is drawn from either 
municipal source, groundwater sources, or 
wells. Some of this water is consumed and 
vaporized throughout the operation. Still, most of 
it is returned to third-party suppliers for water 
treatment or to the municipal sewerage system, 
pretreated in compliance with applicable local 
regulations. Only water drawn from underground 
and third-party sources is used for sanitary, 
washing, and cooling processes. All wastewater 
is treated either on-site or at off-site municipal 
wastewater treatment plants. 
GRI 303-3/4/5
WATER WITHDRAWAL AND CONSUMPTION IN K MEGALITERS 
 
2021
2020
2019
Water withdrawal total*
7.93
7.60
9.16
Water discharge total
6.89
6.90
8.13
Water consumption total
1.04
0.72
1.03
* Water withdrawal total includes water from areas with water stress
Water risk assessment
To demonstrate the Company’s commitment to 
improving its overall environmental performance, 
it has conducted a water risk assessment using 
the Aqueduct tool, developed by the World 
Resources Institute, to identify water-stressed 
zones where the Company has operations. In the 
reporting year, Nemak identified four such areas: 
Garcia, Nuevo León, Mexico, Chennai, Tamil Nadu, 
India, and Izmir, Turkey, which have “very high” 
water stress, and Wernigerode, Germany with 
a “high” water stress. Water withdrawals from 
these zones represent 10.3% of the Company’s 
total withdrawals. Nonetheless, Nemak received 
a B- rating for the second consecutive year in the 
CDP water security questionnaire showing its 
proactivity towards the topic.
NEMAK AT
A GLANCE
LETTER TO
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2021 ANNUAL REPORT
36
NEMAK
SUSTAINABILITY

PRODUCT AND 
INNOVATION  
SDG 9: Industry, Innovation and Infrastructure 
Material aspect: Innovation
Innovation and new technologies, particularly in 
electric transport, are sustainably transforming 
the automotive sector while providing mobility to 
growing populations, improving air quality, and 
protecting the climate. Nemak sees itself as a 
key part of this transformation and is using its 
technology, innovations, and business operations 
to actively reduce the automotive industry’s 
carbon footprint. Additionally, with the shift 
towards electrification and the increasingly strict 
safety requirements for batteries, Nemak views 
product quality and safety as critical issues. The 
Company therefore strives to ensure that all of its 
products, including new technologies, comply with 
all applicable safety requirements and exceed 
customer expectations.
Management approach
Nemak supports the industry’s sustainable 
transformation through its electromobility 
and structural applications business, which 
produces castings, assembled battery housings 
and highly integrated e-motor housings. These 
weight-reducing innovations enable carmakers 
to achieve sustainability targets relating to CO2e 
emissions and fuel efficiency, while meeting 
growing consumer expectations around vehicle 
performance, range and pollution levels. 
All Product Development Centers focus on 
advancing both existing and predominately new 
commercially viable casting technologies.
Nemak’s ambition 
Over the last three years, the Company’s research 
and development spending has averaged around 
2% of its sales. Going forward, Nemak will 
continue investing in the design, development, 
and testing of new lightweight components and 
casting technologies to reduce the environmental 
impact of its products throughout the entire value 
chain. Based in part on expected growth in the 
global penetration of electric vehicles, along with 
automakers’ efforts to minimize the weight of 
these vehicles in order to increase their driving 
range, the Company expects its total addressable 
market in its EV/SC segment alone to reach 
US$27 billion by 2030. Under such a scenario, 
the Company estimates that this segment could 
represent close to 60% of its consolidated revenue 
by that time. As of the date of this report, Nemak 
has been awarded contracts in its EV/SC segment 
worth approximately US$1.05 billion annually. 
To improve sustainability, Nemak initiated life 
cycle assessments for some of its key products 
in 2021. The studies measured each product’s 
environmental impact throughout all phases, 
including the extraction of raw materials, 
production, and consumption. To date, Nemak 
has evaluated three of its core product categories 
using the LCA methodology, providing insights 
into the most impactful areas of the Company’s 
production. These results provide valuable data to 
guide Nemak’s future investments and highlight 
opportunities for improvement where it can most 
effectively reduce its environmental footprint. 
In 2022, Nemak aims to conduct LCAs for each 
product group and increase its overall company 
knowledge and working capabilities using LCA 
methodology. As a result, Nemak’s sustainability 
roadmap also outlines specific key performance 
indicators (KPIs) on this subject.
NEMAK AT
A GLANCE
LETTER TO
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LIGHTWEIGHTING
DEVELOPMENTS
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2021 ANNUAL REPORT
37
NEMAK
SUSTAINABILITY

People and communities 
SDGs 4: Quality Education and 8: Decent Work and Economic Growth 
GRI 102-8, 401: 401-1
Nemak seeks to foster a positive company culture that aligns with its core 
values of customer focus, trust and collaboration, innovation, and respect 
and responsibility. The Company believes that through the creation of 
strong working relationships, its approach to employees, society, and the 
environment, will in turn contribute to business growth and value creation. 
By developing and implementing measures that support 
well-being, occupational health and safety, diversity, and 
corporate citizenship programs, the Company’s initiatives 
aim to boost personal and professional development in a 
safe and structured work environment.
In 2021, the workforce at Nemak was distributed as follows:
NUMBER OF EMPLOYEES BY CONTRACT 
 
PERMANENT CONTRACT
TEMPORARY CONTRACT
Total
20,615
95
Mexico
9,809
85
Europe
6,878
8
Asia
898
0
South America
929
0
US
2,101
2
 
FULL TIME
PART TIME
Female
1,879
72
Male
18,506
253
20,710
employees 
total
9,894
in México
6,886
in Europe
898
in Asia
929
in South America
2,103
in the US
2021 ANNUAL REPORT
38
NEMAK
NEMAK AT
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LETTER TO
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In 2021, Nemak hired a total of 3,141 new qualified employees across 
all regions. The total employee turnover in the reporting period was 
18.6%, with a 25.6% reduction compared to the previous year. Voluntary 
leaves increased slightly from 8.7 to 9.3% in 2021, reflecting a general 
mobility trend in an industry that is still feeling impacts from the 
COVID-19 pandemic. Talent is key for Nemak, and Nemak continues 
implementing actions to strengthen its Employee Value Proposition, 
with the aim of helping to improve employee engagement.
122
3,729
with a permanent 
contract, representing 
a 18.1% turnover rate
with a temporary 
contract
3,141
New hires in 2021:
employees
3,851
turnover total 
in 2021:
2021 ANNUAL REPORT
39
NEMAK
NEMAK AT
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LETTER TO
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WELL-BEING 
AND TALENT 
DEVELOPMENT 
Material aspect: Labor practices 
GRI 401: 401-2, 404, 102-41
Nemak’s growth has always been linked 
to attracting, developing, and retaining 
the best talent. As a global provider 
of innovative lightweighting solutions, 
employee talent is fundamental to 
meeting and exceeding its customers’ 
needs. In addition, Nemak understands 
how critical a positive working 
environment is to its business, therefore, 
it focuses on implementing programs 
that meet its employees’ unique 
expectations, enabling them to thrive in 
their roles at work.
Organization and 
responsibilities
The Human Resources leadership 
team is responsible for all employee-
related issues. Nemak also has a Talent 
Development Center of Excellence, which 
is responsible for promoting best practices, 
creating policies, and overseeing all 
HR-related activities. Nemak’s Human 
Resources departments are organized 
regionally, with the plant manager or 
managing director of each location 
making decisions regarding training 
and development with their local HR 
departments. These decisions are made at 
the start of the year as part of each site’s 
annual objective setting.
Policies and guidelines
Nemak acts responsibly towards its 
employees and is committed to complying 
with all applicable social and labor 
standards. The Company asserts this 
commitment in its Global Code of Conduct, 
Global Human Rights Policy, Diversity and 
Inclusion Policy, and Global HSE Policy, 
which are all continuously updated.
Employee well-being 
GRI 102-41, 401: 401-2
Management approach 
Nemak maintains a fair, equitable and 
consistent approach to its compensation 
decisions throughout the talent 
management process, resulting in an 
average entry-level wage that is 48% 
higher in comparison to the respective country’s legal minimum 
base salary. In addition, 77% of all employees are covered by 
a collective bargaining agreement. Nemak’s compensation 
decisions aim to ensure fair pay among employees using a 
standardized job valuation methodology that it applies across all 
regions without bias.
At some locations, Nemak offers its employees benefits that go 
above and beyond the minimum regulations of the countries 
where it operates. Nemak’s full-time employees receive salary 
and have options for other benefits, including retention bonuses, 
holiday pay, savings funds, recognition for seniority, and pension 
plans. Nemak provides a fair, equitable and consistent approach 
to compensation decisions throughout the talent management 
process. The company’s compensation decisions aim to ensure 
fair pay among employees using a standardized job valuation 
methodology that is applied across all regions without any bias. 
These compensation systems do not differentiate on anything 
other than what is job related. Nemak continually evaluates its 
practices to make sure any potential bias is identified so that the 
necessary corrective measures can be implemented.
In addition, all employees receive feedback on their target 
achievement, which forms the basis of their performance-related 
remuneration. Nemak continually evaluates its practices to ensure 
that the Company identifies any potential bias and implements the 
necessary corrective measures.
Progress and measures 
In 2021, Nemak conducted its third Global Employee Engagement 
Survey, “YOUR VOICE,” which saw a new record of employee 
participation at 92%. Based on the results, the Company has 
progressed in all the evaluated areas, maintaining a positive 
trend since the first edition in 2015. The survey evaluates 17 
categories selected to provide a quantitative measurement 
of the progress made in strengthening Nemak’s Employee 
Value Proposition across its operations compared to previous 
years, global benchmarks from the automotive industry, and 
top-performing organizations. All results and related data 
are handled with the strictest confidentiality to guarantee the 
anonymity of participants’ views and comments. The survey 
2021 ANNUAL REPORT
40
NEMAK
NEMAK AT
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LETTER TO
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results are presented to Nemak’s leadership and 
analyzed and discussed at different organizational 
levels to generate concrete action plans to 
improve employee engagement. In addition, the 
implemented measures are communicated to 
employees as “ECHO OF YOUR VOICE,” to increase 
awareness that all employees’ responses are 
considered and transformed into actions that are 
catalysts of change. 
Employee development 
SDG 4: Quality Education 
Material aspect: Training and development 
GRI 401: 401-1, 404: 404-1, 404-3
Management approach
As Nemak continues to help drive the automotive 
industry’s shift towards electrification, employees 
with advanced skills and knowledge who can 
help implement emerging growth opportunities 
are more important than ever. The Company 
has developed a model that includes talent 
development activities around key skills in the 
area of tooling, assembly and joining, quality 
assurance, product development, R&D, and 
maintenance. In addition, as part of its training 
and development strategy, Nemak aims to fill 
critical and management positions with internal 
candidates. In 2021, out of a total of 648 open 
salary positions, the Company filled 52.9 % of 
these roles with internal candidates. Salary 
positions refers to white collar positions with fixed 
pay rates, rather than hourly ones.
Another aspect of Nemak’s talent development 
plan is to provide employees with consistent 
and helpful feedback. In line with this plan, the 
Company has a performance management 
process structured with objective targets, midterm 
reviews and performance evaluations. In 2021, 
67% of Nemak’s total employees and 99% of the 
Company’s administrative personnel received 
performance evaluations. The Company also 
supported employees with regular dialogue about 
career development and personal growth plans 
based on each individual’s skills and aspirations.
This table summarizes the average training hours 
Nemak provided to employees:
Progress and measures 
In 2021, Nemak invested US$2.2 million in 
training and developing technical talent across 
the Company’s core processes. This investment 
ensures high levels of functional skill, leadership 
development, and teamwork in various strategic 
areas. The training sessions conducted in 2021 
primarily covered health and safety topics, 
including COVID-19 safety measures, leadership 
training, manufacturing-specific sessions such 
as “Forklift” and “Load Security,” and training 
in environmental and sustainability issues. The 
Company is also helping 235 employees attend 
capacity-building courses via paid scholarships 
with external institutions. 
52.9%
of salary positions 
filled internally
47.1%
of salary positions 
filled externally
TRAINING HOURS
 
 
AVERAGE HOURS OF TRAINING BY GENDER
 
 
Female
17.1
hrs
Male
17.4
hrs
AVERAGE HOURS OF TRAINING BY EMPLOYEE CATEGORY
Executives
7.3
hrs
Top management
15.9
hrs
Junior management positions
19.2
hrs
Management positions in revenue-generating 
functions
9
hrs
Employees below management level
14.3
hrs
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
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2021 ANNUAL REPORT
41
NEMAK
SUSTAINABILITY

DIVERSITY AND 
INCLUSION  
Material aspect: Diversity and inclusion 
GRI 405: 405-1, 406
Diversity and inclusion play a fundamental 
role in everything Nemak does and support the 
foundations of the Company’s core values. Nemak 
is committed to promoting and nurturing a culture 
of respect and responsibility towards people, 
the environment, and local communities. Given 
Nemak’s global footprint, it serves a wide variety 
of customers in diverse business environments; 
therefore, embracing diversity and inclusion 
provides a competitive advantage that helps it 
exceed stakeholder expectations.
Management approach
The responsibility for all diversity- and inclusion-
related measures is anchored in Nemak’s Human 
Resources department, which works closely with 
the Chief Executive Officer (CEO) and the Talent 
Attraction department. In the reporting period, 
Nemak defined its diversity and inclusion goals 
for the coming years based on five milestones: 
building foundations and basics, creating a 
common awareness, focusing on integrating 
diversity and inclusion into the Company’s culture, 
processes and systems, and implementing 
diversity and inclusion as a core element of 
Nemak’s sustainable performance and innovation.
Nemak supports equal opportunities for everyone 
and opposes discrimination of all kinds. The 
Company’s policies are clear that no person should 
be discriminated against based on their age, race, 
ethnicity, family or marital status, gender identity 
or expression, sexual orientation, language, 
nationality, physical and mental ability, political 
affiliation, religion, socio-economic status, veteran 
status, or any other characteristics. Nemak is 
committed to maintaining and promoting an 
environment that is free of discrimination and 
harassment by actively promoting diversity and 
inclusion in the workplace. In line with these 
goals, the Company acknowledges the inherent 
barriers female employees face in the automotive 
industry, particularly in heavy manufacturing 
jobs. Therefore, Nemak’s Diversity and Inclusion 
roadmap aims to eliminate these barriers and 
provide women with a safe and more appealing 
work environment.
The Company’s global workforce currently 
consists of approximately 90% men and 10% 
women, with 15% of board positions filled by 
women. Of the executive-level positions, 14.9% 
are filled by women. As a company policy, Nemak 
does not provide information on the remuneration 
of its employees to external bodies.
AGE GROUP
4,690
< 30 YEARS OLD
30 - 50 YEARS OLD
12,631
3,389
> 50 YEARS OLD
GENDER
18,759
MALE
1,951
FEMALE
AGE GROUP
BOARD DIRECTORS
GENDER
BOARD DIRECTORS
11
MALE
2
FEMALE
> 50 YEARS OLD
10
3
30 - 50 YEARS OLD
NEMAK AT
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LETTER TO
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2021 ANNUAL REPORT
42
NEMAK
SUSTAINABILITY

Policies and regulations
Nemak’s Global Diversity and Inclusion Policy aligns with its 
values, Code of Conduct, Business Code for Suppliers, and other 
business policies covering diversity and employee relations. This 
policy also includes key principles from the International Bill of 
Human Rights, the International Labor Organization’s Declaration 
on Fundamental Principles and Rights at Work, the United 
Nations Global Compact, the UN’s Sustainable Development 
Goals (SDGs), and the UN’s Guiding Principles on Business and 
Human Rights.
The Global Diversity and Inclusion Policy applies to all Nemak 
employees, contractors, and joint venture employees under 
Nemak’s management control. 
Dealing with incidents of 
discrimination
Nemak requires its employees to report all known or suspected 
violations of its Global Diversity and Inclusion Policy. All 
stakeholders can safely raise concerns or report violations 
through one of the following channels:
•	Their direct manager or next-level manager
•	The Human Resources manager or director
•	Nemak’s Governance and Compliance department 
(governance@nemak.com)
•	Integrity and Transparency Toll-free Helpline
All reports are handled confidentially. Nemak prohibits any 
form of retaliation against individuals who, in good faith, report 
suspected violations or who cooperate in an investigation of 
a suspected violation reported by someone else. Additionally, 
Nemak strictly adheres to all international whistleblower 
protection laws and standards. Any retaliation against a 
person for reporting an issue in good faith is a violation of the 
Company’s Global Code of Conduct and is strictly prohibited. 
Progress and measures
In 2021, Nemak published its corporate Global Diversity and Inclusion 
Policy and conducted global Diversity and Inclusion training sessions for 
employees in 15 countries and 11 languages. The learning objectives 
focused on strengthening the link between diversity and inclusion and 
Nemak’s corporate values, communicating the Company’s policies and 
commitment regarding the topic, uncovering employees’ unconscious 
biases, and broadening their horizons regarding diversity and inclusion 
issues. Following the initial sessions, 795 managers worldwide received 
unconscious bias training and learned how to identify and minimize its 
impact in the three key processes of talent acquisition, performance 
evaluation and talent management.
The Company also participated in the General Motors Diversity & 
Inclusion Supplier Council and the Diversity, Equity & Inclusion Council of 
the Original Equipment Suppliers Association (OESA). Additionally, Nemak 
sponsored the Society of Women Engineers (SWE) annual conference, the 
largest conference and career fair for women in engineering, to further 
empower female talent in the engineering sector. In Mexico, Nemak 
runs the Women in Nemak (WIN) program, which focuses on talent 
development and leadership. The Company has also organized numerous 
events on women’s health services, career development, and work-life 
balance in recent years, helping more than 600 women.
NEMAK AT
A GLANCE
LETTER TO
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LIGHTWEIGHTING
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2021 ANNUAL REPORT
43
NEMAK
SUSTAINABILITY

OCCUPATIONAL HEALTH 
AND SAFETY  
Material aspects: Occupational health and safety, product quality 
 and safety 
GRI 403: 403-1
Occupational health and safety is integrated 
into every aspect of Nemak’s business and 
is fundamental to its long-term success. The 
Company’s commitment to safety means that 
its work is never so urgent or important that its 
employees cannot take the time to perform their 
functions safely. Nemak recognizes that there are 
inherent dangers in its business activities and 
continually uses risk analysis tools and corrective 
action tracking systems to lower the probability of 
injury and illness.
Management approach
Nemak’s Occupational Health and Safety 
Management System (OSHAS) covers all 
employees and includes health monitoring, risk 
identification and mitigation, safe work practices, 
employee training, and fulfilling legal obligations. 
In addition, 53% of the Company’s locations are 
certified to the international safety management 
system ISO 45001.  
Core components of Nemak’s occupational health 
and safety program include:
•	Management reviews of risk assessments and 
incident reports
•	Union, Works Council and Health and Safety 
Committee involvement
•	Reporting near-misses, incidents, non-
compliance, and improvement suggestion 
programs
•	Training competency and knowledge checks
•	Physical examinations and occupational health 
medical evaluations (health risk assessments)
•	On-site health professionals, such as nurses 
and doctors
•	Industrial hygiene, psychosocial, and working 
condition measurements
•	Programs to prevent COVID-19 outbreaks and 
transmission: cleaning, personal hygiene, 
education, and training
•	Health and safety mailbox and hotline
Nemak’s Occupational Health and Safety 
Management System complies with the respective 
laws in the countries where it has operations, 
and keeps workers’ health-related information 
confidential in accordance with internal policies 
and legal requirements, such as HIPAA and ADA in 
the USA, and GDPR in Europe. 
2021 ANNUAL REPORT
44
NEMAK
NEMAK AT
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Organization and responsibilities 
The global HSE team is responsible for developing goals and strategies for 
occupational health and safety, which the sites implement in accordance 
with their local regulations. The sites’ local health and safety teams 
proactively address any safety concerns or issues raised by employees 
or their unions. They also collaborate with relevant key staff to create 
improvement opportunities by investigating and analyzing the root causes of 
any work-related incidents at Nemak’s facilities. 
Nemak’s ambition 
GRI 403-9
The Company measures its safety performance via the frequency of injuries 
per 100 employees (Total Recordable Incident Rate, “TRIR”) and the severity 
of injuries resulting in restrictions or time away from work. Each location 
sets annual targets aiming not to exceed the prior year’s performance for 
TRIR, LTC (Lost Time Case) and DART (Days Away, Restricted or Transferred). 
HEALTH AND SAFETY METRICS
 
 
 
 
2021
2020
2019
Total recordable incidents
277
296
442
Accidents with serious consequences*
26
-
-
Accidents with lost time
94
87
131
Fatalities*
0
-
1
Total recordable incidents rate**
1.41
1.57
1.86
Lost time case rate**
0.48
0.46
0.55
* Nemak only began reporting this indicator in 2021.	
	
 
** per 100 employees	
	
	
Risk identification and assessment 
GRI 403-2
All facilities conduct quantitative risk assessments to identify risks and 
develop action plans to minimize their likelihood. Risk assessments and 
corrective actions are included in the management review process of 
ISO 45001. The OSHAS requirements apply to all employees, visitors, and 
contractors whenever work is being performed on behalf of the Company, 
including offsite and during travel. Nemak requires all employees to 
immediately report any risks or incidents so that the Company can take 
corrective action.
Occupational health services 
GRI 403-3
Nemak’s sites perform annual health checks to identify any potential 
health risks, supported by the placement of at least one nurse in each 
manufacturing facility. Commonly diagnosed diseases include diabetes, 
cancer, high blood pressure, and other chronic illnesses. The sites also 
run vaccination campaigns for extra protection against seasonal diseases. 
In addition, each site promotes initiatives to improve employee well-
being, including nutritional services and healthy canteen meals, fresh fruit 
deliveries, funds for social activities, recreation and rehabilitation, gym 
discounts, and psychological support.
NEMAK AT
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LETTER TO
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2021 ANNUAL REPORT
45
NEMAK
SUSTAINABILITY

Progress and measures against 
COVID-19
The impact of COVID-19 continued to extend 
throughout the world, putting pressure on Nemak’s 
staff and operations. The Company’s top priority is 
to continue ensuring the highest health and safety 
standards for all its employees, their families, 
and local communities. Therefore, Nemak has 
developed a Pandemic Response Control Plan, 
which supports the global effort to combat the 
COVID-19 pandemic.
The organizational structure for the plan’s 
execution is as follows: 
•	Executive Crisis Management Team: CEO and 
Executive Management Team
•	Business Unit Crisis Management Team: 
Business Unit Director and staff
•	Global Business Continuity Crisis Management 
Teams: individual teams from global HSE, 
Finance, Human Resources, Purchasing, and 
Commercial Sales 
•	Operations Crisis Management Teams: plant 
managers and employees
The Pandemic Response Control Plan consists of 
a COVID-19 occupational health care management 
system, including controls to prevent virus 
transmission, facility preparedness initiatives, and 
internal and external communications. The plan 
has been recognized by employees, customers, 
and government health agencies as an effective 
response to the crisis. 
Employee participation in 
occupational health and 
safety  
GRI 403-4
As a leading global company, Nemak establishes 
defined roles and responsibilities for occupational 
health and safety supported by direct and 
transparent reporting systems. 
Employees can use various channels to communicate 
any health and safety concerns or needs occurring 
in the workplace. These communication channels 
include Nemak’s internal website (MyNemak), 
email, on-site verbal discussions, and messages via 
secure messaging applications  (Mexico and USA). 
To maintain health and safety, Nemak’s employees 
are not permitted to start operational work until they 
have attended onboarding training about their role 
and the risks involved. 
Additionally, Nemak hosted its fifth annual 
HSE week dedicated to increasing employee 
engagement with Health, Safety and Environment 
topics. During the HSE week in 2021, Nemak 
hosted a series of webinars with the participation 
of external experts, including webinars on the 
topics of “Enabling Positive Psychology” and 
“Bouncing Back from COVID”. Nemak hosted 
activities on a global level, as well as local 
initiatives at plant level.
Employee training in 
occupational health and 
safety 
GRI 403-5, 403-7
Nemak provides specific training at each site based 
on local regulations identified by the HSE global 
department. These training sessions include:
•	Risk assessments
•	COVID-19 and other infectious diseases
•	Principles of organizational safety in the 
program “safety differently”
•	The preventive and correct use of chemicals
•	Worker stress and mental health
•	Machine safety
•	Ergonomics and physical health
•	Control of hazardous energy and machine lock-
out programs
•	First aid 
•	Emergency response
2021 ANNUAL REPORT
46
NEMAK
NEMAK AT
A GLANCE
LETTER TO
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SUSTAINABILITY

CORPORATE CITIZENSHIP  
Material aspect: Corporate citizenship 
GRI 413: 413-1, 203: 203-1
Management approach
As part of its commitment to social development, Nemak believes 
it is actively responsible for its employees and the communities in 
which it operates. Indeed, one of the three pillars in the Company’s 
sustainability model is to give back to its local communities 
around the world. As a good corporate citizen, Nemak implements 
social, cultural, and community projects as a core element of its 
strategy, and it aims to be a trusted local provider of structural 
development, education, and equal employment opportunities. 
In addition, Nemak’s Sustainability Committee addresses all its 
corporate citizenship-related goals and measures.
Progress and measures
In 2021, due to preventive measures to combat the spread of 
COVID-19, Nemak’s facilities were forced to suspend most of 
their community engagement activities. Despite the crisis, Nemak 
supported philanthropic activities through investments and 
enabled employee volunteering during paid working hours.
INVESTMENTS IN PHILANTHROPIC ACTIVITIES
Monetary investments in citizenship/ philanthropic activities total
US $2,761,727
         Cash contributions
US $1,679,393
         Monetary contributions to projects/partnerships
US $952,143
         Products/services
US $90,310
         In-kind giving
US $13,964
         Others
US $25,917
CORPORATE CITIZENSHIP ACTIVITIES
 
Time investments in citizenship/ philanthropic activities total
960.5 hrs
Employee volunteering during paid working hours
779 hrs
The Company completed several initiatives, primarily local 
development programs comprising educational programs, 
environmental campaigns, and community support throughout 
the year.
NEMAK AT
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LETTER TO
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NEMAK
SUSTAINABILITY

Mexico
In Mexico, Nemak supported the maintenance 
and renovation of school infrastructure in low-
income areas near its facility, benefitting around 
2,500 children in partnership with the regional 
government. In 2021, the Company also continued 
its annual support for the ALFA Fundación, 
donating approximately US$950,000 and helping 
more than 1,700 people. 
The Company also continued to support 
organizations and programs such as Autism ABP, 
House Indi, and a variety of social assistance 
institutions. Throughout 2021, Nemak donated 
more than US$1.39 million to the benefit of 
approximately 5,000 people in Mexico, and 
over 200 employees joined initiatives to help 
local communities while adhering to all social 
distancing and COVID-19 restrictions.
US
In Sylacauga, United States, Nemak participated 
in the SAFE initiative, providing training and 
education to family members. Additionally, the 
Company held work programs with young people 
to support university career days and training 
courses in new technologies. Nemak also launched 
sponsorships and formed collaborations with 
numerous academic institutions to promote art 
and sports.
South America
Through its two Social Responsibility Programs, 
Bem Social Esporte and Viver Bem, Nemak Brazil 
carried out several initiatives to support families 
and communities in 2021. The programs involved 
either active participation by employees or 
direct financial donations. Nemak Argentina also 
made donations and provided support to local 
institutions.
In April, Nemak donated around 200 essential 
food baskets to Brazilian families who lost their 
jobs due to the pandemic crisis, followed by 669 
toys to five schools close to Nemak’s facilities. 
Additionally, the Company donated 3,558 personal 
care items to a non-governmental organization 
that fights cancer (ORCCA). During the Christmas 
season, the Company also supplied 200 food 
baskets to a nearby school to help families in need.
Europe and Asia 
In Europe and Asia, Nemak carried out a variety 
of initiatives, including providing support to 
schools via scholarships and book donations. 
In 2021, the Company supported fire brigades, 
Ronald McDonald Child Welfare, NGO “Ö-Tafel,” 
Parents’ Association ASO6, SOS Child Welfare 
Organization, Cancer Aid for Children, the Austrian 
Charity “Volkshilfe,” the Austrian Handicapped 
Sports Association, local football teams, and other 
community programs.
NEMAK AT
A GLANCE
LETTER TO
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2021 ANNUAL REPORT
48
NEMAK
SUSTAINABILITY

BUSINESS INTEGRITY 
SDG 12: Responsible Consumption and Production 
Material aspect: Business Ethics
Business integrity at Nemak means 
operating with ethics, honesty, and 
accountability while continuously 
improving corporate governance and 
sustainability practices. To meet these 
aims, the Company uses external 
benchmark assessments and has 
established a series of guiding principles 
to ensure safe, fair, and equitable conduct 
throughout its business activities. These 
initiatives include the compliance of 
Nemak and its stakeholders with the 
policies outlined in the Code of Conduct 
and broader international human rights 
initiatives.
Compliance and integrity 
Nemak’s Employee Code of Conduct 
cements its approach to promoting a 
culture of honesty and integrity. The 
Code of Conduct states that it does 
not tolerate employees or contractors 
engaging, ordering, authorizing, promising, 
conspiring, or inducing corrupt or 
fraudulent practices, either The Company 
Value Chain Engagement 
and Business Integrity
provides regular training on its Code of 
Conduct, and in 2021, 94% of its employees 
participated. It also launched an additional 
training module in December 2021, which 
covers various aspects of compliance. 
The first module includes anti-bribery 
practices, advice for avoiding retaliation, 
and information about giving and receiving 
gifts for all salaried employees worldwide. 
Completion of Corporate Compliance 
Training Module 1 as per table below.
EMPLOYEES WITH MODULE COMPLETE
% COMPLETED
South America
212
100%
Europe
1219
92%
Asia
195
86%
Mexico
1088
82%
US/CAN
363
78%
Global staff
123
85%
Total
3200
86%
Every two years, the Company releases an 
electronic version of its Conflict of Interest 
Letter to all salaried employees via its 
internal Learning Management System 
(LMS), with the next release set to occur 
during 2022. The letter includes a brief 
overview and a questionnaire regarding the 
Code of Conduct, and explains the types of 
issues that can present conflicts of interest. 
In 2020, the Company received responses 
from 96% of employees worldwide. As a 
result, Nemak will now include this exercise 
in the LMS tool for all new employees 
during their orientation period. 
NEMAK AT
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NEMAK
SUSTAINABILITY

Socioeconomic compliance 
GRI 419: 419-1
Nemak’s Code of Conduct states that it expects 
all employees to perform their duties in an ethical 
manner in accordance with applicable laws, rules, 
and regulations in the countries where it operates.
Nemak’s legal department is responsible for 
advising all business and operational departments 
regarding the legal compliance of the Company’s 
business operations, while each department is 
responsible for ensuring on-the-ground compliance. 
Every employee is expected to approach either 
the legal department or their respective Human 
Resources Manager for advice on the lawfulness 
of specific practices or activities in the event that 
issues arise. Legal compliance with certain aspects 
of the law (i.e. tax, accounting, fraud) is part of the 
external audit programs performed periodically by 
the Company’s external auditors.
As part of its compliance program, Nemak conducts 
regular supplier screenings based on sanctions 
compliance. By the end of 2021, the Company 
had screened 100% of its existing suppliers to 
ensure that none was listed in the Specially 
Designated Nationals and Blocked Persons list 
or the Consolidated Sanctions list maintained by 
the Office of Foreign Asset Control of the United 
States and other similar lists maintained by 
governmental authorities that implement sanctions 
programs. Additional lists, such as lists maintained 
by the European Union, by the European Union 
Members, and others, are expected to be added to 
the screening process during 2022. The Company 
undergoes this same screening process with each 
of its new suppliers and its existing suppliers, thus 
ensuring that supplier screening is performed on a 
regular basis. 
Nemak has several global policies that address its 
compliance ambitions. These include policies on 
Global Purchasing, Human Rights, Diversity and 
Inclusion, Anti-Bribery, Antitrust and Fair Trade, 
Anti-Money Laundering and Sanctions Compliance, 
Data Privacy and Confidential Information, and 
various Accounting Policies based on international 
financial reporting standards and auditing 
procedures.
To the Company’s knowledge, there were no 
instances of non-compliance with laws or 
regulations in 2021 that caused economic impacts 
relevant to its business, operations, or results.
Anti-bribery and corruption 
GRI 205: 205-2
As a leading automotive supplier, Nemak does not 
tolerate corruption at any level, including in its 
relationships with other companies, institutions, 
and authorities. It continually strives to ensure 
that all activities comply with international anti-
corruption and anti-bribery laws. Starting in 2022, 
the internal audit team will include anti-bribery 
and corruption in its periodic audit program.
Nemak’s Global Anti-Corruption Policy determines 
the basic principles and frameworks for preventing, 
detecting, investigating, remedying and, if 
applicable, applying penalties to any employee 
that accepts bribes or engages in corrupt behavior. 
The instances most likely to violate this policy are 
interactions with clients and suppliers deemed 
legitimate due to a lack of knowledge, but which still 
fall under the scope of bribery. The Anti-Corruption 
Policy can be found at the following link: https://
nemak.com/media/1644/nemak-global-anti-
corruption-policy.pdf. 
All salaried employees receive training in Nemak’s 
Anti-Corruption Policy. The Company launched a 
new compliance training module in December 2021 
covering anti-bribery and the protocols for giving 
and receiving gifts. Employees must demonstrate 
their understanding of the modules by completing a 
quiz and confirming they accept the Anti-Corruption 
Policy. Nemak has also developed each business 
unit’s training module in its respective native 
language to ensure all employees can participate 
and understand the content.
Nemak published two new policies in 2021, the Anti-
Money Laundering (AML) and Sanctions Compliance, 
as well as the Anti- Trust and Fair Trade Policies, 
which will be included in the Sustainability section of  
Nemak’s website (https://nemak.com/media/2238/
antitrust-and-fair-trade-policy.pdf).
Any employees violating these policies are subject 
to disciplinary actions ranging from warnings to 
termination of their employment contracts. Nemak 
has also implemented a Transparency Helpline 
to report all known or suspected violations to its 
policies. The Helpline forwards all complaints to 
Nemak’s Governance and Compliance Manager 
and senior management, who are responsible 
for addressing any violations and opening 
investigations. All findings are discussed with top 
management and the legal department.
In 2021, there were no legal cases regarding 
corruption against Nemak or its employees.
All salaried employees receive 
training in Nemak’s Anti-Bribery 
Policy.
Training model is offered in 
employee native language
NEMAK AT
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LETTER TO
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NEMAK
SUSTAINABILITY

Anti-competitive behavior 
GRI 206: 206-1
Nemak strives to conduct its business according 
to Fair Trade principles, and it complies with the 
applicable antitrust laws in the jurisdictions where 
it operates. 
The Company’s legal department thoroughly 
analyzes all activities exposing Nemak to 
potential anti-competitive violations, such as 
exclusivity provisions, buying groups, exchange 
of sensitive information, and mergers and 
acquisitions. In cases of doubt, the business 
development, commercial, legal, and governance 
and compliance departments share their input 
with top management and create action plans 
ensuring Nemak does not violate anti-trust or anti-
competitive laws.
The Code of Conduct also includes the topic 
of anti-competitive behavior. Given the high 
importance of this topic, Nemak developed an 
Antitrust and Fair Trade Policy in 2021. The policy 
describes situations in which the Company or 
its employees could be exposed to intentional or 
unintentional anti-competitive behavior. The legal 
department is responsible for providing advice 
in these situations and ensuring appropriate 
safeguards are in place to avoid even the 
perception of anti-competitive behavior. 
In 2022, Nemak will provide training for all salaried 
employees in the Antitrust and Fair-Trade Policy. 
Employees or contractors in breach of this policy 
are subject to disciplinary actions ranging from 
warnings to termination of their employment or 
contract. Nemak expects its employees to report all 
known or suspected violations of the policy via the 
Transparency Hepline.
During the 2021 reporting period, the Company 
had no legal proceedings associated with anti-
competitive behavior. Starting in 2022, this topic 
will be part of the periodic audits performed by the 
internal audit team.
ANTITRUST AND FAIR TRADE POLICY
•	Starting in 2022, Nemak aims 
to train all salaried employees 
in the Antitrust and Fair Trade 
Policy. 
•	Expectation for employees to 
report suspected violation via the 
Transparency Helpline
•	No legal proceedings in reporting 
period associated with anti-
competitive behavior.
2021 ANNUAL REPORT
51
NEMAK
NEMAK AT
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Information technology security
Information technology (IT) security is the critical foundation that 
protects Nemak’s intellectual property as well as its employees’ 
and customers’ information. The Company has a formal set of 
policies and processes outlining how it defines, measures, and 
applies risk mitigation to ensure the confidentiality, integrity, 
and availability of its systems and data. Nemak’s leadership 
understands the critical need for high-level IT security 
throughout the Company and has created an Information 
Security Steering Committee comprised of leadership members 
and functional Vice Presidents. The Steering Committee conducts 
regular meetings to review Nemak’s short- and long-term 
security strategy and performance, and helps the Company 
prioritize and participate in the implemented Information 
Security Management System (ISMS) program. The Steering 
Committee then cascades IT security and strategy directives to 
all IT departments globally, along with defined annual objectives. 
These objectives may include launching technical security 
systems, which fulfills ISO 27001 requirements, as well as 
identifying measurables for tracking at operational levels—such 
as security patches, vulnerability, and security incidents—and 
measuring deliverables based on audit findings regarding overall 
security metrics. 
Nemak has a robust set of IT policies, guidelines and procedures 
covering all of its operations, ranging from the performance of 
its information security management system to its suppliers’ 
security requirements. The foundational design of the Company’s 
IT security is structured and certified according to ISO 27001. 
Nemak’s IT systems also comprise a risk measurement and 
management system with an integrated follow-up process and 
dashboard that is regularly reviewed by the Information Security 
Steering Committee and members of senior management. 
The Company also provides internal education and awareness 
training to all IT-using employees via yearly mandatory training 
sessions supported by awareness campaigns and education 
programs. Additionally, all new employees must participate in IT 
onboarding training covering a variety of important topics.
All global IT operations are tracked and assessed by internal 
auditing. In addition, Nemak partners with world-class security 
firms and performs knowledge transfers with other organizations 
to stay ahead of emerging security threats.
NEMAK AT
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LETTER TO
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NEMAK
SUSTAINABILITY

Human rights 
GRI 412: 412-1, 414: 414-1
Promoting human rights throughout the entire value chain is a 
critical priority for Nemak. Thus, its sustainability assessment and 
adherence to Human Rights principles, such as the prohibition 
of forced and child labor, freedom of association and collective 
bargaining, and anti-discrimination, among others, are a critical 
focus of its compliance guidelines. As part of its compliance 
assurance measures, Nemak conducts supplier screenings based 
on social criteria. At the end of 2021, the Company screened 32% 
of its existing suppliers and 13% of new suppliers for sustainability 
criteria, including social standards such as Human Rights. Nemak 
also works with peer companies, chambers, and associations to 
form collaborative alliances that are united with the same goals. 
In 2021, the Company actively participated in 61 chambers and 
associations, and in several instances, was part of their board or 
strategic committee.
Nemak’s policies and codes include the Global Business Code for 
Suppliers, Sustainable Purchasing Policy, Human Rights Policy, 
and Diversity and Inclusion Policy. The Company is committed 
to complying with the United Nations Global Compact and 
internationally recognized human and labor rights policies, and 
relevant laws, regulations, and social standards.
The Vice President of Purchasing and Sustainability and 
the Purchasing Business Support Team are responsible for 
addressing the topic of human rights. Nemak has also set up a 
purchasing committee that evaluates and considers sustainable 
aspects (which include working conditions) in every decision. 
32%
of existing Nemak 
suppliers screened based 
on sustainability criteria
13%
of new suppliers 
screened
SUPPLIER SUSTAINABILITY 
ASSESSMENTS
NEMAK AT
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2021 ANNUAL REPORT
53
NEMAK
SUSTAINABILITY
SUSTAINABILITY

Freedom of association and 
collective bargaining 
GRI 407
Labor practices are a material topic for 
Nemak, and the Company respects its 
workers’ rights to freedom of association 
and collective bargaining. Its suppliers 
must sign the Global Business Code 
for Suppliers to confirm they will also 
grant their employees the same rights 
and freedoms. In addition, Nemak has 
a specific clause in its contracts and 
purchase orders, which applies to all 
participants in its production chain, 
that the supplier acknowledges and 
follows the ten principles of the United 
Nations Global Compact. In locations 
where these rights do not exist due to 
legal constraints, suppliers must provide 
appropriate channels for employees to 
voice their concerns.
Overall, the Company aims for 100% of its 
suppliers to commit to respecting their 
employees’ freedom of association and 
right to collective bargaining by signing 
the Global Business Code for Suppliers. 
To date, 90% of active suppliers have 
formally signed the code, and those that 
have not signed the Code have been 
excluded from business activities. Nemak 
also observes the results of external 
third-party assessments by EcoVadis, with 
the objective that all assessed suppliers 
achieve a score above 45 out of a possible 
total of 100 to indicate there is no risk in 
this area.
In 2021, Nemak assessed 57 new suppliers 
with EcoVadis, leading to a total of 88 
assessed suppliers with valid scores. In 
the current reporting period, the Company 
has not identified any risks or violations 
regarding freedom of association and 
collective bargaining. 
Forced and child labor 
GRI 408, 409
The Company strictly prohibits any use 
of forced or child labor. By signing and 
accepting the Global Business Code, 
suppliers agree that in order to keep 
supplying products to Nemak, they will not 
allow any form of forced or compulsory 
labor. Suppliers are also not allowed to 
use child labor or employ workers under 
the age of 15 or the legal minimum age if 
it is higher in the respective country.
To prevent forced and child labor 
internally and through suppliers, Nemak 
has included this topic in its codes and 
policies, including its Human Rights 
Policy, Business Code for Suppliers, 
and Sustainable Purchasing Policy. By 
signing and accepting the Global Business 
Code for Suppliers, suppliers commit 
to protecting internationally recognized 
human rights prohibiting forced and child 
labor across all sites. In addition, Nemak 
contracts and purchase orders contain a 
specific clause stating that suppliers must 
adhere to the Company’s specific codes 
and guidelines.
Internally, the Purchasing and SQA 
departments are responsible for on-site 
audits, which also address the issues 
of forced labor and child labor. Nemak 
assesses its suppliers via an external third 
party (EcoVadis)  and reports on their CSR 
performance. Their adherence is monitored 
by the Company’s active supply base and 
the results of the external third-party 
assessments.
Nemak’s goal is for 100% of its suppliers 
to commit to respecting human rights 
by signing and adhering to the Global 
Business Code. The Company will continue 
monitoring human rights compliance with 
external assessments, and it will include 
more suppliers.
During the reporting period, Nemak has not 
identified any risks in the areas of forced and 
child labor within its current procedures.
90%
of active suppliers have signed 
Nemak’s Global Code
NEMAK’S THIRD-PARTY SUSTAINABILITY 
ASSESSMENTS FOR SUPPLIERS
31  +  57  =  88
Previously assessed 
suppliers satisfying 
EcoVadis score 
criteria
Nemak suppliers 
assessed with 
EcoVadis satisfying 
score criteria
Newly assessed 
suppliers satisfying 
EcoVadis score 
criteria
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2021 ANNUAL REPORT
54
NEMAK
SUSTAINABILITY

RESPONSIBLE SUPPLY 
CHAIN MANAGEMENT 
SDG 12: Responsible Consumption and Production, SDG 13: Climate 
Action 
Material aspect: Supply Chain Management 
GRI 102-9, 102-10, 301
The circular economy was one of the top priorities 
identified in Nemak’s materiality analysis. With 
more than 70% of the Company’s CO2e emissions 
resulting directly from its supply chain, Nemak 
is working with suppliers to embed world-class 
performance standards and reduce their ecological 
impacts. The Company actively cooperates 
with suppliers to align their engagement and 
management tools with Nemak’s corporate targets 
and values, including responsible environmental, 
social, and economic practices. 
Nemak’s supply chain emissions start with 
the initial extraction of bauxite and alumina. 
The Company’s business activities have a high 
environmental impact as its core business consists 
mainly of aluminum products, 30% of which are 
primary aluminum. In addition, approximately 
70% of the supply chain-related emissions come 
from aluminum and alloys, which are nearly 
100% recyclable. In an effort to foster responsible 
production, sourcing, and stewardship of 
aluminum, Nemak aims to have all of its aluminum 
suppliers certified to the Aluminum Stewardship 
Initiative (ASI) standard by 2030 as well as engage 
its suppliers to adhere to principles of the Science-
Based Targets initiative.  
Due to the growing portfolio of assembled (rather 
than manufactured) components and products, 
Nemak expects to increase its reliance on 
suppliers, thus it requires a stable and transparent 
supply chain to maintain successful business 
relations and transactions. In light of the current 
global supply crisis, shareholders and investors 
are looking more closely at the effectiveness of the 
supply chain and its potential weaknesses. 
Management approach
To accelerate the shift from a linear to a circular 
economy, Nemak is working to establish clear 
guidelines and means of engaging with its value 
chain regarding its sustainability strategy. The 
Company is progressing towards this goal by 
implementing supplier commitment letters related 
to climate change strategies, conducting supplier 
audits, and applying strict selection criteria.
With its Sustainable Purchasing Policy, Nemak 
commits that it will:
•	Respect and uphold all legal regulations when 
working with suppliers
•	Establish mandatory sustainability 
requirements enforced by the Purchasing 
department during supplier onboarding. These 
requirements include, but are not limited to, 
acceptance and adherence to Nemak’s Global 
Business Code for Suppliers, Human Rights 
Global Policy, Anti-Corruption Global Policy, and 
other applicable supplier policies
•	Consider sustainable aspects such as 
economic, social, ethical, and environmental 
practices in its supplier selection process, 
including supplier execution, tracking, and 
reporting of CO2 emissions and reduction 
targets. Set annual objectives to improve 
the sustainability practices of Nemak and its 
suppliers
•	Annually assess its suppliers’ sustainability 
performance based on criticality analysis 
and priorities according to its supplier 
management process
•	Identify, track and act on any potential risks 
based on its supplier risk management 
process
•	Support locally based community suppliers 
when feasible
Nemak’s Global Business Code for Suppliers 
reflects its commitment to a culture of integrity, 
honesty, and accountability, and it expects 
suppliers to follow these principles when 
conducting business
The Code, the Sustainable Purchasing Policy and 
other relevant documents are available via https://
www.nemak.com/suppliers. 
2021 ANNUAL REPORT
55
NEMAK
NEMAK AT
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SUSTAINABILITY

Organization and responsibilities
The Vice President of Purchasing and Sustainability is responsible 
for the Company’s sustainable purchasing performance, 
supported by the Purchasing Business Support Team. 
Evaluating the sustainability criteria of suppliers includes their 
environmental and social assessments. Every two months, 
Nemak’s Sustainability Committee meets to discuss progress, 
approve decisions, and refine the sustainability strategy, including 
sustainable purchasing tactics.
Progress and measures
Nemak is working diligently with its customers and suppliers 
to transition from primary to secondary alloys and increase the 
recycled content in its products. The Company collaborates with 
customers to make these improvements during the design phase, 
and it carries those advances through to its purchasing decisions. 
These initiatives are driving the development of new purchasing 
strategies and collaborations, resulting in more sustainable 
products. In addition, Nemak has established a Supply Financing 
Program, from which its supplier benefited from approximately 
US$350 million in 2021. 
Furthermore, the Company has implemented a risk management 
process focusing on how critical suppliers’ goods and services 
impact Nemak’s final products. This process includes a manual 
evaluation of dependency, performance, technical limitations, 
substitution possibilities, and an assessment of financial 
and geopolitical risks. Critical materials and services include 
vehicle components, manufacturing services, aluminum, and 
alloys. In addition, Nemak has several strategies to mitigate the 
corresponding risks, such as the Supplier Partnership Program, 
supplier development, risk and performance monitoring and 
strategic volume allocation. 
In 2021, Nemak received an A rating in CDP’s SER (Supplier 
Engagement Rating). The SER is a rating related to the 
company’s ability to include and engage suppliers. As a result, it 
was recognized by CDP as a Supplier Engagement Leader - only 
8% of all companies participating in the CDP’s Climate Change 
Questionnaire received this honor.
2021 ANNUAL REPORT
56
NEMAK
NEMAK AT
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SUSTAINABILITY

Supplier environmental 
assessment 
GRI 308: 308-1
Approximately 70% of Nemak’s carbon footprint is 
generated through its Scope 3 emissions profiles. 
The Company evaluates and actively works 
with suppliers to engage in emission-reduction 
programs and to identify new opportunities to 
minimize their carbon footprint. 
Nemak conducts environmental supplier 
assessments by requesting and evaluating their 
primary carbon footprint data and calculating 
values based on the Science Based Targets 
initiative (SBTi). With this data, the Company can 
identify and prioritize the suppliers it needs to 
work with to help them reduce their emissions and 
initiate effective strategies.
Nemak uses an external third party, EcoVadis, 
to assess its suppliers and report on their CSR 
performance, including environmental KPIs and 
sustainable procurement. In 2021, the Company 
assessed 57 new suppliers with EcoVadis and an 
additional 25 suppliers based on their primary CO2 
footprint calculation data. Overall, Nemak aims to 
evaluate its most prominent suppliers. Through 
EcoVadis’ assessments, Nemak receives access 
to each supplier’s corrective action plans and the 
opportunities they have identified to reduce their 
environmental impacts.
As a mark of further progress, the Company 
received 26 signed commitment letters from 
suppliers that participated in its sustainability 
round tables in 2020. These suppliers have 
pledged to become CO2-neutral by 2050 or earlier, 
and to promote decarbonization via CO2 reduction 
targets, defined strategies, and environmental 
action plans.  In the future, the Company aims 
for each supplier to sign their decarbonization 
commitment as a long-term measure.
Nemak’s commitment to its suppliers and 
helping them meet their environmental targets is 
anchored in its Global Business Code for Suppliers 
and Sustainable Purchasing Policy. Furthermore, 
the Company’s CO2 reduction targets are aligned 
with international climate change efforts such 
as the Paris Climate Agreement, and are publicly 
available. Nemak monitors internal KPIs such as 
its suppliers’ compliance with the Global Supplier 
Business Code and the status of EcoVadis’ ratings 
in the short- and medium-term. 
Information on Nemak’s supplier assessments 
related to social criteria is included in the section 
“Human Rights.”
Sustainability dialogue
Within the scope of supplier engagement, Nemak 
organizes and coordinates virtual sustainability 
events involving roundtables and webinars to 
engage with suppliers in decarbonizing the value 
chain. The Company’s objective is to align its 
suppliers with its Sustainability Strategy and 
increase the transparency of the entire value chain. 
During these sustainability events, Nemak and 
its participating suppliers share best practices, 
experiences, and lessons learned from measuring 
their CO2 footprints. These events which were held 
virtually during the pandemic, are coordinated 
annually and provide a space for open discussions 
between Nemak and its suppliers. In 2021, 137 of 
Nemak’s suppliers participated in Nemak’s yearly 
Sustainability Round Tables.
The Vice President of Purchasing and 
Sustainability participates in some customers’ 
sustainability committees, jointly developing 
supply chain engagement strategies and 
determining how Nemak can address and 
support its customers in sustainability matters. 
The objectives are to engage with suppliers, 
communicate Nemak’s expectations, and discuss 
sustainability benchmarks and the lessons learned 
among participants.
CO2 neutral 
by 2050
Signed commitment 
letters from Nemak 
suppliers to become
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
2021 ANNUAL REPORT
57
NEMAK
SUSTAINABILITY

REPORT PROFILE 
GRI Standards 102-45, 102-48, 102-50, 102-51, 102-52, 102-53, 201-2
This Sustainability Report as part of the 2021 Annual Report 
comprises Nemak’s sustainability activities during the 2021 fiscal 
year, from January 1 to December 31, and covers all of Nemak’s 
locations.
Nemak has prepared this report in accordance with GRI 
Standards: Core.
Compared to the last reports and the 2020 Annual Report, which 
was published in March 2021, no sustainability information has 
been restated. 
Questions regarding this Sustainability Report can be addressed 
to the Investor Relations department: investor@nemak.com
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
2021 ANNUAL REPORT
58
NEMAK
SUSTAINABILITY

Operating summary
Despite continued pandemic and industry-related 
headwinds, Nemak’s 2021 results reflected 
improved underlying business performance over 
the prior year. Its cost-reduction and flexibilization 
initiatives kicked into high gear in 2020, shortly 
after the onset of the COVID-19 pandemic, as 
the Company took meaningful steps to support 
the long-term sustainability of its business. In 
turn, the continued pursuit of greater operational 
efficiencies, improved product mix, and new 
product launches helped Nemak maintain its 
unitary margins above pre-pandemic levels.
In 2021, the Company continued to work 
towards building a leaner and more efficient 
operating structure, adapting swiftly to changing 
market conditions while maintaining financial 
discipline and meeting and exceeding customer 
expectations.
During the year, US light-vehicle sales were 
15.1 million units, a 3% increase year-over-year 
(“y-o-y”) as supply chain constraints limited 
industry recovery. Light-vehicle production 
in North America fell 1% y-o-y as customer 
production continued to be hampered by effects of 
the semiconductor shortage.
In Europe, light-vehicle sales and production were 
16.1 million and 15.3 million units, respectively, 
dropping 2% and 5% y-o-y. As with North America, 
the wide-reaching impacts of the semiconductor 
shortage affected Europe as well. 
Volume increased 2% y-o-y in 2021, on the back 
of new product launches, mainly in the Company’s 
e-mobility and structural applications (EV/SC) 
segment. Revenue increased 21% y-o-y, due to 
the combination of higher aluminum prices and 
equivalent units sold.
EBITDA for 2021 increased 31% y-o-y to US$567 
million, also driven by an improved product mix 
following the integration of new EV/SC products, 
combined with higher volume and operating 
efficiencies achieved through tighter cost and 
expense control. Nemak’s EBITDA per equivalent 
unit was US$15.9 in 2021, which matched the 
highest annual figure Nemak has ever reported, 
and 29% y-o-y growth. Operating income increased 
114% y-o-y to US$229 million, mainly due to the 
same factors that supported EBITDA.
Nemak recorded net income of US$5 million in 
2021, compared to a net loss of US$34 million in 
2020, as the factors behind operating income 
more than offset non-cash charges and the 
refinancing costs of the Company’s senior notes 
due in 2024 and 2025. Adjusting for these non-
recurring items, net income for 2021 would have 
been US$90 million.
Capital expenditures totaled US$360 million in 
2021, compared to US$269 million in 2020. More 
than half of this figure was directed towards new 
product launches, with an increased focus on the 
Company’s EV/SC segment.
As volatility in supply chains and OEM production schedules figured 
prominently in the global automotive industry in 2021, Nemak relied on 
its proven ability to act and react quickly, not only enabling it to meet 
the evolving needs of its customers, but also to win major contracts that 
strengthened the groundwork for the Company’s future growth.
GRI Standard: 201-1
2021 ANNUAL REPORT
59
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
OPERATING
SUMMARY

Regional Operations
NORTH AMERICA
During 2021, US light-vehicle sales were relatively 
stable compared to the previous year; however, 
production in North America remained constrained 
mainly due to widespread disruptions in the supply 
of semiconductors to OEMs. 
US light-vehicle sales totaled 15.1 million units, 
3% higher than in 2020, as strong first-half sales 
more than offset lower sales in the second half. 
However, semiconductor shortages weighed on 
OEM output, causing light-vehicle production in 
North America to finish 1% lower y-o-y. 
Nemak’s North American volume was 18.7 million 
units, 4% lower y-o-y mainly due to industry 
supply chain issues, which weighed on customer 
light-vehicle production and, therefore, demand. 
Revenue rose 17% y-o-y, due mainly to higher 
aluminum prices, while the 9% y-o-y increase in 
EBITDA was mainly attributable to an improved 
product mix—including new product launches in its 
EV/SC segment—and operating efficiencies.
EUROPE
The industry factors impacting Nemak’s business 
in Europe were similar to those in North America, 
as the global semiconductor shortage weighed 
on OEM light-vehicle sales and production in both 
regions. 
Light-vehicle sales in Europe were 2% lower in 
2021 compared to the previous year, while light-
vehicle production decreased 5%, mainly due to 
constraints caused by widespread disruptions in 
the supply of semiconductors to OEMs. However, 
Nemak volume for 2021 was 12.6 million 
equivalent units, 11% higher y-o-y, as new product 
launches more than offset effects of volatility in 
OEM production. 
Revenue and EBITDA increased 23% and 58% over 
the prior year, respectively, borne along by the 
same drivers supporting the Company’s results in 
North America, in conjunction with higher volume.
REST OF THE WORLD
The Rest of the World region for Nemak comprises 
its Asian and South American operations. Industry 
conditions in the Rest of the World saw an overall 
improvement on a year-over-year basis, with 
higher light-vehicle sales and production figures 
for both China and Brazil, the Company’s main 
markets in the region. 
Nemak’s volume was 4.4 million equivalent units, 
as increased customer light-vehicle production 
contributed to a 6% y-o-y increase. In turn, revenue 
climbed 26% y-o-y, supported by volume as well 
aluminum prices. EBITDA increased 81% y-o-y, 
driven mainly by a combination of higher volume 
and commercial negotiations in Brazil.
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
2021 ANNUAL REPORT
60
NEMAK
OPERATING
SUMMARY

Board of directors
GRI Standards: 102-18, 102-22
DIRECTOR
MEMBER SINCE
EXPERTISE & EXPERIENCE
Armando Garza Sada (3)
Co-Chairman of the Board of Nemak
April
1999
Chairman of the Boards of ALFA and Alpek. Member of the Boards of AXTEL, BBVA México, CEMEX, 
Grupo Lamosa, and Liverpool.
Álvaro Fernández Garza (3)
Co-Chairman of the Board of Nemak
March
2010
President of ALFA and Chairman of the Board of Universidad de Monterrey (UDEM). Member of 
the Boards of Citibanamex, Cydsa, Grupo Aeroportuario del Pacífico, and Vitro. Mr. Fernández also 
served as President of CAINTRA from March 2013 to April 2015.
Mónica Aspe Bernal (1)
CEO of AT&T Mexico
July 
2021
Previously, served as Ambassador of Mexico to the Organization for Economic Cooperation and 
Development (OECD) and as Mexico’s Undersecretary of Communications. Current member of the 
Boards of Volaris and Sky Mexico.
Juan Carlos Calderón Rojas (1)
Vice President of Experience and Engagement 
of Employees at Talent & Culture area of Sigma 
Alimentos Corporativo, S.A. de C.V. 
June
2015
Member of the Boards of Coparmex Nuevo León, Grupo Franca, and Movimiento Congruencia.
Robert J. Fascetti (1)
Former Vice President of Powertrain 
Engineering at Ford Motor Company 
December 
2005
He served for more than 29 years in powertrain and product development at Ford Motor Company.
Michael W. Felix (2)
Director of Manufacturing – North America at 
Ford Motor Company 
February 
2020
Mr. Felix has more than 31 years of experience in manufacturing engineering and global strategy 
development with Ford Motor Company.
Antón Mauricio Fernández Zambrano (3)
Director of Administration and Planning at 
Indelpro
March
2021
Former member of the Board of the Mexican Association of the Chemical Industry (ANIQ).
David J. Filipe (2)
Vice President of Global Vehicle Hardware 
Models at Ford Motor Company 
December 
2017
Mr. Filipe has more than 30 years of powertrain and vehicle programs experience with multiple 
global assignments at Ford Motor Company. He leads all vehicle hardware development and 
systems integration of exterior, interior, underbody, ICE powertrain, and electrified modules.
2021 ANNUAL REPORT
61
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
BOARD OF
DIRECTORS

Board of directors
GRI Standards: 102-18, 102-22
DIRECTOR
MEMBER SINCE
EXPERTISE & EXPERIENCE
Eugenio Garza Herrera (1A)
Chairman of the Boards of Xignux, S.A. de C.V., 
Pak2Go, and Maixico
June 
2015
Member of the Boards of Corporación EG, Banco Nacional de México, S.A. (Citibanamex), Cydsa, 
México Evalúa, Arcelor Mittal México, the regional board of Banco de México, and the Roberto 
Garza Sada Center for Art, Architecture and Design of UDEM. Chairman of the Boards of Pak2Go 
and Maixico. He presides over the Consejo Consultivo Norte of Citibanamex and the Transparency, 
Effective Governance, and Regulatory Improvement Commission of Consejo Nuevo León para la 
Planeación Estratégica, and he is a member of the Development Committee of MIT Corporation. He 
is also a member of the Board of Trustees, the Institutional Governance Committee, and Chairman 
of the Development Committee of ITESM.
Fabiola Garza Sada (2)
Investor 
June
2015
Member of the Board of ALFA Fundación.
Eduardo Garza T. Fernández (1A)
President of Grupo Frisa Industrias 
June
2015
Member of the Board of Grupo Lamosa, BBVA México, Consejo Nuevo León para la Planeación 
Estratégica, and Grupo Ragasa.
Gary Lapidus (1)
Independent Investor and Consultant 
June
2015
Former Institutional Investor-ranked automobile and auto parts Senior Equity Research Analyst at 
Goldman, Sachs & Co. and Sanford C. Bernstein & Co. Previously, Mr. Lapidus was a Principal with 
the management consulting firm Booz-Allen Hamilton.
Adrián G. Sada Cueva (2)
President of Vitro, S.A.B. de C.V. 
June
2015
Member of the Boards of Vitro, ALFA, Grupo Financiero Banorte, and Dallas Museum of Art. Former 
President of CAINTRA. He also serves as a member of the Boards of Organización Vida Silvestre 
and Universidad de Monterrey (UDEM).
Carlos Jiménez Barrera
Secretary 
1 Independent Board Member 
2 Patrimonial Board Member 
3 Related Patrimonial Board Member 
A Audit and Corporate Governance Committee
2021 ANNUAL REPORT
62
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
BOARD OF
DIRECTORS

Management team
Luis Manuel Peña
USA, Canada & South America 
Business Unit Director
Klaus Lellig
Europe & Asia Business 
Unit Director
Knut Bentin 
Mexico Business Unit Director
Ernesto Saenz
Vice President of Manufacturing & 
Product Development
Armando Tamez
CEO
Marc Winterhalter
Vice President of Purchasing & 
Sustainability
2021 ANNUAL REPORT
63
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
Alberto Sada 
Chief Financial Officer
Dirk Barschkett 
Vice President of Sales & Marketing 
MANAHEMENT
TEAM

NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
2021 ANNUAL REPORT
64
NEMAK
Corporate
Governance
GRI Standards: 102-18, 102-19, 102-20, 102-22, 102-25, 102-26
Nemak operates in accordance with the Code 
of Principles and Best Corporate Governance 
Practices in place in Mexico since 2000. The 
purpose of the Code is to establish a frame 
of reference for corporate governance and 
thereby increase investor confidence in Mexican 
companies. 
Once a year, every company that is listed on the 
Mexican Stock Exchange (Bolsa Mexicana de Valores, 
S.A.B. de C.V.) (BMV) must disclose the extent to 
which they adhere to the Code by answering a 
questionnaire. The responses provided by each 
company may be found on the BMV’s website. 
A summary of Nemak’s principles of corporate 
governance is presented below, reflecting the 
Company’s responses to the questionnaire 
submitted in May 2021: 
1. 	 	Nemak’s Board of Directors is comprised of 13 
members, six of whom (46%) are independent 
board members. This annual report 
provides information on all board members, 
identifying those who are independent and 
their participation in the Audit and Corporate 
Governance Committee. 
2.	 	In order to correctly perform its functions, 
Nemak’s Board of Directors is advised 
by the Audit and Corporate Governance 
Committee. The Chairman of this Committee 
is an independent board member, as are all 
members of the Committee. 
3. 	 	The Board of Directors of Nemak convenes 
four times a year. Meetings of the Board may 
be called by the Co-Chairmen of the Board, 
the Chairman of the Audit and Corporate 
Governance Committee, the Secretary of the 
Board, or at least 25% of its members. At 
least one such meeting per year is dedicated 
towards defining the Company’s medium and 
long-term strategies. 
4. 	 	Members inform the Co-Chairmen of the 
Board of any conflicts of interest that may 
arise, and refrain from participating in any 
related discussions. Average attendance at 
Nemak’s Board meetings was 96% in 2021. 
5. 	 	For a large part of fiscal year 2021, the 
meetings of Nemak’s Board of Directors 
and the Audit and Corporate Governance 
Committee were held by videoconference, 
due to the pandemic (COVID-19) caused by 
the SARS-CoV-2 virus. The videoconferences 
allowed the board members to interact with 
each other effectively, given the availability of 
audio and video functions. 
CORPORATE
GOVERNANCE

2021 ANNUAL REPORT
65
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
6. 	 	Nemak’s Audit and Corporate Governance 
Committee evaluates and issues 
recommendations to the Board of Directors 
on matters such as selecting and determining 
the fees to be paid to the external auditor, 
coordinating with the Company’s internal 
audit area, studying accounting policies, 
and reviewing environmental, social and 
governance matters, among others. 
7. 	 	Additionally, Nemak’s Audit and 
Corporate Governance Committee issues 
recommendations to the Board on matters 
related to corporate practices, such as 
employment terms and severance payments 
for senior executives, compensation policies, 
and succession planning, among others. 
8. 	 	Nemak has internal control systems with 
general guidelines that are submitted 
to the Audit and Corporate Governance 
Committee for its opinion. In addition, the 
external auditor validates the effectiveness 
of the internal control systems and issues 
reports thereon. 
9. 	 	Nemak’s Board of Directors is advised by 
the Administration and Finance Department 
regarding the feasibility of investments, 
strategic positioning of the Company, 
alignment of investing and financing policies, 
and review of investment projects. 
10. Nemak has a department specifically 
dedicated to maintaining an open line of 
communication between the Company and 
its shareholders and investors. This ensures 
that its shareholders and investors have the 
financial and general information they require 
to evaluate the Company’s development and 
progress. To this end, Nemak uses press 
releases, notices of material events, quarterly 
results conference calls, investor meetings, 
and its website, among other communication 
channels. 
11. Nemak promotes corporate social responsibility 
and has a mission, vision, values, and code 
of ethics that are promoted within the 
organization.
CORPORATE
GOVERNANCE

Independent Auditors’
Report and Consolidated 
Financial Statements 
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019
TABLE OF CONTENTS
66
Management´s Discussion and Analysis of Results (“MD&A”)
71
Independent Auditors’ Report
75
Consolidated Statements of Financial Position
76
Consolidated Statements of Operations
77
Consolidated Statements of Comprehensive Income
78
Consolidated Statements of Changes in Stockholders’ Equity
79
Consolidated Statements of Cash Flows
80
Notes to Consolidated Financial Statements
2021 ANNUAL REPORT
66
NEMAK
NEMAK AT
A GLANCE
LETTER TO
SHAREHOLDERS
LIGHTWEIGHTING
DEVELOPMENTS
SUSTAINABILITY
CORPORATE
GOVERNANCE
FINANCIAL
SECTION
OPERATING
SUMMARY
BOARD
OF DIRECTORS
MANAGEMENT
TEAM
FINANCIAL
SECTION

2021
The following report should be considered in conjunction with the Letter to 
Stockholders (pages 6-8) and the Audited Consolidated Financial Statements 
(pages 65-123). Unless otherwise indicated, amounts are expressed in millions 
of Mexican pesos for information from 2019 to 2021. Percentage changes 
are presented in nominal terms. In addition, some amounts are expressed in 
millions of US dollars (US$) and millions of euros (€). The financial information 
included in this Management’s Discussion & Analysis refers to the last three 
years (2019, 2020 and 2021), and is presented in accordance with International 
Financial Reporting Standards (IFRS). This information has been prepared in 
compliance with the General Provisions applicable to Public Companies and 
Other Participants of the Securities Market, as issued by the National Banking 
and Securities Commission (CNBV, as per the Spanish acronym) through 
December 31, 2021.  
San Pedro Garza García, N. L., January 31, 2022
ECONOMIC ENVIRONMENT
The Mexican economy continues to recover from its most serious decline in 
decades, driven by growth in the US and the progress of vaccination against 
COVID-19.
Mexican authorities were able to maintain financial and fiscal stability during 
2021. Manufacturing and export indexes have returned to pre-pandemic levels, 
services are being reactivated gradually, and the employment rate has shown 
signs of recovery. However, the difference in real per capita income versus 
the US continues to increase, creating a significant gap in purchasing power. 
Mexico’s key economic problems continue to be low productivity growth and 
poverty rates. 
There was marked MXN/USD exchange rate volatility throughout the year, 
posting depreciation of 3% with respect to the prior year. Nonetheless, the 
Mexican peso was one of the currencies that underwent the greatest recovery 
during the year, together with the currencies of Norway, China, and Russia.
Management´s Discussion and Analysis of Results (“MD&A”)
Trends in Gross Domestic Product (GDP) and other variables in Mexico and 
abroad, which are key to understanding Nemak’s results, are described in the 
following paragraphs:
During 2021, Mexico’s GDP grew by 5.4%(a) (estimated) following a contraction 
of -8.5% in 2020, while the national consumer price index in Mexico recorded 
an annual change of 7.4%(b), thus exceeding the 3.2%(b) recorded for 2020. The 
Mexican peso experienced annual nominal depreciation of 2.8%(c) in 2021, and 
5.5% in 2020. In real terms, the average annual overvaluation of the Mexican 
peso versus the US dollar increased from -2.7%(d) in 2020 to -3.6%(d) in 2021.
According to the monetary policy agreed by Banxico during the year, the average 
28-day Interbank Interest Rate (TIIE) in 2021 was 4.6%(b) in nominal terms, 
compared to 5.7%(b) in 2020. Expressed in real terms, the annual average was 
-0.9%(b) in 2021, compared to 2.4%(b) in 2020.
The annual average LIBOR three-month rate in US dollars was 0.2%(b) in 2021, 
compared to 0.7%(b) in 2020. Considering the nominal depreciation of the 
Mexican peso versus the US dollar, the LIBOR rate in constant pesos fell from 
8.7%(a) in 2020 to -10.6%(a) in 2021.
Sources:	
(a) Instituto Nacional de Estadística, Geografía e Informática (INEGI). January 31, 2022.
(b) Banco de México (Banxico).
(c) Banxico. Exchange rate used for certain obligations denominated in foreign currency and payable in Mexico.
(d) Own calculations with INEGI data on the bilateral relationship with the United States, while considering 
consumer prices. 
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
66
NEMAK

RESULTS 2021
2021 VS. 2020 (NUMBERS ARE STATED IN MILLIONS OF MEXICAN 
PESOS UNLESS OTHERWISE INDICATED) 
In 2021, Nemak continued to advance with the implementation of its strategy, 
focusing on ramping up its e-mobility and structural applications (EV/SC) 
business, while at the same time working to mitigate ongoing impacts from 
the COVID-19 pandemic and the global semiconductor shortage on customer 
light-vehicle production, and therefore on the Company’s volume. Strategy 
execution, in conjunction with specific cost-cutting initiatives and improved 
operating performance, enabled the Company to exceed the EBITDA target 
established in its updated 2021 guidance, and match its highest-ever total 
for full-year EBITDA per equivalent unit.
Total Revenue for the year was $77,078, 16.2% higher than the $66,325 
reported in 2020. This result was driven by a better product mix, higher 
aluminum prices, and to a lesser extent by increased volume, which was 
attributable in part to the launch of new products in its EV/SC segment. 
Cost of Goods Sold (COGS), which includes depreciation of fixed assets, was 
$67,526, up 15.7% over the $58,343 reported in 2020. This variation is mainly 
due to increased aluminum prices and effects of higher volume, which were 
partially offset by the operating efficiency initiatives implemented. 
Sales, General and Administrative (SG&A) Expenses were $5,001, a 0.4% 
increase over the $4,980 reported in 2020, as the expense-control strategy 
put into place by the Company helped offset effects of higher sales.
Operating Income in 2021 was $4,662, an increase of 137% over the $1,967 
reported in 2020, largely driven by a more favorable product mix and higher 
volume, in conjunction with cost and expense reductions resulting from 
efficiency initiatives that were launched throughout the year. 
EBITDA (Operating Income plus Depreciation and Amortization, plus/minus 
Other Non-Cash Charges) was $11,522, which was 29.1% higher than the $8,926 
reported in 2020, reflecting the same factors that benefited Operating Income.
In 2021, there was a Net Financial Loss of $2,593, compared to a loss of 
$2,690 reported in 2020. This line item includes a premium for early payment 
of the senior notes expiring in 2024 and 2025, and certain non-cash exchange 
rate effects that can be attributed to the exchange rate fluctuations between 
the United States dollar, the Mexican peso, and the euro.
Income Taxes were $1,962 in 2021, compared to $181 reported in 2020. 
This increase is explained mainly by the non-cash charges caused by the 
revaluation of deferred income tax assets in Nemak’s US operations during 
the fourth quarter of 2021, as well as a greater taxable base due to the 
Company’s stronger performance.
Net income was $85, compared to a loss of $933 in 2020, as the factors 
behind the performance mentioned in the preceding lines were sufficient to 
compensate for the non-recurring impacts recorded in financing expenses 
and income tax.  
Capital expenditures were $7,343 in 2021, a 29.8% increase compared to 
the $5,655 in 2020, as Nemak continued to focus on supporting new product 
launches.
At the close of 2021, Nemak’s Net Debt was $26,865 (US$1.306 billion), higher 
than the $24,468 (US$1.227 billion) in 2020. Financial ratios were: rolling 
12-month Net Debt to EBITDA of 2.3 times; and Interest Coverage of 5.2 times. 
Excluding the extraordinary financial costs related to early payment of the 
senior notes, interest coverage would have been 7.0 times. In comparison, 
these ratios were 2.8 and 5.6 times, respectively, at the close of 2020.
HIGHLIGHTS 2021
DEVELOPMENT OF THE E-MOBILITY AND STRUCTURAL APPLICATIONS 
BUSINESS 
Nemak continued to harness its technological capabilities to capitalize on 
emerging opportunities in the fast-changing mobility landscape, moving 
forward with implementation of its strategy, which focuses on tapping into 
growing addressable markets in its e-mobility and structural applications 
(EV/SC) segment. Some key highlights included:
•	 During 2021, Nemak’s EV/SC segment generated approximately US$390 
million in revenue, more than double the total of the previous year.  
•	 Successfully launched new products used in electric vehicles of OEM 
customers—including battery housings, e-motor components, and structural 
parts—in North America and Europe. At year-end, Nemak was launching or 
producing EV/SC parts fat 12 of its 38 manufacturing facilities worldwide.
•	 Awarded new business worth approximately US$200 million annually 
to produce EV/SC, bringing its total order book in the segment to 
approximately US$1.05 billion annually at year-end. 
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CONCLUSION OF MERGER 
The merger of Controladora Nemak, S.A.B. de C.V. (“Controladora Nemak”) 
into Nemak was concluded successfully in September 2021, representing the 
culmination of a multi-step process to spin Nemak off from its former parent 
company, Alfa, S.A.B. de C.V. The number of shares outstanding remains 
unchanged, and Nemak, as the surviving company following the merger, is 
now a fully independent company trading under a single listed entity. The 
Company believes that this successful merger is an important milestone in 
driving value creation for its shareholders, with a higher stock float expected 
to ultimately have a positive effect on share liquidity.
SUSTAINABILITY-LINKED BONDS
In 2021, Nemak successfully issued two sustainability-linked bonds, the 
first for US$500 million, and the second for €500 million. Jointly, the 
proceeds from these two sustainability-linked issuances enabled the 
Company to extend its average debt profile while reducing its financing 
cost. Furthermore, these issuances reaffirm the Company’s commitment 
to reduce Scope 1 and 2 GHG emissions by incorporating specific GHG 
emissions targets in the placements, with a step-up clause if the stated 
targets are not met.
TARGETS TO REDUCE GREENHOUSE GAS EMISSIONS 
In March 2021, Nemak announced targets to reduce by 28% its greenhouse 
gas (GHG) emissions by 2030. After completing a rigorous validation process 
with the Science-Based Targets initiative, Nemak committed to achieving a 
28% absolute reduction in Scope 1 and 2 GHG emissions (direct and certain 
indirect emissions, respectively) by 2030, from a 2019 baseline year. Nemak 
also committed to reducing absolute Scope 3 GHG emissions from purchased 
goods and services by 14% over the same timeframe. 
AWARDS AND RECOGNITION
Nemak received several accolades from customers, including being 
recognized as a top-performing global supplier at the 23rd annual Ford World 
Excellence Awards; being named a GM Supplier of the Year winner in General 
Motors’ 29th annual Supplier of the Year award; and receiving an award for 
best-in-class quality performance in support of Volkswagen Group in China.
Nemak was also selected to be part of several stock indexes comprised 
of companies that meet relevant sustainability criteria, including, for the 
second consecutive year, the S&P/BMV Total Mexico ESG Index, and for 
the third consecutive year, both the Dow Jones Sustainability MILA Pacific 
Alliance Index, and the London Stock Exchange’s FTSE4Good Index.
Finally, the Company received the CDP’s top Supplier Engagement 
Rating of “A,” along with an industry-beating “B” rating in the 2020 CDP’s 
internationally recognized Climate Change assessment.
RESULTS 2020
2020 VS. 2019 (NUMBERS ARE IN MEXICAN PESOS UNLESS 
OTHERWISE INDICATED)
During 2020, Nemak harnessed a variety of initiatives across its regions to 
safeguard the health and well-being of its people as well as the long-term 
sustainability of its business amidst the COVID-19 pandemic. These efforts 
enabled the Company to make its cost structure leaner and more efficient 
while continuing to meet its customers’ supply needs, positioning it to better 
capitalize on industry recovery and deliver improved results in the second 
half of the year. 
Total Revenue was $66,325 for the year, 14.3% lower than the $77,363 
reported in 2019. This decrease was due mainly to effects of the pandemic, 
as temporary shutdowns across the global automotive industry resulted in a 
reduction in light-vehicle sales and production, which in turn weighed on the 
Company’s volume. While light-vehicle production picked up notably in the 
second half of the year, as OEMs rushed to restore inventories, which had 
dropped to historically low levels during the shutdowns, there was still an 
overall decrease for the full year. 
Cost of Goods Sold (COGS), which includes depreciation of fixed assets, was 
$58,343, down 12% from the $66,276 reported in 2019. This was mainly due to 
a combination of lower volume and reductions in costs and expenses following 
restructuring initiatives implemented during the first half of the year. 
Sales, General and Administrative (SG&A) Expenses fell to $4,980, compared 
to $5,328 reported in 2019, again on lower volume and efficiencies. 
Operating Income for 2020 was $1,967, down from the $4,964 reported 
in 2019, due mainly to lower revenue and non-recurring severance 
payments and other COVID-related expenses incurred during the year, 
which outweighed benefits of efficiencies. EBITDA (Operating Income plus 
Depreciation and Amortization, plus/minus Other Non-Cash Charges) was 
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$8,926, down 25.4% from the $11,958 reported in 2019, basically as a result 
of the same factors affecting Operating Income. 
There was a Net Financial Loss in 2020 of $2,690, compared to the $1,367 
loss reported in 2019. This variation was largely attributed to exchange rate 
fluctuations between the US dollar, Mexican peso, and the euro.
Income Taxes for 2020 were $181, down 84% against the $1,145 reported in 
2019, mainly due to the lower net taxable result. 
Net Result reported was $(933), over the $2,493 reported in 2019, driven 
by the combination of non-cash exchange rate effects and lower operating 
income. 
Capital expenditures for the year were $5,655, 14.5% lower than the $6,616 
in 2019, as Nemak conserved cash and worked in tandem with its customers 
to defer non-essential investment in light of pandemic-related effects on the 
industry. 
Nemak’s Net Debt at the close of the year was $24,468 (US$1.227 billion), 
higher than Net Debt of $22,718 (US$1.206 billion) in 2019. By year-end, the 
Company had repaid most of the credit lines it had withdrawn in the first 
half of the year to increase its liquidity during the pandemic. Financial ratios 
were: Net Debt to EBITDA, 2.8 times for the last twelve months; and Interest 
Coverage, 5.6 times. When adjusted for non-recurring items associated with 
severance payments and other COVID-related expenses incurred during the 
year, these ratios were 2.5 times and 6.0 times, respectively.
HIGHLIGHTS 2020
NEW CONTRACTS 
In 2020, Nemak signed contracts worth a total of approximately US$700 
million in annual revenue across its product lines, which break down as 
follows: US$590 million to produce powertrain applications, and US$110 
million to produce e-mobility and structural applications. 
DEVELOPMENT OF E-MOBILITY AND STRUCTURAL APPLICATIONS 
BUSINESS 
Nemak continued to ramp up its production of e-mobility and structural 
applications, while at the same time winning incremental business to further 
strengthen its foundation for long-term growth in this segment. The main 
highlights on this front included: 
•	The Company’s order book in its e-mobility and structural applications 
segment reached approximately US$850 million annually. 
•	Initiating series production of battery housings for the Ford Mustang Mach-E 
at Nemak’s new Electric Mobility Center in Nuevo León, Mexico. 
•	Adapting existing capacity spanning Europe, North America, and Asia to 
support the production of electric vehicle applications of its customers.
START OF TRADING OF CONTROLADORA NEMAK
On August 17, 2020, shareholders of Nemak’s parent company, ALFA, approved 
a proposal to transfer their entire share ownership in Nemak to a new entity 
to be listed on the Mexican Stock Exchange: Controladora Nemak, S.A.B. de C.V. 
(“Controladora Nemak”). As a result of this transaction, shareholders received 
one share of Controladora Nemak for each of their ALFA shares on December 
14, 2020, the first day of trading of Controladora Nemak. 
INDUSTRY RECOGNITION 
Nemak was chosen as a recipient of the General Motors Supplier of the Year 
award for the third consecutive year. As a 16-time winner, Nemak is one of 
the most recognized suppliers in the 28-year history of the award. 
Nemak also received the Volkswagen Group Award in the category 
“Launch of the Year,” in recognition of the Company’s performance in the 
development, innovation, and manufacturing of battery housings for plug-in 
hybrid electric vehicles. 
Finally, for the second consecutive year, Nemak was selected to be an index 
component of the Dow Jones Sustainability Indices (DJSI) as well as the 
London Stock Exchange’s FTSE4Good Index Series. It remains part of the 
Dow Jones Sustainability MILA Pacific Alliance Index, which is comprised 
of companies with leading economic, social, and environmental practices in 
Latin America. The DJSI is among the first set of global indices to track the 
largest and leading sustainability-driven publicly listed companies. 
These awards exemplify Nemak’s customer focus, and its commitment to 
continue delivering leading-edge sustainable mobility solutions. 
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EFFORTS TO PROTECT EMPLOYEES AND ADAPT TO EFFECTS OF 
THE COVID-19 PANDEMIC 
Throughout the year, Nemak remained focused on safeguarding the health 
and well-being of its people and communities, and ensuring business 
continuity amidst the COVID-19 pandemic. 
In January, Nemak created a task force comprised of members of top 
management and health and safety experts, with the purpose of overseeing 
the implementation of best practices to help reduce the spread of the virus. 
The Company implemented a series of measures toward this end, including 
checkpoint screening, ongoing facility disinfection, and physical distancing 
protocols, among others. Additionally, the Company maintained close contact 
with its stakeholders all over the world, including customers, suppliers, 
non-profit organizations, and government agencies, in order to identify and 
implement additional actions in support of worldwide efforts to minimize 
virus transmission.
At the same time, Nemak intensified measures to optimize costs, expenses, 
and cash flow in the face of light-vehicle production cuts among certain 
customers. These include postponement of non-essential investments, 
implementation of flexible production schemes, and idling production at 
certain sites on a temporary basis. The Company also temporarily ceased 
production at certain plants and production lines in accordance with 
emergency declarations issued in certain jurisdictions where it operates. 
Taken together, these efforts helped lay the groundwork for a successful 
rampup of production at Nemak locations worldwide, particularly in the 
second half of the year, as OEMs restarted light-vehicle production following 
the easing of pandemic-related lockdowns.
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OPINION
We have audited the consolidated financial statements of Nemak, S. A. B. 
de C. V. and Subsidiaries (the “Company”), which comprise the consolidated 
statements of financial position as of December 31, 2021, 2020 and 2019, 
and the consolidated statements of income, the consolidated statements of 
comprehensive income, the consolidated statements of changes in stockholders’ 
equity and the consolidated statements of cash flows for the years then ended, 
and the notes to the consolidated financial statements, including a summary of 
significant accounting policies.
In our opinion, the accompanying consolidated financial statements present 
fairly, in all material respects, the consolidated financial position of the Company 
as of December 31, 2021, 2020 and 2019 and their consolidated financial 
performance and their cash flows for the years then ended, in accordance 
with International Financial Reporting Standards (“IFRS”), as issued by the 
International Accounting Standards Board. 
BASIS FOR OPINION
We conducted our audits in accordance with International Standards on Auditing 
(“ISA”). Our responsibilities under those standards are further described in the 
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements 
section of our report. We are independent of the Company in accordance with 
the International Ethics Standards Board for Accountants’ Code of Ethics for 
Professional Accountants (“IESBA Code”) together with the Code of Ethics issued 
by the Mexican Institute of Public Accountants (“IMCP Code”), and we have 
fulfilled our other ethical responsibilities in accordance with the IESBA Code 
and with the IMCP Code. We believe that the audit evidence we have obtained is 
sufficient and appropriate to provide a basis for our opinion. 
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were 
of most importance in our audit of the 2021 consolidated financial statements. 
These matters were addressed in the context of our audit of the consolidated 
financial statements as a whole, and in forming our opinion thereon, and we do 
not provide a separate opinion on these matters. 
Independent Auditors’ Report to the Board of Directors and 
Stockholders of Nemak, S. A. B. de C. V.
ASSESSMENT OF TESTS OF IMPAIRMENT OF GOODWILL AND 
LONG-LIVED ASSETS 
As described in Notes 3 j., 3 l., 3 m., 10, 11 and 12 to the consolidated financial 
statements, the Company performs impairment tests to its goodwill and 
intangibles with indefinite useful lives; in addition, it performs impairment tests 
when there are indicators that the value of long-lived assets, such as property, 
plant and equipment, intangible assets with finite useful lives and right-of-use 
assets, will not be recovered.
We have identified the long-lived assets and goodwill review as a key audit 
matter, mainly due to the fact that impairment tests involve the application 
of judgments and significant estimates by the Company’s management in 
determining the assumptions of valuation and financial projections, cash 
flows, budgeted income, and the selection of discount rates used to estimate 
the recoverable value of the cash generating units (“CGUs”) of the Company, 
as well as changes in the current economic environment caused by the global 
coronavirus pandemic (COVID-19) in the business, as well as the semiconductor 
chip shortage affecting the industry where it operates, in addition to the 
importance of the goodwill balance of $6,096 million and of $60,345 million 
of pesos of long-lived assets in the consolidated financial statements of 
the Company. Therefore, our review procedures require a high degree of 
professional judgment, a significant increase in the degree of audit effort, and the 
incorporation of our valuation specialists.
We performed the following audit procedures on the significant assumptions 
that the Company considered when estimating future projections to evaluate 
the recoverable value of goodwill as well as long-lived assets, among others; 
projections of income and expenses, expected gross and operating profit 
margins, discount rate, the industry growth rate, discount rate, comparison of the 
expected gross profit margin, projected flows considering the effects originated 
by the COVID-19 and the semiconductor chips shortage within the Company’s 
industry. Such procedures are listed as follows:
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•	We tested the design, implementation and the operating effectiveness of 
internal controls in the determination of the recoverable value and the 
assumptions used in the valuation.
•	With the assistance of our valuation specialists, we assessed the 
reasonableness of the methodology to determine the recoverable value 
of tangible, intangible assets with indefinite useful lives and goodwill and 
reviewed the financial projections including the impacts of COVID-19 and 
the semiconductor chips shortage of the OEMs on business operations, 
comparing them with performance and historical business trends, 
corroborating the explanations of the variations with management. Likewise, 
we assessed the internal processes used by management to calculate 
projections, including timely monitoring and analysis by the Board of 
Directors, and whether the projections are consistent with the budgets 
approved by the Board. 
•	We reviewed the significant assumptions used in the impairment calculation 
model, specifically including income and cash flow projections, the projected 
industry growth rate and the projected long-term growth rate; gross and 
operating margins, as well as the multiple of earnings before interest, 
taxes, depreciation and amortization (“EBITDA”). Additionally, we tested the 
mathematical accuracy and integrity of the impairment model, the sensitivity 
calculations of the significant assumptions of the calculation for all CGUs, 
calculating an independent estimate to conclude whether the assumptions 
used would need to be modified and the probability that such modifications 
happen.
•	We evaluated the discount rates independently and compared such rates with 
the estimates used by management.
•	We evaluated the factors and variables used to determine the CGUs, 
among which were considered: the analysis of operating cash flows and 
indebtedness policies, analysis of the legal structure, allocation of production 
and understanding of the operation of the commercial and sales areas. 
The results of our procedures were satisfactory, and we agree that the 
determination of the recoverable value of the CGUs and the assumptions used 
are reasonable.
ASSESSMENT OF THE RECOVERABILITY OF DEFERRED INCOME 
TAX ASSETS
The Company records deferred income tax assets derived from tax losses. 
Management performed an assessment of the probability of recovering the tax 
loss carryforwards to generate an economic and tax benefit in the future, to 
support the deferred tax assets recognized in its consolidated financial statements.
Due to the significance of the deferred income tax asset balance derived from tax 
losses as of December 31, 2021 amounting to $592 million of pesos (Note 25), 
and the significant judgments and estimates to determine future projections of 
the Company’s taxable income, we focused on this line item, among others, and 
performed the following procedures:
•	We verified the reasonableness of the projections used to determine future 
taxable income. 
•	We challenged the projections used in the assessment by comparing them to 
the business performance and historical trends, verifying the explanations of 
variations with management.
•	With the support of internal experts, we reviewed the projected taxable 
income, and the assumptions used by management in preparing such tax 
projections.
•	We discussed with management the sensitivity analysis and assessed the 
extent to which the key assumptions used would need to be modified for an 
adjustment to be considered for evaluation.
The results of our audit procedures were satisfactory. The Company’s accounting 
policy to record deferred taxes, as well as the details of their disclosure are 
included in Notes 3 n. and 25, respectively, to the accompanying consolidated 
financial statements. 
EMPHASIS PARAGRAPHS 
Merger of the Company with Controladora Nemak, S.A.B. de C.V. (“Controladora Nemak”)
As mentioned in Note 2 e., on June 29, 2021, the Company announced a proposal 
to merge Controladora Nemak into the Company; this proposal was approved 
by the shareholders of each company on July 29, 2021. Controladora Nemak 
would cease to exist and its shares would be canceled, while the Company 
would remain as the subsisting entity and its number of shares would remain 
outstanding without any changes. 
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As of September 6, 2021 (the “Merger Effective Date”), the 2,317,921,869 
common, registered shares, without par value, representing the capital 
of the Company, that were held by Controladora Nemak, were transferred 
to Controladora Nemak’s stockholders at an exchange factor of 
0.472157717310754 the Company’s shares per Controladora Nemak share. 
On this same date, the listing of the shares representing the capital stock of 
Controladora Nemak on the Mexican Stock Exchange was canceled and the 
merger process was concluded. This transaction did not have any effects on the 
financial information of the Company.
COVID-19 impact and semiconductor chips shortage impact.
As mentioned in Note 2 a. and 2 b. to the consolidated financial statements, on 
March 11, 2020, the World Health Organization declared the SARS-COV2 virus 
(“COVID-19”) as a pandemic; after this event, the spread of COVID-19 caused a 
slowdown in the automotive industry in which the Company operates, having 
effects on the consolidated financial and operational information during 2021 
and 2020. The Company’s management continues to implement measures 
to address the economic conditions of the market. Our opinion has not been 
modified by this matter.
INFORMATION OTHER THAN THE CONSOLIDATED FINANCIAL 
STATEMENTS AND AUDITORS’ REPORT THEREON
Company’s management is responsible for additional information. Additional 
information includes: i) the information that will be incorporated in the Annual 
Report that the Company is required to prepare in accordance with Article 33, 
section I, subsection b) of Title Four, Chapter One of the General Provisions 
Applicable to Issuers and other Participants of the Stock Market in Mexico 
and the Instructions that accompany these provisions (the “Provisions”) and 
ii) the other additional information, which is a measure that is not required 
by IFRS and has been incorporated to provide an additional explanation to its 
investors and main readers of its consolidated financial statements to evaluate 
the performance of each of the operating segments and other indicators on 
the capacity to meet obligations regarding the earnings before interest, taxes, 
depreciation, amortization and impairment of assets (adjusted “EBITDA”) of 
the Company; this information is presented in Note 27. Our opinion on the 
consolidated financial statements will not cover the additional information and 
we will not express any form of assurance about it.
In relation to our audit of the consolidated financial statements, our responsibility 
will be to read the additional information when it becomes available, and when we 
do so, consider whether the additional information contained therein is materially 
inconsistent with the consolidated financial statements or with our knowledge 
obtained during the audit, or that seems to contain a material error. When we 
read the Annual Report, we will issue the declaration on its reading, required in 
Article 33 Section I, subsection b) number 1.2. of the Provisions. Additionally, and in 
relation to our audit of the consolidated financial statements, our responsibility is 
to read and recalculate the additional information, which in this case, is a measure 
not required by IFRS and in doing so consider whether the other information 
contained therein is materially inconsistent with the consolidated financial 
statements or with our knowledge obtained during the audit, or that seems to 
contain a material error. If based on the work we have performed, we conclude that 
there is a material error in the additional information, we would have to report this 
fact. We do not have anything to inform in this regard.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED 
WITH GOVERNANCE FOR THE CONSOLIDATED FINANCIAL 
STATEMENTS 
Management is responsible for the preparation and fair presentation of the 
consolidated financial statements in accordance with IFRS, and for such internal 
control as management determines is necessary to enable the preparation of 
consolidated financial statements that are free from material misstatement, 
whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible 
for assessing the 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 management either intends to liquidate the Company or to 
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s 
consolidated financial reporting process.
AUDITORS’ RESPONSIBILITIES FOR THE AUDIT OF THE 
CONSOLIDATED FINANCIAL STATEMENTS 
Our objectives are to obtain reasonable assurance about whether the 
consolidated financial statements as a whole are free from material 
misstatement, whether due to fraud or error, and to issue an auditors’ report 
that includes our opinion. Reasonable assurance is a high level of assurance, but 
is not a guarantee that an audit conducted in accordance with ISAs will always 
detect a material misstatement when it exists. Misstatements can arise from 
fraud or error and are considered material if, individually or in the aggregate, 
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they could reasonably be expected to influence the economic decisions of users 
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment 
and maintain professional skepticism throughout the audit. We also:
•	 ­Identify and assess the risks of material misstatement of the consolidated 
financial statements, whether due to fraud or error, design and perform 
audit procedures responsive to those risks, and obtain audit evidence that is 
sufficient and appropriate to provide a basis for our opinion. The risk of not 
detecting a material misstatement resulting from fraud is higher than for 
one resulting from error, as fraud may involve collusion, forgery, intentional 
omissions, misrepresentations, or the override of internal control.
•	 ­Obtain an understanding of internal control relevant to the audit in order 
to design audit procedures that are appropriate in the circumstances, but 
not for the purpose of expressing an opinion on the effectiveness of the 
Company’s internal control. 
•	 ­Evaluate the appropriateness of accounting policies used and the 
reasonableness of accounting estimates and related disclosures made by 
management.
•	 ­Conclude on the appropriateness of management’s use of the going 
concern basis of accounting and, based on the audit evidence obtained, 
whether a material uncertainty exists related to events or conditions that 
may cast significant doubt on the Company’s ability to continue as a going 
concern. If we conclude that a material uncertainty exists, we are required 
to draw attention in our auditors’ report to the related disclosures in the 
consolidated financial statements or, if such disclosures are inadequate, 
to modify our opinion. Our conclusions are based on the audit evidence 
obtained up to the date of our auditors’ report. However, future events or 
conditions may cause the Company to cease to continue as a going concern.
•	 ­Evaluate the overall presentation, structure and content of the financial 
statements, including the disclosures, and whether the consolidated 
financial statements represent the underlying transactions and events in a 
manner that achieves fair presentation.
•	 ­Obtain sufficient appropriate audit evidence regarding the financial 
information of the entities or business activities within the Company and 
subsidiaries to express an opinion on the consolidated financial statements. 
We are responsible for the direction, supervision, and performance of the 
Company and subsidiaries audit. We remain solely responsible for our audit 
opinion. 
We communicate with those charged with governance regarding, among other 
matters, the planned scope and timing of the audit and significant audit findings, 
including any significant deficiencies in internal control that we identify during 
our audit.
We also provide those charged with governance with a statement that we have 
complied with relevant ethical requirements regarding independence, and to 
communicate with them all relationships and other matters that may reasonably 
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we 
determine those matters that were of most significance in the audit of the 
consolidated financial statements of the current period and are therefore the key 
audit matters. We describe these matters in our auditors’ report unless law or 
regulation precludes public disclosure about the matter or when, in extremely 
rare circumstances, we determine that a matter should not be communicated in 
our report because the adverse consequences of doing so would reasonably be 
expected to outweigh the public interest benefits of such communication.
Galaz, Yamazaki, Ruiz Urquiza, S.C.
Member of Deloitte Touche Tohmatsu Limited
C. P. C. Carlos A. López Vázquez
Monterrey, Nuevo Leon, Mexico
January 31, 2022
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Consolidated Statements of Financial Position 
As of December 31, 2021, 2020 and 2019
In millions of Mexican pesos
AS OF DECEMBER 31
NOTE
2021
2020
2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
6
$    5,799
$    8,720
$    5,883
Restricted cash
7
100
121
120
Trade and other accounts receivable, net
8
10,389
9,229
7,860
Inventories
9
16,995
12,630
11,146
Assets held for sale
3x
185
55
-
Prepaid expenses
3w
400
436
394
Total current assets
33,868
31,191
25,403
NON-CURRENT ASSETS:
Property, plant and equipment, net
10
52,679
51,491
48,140
Right-of-use assets, net
11
1,867
1,797
1,763
Goodwill and intangible assets, net
12
11,895
12,221
11,182
Deferred income tax
25
125
1,030
1,057
Other non-current accounts receivable 
8, 26
-
-
2
Other non-current assets
13
961
1,002
1,197
Total non-current assets
67,527
67,541
63,341
TOTAL ASSETS
$101,395
$  98,732
$  88,744
NOTE
2021
2020
2019
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
CURRENT LIABILITIES:
Debt
15
$    4,116
$    4,490
$    2,297
Lease liability
16
441
422
372
Trade and other accounts payable
14
28,186
24,985
21,166
Income taxes payable
718
682
883
Other current liabilities
17
392
416
614
Total current liabilities
33,853
30,995
25,332
NON-CURRENT LIABILITIES:
Debt
15
26,466
26,723
24,440
Lease liability
16
1,642
1,554
1,481
Employee benefits
18
1,454
1,568
1,408
Deferred income taxes
25
2,242
1,951
1,955
Other non-current liabilities
17
225
273
184
Total non-current liabilities
32,029
32,069
29,468
Total liabilities
65,882
63,064
54,800
Stockholders’ equity
19
Capital stock
6,553
6,599
6,599
Share premium
10,434
10,434
10,434
Retained earnings
9,970
10,201
11,373
Other reserves
8,556
8,434
5,538
Total stockholders’ equity
35,513
35,668
33,944
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$101,395
$  98,732
$  88,744
The accompanying notes are an integral part of these consolidated financial statements.
ARMANDO TAMEZ MARTÍNEZ
Chief Executive Officer
ALBERTO SADA MEDINA
Chief Financial Officer
AS OF DECEMBER 31
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
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NEMAK

Consolidated Statements of Income
For the years ended December 31, 2021, 2020 and 2019
In millions of Mexican pesos
NOTE
2021
2020
2019
Revenues
27
$  77,078
$  66,325
$    77,363
Cost of sales
21
(67,526)
(58,343)
(66,276)
Gross profit
9,552
7,982
11,087
Administrative and sales expenses
21
(5,001)
(4,980)
(5,328)
Other income (expenses), net
22
111
(1,035)
(795)
Operating income
4,662
1,967
4,964
Financial income
23
71
76
242
Financial expenses 
23
(2,259)
(1,746)
(1,576)
Exchange fluctuation loss, net
23
(405)
(1,020)
(34)
Financial results, net
23
(2,593)
(2,690)
(1,368)
Equity in (loss) income of associates recognized using the equity method
13
(22)
(29)
41
Income (loss) before income taxes
2,047
(752)
3,637
Income taxes
25
(1,962)
(181)
(1,144)
Net consolidated income (loss)
$         85
$      (933)
$      2,493
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE, IN MEXICAN PESOS
$      0.03
$     (0.30)
$       0.81
Weighted average outstanding shares (millions)
19
3,055
3,077
3,077
The accompanying notes are an integral part of these consolidated financial statements.
ARMANDO TAMEZ MARTÍNEZ
Chief Executive Officer
ALBERTO SADA MEDINA
Chief Financial Officer
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
76
NEMAK

Consolidated Statements of Comprehensive Income
For the years ended December 31, 2021, 2020 and 2019
In millions of Mexican pesos
NOTE
2021
2020
2019
Net consolidated income (loss)
$       85
$  (933)
$ 2,493
Other comprehensive income for the year:
ITEMS THAT WILL NOT BE RECLASSIFIED TO THE CONSOLIDATED STATEMENTS OF INCOME:
Remeasurement of employee benefit obligations, net of taxes
25
159
(13)
(115)
ITEMS THAT COULD BE RECLASSIFIED TO THE CONSOLIDATED STATEMENTS OF INCOME:
Effect of derivative financial instruments contracted as cash flow hedges, net of taxes
25
(20)
-
-
Cumulative translation effect of foreign entities
25
(63)
2,909
(1,846)
Total comprehensive income (loss) of the year
76
2,896
(1,961)
CONSOLIDATED COMPREHENSIVE INCOME
$     161
$ 1,963 
$    532
The accompanying notes are an integral part of these consolidated financial statements.
ARMANDO TAMEZ MARTÍNEZ
Chief Executive Officer
ALBERTO SADA MEDINA
Chief Financial Officer
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
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NEMAK

Consolidated Statements of Changes in Stockholders’ Equity 
For the years ended December 31, 2021, 2020 and 2019
In millions of Mexican pesos
CAPITAL 
STOCK
SHARE 
PREMIUM
RETAINED 
EARNINGS
OTHER 
RESERVES
TOTAL 
STOCKHOLDERS’
 EQUITY
BALANCES AS OF DECEMBER 31, 2018
$        6,604
$      10,434
$      11,567
$        7,499
$      36,104
Transactions with stockholders:
Others
(5)
-  
14
-
9
Dividends declared (Notes 19 and 26)
-
-
(2,439)
-
(2,439)
6,599
10,434 
9,142
7,499
33,674
Net income
-
-
2,493
-
2,493
Total other comprehensive loss of the year
-
-
-
(1,961)
(1,961)
Comprehensive income
-
-
2,493
(1,961)
532
Effect of Adoption of IFRIC 23
-
-
(262)
-
(262)
BALANCES AS OF DECEMBER 31, 2019
6,599
10,434
11,373
5,538
33,944
Transactions with stockholders:
Dividends declared (Notes 19 and 26)
-
-
(239)
-
(239)
6,599
10,434
11,134
5,538
33,705
Net loss
-
-
(933)
-
(933)
Total other comprehensive income of the year
-
-
-
2,896
2,896
Comprehensive income
-
-
(933)
2,896
1,963
BALANCES AS OF DECEMBER 31, 2020
6,599
10,434
10,201
8,434
35,668
Transactions with stockholders:
Others
(46)
-
(316)
46
(316)
6,553
10,434
9,885
8,480
35,352
Net income 
-
-
85
-
85
Total other comprehensive income of the year
-
-
-
76
76
Comprehensive income
-
-
85
76
161
BALANCES AS OF DECEMBER 31, 2021
$        6,553
$      10,434
$        9,970
$        8,556
$      35,513
The accompanying notes are an integral part of these consolidated financial statements.
ARMANDO TAMEZ MARTÍNEZ
Chief Executive Officer
ALBERTO SADA MEDINA
Chief Financial Officer
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
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NEMAK

2021
2020
2019
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) before income taxes
$      2,047
$       (752) 
$    3,637
Depreciation and amortization
6,718
6,826
6,079
Gain on sale of property, plant and equipment 
(1)
(6)
(4)
Impairment of property, plant and equipment
141
133
915
Exchange fluctuation, net
405
1,020
34
Interest expense, net
2,078
1,535
1,166
Other
279
276
152
Movements in working capital:
Trade receivables and other accounts receivable
(972)
(1,232)
1,309
Inventories
(4,433)
(631)
1,048
Suppliers and related parties
2,744
1,800
(558)
Income taxes paid
(897)
(366)
(1,945)
NET CASH FLOWS GENERATED BY OPERATING ACTIVITIES
8,109
8,603
11,833
2021
2020
2019
CASH FLOWS FROM INVESTING ACTIVITIES
Interest collected
60
66
189
Cash flow in acquisitions of property, plant and equip-
ment
(6,250)
(4,439)
(5,102)
Cash flow in acquisition of intangible assets
(1,093)
(1,216)
(1,513)
Dividends received
24
24
-
Restricted cash
25
-
986
Other assets
51
(87)
766
NET CASH FLOWS USED IN INVESTING ACTIVITIES
(7,183)
(5,652)
(4,674)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt
18,168
15,851
7,164
Payments of debt
(18,884)
(13,410)
(7,584)
Lease payments 
(698)
(298)
(380)
Interest paid
(2,225)
(1,498)
(1,368)
Repurchase of shares and others
(124)
5
(22)
Dividends paid
-
(306)
(2,439)
NET CASH FLOWS (USED IN) GENERATED BY FINANCING 
ACTIVITIES
(3,763)
344
(4,629)
Net (decrease) increase in cash and cash equivalents
(2,837)
3,295
2,530
Exchange fluctuation of cash and cash equivalents
(84)
(458)
(202)
Cash and cash equivalents at the beginning of the year
8,720
5,883
3,555
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
$     5,799
$     8,720 
$     5,883
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Cash Flows
For the years ended December 31, 2021, 2020 and 2019
In millions of Mexican pesos
ARMANDO TAMEZ MARTÍNEZ
Chief Executive Officer
ALBERTO SADA MEDINA
Chief Financial Officer
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
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NEMAK

Notes to the Consolidated Financial Statements
As of and for the years ended December 31, 2020 and 2019
Millions of Mexican pesos, except where otherwise indicated 
1. GENERAL INFORMATION
Nemak, S. A. B. de C. V. and subsidiaries (“Nemak” or the “Company”), formerly 
a subsidiary of Controladora Nemak, S.A.B. de C. V. (“Controladora Nemak”), 
with which it merged on August 18, 2021 (Note 2 e.), with Nemak remaining 
as the merging and surviving Company, is a leading provider of innovative 
lightweighting solutions for the global automotive industry, specializing in the 
development and manufacturing of aluminum components for powertrain, 
e-mobility and structural applications. Nemak’s main offices are located at 
Libramiento Arco Vial Km. 3.8, García, Nuevo León, 66017, Mexico.
When reference is made to the controlling entity Nemak, S. A. B. de C. V. as an 
individual legal entity, it will be referred to as “Nemak SAB”.
Nemak SAB is a publicly traded corporation whose shares are listed on the 
Mexican Stock Exchange. The entire subscribed and paid-in capital of Nemak 
is represented by Class “I” shares in the “A” Series, common, registered, and 
without par value, which are listed under the ticker symbol “NEMAK”.
In the following notes to the consolidated financial statements, reference to 
pesos, Mexican pesos, or “$” refers to millions of Mexican pesos. Reference to 
“US$” or dollars is in relation to millions of US dollars. Finally, reference to “EUR” 
or euros will refer to millions of euros.
2. SIGNIFICANT EVENTS
2021
a. COVID-19 impact
On March 11, 2020, the World Health Organization declared a pandemic due to 
the infectious disease caused by the SARS-COV2 virus (hereinafter “COVID-19”). 
COVID-19 had and continues to have strong impacts on health, economic, and 
social systems worldwide, extending into 2021.
Through its subsidiaries, the Company takes steps to counteract the effects that 
COVID-19 has had on the economic markets in which it participates, focusing on 
(i) strengthening financial and operating performance by constantly monitoring 
its cost structure, key business processes, and a commitment to its employees, 
focusing specifically on remote-working experiences; (ii) maintaining a solid 
liquidity structure through detailed cash flow management; and (iii) constantly 
monitoring its financial position to ensure compliance with its established 
affirmative and negative covenants, as well as its key financial ratios. 
As of December 31, 2021, the Company continues to monitor the development 
of its business, in accordance with the government regulations of the 
different countries where it operates and responding in a timely manner to 
changes that emerge.
b. Impact of the semiconductor chip shortage
Due to the global semiconductor chip shortage, since early 2021, light vehicle 
production among Nemak’s clients has been impacted, which has in turn 
influenced the demand for parts that the Company produces. In response, the 
Company has implemented a variety of financial flexibility and operational 
efficiency initiatives, helping to mitigate the effects of this situation.  The 
Company continues to monitor the situation, responding to changes that emerge 
in a timely manner. 
c. Announcement of greenhouse gas emissions reduction targets by 2030
On March 31, 2021, Nemak announced targets to reduce by 28% its greenhouse 
gas (GHG) emissions by 2030. After completing a rigorous validation process with 
the Science-Based Targets initiative, Nemak has committed to achieving a 28% 
absolute reduction in Scope 1 and 2 GHG emissions (direct and certain indirect 
emissions, respectively) by 2030, from a 2019 baseline year. Nemak has also 
committed to reducing absolute Scope 3 GHG emissions from purchased goods 
and services by 14% over the same timeframe.
d. Placement of the first sustainability-linked bond in dollars
On June 23, 2021, Nemak announced the successful placement of its first 
sustainability-linked bond in international markets. The placement consisted 
of an issuance of senior notes for US$500, with a 10-year maturity and 
3.625% coupon; the proceeds were used to prepay Senior Notes with maturity 
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
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date in 2025. Prior to the placement of this issuance, Nemak published a 
sustainability-linked bond framework in accordance with the Sustainability-
Linked Bond Principles 2020, with a commitment to GHG reduction targets of 
28% by 2030, approved by the Science-Based Targets initiative in March 2021. 
Nemak reaffirms its commitment to reduce Scopes 1 and 2 GHG emissions by 
incorporating in this placement a target of 18% reduction by 2026 (relative to a 
2019 baseline).
e. Merger with Controladora Nemak S.A.B. de C.V.
On June 29, 2021, Nemak announced a proposal to merge Controladora Nemak 
into Nemak SAB; this proposal was approved by the shareholders of each 
company on July 29, 2021. Controladora Nemak would cease to exist and its 
shares would be canceled, while Nemak SAB would remain as the surviving 
entity, and its number of shares would remain outstanding without any changes. 
As of September 6, 2021 (the “Merger Effective Date”), the 2,317,921,869 
common, registered shares, without par value, representing the capital 
of Nemak SAB, that had been owned by Controladora Nemak, were 
transferred to Controladora Nemak’s stockholders at an exchange factor of 
0.472157717310754 Nemak shares per Controladora Nemak share. On this same 
date, the listing of the shares representing the capital stock of Controladora 
Nemak on the Mexican Stock Exchange was canceled and the merger process 
was concluded. 
f. Placement of the first sustainability-linked bond in euros
On July 7, 2021, Nemak announced the successful placement in international 
markets of its first sustainability-linked bond in euros. The placement consisted 
of a EUR 500 issuance of 7-year senior notes, bearing a coupon of 2.25%; the 
proceeds were used to finance a cash tender  to purchase Nemak’s 3.25% 
2024 notes, which have an outstanding balance for the same amount, and the 
remainder was used to prepay outstanding debt and for general corporate 
purposes. This second placement adheres to the sustainability-linked bond 
framework and is in accordance with the Sustainability-Linked Bond Principles 
2020. The Company reaffirms its commitment to reduce Scope 1 and 2 GHG 
emissions by incorporating in this placement a target of 18% reduction by 
2026 (relative to a 2019 baseline) in accordance with its plans to achieve a 28% 
reduction by 2030, which were approved by the Science-Based Targets initiative 
in March 2021. This operation originated a transaction that did not generate any 
cash flow for the Company of $5,563 (EUR 236).
2020
g. COVID-19 impacts
On March 11, 2020, the World Health Organization declared a pandemic due to 
the infectious disease caused by the SARS-COV2 virus (hereinafter “COVID-19”). 
COVID-19 had and continues to have strong impacts on health, economic, and 
social systems worldwide.
As a result of the pandemic, along with emergency declarations issued in certain 
jurisdictions where the Company operates, it suspended production for several 
months in 2020 at all its plants worldwide; it simultaneously implemented 
measures aimed at optimizing costs, expenses and cash flows, through the use 
of committed and uncommitted credit lines (Note 4), the reduction of work hours, 
early vacations and honoring salary commitments with Western European 
government support, among other measures (Note 18). The main impacts 
occurred in the months of April and May, which was reflected in a 60% decrease 
in sales in the second quarter of 2020 and with respect to the second quarter of 
the previous year.	
In response to this situation, the Company reduced the size of its total workforce 
by 9% in 2020, incurring a termination benefits expense and other COVID-19 
related expenses of US$36. It also announced cancellation of payment of the 
remaining balance of dividends declared at its General Shareholders’ Meeting 
held on February 25, 2020 (Note 19).
h. Spin-off of ALFA’s stake in Nemak and creation of Controladora Nemak 
S.A.B. de C.V.
On August 17, 2020, Nemak announced that the shareholders of its former 
parent company (ALFA) approved a spin-off proposal to transfer ALFA’s entire 
shareholding stake in Nemak, to a newly created company denominated 
Controladora Nemak, S.A.B de C.V., to be listed on the Mexican Stock Exchange.
On December 4, 2020, Nemak announced that the National Banking and 
Securities Commission (“CNBV”) had granted authorization to register the shares 
of Controladora Nemak, S.A.B de C.V. in the National Securities Registry. As a 
result of the transaction, ALFA shareholders received one share of Controladora 
Nemak for each of their ALFA shares as of market close on December 11, 2020. 
The number of Nemak shares remained unchanged. Controladora Nemak began 
trading on the Mexican Stock Exchange on December 14, 2020, as of which date 
ALFA no longer consolidates Nemak’s operations in its consolidated financial 
statements.
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
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2019
i. Closure of manufacturing operations in Windsor, Canada
On July 16, 2019, Nemak announced its decision to close its manufacturing 
operations in Windsor, Canada, whose final day of operations was October 
16, 2020. The operation represented approximately 1% of the Company’s 
consolidated sales. The decision was made due to the early phase-out of an 
export program for a customer in China. Therefore, for the year ended December 
31, 2020 and 2019, Nemak acknowledged an impairment of $110 and $714 and 
reorganization expenses of $21 and $80, respectively, in other expenses, net 
(Note 22).
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following are the most significant accounting policies followed by Nemak and 
its subsidiaries, which have been consistently applied in the preparation of the 
financial information in the years presented, unless otherwise specified:
A. BASIS FOR PREPARATION 
The consolidated financial statements of Nemak have been prepared in 
accordance with International Financial Reporting Standards (“IFRS”) issued 
by the International Accounting Standards Board (“IASB”). IFRS include all 
International Accounting Standards (“IAS”) in effect and all related interpretations 
issued by the International Financial Reporting Interpretations Committee 
(“IFRIC”), including those previously issued by the Standing Interpretations 
Committee (“SIC”).
The consolidated financial statements have been prepared on a historical cost 
basis, except for the cash flow hedges, which are measured at fair value and 
the net assets and the results of the operations of the Company in Argentina, an 
economy that is considered hyperinflationary, which are expressed in terms of 
the unit of current measurement as of the closing date of the reporting period.
The preparation of the consolidated financial statements in conformity with 
IFRS requires the use of certain critical accounting estimates. Additionally, 
it requires management to exercise judgment in the process of applying the 
Company’s accounting policies. The areas involving a higher degree of judgment 
or complexity, or areas where judgments and estimates are significant to the 
consolidated financial statements are disclosed in Note 5.
B. CONSOLIDATION 
i. Subsidiaries 
The subsidiaries are all the entities over which the Company has control. The 
Company controls an entity when it is exposed or has the right to variable 
returns from its interest in the entity and has the ability to use its power over the 
entity to affect returns. When the Company’s participation in subsidiaries is less 
than 100%, the share attributed to outside shareholders is reflected recorded 
as non-controlling interest. The gain or loss of the subsidiaries, as well as their 
assets and liabilities, are fully consolidated from the date on which control is 
transferred to the Company and up to the date it loses such control.
The accounting method used by the Company for business combinations is 
the acquisition method. The Company defines a business combination as a 
transaction in which it gains control of a business, and through which it is able 
to direct and manage the relevant activities of the set of assets and liabilities of 
such business with the purpose of providing a return in the form of dividends, 
smaller costs or other economic benefits directly to stockholders.
The consideration transferred for the acquisition of a subsidiary is the fair 
value of the assets transferred, the liabilities incurred and the equity interests 
issued by the Company. The consideration transferred includes the fair value 
of any asset or liability resulting from a contingent consideration arrangement. 
Identifiable acquired assets and liabilities and contingent liabilities assumed in a 
business combination are initially measured at their fair values at the acquisition 
date. The Company recognizes any non-controlling interest in the acquiree based 
on the share of the non-controlling interest in the net identifiable assets of the 
acquired entity.
The Company accounts for business combinations using the predecessor method 
in a jointly controlled entity. The predecessor method involves the incorporation 
of the carrying amounts of the acquired entity, which includes the goodwill 
recognized at the consolidated level with respect to the acquiree. Any difference 
between the carrying value of the net assets acquired at the level of the 
subsidiary and its carrying amount at the level of the Company are recognized in 
stockholders’ equity.
The acquisition-related costs are recognized as expenses when incurred.
Goodwill is initially measured as excess of the sum of the consideration 
transferred and the fair value of the non-controlling interest over the net 
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NEMAK

identifiable assets and liabilities assured. If the consideration transferred is 
less than the fair value of the net assets of the subsidiary acquired in the case 
of a bargain purchase, the difference is recognized directly in the consolidated 
statement of income.
If the business combination is achieved in stages, the value in books at the 
acquisition date of the equity previously held by the Company in the acquired 
entity is remeasured at its fair value at the acquisition date. Any loss or gain 
resulting from such remeasurement is recorded in income of the year.
Transactions and intercompany balances and unrealized gains on transactions 
between Nemak companies are eliminated in preparing the consolidated 
financial statements. In order to ensure consistency with the policies adopted by 
the Company, the accounting policies of subsidiaries have been changed where 
deemed necessary.
As of December 31, 2021, 2020 and 2019 the subsidiaries included in the 
consolidated financial statements of Nemak were as follows:
COUNTRY (1)
PERCENTAGE OF 
OWNERSHIP(%)(2)
FUNCTIONAL
CURRENCY
Nemak, S. A. B. de C. V. (Holding)
Mexico
U.S. dollar
Nemak Mexico, S. A. (3)
Mexico
100
U.S. dollar
Modellbau Schönheide GmbH
Germany
100
Euro
Corporativo Nemak, S. A. de C. V. (Adminis-
trative services) (3)
Mexico
100
Mexican peso
Nemak Canada, S. A. de C. V. (Holding)
Mexico
100
Mexican peso
Nemak of Canada Corporation
Canada
100
Canadian dollar
Nemak Gas, S. A. de C. V.
Mexico
100
Mexican peso
Nemak Automotive, S. A. de C. V. (3)
Mexico
100
U.S. dollar
Camen International Trading, Inc.
USA
100
U.S. dollar
Nemak Europe GmbH
Germany
100
Euro
Nemak Exterior, S. L. (Holding)
Spain
100
Euro
Nemak Dillingen GmbH
Germany
100
Euro
Nemak Dillingen Casting GmbH & Co. KG
Germany
100
Euro
Nemak Wernigerode GmbH
Germany
100
Euro
Nemak Wernigerode GmbH & Co. KG
Germany
100
Euro
COUNTRY (1)
PERCENTAGE OF 
OWNERSHIP(%)(2)
FUNCTIONAL
CURRENCY
Nemak Linz GmbH
Austria
100
Euro
Nemak Györ Kft
Hungary
100
Euro
Nemak Poland Sp. Z.o.o.
Poland
100
Euro
Nemak BSEU Sp. Z.o.o.
Poland
100
Euro
Nemak Slovakia, S. r. o.
Slovakia
100
Euro
Nemak Czech Republic, S.r.o.
Czech 
Republic
100
Euro
Nemak Spain, S. L.
Spain
100
Euro
Nemak Rus, LLC.
Russia
100
Russian ruble
Nemak Pilsting GmbH
Germany
100
Euro
Nemak Alumínio do Brazil Ltda.
Brazil
100
Brazilian real
Nemak Argentina, S. R. L.
Argentina
100
Argentinean peso
Nemak Nanjing Automotive 
Components Co., Ltd.
China
100
Chinese renminbi 
yuan
Nemak Chongqing Automotive
Components, Co, Ltd.
China
100
Chinese renminbi 
yuan
Nemak Shanghai Management Co., Ltd.
China
100
Chinese renminbi 
yuan
Nemak Aluminum Casting India Private, Ltd.
India
100
Indian rupee
Nemre Insurance Pte Ltd.
Singapore
100
U.S. dollar
Nemak Commercial Services, Inc.
USA
100
U.S. dollar
Nemak USA, Inc.
USA
100
U.S. dollar
Nemak USA Services Inc.
USA
100
U.S. dollar
Nemak Automotive Castings, Inc.
USA
100
U.S. dollar
Nemak Izmir Döküm Sanayi A. Ş. 
Turkey
100
Euro
Nemak Izmir Dis Ticaret A. Ş. 
Turkey
100
Euro
(1)	Country of company’s incorporation. 
(2)	Direct and indirect ownership percentage of Nemak SAB. Share ownership percentages as of December 31, 2021, 2020 
and 2019.
(3)	Corporativo Nemak S.A. de C.V. and Nemak Automotive, S.A. de C.V. merged into Nemak México, S.A. on August 1, 2021.
As of December 31, 2021, 2020 and 2019, there are no significant restrictions on 
investment in shares of the subsidiary companies mentioned above. 
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NEMAK

ii. Absorption (dilution) of control in subsidiaries 
The effect of absorption (dilution) of control in subsidiaries, in example, an 
increase or decrease in the percentage of control, is recorded in stockholders’ 
equity, directly in retained earnings, in the period in which the transactions 
that cause such effects occur. The effect of absorption (dilution) of control is 
determined by comparing the book value of the investment before the event of 
dilution or absorption against the book value after the relevant event. In the case 
of loss of control, the dilution effect is recognized in income.
iii.  Sale or disposal of subsidiaries
When the Company ceases to have control any retained interest in the entity is 
re-measured at fair value, and the change in the carrying amount is recognized 
in the consolidated statement of income. The fair value is the initial carrying 
value for accounting purposes for any subsequent retained interest in the 
associate, joint venture or financial asset. Any amount previously recognized 
in comprehensive income in respect of that entity is accounted for as if the 
Company had directly disposed of the related assets and liabilities. This implies 
that the amounts recognized in comprehensive income are reclassified to income 
for the year.
iv. Associates
Associates are all entities over which the Company has significant influence but 
not control. Generally, an investor must hold between 20% and 50% of the voting 
rights in an investee for it to be an associate. Investments in associates are 
accounted for using the equity method and are initially recognized at cost. The 
Company’s investment in associates includes goodwill identified at acquisition, 
net of any accumulated impairment loss.
If the equity in an associate is reduced but significant influence is maintained, 
only a portion of the amounts recognized in comprehensive income are 
reclassified to income for the year, where appropriate.
The Company’s share of profits or losses of associates, post-acquisition, is 
recognized in the consolidated statement of income and its share in other 
comprehensive income of associates is recognized as other comprehensive 
income. When the Company’s share of losses in an associate equals or exceeds 
its equity in the associate, including unsecured receivables, the Company does 
not recognize further losses unless it has incurred obligations or has made 
payments on behalf of the associate.
The Company assesses at each reporting date whether there is objective 
evidence that the investment in the associate is impaired. If so, the Company 
calculates the amount of impairment as the difference between the recoverable 
amount of the associate and its carrying value and recognizes it in “share of 
profit/loss of associates recognized by the equity method” in the consolidated 
statements of income. 
Unrealized gains on transactions between the Company and its associates are 
eliminated to the extent of the Company’s equity in such gains. Unrealized losses 
are also eliminated unless the transaction provides evidence that the asset 
transferred is impaired. In order to ensure consistency with the policies adopted 
by the Company, the accounting policies of associates have been modified. 
When the Company ceases to have significant influence over an associate, any 
difference between the fair value of the remaining investment, including any 
consideration received from the partial disposal of the investment and the book 
value of the investment is recognized in the consolidated statement of income.
C. FOREIGN CURRENCY TRANSLATION 
i. Functional and presentation currency
The amounts included in the financial statements of each of the Company’s 
subsidiaries and associates should be measured using the currency of the 
primary economic environment in which the entity operates (“the functional 
currency”). The consolidated financial statements are presented in millions of 
Mexican pesos. 
When there is a change in the functional currency of one of the subsidiaries, 
according to International Accounting Standard 21, Effects of changes in foreign 
exchange rates (“IAS 21”), this change is accounted for prospectively, translating 
at the date of the change of functional currency, all assets, liabilities, equity and 
income items to the exchange rate on that date.
ii. Transactions and balances
Transactions in foreign currencies are translated into the functional currency 
using the foreign exchange rates prevailing at the transaction date or valuation 
date when the amounts are re-measured. Gains and losses resulting from the 
settlement of such transactions and from the translation of monetary assets 
and liabilities denominated in foreign currencies at the closing exchange rates 
are recognized as foreign exchange gain or loss in the income statement, 
except for those which are deferred in comprehensive income and qualify as 
cash flow hedges.
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Changes in the fair value of securities or monetary financial assets denominated 
in foreign currency classified as available for sale are divided between 
fluctuations resulting from changes in the amortized cost of such securities 
and other changes in value. Subsequently, currency fluctuations are recognized 
in income and changes in the carrying amount arising from any other 
circumstances are recognized as part of comprehensive income.
Conversion differences of non-monetary assets, for example, investments 
classified as available for sale, are included in other comprehensive income.
Exchange differences of monetary assets classified as financial instruments at 
fair value through profit or loss are recognized in the consolidated statement of 
income as part of the gain or loss of fair value. 
Translation of subsidiaries with recording currency other than the functional 
currency.
The financial statements of foreign subsidiaries, having a recording currency 
different from their functional currency were translated into the functional 
currency in accordance with the following procedure:
a.	The balances of monetary assets and liabilities denominated in the recording 
currency were translated at the closing exchange rates.
b.	To the historical balances of monetary assets and liabilities and stockholders’ 
equity translated into the functional currency there were added the 
movements occurred during the period, which were translated at historical 
exchange rates. In the case of the movements of non-monetary items 
recognized at fair value, which occurred during the period, stated in the 
recording currency, these were translated using the historical exchange rates 
in effect on the date when the fair value was determined.
c.	Income, costs and expenses of the periods, expressed in the recording 
currency, were translated at the historical exchange rate of the date they were 
accrued and recognized in the income statement, except when they arose from 
non-monetary items, in which case the historical exchange rate of the non-
monetary items was used.
d.	The exchange differences arising in the translation from the recording 
currency to the functional currency were recognized as income or expense in 
the consolidated statement of income in the period they arose.
Translation of subsidiaries with functional currency other than the presentation 
currency.
The results and financial position of all Nemak entities that have a functional 
currency different from the presentation currency are translated into the 
presentation currency as follows, depending on whether the functional currency 
comes from a non-hyperinflationary or hyperinflationary environment:
Non-hyperinflationary environment
a.	Assets and liabilities for each statement of financial position presented are 
translated at the closing exchange rate at the closing date;
b.	Stockholders’ equity of each consolidated statement of financial position are 
translated at historical rates.
c.	Income and expenses for each statement of income are translated at an 
average exchange rate (when the average exchange rate is not a reasonable 
approximation of the cumulative effect of the rates of the transaction, to the 
exchange rate at the date of the transaction is used); and
d.	The resulting exchange differences are recognized in the consolidated 
statement of other comprehensive income.
Hyperinflationary environment
a.	Assets, liabilities and equity in the statement of financial position, as well as 
income and expenses in the income statement, are translated at the closing 
exchange rate of the statement of financial position, after being restated in its 
functional currency (Note 3 d.); and
b.	Assets, liabilities, equity, income and expenses of the comparative period, are 
maintained according to the amount obtained in the translation of the year 
in question, that is, the financial statements of the preceding period. These 
amounts are not adjusted to subsequent exchange rates because the Company 
presents its financial information in Mexican pesos, which correspond to a 
currency of a non-hyperinflationary environment.
Goodwill and fair value adjustments arising on the acquisition date of a foreign 
transaction to measure them at their fair value are recognized as assets and 
liabilities of the foreign entity and are converted to the closing exchange rate. The 
exchange differences that arise are recognized in the consolidated statement of 
comprehensive income. 
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The primary exchange rates in the various translation processes are listed below:
Local currency to Mexican pesos
CLOSING EXCHANGE 
RATE AT DECEMBER 31,
AVERAGE EXCHANGE 
RATE AT DECEMBER 31,
COUNTRY
LOCAL 
CURRENCY
2021
2020
2019
2021
2020
2019
Canada 
Canadian 
dollar
16.29
15.66
14.53
16.23
16.03
14.56
United 
States 
U.S. dollar 
20.58
19.95
18.85
20.28
21.49
19.26
Brazil 
Brazilian 
real 
3.69
3.84
4.69
3.78
4.16
4.91
Argentina 
Argentinean 
peso 
0.20
0.24
0.31
0.21
0.31
0.41
Czech 
Republic
Euro
23.41
24.41
21.15
23.99
24.51
21.56
Germany 
Euro 
23.41
24.41
21.15
23.99
24.51
21.56
Austria 
Euro 
23.41
24.41
21.15
23.99
24.51
21.56
Hungary 
Euro
23.41
24.41
21.15
23.99
24.51
21.56
Poland 
Euro
23.41
24.41
21.15
23.99
24.51
21.56
Slovakia 
Euro 
23.41
24.41
21.15
23.99
24.51
21.56
Spain 
Euro 
23.41
24.41
21.15
23.99
24.51
21.56
China 
Chinese 
renminbi 
yuan 
3.24
3.06
2.71
3.16
3.12
2.80
India 
Indian 
rupee 
0.28
0.27
0.26
0.28
0.29
0.27
Russia
Russian 
ruble
0.27
0.27
0.30
0.28
0.30
0.30
Singapore
U.S. dollar
20.58
19.95
18.85
20.28
21.49
19.26
Turkey
Euro
23.41
24.41
21.15
23.99
24.51
21.56
D. HYPERINFLATIONARY EFFECTS
As of July 1, 2018, the cumulative inflation from the prior 3 years in Argentina 
exceeded 100%; consequently, the Argentine peso was classified as a currency of 
a hyperinflationary economic environment. As a result, the financial statements 
of the subsidiaries located in that country, whose functional currency is the 
Argentine peso, have been restated and adjusted for inflation in accordance 
with the requirements of the International Accounting Standard 29, Financial 
Information in Hyperinflationary Economies (“IAS 29”), and have been 
consolidated in compliance with the requirements of IAS 21. The purpose of 
applying these requirements is to consider changes in the general purchasing 
power of the Argentine peso in order to present the financial statements in the 
measuring unit effective at the date of the statement of financial position. The 
financial statements before including any inflation adjustments were prepared 
using the historical cost method.
The Company determined the inflation adjustments in its consolidated financial 
statements in the following manner:
a.	The amounts corresponding to non-monetary items of each statement of 
financial position, which are not measured at the date of the statement of 
financial position at their fair value or net realizable value, as the case may be, 
are restated by applying to their historical cost the change of a general price 
index from the date of acquisition or the date of its last measurement at fair 
value, to the date of the statement of financial position;
b.	The amounts corresponding to monetary items of the statement of financial 
position are not restated;
c.	The components of stockholders’ equity of each statement of financial position 
are restated:
1)	At the beginning of the first period of application of IAS 29, except for 
retained earnings, by applying the change of a general price index from the 
dates the components were originated to the date of restatement. Restated 
retained earnings are derived from all the other balances in the statement 
of financial position;
2)	At the end of the first period and in subsequent periods, all components of 
stockholders’ equity are restated by applying a general price index from the 
beginning of the period or the date of contribution, if later.
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d. Revenues and expenses are restated by applying the change in the general 
price index, from the date on which the expenses and revenues were 
recognized, up to the reporting date.
e.	Gains or losses arising from the net monetary position are recognized in the 
consolidated statement of income.
The Company reflects the effects of hyperinflation on the financial information of 
its subsidiaries in Argentina using price indexes that are considered appropriate in 
accordance with Resolution 539/19 JG (the “Resolution”) of the Argentine Federation 
of Professional Councils of Economic Sciences. This resolution establishes that 
a combination of price indices should be used in the calculation of the effects of 
restatement of financial statements. Therefore, the Company has decided to use the 
Consumer Price Index (“CPI”) to restate balances and transactions. 
The effects of the restatement of the financial statements of the subsidiaries 
located in Argentina were not material, and they were included in the “Financial 
result, net” line item of the year ended December 31, 2021.
E. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, bank deposits available for 
operations and other short-term investments of high liquidity with original 
maturities of three months or less, all of which are subject to insignificant risk 
of changes in value and maintain a high credit quality. Bank overdrafts are 
presented as loans as a part of the current liabilities.
F. RESTRICTED CASH
Cash and cash equivalents whose restrictions cause them not to comply with the 
definition of cash and cash equivalents given above, are presented in a separate 
line in the consolidated statement of financial position and are excluded from 
cash and cash equivalents in the consolidated statement cash flows.
G. FINANCIAL INSTRUMENTS
Financial assets
The Company classifies and measures its financial assets based on 
the Company’s business model to manage financial assets, and on the 
characteristics of the contractual cash flows of such assets. This way 
financial assets can be classified at amortized cost, at fair value through other 
comprehensive income, and at fair value through profit or loss. Management 
determines the classification of its financial assets upon initial recognition. 
Purchases and sales of financial assets are recognized at settlement date.
Financial assets are entirely written off when the right to receive the related 
cash flows expires or is transferred, and the Company has also substantially 
transferred all the risks and rewards of its ownership, as well as the control of 
the financial asset.
Classes of financial assets 
i. Financial assets at amortized cost
Financial assets at amortized cost are financial assets that i) are held within 
a business model whose objective is to hold said assets in order to collect 
contractual cash flows; and ii) the contractual terms of the financial asset give 
rise, on specified dates, to cash flows that are solely payments of principal and 
interest on the amount of outstanding principal.
ii. Financial assets at fair value through other comprehensive income 
Financial assets at fair value through other comprehensive income are financial 
assets: i) held within a business model whose objective is achieved by both 
collecting contractual cash flows and selling the financial assets; and ii) the 
contractual terms of the financial asset give rise, on specified dates, to cash 
flows that are solely payments of principal and interest on the amount of 
outstanding principal. As of December 31, 2021, 2020 and 2019, the Company 
does not have financial assets to be measured at fair value through other 
comprehensive income.
iii. Financial assets at fair value through profit or loss 
Financial assets at fair value through profit or loss, in addition to those described 
in point i in this section, are financial assets that do not meet the characteristics 
to be measured at amortized cost or fair value through other comprehensive 
income, since i) they have a business model different to those that seek to collect 
contractual cash flows, or collect contractual cash flows and sell the financial 
assets, or otherwise ii) the generated cash flows are not solely payments of 
principal and interest on the amount of outstanding principal.
Despite the aforementioned classifications, the Company can make the following 
irrevocable elections in the initial recognition of a financial asset:
a.	Present the subsequent changes in the fair value of a capital investment 
in other comprehensive income, as long as the investment is not held for 
trading purposes, that is a contingent consideration recognized as a result of a 
business combination.
b.	Designate a debt instrument that meets the criteria to be subsequently 
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measured at amortized cost or at fair value through other comprehensive 
results, to be measured at fair value through results, if doing so eliminates 
or significantly reduces an accounting asymmetry that would arise from the 
measurement of assets or liabilities or the recognition of gains and losses on 
them in different bases.
As of December 31, 2021, 2020 and 2019, the Company has not made any of the 
irrevocable designations described above.
Impairment of financial assets
The Company uses a new impairment model based on expected credit losses 
rather than losses incurred, applicable to financial assets subject to such 
assessment (i.e. financial assets measured at amortized cost and at fair value 
through other comprehensive income), as well as lease receivables, contract 
assets, certain written loan commitments, and financial guarantee contracts. The 
expected credit losses on these financial assets are estimated from the origin of 
the asset at each reporting date, taking as a reference the historical experience 
of the Company’s credit losses, adjusted for factors that are specific to the 
debtors or groups of debtors, the general economic conditions and an evaluation 
of both the current direction and the forecast of future conditions.
a. Trade receivables
The Company adopted the simplified expected loss calculation model, through 
which expected credit losses during the asset’s lifetime are recognized. 
The Company carries out an analysis of its portfolio of accounts receivable 
from clients, in order to determine if there are significant clients for whom it 
requires an individual evaluation; On the other hand, customers with similar 
characteristics that share credit risks (participation in the portfolio of accounts 
receivable, market type, sector, geographic area, etc.), are grouped to be 
evaluated collectively.
For the impairment assessment, the Company may include indications that the 
debtors or a group of debtors are experiencing significant financial difficulties; 
increase in the probability of debtors entering into bankruptcy or a financial 
restructuring, as well as observable data indicating that there is a considerable 
decrease in the estimate of the cash flows to be received, including arrears. 
For purposes of the previous estimate, the Company considers that the following 
constitutes an event of default, since historical experience indicates that financial 
assets are not recoverable when they meet any of the following criteria:
•	The debtor fails to meet the financial covenants; or
•	Information developed internally or obtained from external sources indicates 
that the debtor is unlikely to pay its creditors, including the Company, in its 
entirety (without considering any guarantee held by the Company).
The Company defined as the default threshold, the period from which the 
recovery of the account receivable subject to analysis is marginal; in this case, 
271 days of delay, which is in line with internal risk management. 
b. Other financial instruments
The Company recognizes credit losses expected during the asset’s lifetime of all 
financial instruments for which credit risk has significantly increased since its 
initial recognition (assessed on a collective or individual basis), considering all 
the reasonable and sustainable information, including the one referring to the 
future. If as of the date of presentation of the credit risk a financial instrument 
has not significantly increased since its initial recognition, the Company 
calculates the loss allowance for that financial instrument as the amount of 
expected credit losses in the following 12 months. 
In both cases, the Company recognizes in profit or loss of the period the 
decrease or increase in the expected credit loss allowance at the end of the 
period, as an impairment gain or loss. 
The Company calculates expected credit losses of a financial instrument in such 
a way that reflects: 
a.	an amount of weighted probability, not biased, which is determined by the 
assessment of a range of possible results;
b.	the time value of money; and
c.	the reasonable and sustainable information that is available without cost or 
disproportionate effort at the date of presentation on past events, current 
conditions and forecasts of future economic conditions.
In measuring the expected credit losses, the Company does not necessarily 
identify all the possible scenarios. However, it considers the risk or probability 
that a credit loss occurs, reflecting the possibility that the payment default 
occurs and does not occur, even if that possibility is very low. In addition, the 
Company determines the period for the default to occur, and the recoverability 
rate after default.
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Management assesses the impairment model and the inputs used therein at 
least once every 3 months, in order to ensure that they remain in effect based on 
the current situation of the portfolio.
Financial liabilities
Financial liabilities that are not derivatives are initially recognized at fair value 
and subsequently are valued at the amortized cost using the effective interest 
method. Liabilities in this category are classified as current liabilities when they 
must be settled within the next 12 months; otherwise, they are classified as non-
current liabilities.
Accounts payable are obligations to pay for goods or services that have been 
acquired or received by suppliers in the ordinary course of business. Loans 
are initially recognized at their fair value, net of transaction costs incurred. The 
loans are subsequently recognized at amortized cost; any difference between 
the resources received (net of transaction costs) and the settlement value is 
recognized in the consolidated statement of income over the term of loan using 
the effective interest method.
Derecognition of financial liabilities 
The Company derecognizes financial liabilities if, and only, the Company´s 
liabilities are met, cancelled or expired. The difference between the book value of 
the financial liabilities derecognized and the consideration, is recognized in the 
consolidated statement of income. 
Additionally, when the Company incurs a refinancing transaction and the 
previous liability qualifies to be derecognized, the incurred costs of refinancing 
are recognized immediately in the consolidated statement of income at the 
extinction date of the past financial liability. 
Compensation of financial assets and liabilities
Financial assets and liabilities are offset and the net amount is presented in the 
consolidated statement of financial position when the right to offset the amounts 
recognized is legally enforceable and there is an intention to settle them on a net 
basis or to realize the asset and pay the liability simultaneously.
H. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
All derivative financial instruments are identified and classified as fair value 
hedges or cash flow hedges, for trading or hedging market risks and are 
recognized in the consolidated statement of financial position as assets and/or 
liabilities at fair value and subsequently measured at fair value. The fair value is 
determined based on recognized market prices and using valuation techniques 
accepted in the financial sector.
The fair value of hedging derivatives is classified as a non-current asset or 
liability if the remaining maturity of the hedged item is more than 12 months and 
as a current asset or liability if the remaining maturity of the hedged item is less 
than 12 months.
Derivative financial instruments classified as hedges are contracted for risk 
hedging purposes and meet all hedging requirements; their designation at the 
beginning of the hedging operation is documented, describing the objective, 
primary position, risks to be hedged and the effectiveness of the hedge 
relationship, characteristics, accounting recognition and how the effectiveness 
will be measured, applicable to this transaction.
Fair value hedges 
Changes in the fair value of derivative financial instruments are recorded in 
the consolidated statement of income. The change in fair value hedges and the 
change in the primary position attributable to the hedged risk are recorded in the 
consolidated statement of income in the same line item as the hedged position. 
As of December 31, 2021, 2020 and 2019, the Company has no derivative 
financial instruments classified as fair value hedges.
Cash flow hedges 
The changes in the fair value of derivative instruments associated to cash 
flow hedges are recorded in stockholders’ equity. The effective portion is 
temporarily recorded in comprehensive income, within stockholders’ equity 
and is reclassified to profit or loss when the hedged position affects them. The 
ineffective portion is immediately recorded in income.
Net investment hedge in a foreign transaction
The Company applies hedge accounting to currency risk arising from its 
investments in foreign transactions for variations in exchange rates arising 
between the functional currency of such transaction and the functional currency 
of the holding entity, regardless of whether the investment is maintained directly 
or through a sub-holding entity. Variation in exchange rates is recognized in the 
other items of comprehensive income as part of the translation effect, when the 
foreign transaction is consolidated.
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To this end, the Company designates the debt denominated in a foreign currency 
as a hedging instrument; therefore, the exchange rate effects caused by the debt 
are recognized in other components of comprehensive income, on the translation 
effects line item, to the extent that the hedge is effective. When the hedge is not 
effective, exchange differences are recognized in profit or loss.
Suspension of hedge accounting 
The Company suspends hedge accounting when the derivative financial 
instrument or the non-derivative financial instrument has expired, is cancelled 
or exercised, when the derivative or non-derivative financial instrument is not 
highly effective to offset the changes in the fair value or cash flows of the hedged 
item, or when the Company decides to cancel the hedge designation.
On suspending hedge accounting, in the case of fair value hedges, the adjustment 
to the carrying amount of a hedged amount for which the effective interest rate 
method is used, is amortized to income over the period to maturity. In the case of 
cash flow hedges, the amounts accumulated in equity as a part of comprehensive 
income remain in equity until the effects of the forecasted transaction affect 
income. In the event the forecasted transaction is not likely to occur, the income 
or loss accumulated in comprehensive income is immediately recognized 
in the consolidated statement of income. When the hedge of a forecasted 
transaction is satisfactory and subsequently does not meet the effectiveness 
test, the cumulative effects in comprehensive income in stockholders’ equity are 
proportionally transferred to the consolidated statement of income, to the extent 
the forecasted transaction impacts it.
The fair value of derivative financial instruments reflected in the consolidated 
financial statements of the Company, is a mathematical approximation of their 
fair value. It is computed using proprietary models of independent third parties 
using assumptions based on past and present market conditions and future 
expectations at the closing date.
I. INVENTORIES
Inventories are stated at the lower of cost or net realizable value. Cost is 
determined using the average cost method. The cost of finished goods and work-
in-progress includes cost of product design, raw materials, direct labor, other direct 
costs and production overheads (based on normal operating capacity), it excludes 
borrowing costs. The net realizable value is the estimated selling price in the 
normal course of business, less the applicable variable selling expenses. Costs of 
inventories include any gain or loss transferred from other comprehensive income 
corresponding to raw material purchases that qualify as cash flow hedges.
J. PROPERTY, PLANT AND EQUIPMENT 
Items of property, plant and equipment are recorded at cost less the accumulated 
depreciation and any accrued impairment losses. Costs include expenses directly 
attributable to the asset acquisition.
Subsequent costs are included in the asset’s carrying amount or recognized as 
a separate asset, as appropriate, only when it is probable that future economic 
benefits associated with the item will flow to the Company and the cost of the 
item can be reliably measured. The carrying amount of the replaced part is 
derecognized. Repairs and maintenance are recognized in the consolidated 
statement of income during the year they are incurred. Major improvements are 
depreciated over the remaining useful life of the related asset. 
When the Company carries out major repairs or maintenance of its property, 
plant and equipment assets, and the cost is recognized in the book value of the 
corresponding asset as a replacement, provided that the recognition criteria are 
met, the remaining portion of any major repair or maintenance is derecognized. 
The Company subsequently depreciates the recognized cost in the useful life 
assigned to it, based on its best estimate of useful life
Depreciation is calculated using the straight-line method, considering each 
of the asset’s components separately, except for land, which is not subject to 
depreciation. The estimated useful lives of asset classes are as follows:
Buildings and constructions
20 to 50 years
Machinery and equipment
10 to 30 years
Vehicles
4 to 20 years
Furniture and office equipment
6 to 15 years
Other assets
10 to 20 years
The spare parts to be used after one year and attributable to specific machinery 
are classified as property, plant and equipment in other fixed assets.
Borrowing costs related to financing of property, plant and equipment whose 
acquisition or construction takes a substantial period to be ready for its use (nine 
months or more), are capitalized as part of the cost of acquiring such qualifying 
assets, up to the moment when they are suitable for their intended use or sale.
Assets classified as property, plant and equipment are subject to impairment 
tests when events or circumstances occur indicating that the carrying amount 
of the assets may not be recoverable. An impairment loss is recognized in the 
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consolidated statement of income in other expenses, net, for the amount by 
which the carrying amount of the asset exceeds its recoverable amount. The 
recoverable amount is the higher of fair value less costs to sell and value in use. 
The residual value and useful lives of assets are reviewed at least at the end of 
each reporting period and, if expectations differ from previous estimates, the 
changes are accounted for as a change in accounting estimate.
As of December 31, 2020 and 2019, the Company made changes in the estimated 
useful life of its fixed assets as will generate future economic benefits for a 
period longer than previously estimated which were recognized prospectively, 
representing a profit of $327 and $768, respectively, in the consolidated statement 
of income, with respect to the depreciation that would have been recognized 
without such revisions in the estimate.  The Company did not make any changes in 
the estimated useful life of its fixed assets  as of December 31, 2021.  
Gains and losses on disposal of assets are determined by comparing the sale 
value with the carrying amount and are recognized in other expenses, net, in the 
consolidated statement of income.
K. LEASES
The Company as lessee
The Company evaluates whether a contract is or contains a lease agreement 
at inception of a contract. A lease is defined as an agreement or part of an 
agreement that conveys the right to control the use of an identified asset for 
a period of time in exchange for a consideration. The Company recognizes a 
right-of-use asset and the corresponding lease liability, for all lease agreements 
in which it acts as lessee, except in the following cases: short-term leases 
(defined as leases with a lease term of less than 12 months); leases of low-value 
assets (defined as leases of assets with an individual market value of less than 
US$5,000 (five thousand dollars); and, lease agreements whose payments are 
variable (without any contractually defined fixed payment). For these agreements, 
which exempt the recognition of an asset for right-of-use and a lease liability, the 
Company recognizes the rent payments as an operating expense in a straight-
line method over the lease period.
The right-of-use asset comprises all lease payments discounted at present 
value; the direct costs to obtain a lease; the advance lease payments; and the 
obligations of dismantling or removal of assets. The Company depreciates the 
right-of-use asset over the shorter of the lease term or the useful life of the 
underlying asset; therefore, when the lessee will exercise a purchase option, the 
lessee shall depreciate the right-of-use asset from the commencement date to 
the end of the useful life of the underlying asset. Depreciation begins on the lease 
commencement date.
The lease liability is initially measured at the present value of the future minimum 
lease payments that have not been paid at that date, using a discount rate that 
reflects the cost of obtaining funds for an amount similar to the value of the lease 
payments, for the acquisition of the underlying asset, in the same currency and 
for a similar period to the corresponding contract (incremental borrowing rate). 
When lease payments contain non-lease components (services), the Company has 
chosen, for some class of assets, not to separate them and measure all payments 
as a single lease component; however, for the rest of the class of assets, the 
Company measures the lease liability only considering lease payments, while 
all of the services implicit in the payments, are recognized directly in the 
consolidated statement of income as operating expenses. 
To determine the lease term, the Company considers the non-cancellable period, 
including the probability to exercise any right to extend and/or terminate the 
lease term. 
Subsequently, the lease liability is measured increasing the carrying amount 
to reflect interest on the lease liability (using the effective interest method) and 
reducing the carrying amount to reflect the lease payments made.
When there is a modification in future lease payments resulting from changes in 
an index or a rate used to determine those payments, the Company remeasures 
the lease liability when the adjustment to the lease payments takes effect, without 
reassessing the discount rate. However, if the modifications are related to the 
lease term or exercising a purchase option, the Company reassesses the discount 
rate during the liability’s remeasurement. Any increase or decrease in the value 
of the lease liability subsequent to this remeasurement is recognized as an 
adjustment to the right-of-use asset to the same extent.
Finally, the lease liability is derecognized when the Company fulfills all lease 
payments. When the Company determines that it is probable that it will exercise 
an early termination of the contract that leads to a cash disbursement, such 
disbursement is accounted as part of the liability’s remeasurement mentioned 
in the previous paragraph; however, in cases in which the early termination does 
not involve a cash disbursement, the Company cancels the lease liability and the 
corresponding right-of-use asset, recognizing the difference immediately in the 
consolidated statement of income.  
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The Company as lessor
Leases where the Company acts as lessor are classified as financial or operating 
leases. As long as the terms of the contract substantially transfer all risks and 
benefits of the ownership to the lessee, the contract is classified as a financial 
lease. Remaining leases are classified as operating leases. 
Revenues from operating leases are recognized in a straight-line basis during 
the term of the corresponding lease. The initial direct costs incurred in the 
negotiation and organization of an operating lease are added to the carrying 
amount of the leased asset and are recognized on a straight-line basis during 
the term of the lease. Operating lease balances are recognized as accounts 
receivable for the amount of the Company’s net investment in such leases. 
L. INTANGIBLE ASSETS
Intangible assets are recognized in the consolidated statement of financial 
position when they meet the following conditions: they are identifiable, provide 
future economic benefits and the Company has control over such benefits.
Intangible assets are classified as follows:
(i) Indefinite useful life
These intangible assets are not amortized and are subject to annual impairment 
assessment. As of December 31, 2021, 2020 and 2019, no factors have been 
identified limiting the life of these intangible assets. 
(ii) Finite useful life
These assets are recognized at cost less accumulated amortization and 
impairment losses recognized. They are amortized on a straight-line basis over 
their estimated useful life, determined based on the expectation of generating 
future economic benefits, and are subject to impairment tests when triggering 
events of impairment are identified.
The estimated useful lives of intangible assets with finite useful lives are 
summarized as follows:
Development costs
5 to 10 years
Relationships with customers
5 to 17 years
Software and licenses
3 to 11 years
Trademarks and patents
15 to 20 years
a. Goodwill
Goodwill represents the excess of the acquisition cost of a subsidiary over 
the Company’s equity in the fair value of the identifiable net assets acquired, 
determined at the date of acquisition, and is not subject to amortization. 
Goodwill is shown under goodwill and intangible assets and is recognized at 
cost less accumulated impairment losses, which are not reversed. Gains or 
losses on the disposal of an entity include the carrying amount of goodwill 
related to the entity sold.
b. Development costs 
Research costs are recognized in income as incurred. Expenditures on 
development activities are recognized as intangible assets when such costs can 
be reliably measured, the product or process is technically and commercially 
feasible, potential future economic benefits are obtained and the Company intends 
and also has sufficient resources to complete the development and to use or sell 
the asset. Their amortization is recognized in income using straight-line method 
over the estimated useful life of the asset. Development expenditures that do not 
qualify for capitalization are recognized in income as incurred.
c. Other relationships with customers
The Company has recognized certain relationships with customers 
corresponding to the costs incurred to obtain new agreements with certain 
OEMs (Original Equipment Manufacturers), and which will be recognized as a 
revenue reduction over the term of these agreements. The amortization method 
used is based on the volume of units produced. As of December 31, 2021, 2020 
and 2019, the Company recorded a reduction in revenues associated with the 
amortization of these assets of $155, $168 and $165 for this item, respectively.
M. IMPAIRMENT OF NON-FINANCIAL ASSETS 
Assets that have an indefinite useful life, for example goodwill, are not 
depreciable or amortizable and are subject to annual impairment tests. Assets 
that are subject to amortization are reviewed for impairment when events 
or changes in circumstances indicate that the carrying amount may not be 
recoverable. An impairment loss is recognized for the amount by which the 
asset’s carrying amount exceeds its recoverable amount. The recoverable 
amount is the higher of the asset’s fair value less costs to sell and its value in 
use. For the purpose of assessing impairment, assets are grouped at the lowest 
levels at which there are separately identifiable cash flows (cash generating 
units). Non-financial long-term assets other than goodwill that have suffered 
impairment are reviewed for possible reversal of the impairment at each 
reporting date.
N. INCOME TAX 
The amount of income taxes in the consolidated statements of income 
represents the sum of the current and deferred income taxes.
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The amount of income taxes included in the consolidated statements of income 
represents the current tax and the effects of deferred income tax assets 
determined in each subsidiary using the asset and liability method, applying 
the rate established by the legislation enacted or substantially enacted at 
the consolidated statement of financial position date, wherever the Company 
operates and generates taxable income. The applicable rates are applied to the 
total temporary differences resulting from comparing the accounting and tax 
bases of assets and liabilities, and that are expected to be applied when the 
deferred tax asset is realized or the deferred tax liability is expected to be settled, 
considering, when applicable, any tax-loss carryforwards, prior to the recovery 
analysis. The effect of the change in current tax rates is recognized in current 
income of the period in which the rate change is determined.
Management periodically evaluates positions taken in tax returns with respect to 
situations in which the applicable law is subject to interpretation. Provisions are 
recognized when appropriate based on the amounts expected to be paid to the 
tax authorities.
Deferred tax assets are recognized only when it is probable that future taxable profits 
will exist against which the deductions for temporary differences can be taken.
The deferred income tax on temporary differences arising from investments 
in subsidiaries and associates is recognized, unless the period of reversal 
of temporary differences is controlled by Nemak and it is probable that the 
temporary differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset only when a legal right exists and 
offset exists when taxes are levied by the same tax authority.
O. EMPLOYEE BENEFITS 
i. Pension plans
Defined contribution plans:
A defined contribution plan is a pension plan under which the Company pays 
fixed contributions to a separate entity. The Company has no legal or constructive 
obligations to pay further contributions if the fund does not hold sufficient assets 
to pay all employees the benefits relating to their service in the current and past 
periods. Contributions are recognized as employee benefit expense on the date 
the contribution is required.
Defined benefit plans
A defined benefit plan is a plan, which specifies the amount of the pension an 
employee will receive at retirement, usually dependent on one or more factors 
such as age, years of service and compensation.
The liability recognized in the consolidated statement of financial position in 
respect of defined benefit plans is the present value of the defined benefit 
obligation at the consolidated statement of financial position date less the fair 
value of plan assets. The defined benefit obligation is calculated annually by 
independent actuaries using the projected unit credit method. The present value 
of the defined benefit obligation is determined by discounting the estimated 
future cash outflows using discount rates in conformity with the IAS 19 – 
Employee Benefits, that are denominated in the currency in which the benefits 
will be paid, and have maturities that approximate the terms of the pension 
liability. 
Actuarial gains and losses from adjustments and changes in actuarial 
assumptions are recognized directly in other comprehensive income in the year 
they occur. 
The Company determines the net finance expense (income) by applying the 
discount rate to the liabilities (assets) from net defined benefits.
Past-service costs are recognized immediately in the consolidated statements of 
income.  
ii. Post-employment medical benefits
The Company provides medical benefits to retired employees after termination 
of employment. Eligibility for these benefits usually depends on the employee 
having worked up to the retirement age and having completed a minimum 
number of years of service. The expected costs of these benefits are accrued 
over the period of employment using the same criteria as those described for 
defined benefit pension plans.
iii. Termination benefits
Termination benefits are payable when the Company terminates the employment 
contract before the normal retirement date or when the employee accepts 
voluntary severance in exchange for these benefits. The Company recognizes 
termination benefits in the first of the following dates: (a) when the Company 
can no longer withdraw the offer of these benefits, and (b) when the Company 
recognizes the costs from restructuring within the scope of the IAS 37 and it 
involves the payment of termination benefits. If there is an offer that promotes 
the termination of the employment relationship voluntarily by employees, 
termination benefits are valued based on the number of employees expected to 
accept the offer. Benefits that will be paid in the long-term are discounted at their 
present value.	
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iv. Short-term benefits 
The Company provides benefits to employees in the short-term, which may 
include wages, salaries, annual compensation and bonuses payable within 12 
months. Nemak recognizes an undiscounted provision when it is contractually 
obligated or when past practice has created an obligation. 
v. Employee participation in profit and bonuses 
The Company recognizes a liability and an expense for bonuses and employee 
profit sharing when it has a legal or assumed obligation to pay these benefits 
and determines the amount to be recognized based on the profit for the year 
after certain adjustments.
P. PROVISIONS
Liability provisions represent a present legal obligation or a constructive 
obligation as a result of past events where an outflow of resources to meet the 
obligation is likely and where the amount has been reliably estimated. Provisions 
are not recognized for future operating losses.
Provisions are measured at the present value of the expenditures expected to 
be required to settle the obligation using a pre-tax rate that reflects current 
market assessments of the value of money over time and the risks specific to the 
obligation. The increase in the provision due to the passage of time is recognized 
as interest expense. 
When there is a number of similar obligations, the likelihood that an outflow will 
be required for settlement is determined by considering the class of obligations 
as a whole. A provision is recognized even if the likelihood of an outflow with 
respect to any item included in the same class of obligations may be remote.
Provisions for legal claims are recognized when the Company has a present 
obligation (legal or assumed) as a result of past events, it is likely that an outflow 
of economic resources will be required to settle the obligation and the amount 
can be reasonably estimated. 
A restructuring provision is recorded when the Company has developed a formal 
detailed plan for the restructure, and a valid expectation for the restructure has 
been created between the people affected, possibly for having started the plan 
implementation or for having announced its main characteristics to them.
Q. SHARE-BASED PAYMENTS 
The Company has compensation plans based on the market value of Nemak 
and Alfa´s shares (the latter was considered until the spin-off date) in favor of 
certain senior executives and subsidiaries (Note 20). The conditions for granting 
such compensation to the eligible executives include compliance with certain 
financial metrics such as the level of profit achieved and remaining in the 
Company for up to 5 years, among other requirements. The Board of Directors 
has appointed a technical committee to manage the plan, and it reviews the 
estimated cash settlement of this compensation at the end of the year. The 
payment plan is always subject to the discretion of the senior management of 
Nemak. Adjustments to this estimate are charged or credited to the consolidated 
statement of income. 
The fair value of the amount payable to employees in respect of share-based 
payments which are settled in cash is recognized as an expense, with a 
corresponding increase in liabilities, over the period of service required. The 
liability is included within other liabilities and is adjusted at each reporting date 
and the settlement date. Any change in the fair value of the liability is recognized 
as compensation expense in the consolidated statement of income.
R. TREASURY SHARES 
The Company’s stockholders periodically authorize a maximum amount for the 
acquisition of the Company’s own shares. Upon the occurrence of a repurchase 
of its own shares, they become treasury shares and the amount is presented 
as a reduction to stockholders’ equity at the purchase price. These amounts are 
stated at their historical value. As of December 31, 2021 and 2019, $46 and $5 
were repurchased, respectively. 
S. CAPITAL STOCK 
Nemak SAB’s common shares are classified as capital stock within stockholders’ 
equity. Incremental costs directly attributable to the issuance of new shares are 
included in equity as a reduction from the consideration received, net of tax.
T. COMPREHENSIVE INCOME 
Comprehensive income is composed of net income plus the annual effects 
of their capital reserves, net of taxes, which are comprised of the translation 
of foreign subsidiaries, the effects of derivative cash flow hedges, actuarial 
gains or losses, net investment hedges, the effects of the change in the fair 
value of financial instruments available for sale, the equity in other items of 
comprehensive income of associates, and other items specifically required 
to be reflected in stockholders’ equity, and which do not constitute capital 
contributions, reductions and distributions.
U. SEGMENT REPORTING 
Segment information is presented consistently with the internal reporting 
provided to the chief operating decision maker who is the highest authority in 
operational decision-making, resource allocation and assessment of operating 
segment performance.
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V. REVENUE RECOGNITION 
Revenues comprise the fair value of the consideration received or to receive for 
the sale of goods and services in the ordinary course of the transactions, and 
are presented in the consolidated statements of income, net of the amount of 
variable considerations, which comprise the estimated amount of returns from 
customers, rebates and similar discounts and payments made to customers 
for the purpose of accommodating goods in attractive and favorable spaces at 
their facilities. 
To recognize revenues from contracts with customers, the comprehensive 
model for revenue accounting is applied, which is based on a five-step approach 
consisting of the following: (1) identify the contract; (2) identify performance 
obligations in the contract; (3) determine the transaction price; (4) allocate 
the transaction price to each performance obligation in the contract; and (5) 
recognize revenue when the company satisfies a performance obligation. 
Contracts with customers are given by commercial agreements with the OEM 
and complemented by purchase orders, whose costs comprise the promises 
to produce, distribute and deliver goods based on the contractual terms and 
conditions set forth, which do not imply a significant judgment to be determined. 
When there are payments related to obtaining new contracts, they are capitalized 
and amortized over the term of the contract obtained. 
The Company evaluates whether the agreements signed for the development of 
tooling, in parallel with a production contract with the OEMs, should be combined 
as a single contract. In cases where the two contracts meet the characteristics to 
be combined, the Company´s management evaluates whether the development 
of tooling represents a performance obligation, or a cost to fulfill a contract.
Based on the above, when determining the existence of separable performance 
obligations in a contract with customers, management evaluates the transfer of 
control of the good or service to the customer, for the purpose of determining the 
moment of revenue recognition related to each performance obligation.
Moreover, the payment terms identified in the majority of the sources of 
revenue are in the short-term, with variable considerations primarily focused 
on discounts and rebates of goods given to customers, without financing 
components or significant guarantees. These discounts and incentives to 
customers are recognized as a reduction to income or as sale expenses, 
according to their nature. Therefore, the allocation of the price is directly on the 
performance obligations of production, distribution and delivery, including the 
effects of variable considerations.
The Company recognizes revenue at a point in time, when control of sold 
goods has been transferred to the customer, which is given upon delivery and 
acceptance of the goods promised to the customer according to the negotiated 
incoterm. An account receivable is recognized when the performance obligations 
have been met, recognizing the corresponding revenue. 
W. ADVANCED PAYMENTS
Advanced payments mainly comprise insurance and the corporate fee paid to 
suppliers. These amounts are recorded based on the contractual value and are 
carried to the consolidated statement of income on a monthly basis during the 
life to which each advanced payment corresponds: the amount that corresponds 
to the portion to be recognized within the next 12 months is presented in current 
assets and the remaining amount is presented in non-current assets.
X. ASSETS HELD FOR SALE
Assets (and disposal groups) classified as held for sale are measured at the 
lower of carrying amount and fair value less costs to sell.
Assets and disposal groups are classified as held for sale if their carrying 
amount will be recovered through a sale transaction rather than through 
continuing use. This condition is regarded as met only when the sale is highly 
probable and the asset (or disposal group) is available for immediate sale in its 
present condition. Management must be committed to the sale which should be 
expected to qualify for recognition as a completed sale within one year from the 
date of classification.
Y. EARNINGS PER SHARE 
Earnings per share are calculated by dividing the profit attributable to the 
stockholders of the parent by the weighted average number of common shares 
outstanding during the year. As of December 31, 2021, 2020 and 2019, there are 
no dilutive effects from financial instruments potentially convertible into shares.
Z. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES 
i. New standards and changes adopted by the Company.
In the current year, the Company has applied a number of new and amended 
IFRS and interpretations issued by the International Accounting Standards 
Board (“IASB”) that are mandatorily effective for an accounting period that 
begins on or after January 1, 2020. The conclusions related to their adoption 
are described as follows:
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Amendments to IFRS 16, Rent Concessions Related to Covid-19 after June 30, 2021
The amendments introduce a practical expedient that provides lessees the option 
not to assess whether a rent concession that meets certain conditions is a lease 
modification. The practical expedient is applicable to rent concessions occurring 
as a direct consequence of the Covid-19 pandemic and only if all of the following 
conditions are met: 
a.	The change in the lease payments results in revised consideration for the 
lease that is substantially the same as, or less than, the consideration for the 
lease immediately preceding the change; 
b.	Any reduction in lease payments affects only payments originally due on or 
before June 30, 2022 (originally due on or before June 30, 2021); and
c.	There is no substantive change to other terms and conditions of the lease.
Additionally, the amendments include the following modifications: 
a.	The lessee may apply those modifications for annual periods beginning on or 
after April 1, 2021.
b.	The lessees that apply those modifications may do it retrospectively, 
recognizing the cumulative effect of having initially applied the modifications 
as an adjustment to the initial balance of retained earnings at the beginning of 
the annual period in which the lessee applies these modifications. 
The Company did not have any significant impacts on its consolidated financial 
statements due to the adoption of the amendment, as it did not receive 
significant concessions during the year. 
•	Phase 2 of the benchmark interest rate reform (IBOR- Amendments to IFRS 
9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)
Interbank offered rates (IBORs) are interest reference rates, such as LIBOR, 
EURIBOR and TIBOR, that represent the cost of obtaining unsecured funding, that 
have been questioned for their long-term viability as benchmarks. The Interest 
Rate Benchmark Reform on its phase 2, refers to the modification of financial 
assets, financial liabilities and lease liabilities, hedge accounting requirements 
and disclosure of financial instruments.
Regarding the modification of financial assets, financial liabilities and lease 
liabilities, the IASB introduced a practical expedient which implies updating the 
effective interest rate at the moment in which a fallback reserve clause is activated 
for the substitution of the reference rate defined in the contract, without requiring 
the recognition of a modification in the valuation of the financial instrument.
On the other hand, regarding the hedge accounting, the amendments to IFRS 9 
allow accounting hedging relationships, where the hedged item is the LIBOR rate, 
not to be discontinued by the elimination of such reference rate.
The Company assessed its exposure to IBOR rates and is in process of 
formalizing the interest reference rate of the only loan bearing such rate. 
Additionally, the Company does not have any derivative financial instruments 
hedging the variability of the IBOR rates. Therefore, it did not have any significant 
impacts on its consolidated financial statements due to adopting the reform. 
ii. New, revised and issued IFRS, but not yet effective
As of the authorization date of these financial statements, the Company has not 
applied the new, revised and issued IFRS, but not yet effective. The Company 
is in the process of determining the impact these amendments may have in its 
consolidated financial statements, however, only precision effects are expected 
in accounting policies:
•	Amendments to IAS 16, Property, Plant and Equipment Proceeds before 
Intended Use (1) 
•	Amendments to IAS 37, Costs of fulfilling an onerous contract (1) 
•	Amendments to IFRS 9, Financial Instruments (1) 
•	Amendments to IAS 1, Classifying liabilities as current or non-current (2) 
•	Amendments to IAS 1 and IFRS Practice Statement 2, Disclosure of 
accounting policies (2) 
•	Amendments to IAS 8, Definition of accounting estimates (2) 
•	Amendments to IAS 12, Deferred tax related to assets and liabilities arising 
from a single transaction (2) 
•	Amendments to IFRS 17, Insurance contracts (2) 
(1) Effective for annual reporting periods beginning on January 1, 2022
(2) Effective for annual reporting periods beginning on January 1, 2023 
4. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to various financial risks; market risk 
(including exchange rate risk, aluminum, price risk, and interest rate variation 
risk), credit risk and liquidity risk. 
The Company has a general risk management program focused on the 
unpredictability of financial markets, and seeks to minimize the potential adverse 
effects on its financial performance. The objective of the risk management 
program is to protect the financial health of its business, considering the volatility 
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associated with prices, foreign exchange and interest rates. The Company uses 
derivative financial instruments to hedge certain exposures to risks, including 
hedges of input prices.
The proposed transactions must meet certain criteria, including that hedges are 
lower than established risk parameters, and that they are the result of a detailed 
analysis and are properly documented. Sensitivity analysis and other risk 
analyses should be performed before the operation is conducted.
The Company’s risk management policy indicates that the hedging positions 
should always be lower than the projected exposure to allow an acceptable 
margin of uncertainty. Unhedged operations are expressly prohibited. The 
Company’s risk management policy indicates the maximum percentages must be 
hedged with respect to the projected exposure:
MAXIMUM COVERAGE (AS A PERCENTAGE 
OF THE PROJECTED EXPOSURE)
CURRENT YEAR
Commodities
100
Energy costs
75
Exchange rate for operating transactions
80
Exchange rate for financial transactions
100
Interest rates
100
CAPITAL MANAGEMENT
The Company’s objectives when managing capital is to safeguard its ability 
to continue as a going concern, so that it can continue to provide returns to 
stockholders and benefits to other stakeholders, as well as maintaining an 
optimal capital structure to reduce cost of capital.
To maintain or adjust the capital structure, the Company may adjust the amount 
of dividends paid to stockholders, return equity to stockholders, issue new shares 
or sell assets to reduce debt.
Nemak monitors capital based on a leverage ratio. This percentage is calculated 
by dividing total liabilities by total equity. 
The financial ratio of total liabilities/total equity was 1.86, 1.77 and 1.61 as of 
December 31, 2021, 2020 and 2019, respectively, resulting in a leverage ratio that 
complies with the Company’s management and risk policies.
FINANCIAL INSTRUMENTS BY CATEGORY
Below are the Company’s financial instruments by category:
As of December 31, 2021, 2020 and 2019, financial assets and liabilities consist 
of the following:
2021
2020
2019
Cash and cash equivalents
$       5,799
$       8,720 
$     5,883
Restricted cash
229
256
276
FINANCIAL ASSETS MEASURED AT 
AMORTIZED COST:
Trade and other accounts receivable
10,193
9,133
7,518
$     16,221
$     18,109
$   13,677
FINANCIAL LIABILITIES MEASURED AT 
AMORTIZED COST:
Debt
$      30,582
$     31,213
$   26,737
Lease liability
2,083
1,976  
1,853
Trade and accounts payable to related 
parties
20,674
17,451
16,061
$     53,339
$     50,640
$     44,651
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES MEASURED 
AT AMORTIZED COST
The amount of cash and cash equivalents, restricted cash, customers and other 
accounts receivable, other current assets, trade and other accounts payable, 
current debt, other current liabilities approximate their fair value, because their 
maturity date is less than twelve months. The net carrying amount of these 
accounts represents the expected cash flows to be received as of December 31, 
2021, 2020 and 2019. 
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The carrying amount and estimated fair value of non-current financial assets and 
liabilities valued at amortized cost is presented below:
As of December 
31, 2021
As of December 
31, 2020
As of December 
31, 2019
CARRYING 
AMOUNT 
FAIR 
VALUE
CARRYING 
AMOUNT
FAIR 
VALUE
CARRYING 
AMOUNT
FAIR 
VALUE
FINANCIAL ASSETS:
Non-current accounts 
receivable
$          -          $          -          $           -          $          -        $          2
$          1
FINANCIAL LIABILITIES:
Non-current liabilities 
efore issuance and 
obtaining costs
$ 26,942
$ 26,330
$ 27,239 
$ 27,959
$ 24,751
$ 25,606
Estimated fair values as of December 31, 2021, 2020 and 2019, were determined 
based on a discounted cash flow basis. Measurement at fair value of non-current 
accounts is considered within level 3 of the fair value hierarchy, whereas, for the 
financial debt, the measurement at fair value is considered within levels 1 and 2 
of the hierarchy.  
MARKET RISKS
(i) Exchange rate risk
The Company operates internationally, and is exposed to foreign exchange risk, 
primarily derived from the transactions and balances that the subsidiaries 
conduct and have in foreign currency, respectively. A foreign currency is that 
which is different from the functional currency of an entity. In addition, the 
Company is exposed to changes in the value of financial instruments arising 
from foreign exchange variations.  
The respective exchange rates of the Mexican peso, the U.S. dollar and the Euro 
are very important factors for the Company due to the effect they have on its 
consolidated results. Nemak estimates that approximately 51% of its sales 
are U.S dollars denominated, 37% in Euros, and the remaining 12% in other 
currencies since the price of its products is set based on such currencies.
The main risk of the Company associated with its financial instruments comes 
from its debt in foreign currency, mainly in euros, held by entities whose 
functional currency is the US dollar. In addition, the Company maintains assets 
and liabilities denominated in foreign currency in relation to the functional 
currency of the subsidiaries in Mexican pesos and Euros.  The monetary position 
in euros has been converted to millions of Mexican pesos at the closing exchange 
rate of December 31, 2021:
MXP
EUR
Financial assets
$   1,182      
$        173          
Financial liabilities
(4,798)
(11,809)
FINANCIAL POSITION IN FOREIGN CURRENCY 
$ (3,616)  
$ (11,636)  
The exchange rate used to convert the financial position in foreign currency from 
Euros to Mexican pesos, is described on Note 3 c.
Based on the monetary positions in foreign currencies that the Company 
maintains, a hypothetical variation of 10% in the exchange rate USD/MXP and 
USD/EUR, maintaining all the other variables constant, will result in an effect of 
$943 in the consolidated statement of income and of $1,525 in equity.
FINANCIAL INSTRUMENTS TO HEDGE NET INVESTMENTS IN 
FOREIGN TRANSACTIONS
The Company designates certain non-current debt instruments as hedges to 
net investments in foreign transactions in order to mitigate the variations in 
exchange rates arising between the functional currency for such transactions 
and the functional currency of the holding or sub-holding company that 
maintains these investments. 
The Company formally designated and documented each hedging relationship 
establishing objectives, management’s strategy to cover the risk, the 
identification of the hedging instrument, the hedged item, the nature of the 
risk to be hedged, and the methodology to assess the effectiveness. Given that 
the exchange rate hedging relationship is clear, the method that the Company 
used to assess the effectiveness consisted of a qualitative effectiveness test by 
comparing the critical terms between the hedging instruments and the hedged 
items. The hedging effectiveness results confirm that the hedging relationships 
are highly effective due to the economic relationship between hedging 
instrument and hedged items. For its part, when the value of the net assets of 
the foreign transaction is less than the notional value of the designated debt, 
the company performs a rebalancing of the hedging relationship and recognizes 
ineffectiveness in the statement of income.
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The Company maintains the following hedging relationships:
As of December 31, 2021
HOLDING
FUNCTIONAL 
CURRENCY
HEDGING 
INSTRMENT
NOTIONAL 
VALUE
(EUROS)
COVERED ITEM
NET ASSETS OF 
THE HEDGED ITEM
(EUROS)
Nemak, 
S. A. B. 
de C. V.
USD
Sustainabi-
lity-Linked 
Bonds
EUR 249
Nemak Dillingen GmbH
EUR   155
Nemak Linz GmbH
31
Nemak Gyor Kft.
136
Nemak Slovakia, S.r.o.
67
Nemak Wernigerode GmbH
67
Nemak Czech Republic, S.r.o.
58
Nemak Poland Sp.z.o.o.
45
Nemak Spain, S.L.
24
Nemak Pilsting GmbH
14
Nemak Izmir Dokum Sanayi 
A.S.
52
EUR 249
EUR  649
As of December 31, 2020
HOLDING
FUNCTIONAL 
CURRENCY
HEDGING 
INSTRMENT
NOTIONAL 
VALUE
(EUROS)
COVERED ITEM
NET ASSETS OF 
THE HEDGED ITEM
(EUROS)
Nemak, 
S. A. B. 
de C. V.
USD
Senior Notes
EUR 284               Nemak Dillingen GmbH
EUR    126                                
Bank Loans  
4
Nemak Linz GmbH
27
Nemak Gyor Kft.
130
Nemak Slovakia, S.r.o.
53
Nemak Wernigerode GmbH
66
Nemak Czech Republic, S.r.o.
56
Nemak Poland Sp.z.o.o.
40
Nemak Spain, S.L.
28
Nemak Pilsting GmbH
11
Nemak Izmir Dokum Sanayi 
A.S.
50
EUR    288 
EUR    587                               
As of December 31, 2019
HOLDING
FUNCTIONAL 
CURRENCY
HEDGING 
INSTRMENT
NOTIONAL 
VALUE
(EUROS)
COVERED ITEM
NET ASSETS OF 
THE HEDGED ITEM
(EUROS)
Nemak, 
S. A. B. 
de C. V.
USD
Senior Notes
EUR  211
Nemak Dillingen GmbH
EUR   109
Bank Loans  
4
Nemak Linz GmbH
29
Nemak Gyor Kft.
125
Nemak Slovakia, S.r.o.
43
Nemak Wernigerode GmbH
67
Nemak Czech Republic, 
S.r.o.
55
Nemak Poland Sp.z.o.o.
45
Nemak Spain, S.L.
36
Nemak Pilsting GmbH
10
Nemak Izmir Dokum Sanayi 
A.S.
46
EUR   215
EUR    565
The average coverage ratio of the Company amounted to 36.48%, 49.35% and 
35.38% for the years ended December 31, 2021, 2020 and 2019, respectively. 
Therefore, the exchange rate fluctuation generated by the hedging instruments 
for the years ended December 31, 2021, 2020 and 2019 amounted to a net 
profit (loss) of $371, $(687) and $84, respectively, which was recognized in 
other comprehensive income compensating the translation effect by each 
foreign investment. The results of the effectiveness of each hedging instrument 
confirms that the hedging relationships are highly effective due to the economic 
relationship between the hedging instruments and the hedging items. 
(ii) Price risk commodities
a. Aluminum
Nemak utilizes significant amounts of aluminum in the form of scrap, as well 
as ingots as its main raw material. In order to mitigate the risks related to 
the volatility of the prices of this commodity, the Company has entered into 
agreements with its customers, whereby the variations of aluminum prices are 
transferred to the sales price of the products through a pre-established formula.
However, there is a residual risk since each OEM uses its own formula to 
estimate aluminum prices, which normally reflects market prices based on an 
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
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NEMAK

average term that may range from one to three months. As a result, the basis 
used by each OEM to calculate the prices of aluminum alloys may differ from the 
ones used by the Entity to buy aluminum, which could negatively or positively 
impact its business, financial position and the results of its operations.
b. Natural gas
Nemak is an entity that uses natural gas to carry out its operating processes 
and develop its products. This consumption has grown as the volume of their 
end products increase, which causes that an increase in the price of natural 
gas creates negative effects on the operating cash flows. In order to mitigate 
its exposure to the price of this material, the Entity conducts, some natural gas 
hedging transactions using derivative instruments. Therefore, according to its risk 
management program, the Company enters into hedges against the exposure to 
the increase in natural gas prices, for future purchases by entering into swaps 
where variable prices are received and a fixed price is paid. A strategy called roll-
over has been implemented, through which it is analyzed each month if more 
derivatives should be contracted to expand the time or the amount of hedging. 
Given the volatility of gas prices, during October 2021, the Company entered into 
gas hedges for Mexico and the USA, that represented 25% of its consumption of 
December 2021 and January, February and March,2022. In addition, the Company 
entered into hedges during December for Mexico of 50% of its consumption of 
January, February and March 2022. As of December 31, 2021, the fair value of the 
derivative financial instruments was $18. As of December 31, 2020 and 2019, the 
Company did not have this type of derivative financial instruments. 
INTEREST RATE RISK
The Company is exposed to interest rate risk mainly for long-term loans bearing 
interest at variable rates. Fixed-interest loans expose the Company to interest 
rate risk at fair value, which implies that Nemak might be paying interest at rates 
significantly different from those of an observable market. 
As of December 31, 2021, if interest rates on variable rate are increased or 
decreased by 100 basis points in relation to the rate in effect, the income and 
stockholders’ equity of the Company would change by $326.
CREDIT RISK  
Credit risk represents a potential loss due to non-compliance of counterparts in 
their payment obligations. Credit risk is generated by cash and cash equivalents, 
derivative financial instruments and deposits with banks and financial 
institutions, as well as credit exposure to customers, including receivables and 
committed transactions.
The Company is managed on a group basis and credit risk profile, the significant 
clients with whom it maintains a receivable, distinguishing those that require 
an individual credit risk assessment. For the rest of the clients, the Company 
carries out its classification according to the type of market in which they operate, 
according with the business management and the internal risk management. Each 
subsidiary is responsible for managing and analyzing credit risk for each of its 
new customers before setting the terms and conditions of payment. If wholesale 
customers are qualified independently, these are the qualifications used. If there is 
no independent qualification, the Company´s risk control assesses the customer´s 
credit quality, taking into account its financial position, previous experience and 
other factors. The maximum exposure to credit risk is given by the balances of 
these items as presented in the consolidated state of financial position. 
Individual risk limits are determined based on internal and external ratings in 
accordance with limits set in the financial risk management policy. The use of 
credit risks is monitored regularly. During 2021, 2020 and 2019, credit limits 
were not exceeded and management does not expect losses in excess of the 
impairment recognized in the corresponding periods.
In addition, the Company performs a qualitative evaluation of economic 
projections, with the purpose of determining the possible impact on probabilities 
of default and the rate of recovery that it assigns to its clients. 
During the year ended December 31, 2021, there have been no changes in the 
techniques of estimation or assumption. 
LIQUIDITY RISK
Projected cash flows are determined at each operating subsidiary of the 
Company and subsequently the finance department consolidates this 
information. The finance department of the Company continuously monitors the 
cash flow projections and liquidity requirements of the Company ensuring that 
sufficient cash and liquid investments are maintained to meet operating needs, 
and that some flexibility is maintained through unused committed credit lines.  
The Company regularly monitors and makes decisions ensuring that the limits 
or covenants set forth in debt contracts are not breached. Projections consider 
the financing plans of the Company, compliance with covenants, compliance with 
minimum liquidity ratios and internal legal or regulatory requirements.
The Company’s treasury department invests those funds in time deposits, with 
high credit quality whose maturities or liquidity allow flexibility to meet the cash 
flow needs of the Company.  
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
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NEMAK

The following table analyzes the non-derivative financial instruments, grouped 
according to their maturity, from the date of the consolidated statement of 
financial position to the contractual maturity date. The amounts disclosed in the 
table are contractual undiscounted cash flows, including future non-accrued 
interests and sustainability-linked bonds.
LESS THAN A YEAR
FROM
1 TO 5 YEARS
MORE THAN 5
YEARS
AS OF DECEMBER 31, 2021
Trade and accounts payable to 
related parties
$   20,674
$             -                
$            -          
Debt (excluding debt obtaining 
costs)
4,093
2,179
2,767
Lease liability
441
724
918
Sustainability-linked bond 
(excluding issuance costs)
669
3,346
21,996
Interest payable
146
-
-
AS OF DECEMBER 31, 2020
Trade and accounts payable to 
related parties
$ 17,451
$           -                
$          -          
Debt (excluding debt obtaining 
costs)
4,267
1,741
3,776
Lease liability
422
1,189
365
Senior Notes (excluding issuance 
costs)
870
24,930
-
Interest payable
346
-
-
AS OF DECEMBER 31, 2019
Trade and accounts payable to 
related parties
$ 16,061
$           -
$         -
Debt (excluding debt obtaining 
costs)
2,163
1,937
4,011
Lease liability
372
1,151
330
Senior Notes (excluding issuance 
costs)
791
23,307
-
Interest payable
320
-
-
The Company expects to meet its obligations with cash flows generated by 
operations. Additionally, Nemak has access to credit lines with various banks to 
meet possible requirements.
As of December 31, 2021, 2020 and 2019, the Company has uncommitted short-
term credit lines unused of more than US$349 ($7,184), US$425 ($8,478) and 
US$734 ($13,836), respectively. Additionally, as of December 31, 2021, 2020 and 
2019, Nemak has committed medium-term credit lines available of US$405 
($8,335), US$412 ($8,215) and US$404 ($7,613) respectively. In order to maintain 
a solid liquidity position and have sufficient cash on hand to support operations 
and COVID-19 impacts, during the year ended December 31, 2020, Nemak 
disposed all of its committed lines for US$412, settling them in November. On 
the other hand, the uncommitted lines were disposed for US$250 during March 
2020, partially liquidated in December 2020.
FAIR VALUE HIERARCHY
The following is an analysis of financial instruments measured in accordance 
with the fair value hierarchy. The 3 different levels of the fair value hierarchy are 
presented below:
•	 ­Level 1: Quoted prices for identical instruments in active markets.
•	 ­Level 2: Other valuations including quoted prices for similar instruments in 
active markets, which are directly or indirectly observable.
•	 ­Level 3: Valuations made through technics where one or more of their 
significant data inputs are unobservable.
The Company’s assets and liabilities that are measured at fair value as of 
December 31, 2021, 2020 and 2019, are classified within the level 2 of the fair 
value hierarchy.
There were no transfers between Levels 1 and 2 or between Level 2 and 3 
during the period. 
The specific valuation techniques used to value financial instruments include:
•	 ­Market quotations or trader quotations for similar instruments.
•	 ­The fair value of interest rate swaps is calculated as the present value of 
estimated future cash flows based on observable yield curves.
•	 ­The fair value of forward exchange agreements is determined using 
exchange rates at the closing balance date, with the resulting value 
discounted at present value.
•	 ­Other techniques such as the analysis of discounted cash flows, which are 
used to determine fair value of the remaining financial instruments.
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
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NEMAK

5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and judgments are continually evaluated and are based on historical 
experience and other factors, including expectations of future events that are 
believed to be reasonable under the circumstances.
The Company makes estimates and assumptions concerning the future. The 
resulting accounting estimates will, by definition, seldom equal the related actual 
results. The estimates and assumptions that have a significant risk of causing a 
material adjustment to the carrying amounts of assets and liabilities within the 
next financial year are addressed below.
A. ESTIMATED IMPAIRMENT OF GOODWILL 
The Company conducts annual tests to determine whether goodwill and 
intangible assets with indefinite useful lives have suffered any impairment (Note 
12). For impairment testing, goodwill and intangibles assets with indefinite lives 
are allocated to those cash generating units (“CGUs”) for which the Company 
has considered that economic and operational synergies of the business 
combinations are generated. The recoverable amounts of the groups of CGUs 
were determined based on the calculations of their value in use, which require 
the use of estimates, within which, the most significant are the following:
•	Future gross and operating margins according to the historical performance 
and expectations of the industry for each CGU group.
•	Discount rate based on the weighted cost of capital (WACC) of each CGU or 
CGU group.
•	Long-term growth rates.
B. RECOVERABILITY OF DEFERRED TAX ASSETS
The Company has tax losses to be utilized, derived mainly from significant 
foreign exchange losses, which may be used in the subsequent years (Note 
25). Based on income and tax revenue projections Nemak will generate in 
subsequent years through a structured and robust business plan, which includes 
the sale of non-strategic assets, new services to be provided to its subsidiaries, 
among others, the Company’s management has considered that its tax loss 
carryforwards will be used before they expire and therefore it has been deemed 
appropriate to recognize a deferred tax asset for such losses.  
C. CONTINGENT LIABILITIES 
Management also makes judgments and estimates in recording provisions for 
matters relating to claims and litigation. Actual costs may vary from estimates 
for several reasons, such as changes in cost estimates for resolution of 
complaints and disputes based on different interpretations of the law, opinions 
and evaluations concerning the amount of loss.
Contingencies are recorded as provisions when it is likely that a liability has been 
incurred and the amount of the loss is reasonably estimable. It is not practical to 
estimate sensitivity to potential losses if other assumptions were used to record 
these provisions, due to the number of underlying assumptions and the range of 
possible reasonable outcomes regarding potential actions by third parties, such 
as regulators, both in terms of loss probability and estimates of such loss.
D. LONG-LIVED ASSETS 
The Company estimates the useful lives of long-lived assets in order to 
determine the depreciation and amortization expenses to be recorded 
during the reporting period. The useful life of an asset is calculated when 
the asset is acquired and is based on past experience with similar assets, 
considering anticipated technological changes or any other type of changes. 
Were technological changes to occur faster than estimated, or differently than 
anticipated, the useful lives assigned to these assets could have to be reduced. 
This would lead to the recognition of a greater depreciation and amortization 
expense in future periods. Alternatively, these types of technological changes 
could result in the recognition of a charge for impairment to reflect the reduction 
in the expected future economic benefits associated with the assets. 
The Company reviews the impairment indicators for depreciable and amortizable 
assets annually, or when certain events or circumstances indicate that the 
book value may not be recovered in the remaining useful life of those assets. 
On the other hand, intangible assets with an indefinite useful life are subject to 
impairment tests at least every year and provided there is an indication that the 
asset could have been impaired.
To evaluate the impairment, the Company uses cash flows, which consider 
the administrative estimates for future transactions, including estimates for 
revenues, costs, operating expenses, capital expenses and debt service. In 
accordance with IFRS, discounted future cash flows associated with an asset or 
cash-generating unit (CGU) would be compared to the carrying amount of the 
asset or CGU in question to determine whether an impairment or a reversal of 
impairment exists whenever such discounted future cash flows are less than 
their carrying amount. In such case, the carrying amount of the asset or group of 
assets is reduced to its recoverable amount.
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
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NEMAK

E. ESTIMATION OF DEFAULT PROBABILITIES AND RECOVERY 
RATE TO APPLY THE MODEL OF EXPECTED LOSSES IN THE 
CALCULATION OF IMPAIRMENT OF FINANCIAL ASSETS.
The Company assigns to customers with whom it maintains an account 
receivable at each reporting date, either individually or as a group, an estimate 
of the probability of default on the payment of accounts receivable and the 
estimated recovery rate, with the purpose of reflecting the cash flows expected 
to be received from the outstanding balances on such date.
F. ESTIMATION OF THE DISCOUNT RATE TO CALCULATE THE 
PRESENT VALUE OF FUTURE MINIMUM INCOME PAYMENTS
The Company estimates the discount rate to be used in determining the lease 
liability, based on the incremental loan rate (“IBR”).
The Company uses a three-tier model, with which it determines the three 
elements that make up the discount rate: (i) reference rate, (ii) credit risk 
component and (iii) adjustment for characteristics of the underlying asset. In 
this model, management also considers its policies and practices to obtain 
financing, distinguishing between that obtained at the corporate level (that is, by 
the holder), or at the level of each subsidiary. Finally, for the real estate leases 
or in which there is significant and observable evidence of its residual value, the 
Company estimates and evaluates an adjustment for the characteristics of the 
underlying asset, taking into account the possibility that said asset be granted as 
collateral or guarantee against the risk of default.
G. ESTIMATE OF THE LEASE TERM
The Company defines the term of the leases as the period for which there is a 
contractual payment commitment, considering the non-cancelable period of the 
contract, as well as the renewal and early termination options that are likely to 
be exercised. The Company participates in lease agreements that do not have a 
definite forced term, a defined renewal period (if it contains a renewal clause), or 
automatic annual renewals, therefore, to measure the lease liability, it estimates 
the term of the contracts considering their contractual rights and limitations, 
their business plan, as well as the administration’s intentions for the use of the 
underlying asset. Additionally, the Company considers the early termination 
clauses of its contracts and the probability of exercising them, as part of its 
estimate of the lease term.
6. CASH AND CASH EQUIVALENTS
Cash and cash equivalents presented in the consolidated statements of financial 
position consist of the following:
December 31 
2021
2020
2019
Cash on hand and in banks  
$ 1,939
$ 2,943
$  2,150
Short-term bank deposits
3,860
5,777
3,733
TOTAL CASH AND CASH EQUIVALENTS
$ 5,799
$ 8,720
$ 5,883
7. RESTRICTED CASH
The value of restricted cash is composed as follows:
December 31 
2021
2020
2019
Current
$      100
$      121 
$      120
Non-current (Note 13)
129
135
156
RESTRICTED CASH (1)
$      229
$      256  
$      276
(1) In accordance with the provisions of a credit agreement, the Company has made long-term cash deposit pursuant 
to a preferential loan arranged in order to participate in a financing by a US agency to promote investment in rural / 
low-development regions in the USA.
8. TRADE AND OTHER ACCOUNTS RECEIVABLES, NET
December 31 
2021
2020
2019
 CURRENT:
Trade accounts receivable
$  6,549
$    6,354
$     4,790
Due from related parties (Note 26)
1,431
1,076
779
Recoverable taxes
196
96
342
Sundry debtors
2,441
1,946
2,179
Allowance for impairment of trade ac-
counts receivable and related parties
(228)
(243)
(230)
TOTAL
$10,389
$    9,229
$    7,860
NON-CURRENT:
Non-current receivables from related 
parties (Note 26)
$         -       
$           -       
$           2
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
103
NEMAK

Movements in the allowance for impairment of trade accounts receivable are as 
follows:
2021
2020
2019
Opening balance as of January 1
$      (243)
$      (230)
$      (251) 
Allowance for impairment of trade and 
related parties
(18)
(43)
-
Receivables written off during the year
27
43
20
Other
6
(13)
1
FINAL BALANCE AS OF DECEMBER 31
$        (228)
$      (243)
$      (230)
The net change in the estimate of impairment of accounts receivable for the 
years ended December 31, 2021, 2020 and 2019 were $15, $(13) and $21, 
respectively, it was mainly due to changes in the estimation of probabilities of 
default and the percentage of recovery, allocated to different customer groups 
in which the Company operates, which reflected an increase in credit risk over 
these financial assets.
The following describes the probability of default ranges and recovery rates 
allocated to the main customer segments with which the company has balances 
receivable in its different businesses:
As of December 31, 2021
CLIENTS OR GROUP 
OF CLIENTS
 PROBABILITY OF 
DEFAULT RANGE 
SEVERITY 
OF LOSS
Automotive
0.00% - 5.43%(1)
99.47%
Related parties
0.00% - 0.23%
99.85%
As of December 31, 2020
CLIENTS OR GROUP 
OF CLIENTS
 PROBABILITY OF 
DEFAULT RANGE 
SEVERITY 
OF LOSS
Automotive
0.00% - 3.75%(1)
99.31%
Related parties
0.00% - 0.61%
99.09%
As of December 31, 2019
CLIENTS OR GROUP 
OF CLIENTS
 PROBABILITY OF 
DEFAULT RANGE 
SEVERITY 
OF LOSS
Automotive
0.00% - 0.54%
99.54%
Related parties
0.00% - 0.20%
99.82%
(1)	As of December 31, 2021 and 2020, the maximum probability of default range belongs to a single client. All the other 
clients of the Company maintain a maximum probability of default of 0.78% and 0.73%, respectively. 
Increases and decreases in customer impairment estimation, when they do not 
imply the legal loss of an account receivable, are recognized in the consolidated 
statement of income within the heading of sales costs. On the other hand, when 
collection rights are legally lost, the Company cancels the accumulated doubtful 
collection estimate, with the gross amount of the account receivable 
The company does not maintain any significant collateral or guarantees that 
mitigate exposure to the credit risk of its financial assets.
9. INVENTORIES
December 31 
2021
2020
2019
Raw material and other consumables
$  7,906
$   5,969 
$   5,310
Work in process
5,465
4,134
3,969
Finished goods
3,624
2,527
1,867
$ 16,995
$ 12,630
$ 11,146
For the years ended on December 31, 2021, 2020 and 2019, damaged, slow-
moving and obsolete inventory was charged to cost of sales in the amount of 
$32, $78 and $65, respectively.
At December 31, 2021, 2020 and 2019, there were no inventories pledged as 
collateral.
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
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NEMAK

10.  PROPERTY, PLANT AND EQUIPMENT, NET
LAND
BUILDINGS AND 
CONSTRUCTIONS
MACHINERY AND 
EQUIPMENT
VEHICLES
FURNITURE AND 
EQUIPMENT
CONSTRUCTIONS IN 
PROGRESS
OTHER FIXED 
ASSETS
TOTAL
FOR THE YEAR ENDED DECEMBER 31, 2019
Opening balance, net
$    1,685
$        9,197
$       32,911
$          48
$         819
$      5,860
$     1,109
$     51,629
Reclassifications to right-of-use asset
-
(534)
-
(7)
(22)
-
-
(563)
Translation effect
(84)
(414)
(1,611)
5
(38)
(307)
(56)
(2,505)
Additions
-
9
348
-
26
4,697
226
5,306
Disposals
-
(1)
(7)
-
(23)
(10)
(11)
(52)
Impairment charge recognized in the year
-
(73)
(832)
-
1
-
(11)
(915)
Depreciation charge recognized in the year
-
(477)
(4,011)
(23)
(227)
-
(22)
(4,760)
Transfers
6
663
4,350
19
123
(5,182)
21
-
$    1,607
$        8,370
$       31,148
$          42
$         659
$      5,058
$     1,256
$     48,140
As of December 31, 2019
Cost
$    1,607
$      14,608
$       78,708
$        201
$      2,362
$      5,058
$     1,314
$   103,858
Accumulated depreciation
-
(6,238)
(47,560)
(159)
(1,703)
-
(58)
(55,718)
NET CARRYING AMOUNT AS OF DECEMBER 31, 2019
$    1,607
$         8,370
$        31,148
$           42
$          659
$       5,058
$     1,256
$       48,140
FOR THE YEAR ENDED DECEMBER 31, 2020
Opening balance, net
$    1,607
$        8,370
$       31,148
$          42
$         659
$      5,058
$     1,256
$     48,140  
Translation effect
71
730
3,081
5
98
399
96
4,480
Additions
-
-
166
-
2
4,168
103
4,439
Disposals
-
-
-
-
(1)
-
(211)
(212)
Impairment charge recognized in the year
-
-
(133)
-
-
-
-
(133)
Depreciation charge recognized in the year
-
(522)
(4,438)
(17)
(229)
-
(17)
(5,223)
Transfers
-
430
4,001
11
97
(4,548)
9
-
$    1,678
$        9,008
$       33,825       
$          41
$         626     
$      5,077
$     1,236
$     51,491
As of December 31, 2020
Cost
$    1,678
$      16,351
$       89,480
$        287
$      2,726
$      5,077
$     1,317
$   116,916  
Accumulated depreciation
-
(7,343)
(55,655)
(246)
(2,100)
-
(81)
(65,425)
NET CARRYING AMOUNT AS OF DECEMBER 31, 2020
$    1,678
$         9,008
$        33,825
$           41             
$          626   
$      5,077
$     1,236
$       51,491  
FOR THE YEAR ENDED DECEMBER 31, 2021
Opening balance, net
$    1,678
$        9,008
$       33,825
$          41
$         626
$      5,077
$     1,236    
$     51,491  
Translation effect
6
16
367
-
(8)
15
(132)
264
Additions
-
3
144
1
-
6,101
1
6,250
Disposals
-
-
-
-
(6)
(2)
(38)
(46)
Impairment charge recognized in the year
-
-
(141)
-
-
-
-
(141)
Depreciation charge recognized in the year
-
(513)
(4,394)
(18)
(199)
-
(15)
(5,139)
Transfers
-
300
3,934
9
171
(4,426)
12
-
$    1,684
$        8,814
$       33,735
$ 33
$         584
$      6,765
$     1,064
$     52,679
As of December 31, 2021
Cost
$    1,684
$      16,664
$       92,355
$        275
$      2,846
$      6,765
$     1,151
$   121,740
Accumulated depreciation
-
(7,850)
(58,620)
(242)
(2,262)
-
(87)
(69,061)
NET CARRYING AMOUNT AS OF DECEMBER 31, 2021
$    1,684
$         8,814
$        33,735
$           33
$         584
$      6,765
$     1,064
$       52,679
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
105
NEMAK

As of December 31, 2021, 2020 and 2019, the Company capitalized borrowing 
costs to qualifying assets for $32, $4 and $38, respectively, which were not 
significant. 
Of the total depreciation expense, $4,796, $4,902 and $4,498 were charged to 
cost of sales, $1, $5 and $1, to selling expenses and $342, $316 and $261, to 
administrative expenses in 2021, 2020 and 2019, respectively.
As of December 31, 2021, 2020 and 2019, there were property, plant and 
equipment pledged as collateral (see Note 15).
The other fixed assets are mainly made up of spare parts and long-term 
improvements.
11. RIGHT-OF-USE ASSETS, NET
The Company leases a different set of fixed assets including, buildings, 
machinery and equipment, vehicles, and computer equipment. The average term 
of the lease contracts as of December 31, 2021, 2020 and 2019 is 12 years.
a) The right of use recognized in the consolidated statement of financial position 
as of December 31, 2021, 2020 and 2019, is as follows:	
	
BULDINGS
MACHINERY AND 
EQUIPMENT
VEHICLES
OTHER FIXED 
ASSETS
TOTAL
COST:
Adoption effect
$    584
$         170
$     114
$     34 
$        902
Property, plant 
and equipment 
reclassification
534 
-
7
22
563
Initial balances as 
of January 1, 2019
$  1,118
$         170
$     121
$     56
$     1,465
FINAL BALANCES AS OF 
DECEMBER 31, 2019
$ 1,084
$        122 
$    497 
$    60
$     1,763
FINAL BALANCES AS OF 
DECEMBER 31, 2020
$ 1,264
$        135
$    343
$    55
$     1,797
FINAL BALANCES AS OF 
DECEMBER 31, 2021
$ 1,464
$        101
$    263
$    39
$     1,867
BULDINGS
MACHINERY AND 
EQUIPMENT
VEHICLES
OTHER FIXED 
ASSETS
TOTAL
DEPRECIATION 
EXPENSE 2019
$   (139)
$          (93)
$ (191)
$  (19)
$     (442)
DEPRECIATION 
EXPENSE 2020
$   (217)
$          (92)
$ (209)
$  (30)
$     (548)
DEPRECIATION 
EXPENSE 2021
$   (227)
$          (40)
$ (206)
$  (32)
$     (505)
The additions to the net book value of the right of use assets for the years ended 
December 31, 2021, 2020 and 2019 amounted $653, $376 and $771, respectively.
b) Expenses recognized in the consolidated statements of income for the years 
ended December 31, 2021, 2020 and 2019, are as follows: 
December 31 
2021
2020
2019
Rent expenses from a short-term 
and low-value assets leases
$   268
$   255
$   319
The Company has not signed lease contracts, which at the date of the 
consolidated financial statements have not started.
During the year, the Company did not realize significant extensions to the term of 
its lease contracts.
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
106
NEMAK

12. GOODWILL AND INTANGIBLE ASSETS
DEVELOPMENT 
COSTS
RELATIONSHIPS WITH 
CUSTOMERS
SOFTWARE 
AND LICENSES
INTELLECTUAL PROPERTY 
RIGHTS
GOODWILL
OTHERS
TOTAL
COST
As of January 1, 2019
$       8,652
$        1,971
$       333
$       112
$        5,850
$         690
$      17,608
Translation effects
(933)
231
(9)
(10)
(315)
(57)
(1,093)
Additions
1,564
35
16
-
-
3
1,618
Disposals
(12)
(53)
(2)
-
-
(1)
(68)
As of December 31, 2019
$       9,271
$        2,184
$       338
$       102
$        5,535
$         635
$      18,065
Translation effects
693
307
16
6
659
(11)
1,670
Additions
965
221
13
-
-
17
1,216
Disposals
-
-
(14)
-
-
(6)
(20)
As of December 31, 2020
$     10,929
$        2,712
$       353
$       108
$        6,194
$         635
$      20,931
Translation effects
239
(48)
7
3
(98)
(8)
95
Additions
1,082
-
6
-
-
5
1,093
Disposals
(249)
(167)
(6)
-
-
(114)
(536)
As of December 31, 2021
$     12,001
$        2,497
$       360
$       111
$        6,096
$         518
$      21,583
ACCUMULATED AMORTIZATION 
January 1, 2019
$     (4,294)
$     (1,239)
$      (258)
$     (106)
$               -
$      (404)
$     (6,301)
Amortizations 
(750)
(218)
(27)
-
-
(47)
(1,042)
Disposals
12
13
2
-
-
-
27
Translation effects
286
76
14
4
-
53
433
As of December 31, 2019
$     (4,746) 
$      (1,368) 
$      (269) 
$     (102) 
$               -
$      (398) 
$     (6,883) 
Amortizations 
(931)
(218)
(28)
-
-
(46)
(1,223)
Disposals
-
-
14
-
-
6
20
Translation effects
(418)
(196)
(9)
(6)
-
5
(624)
As of December 31, 2020
$      (6,095)
$      (1,782)
$      (292)
$     (108)
$               -
$      (433)
$     (8,710)
Amortizations 
(1,022)
(174)
(24)
-
-
(9)
(1,229)
Disposals
237
159
6
-
-
7
409
Translation effects
(210)
54
7
(3)
-
(6)
(158)
As of December 31, 2021
$      (7,090)
$      (1,743)
$      (303)
$     (111)
$               -
$      (441)
$     (9,688)
NET CARRYING AMOUNT
Cost
$        9,271
$        2,184
$         338
$       102
$        5,535
$        635
$      18,065
Accumulated amortization
(4,746)
(1,368)
(269)
(102)
-
(398)
(6,883)
AS OF DECEMBER 31, 2019
$        4,525
$            816
$           69
$           -
$         5,535
$         237
$        11,182
Cost
$     10,929
$        2,712
$        353
$      108
$        6,194
$        635
$     20,931
Accumulated amortization
(6,095)
(1,782)
(292)
(108)
-
(433)
(8,710)
AS OF DECEMBER 31, 2020
$        4,834
$            930
$          61
$           -
$         6,194
$        202
$       12,221
Cost
$     12,001
$        2,497
$       360
$      111
$        6,096
$       518
$     21,583
Accumulated amortization
(7,090)
(1,743)
(303)
(111)
-
(441)
(9,688)
AS OF DECEMBER 31, 2021
$        4,911
$            754
$          57
$           -
$        6,096
$          77
$      11,895
 
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
107
NEMAK

Of the total amortization expense, $896, $869 and $639, were charged to cost of 
sales, $174, $183 and $232, to administrative expenses, $4, $3 and $6 to selling 
expenses, $155, $168 and $165 decreasing the revenues to costs incurred to 
obtain new agreements with clients in 2021, 2020 and 2019, respectively.
IMPAIRMENT TESTING OF GOODWILL
Goodwill is allocated to operating segments that are expected to benefit from the 
synergies of the business combination, irrespective of whether other assets or 
liabilities of the acquirer are assigned to those units or groups of units, as follows:
NORTH 
AMERICA
EUROPE
TOTAL
Balance as of January 1, 2019
$  2,103
$ 3,747
$ 5,850
Translation effect
(90)
(225)
(315)
Balance as of December 31, 2019
2,013
3,522 
5,535 
Translation effect
117
542
659
Balance as of December 31, 2020
$  2,130
$ 4,064
$ 6,194
Translation effect
69
(167)
(98)
BALANCE AS OF DECEMBER 31, 2021
$   2,199
$  3,897
$  6,096
The estimated gross margin has been budgeted based on past performance and 
market development expectations. The growth rate used is consistent with the 
projections included in the industry reports. The discount rate used is before 
taxes and it reflects the inherent risk in future cash flows. 
The recoverable amount of all cash generating units has been determined 
based on fair value less costs of disposal considering a market participant’s 
perspective. These calculations use cash flow projections based on pre-tax 
financial budgets approved by management covering a 5 year period. Cash flows 
beyond the 5 year period are extrapolated using the estimated growth rates 
stated below.
The key assumptions used in calculating the value in use in 2021, 2020 and 2019 
were as follows:
2021
NORTH AMERICA
EUROPE
REST OF THE WORLD
Growth rate
1.50%
1.50%
2.50%
Discount rate
10.32%
9.59%
10.66%
2020
NORTH AMERICA
EUROPE
REST OF THE WORLD
Growth rate
1.50%
1.50%
2.50%
Discount rate
10.97%
10.15%
11.57%
2019
NORTH AMERICA
EUROPE
REST OF THE WORLD
Growth rate
1.50%
1.50%
2.50%
Discount rate
12.90%
10.70%
9.74%
The Company performed a sensitivity analysis considering an increase in the 
discount rate of 100 basis points, as well as a similar decrease in the long-term 
growth rate. As a result of the analysis, the Company concluded that there are no 
significant variations in the impairment calculations as of December 31, 2021.
13. OTHER NON-CURRENT ASSETS
December 31 
2021
2020
2019
Restricted cash
$   129
$   135
$    156
Equity investments (1)
71
71
 71
Investments in associates 
521
565
 544
Tax credits receivable (2) 
160
128
315
Other assets
80
103
111
TOTAL OTHER NON-CURRENT ASSETS
$   961
$1,002
$1,197
(1)	Equity investments are investment in shares of non-publicly traded companies. No impairment loss was recognized as 
of December 31, 2021, 2020 and 2019.
(2)	The Company received formal notices from the Brazilian tax authorities corresponding to tax credits, related to their review 
of its operations in Brazil. Pending the resolution of these requirements, and by virtue of a court order, Nemak segregated 
bank balances which will be reimbursed to the Company upon final resolution. In the first semester of 2019, the Company 
obtained the final court decision related to its right to utilize tax credits of $315 the last 15 years with no possibility of 
appeal from the Federal government, additionally the corresponding bank balances were refunded. 
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
108
NEMAK

The accumulated summarized financial information for investments in 
associates accounted for under the equity method and that are not considered 
material, is as follows:  
2021
2020
2019
Net (loss) income and comprehensive income (loss)
$      (22)
$      (29)
$       41
There are no contingent liabilities or commitments related to the Company’s 
investments in associates. 
14. TRADE AND OTHER ACCOUNTS PAYABLE
December 31 
2021
2020
2019
Trade account payable 
$ 20,628
$ 17,408
$ 16,008
Advances from customers
879
522
521
Other social security fees and benefits
1,790
1,859
1,258
Related parties (Note 26)
46
43
53
Other payables
4,843
5,153
3,326
$ 28,186
$ 24,985
$ 21,166
15.  DEBT
	
December 31 
2021
2020
2019
CURRENT:
Bank loans (1) (2)
$    3,733
$    3,894
$    1,955
Current portion of non-current debt
237
250
22
Interest payable (1)
146
346
320
TOTAL CURRENT DEBT
$    4,116
$     4,490
$    2,297
NON-CURRENT DEBT:
Secured bank loans
$           4
$            5         
$           9
Unsecured bank loans
4,942
5,057
  4,743
In U.S dollars:
Sustainability-linked bonds / Senior Notes
10,292
9,974
9,422
In Euros:
Sustainability-linked bonds / Senior Notes
11,704
12,203
10,577
Non-current debt before debt 
issuance and obtaining costs
26,942
27,239
24,751
Less: Debt issuance and obtaining costs
(239)
(266)
(289)
Less: current portion of other debts
(237)
(250)
(22)
NON-CURRENT DEBT
$  26,466
$   26,723
$  24,440
(1)	As of December 31, 2021, 2020 and 2019, short-term bank loans bore interest at an average rate of 3.55%, 3.97% and 
4.27%, respectively. The short-term interest payable balance is $19 as of December 31, 2021.
(2)	The fair value of bank loans approximates their current book value, due to their short maturity.
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
109
NEMAK

The carrying amounts, terms and conditions of non-current debt were as follows:
DESCRIPTION
CONTRACTUAL 
CURRENCY
VALUE 
(MXP)
DEBT 
ISSUANCE AND 
OBTAINING
COSTS
INTEREST
PAID
BALANCE 
AS OF 
DECEMBER 
31, 2021
BALANCE 
AS OF 
DECEMBER 
31, 2020
BALANCE 
AS OF 
DECEMBER 
31, 2019
INCEPTION DATE 
MM/DD/YYYY
MATURITY DATE
MM/DD/YYYY
INTEREST
RATE
Brazil
BRL
$             4          
$         -      
$     -     
$            4
$            5       
$            9
01/31/2016
01/20/2025
6.00%
Total secured bank loans
4
-
-
4
5
9
Bancomext LP
USD
3,845
19
2
3,828
3,788
3,599
12/23/2019
12/23/2029
Libor 3M 
+2.70%
Scotiabank Turkey
EUR
439
-
1
440
612
530
10/28/2019
10/28/2024
1.06%
Spain
EUR
69
-
1
70
86
94
08/13/2012
02/01/2028
1.50%
USA  
USD
589
86
-
503
476
442
04/06/2017
12/21/2025
1.32%
Total unsecured bank loans
4,942
105
4
4,841
4,962
4,665
Total bank loans
4,946
105
4
4,845
4,967
4,674
Sustainability-linked bond / Senior 
Notes 
USD
10,292
67
-
10,225
10,103
9,535
06/28/2021
06/28/2031
3.63%
Sustainability-linked bond / Senior Notes  
EUR
11,704
67
123
11,760
12,249
10,573
07/20/2021
07/20/2028
2.25%
Total Senior Notes
21,996
134
123
21,985
22,352
20,108
Total
26,942
239
127
26,830
27,319
24,782
Less: current portion of non-current debt
(237)
-
-
(237)
(250)
(22)
NON-CURRENT DEBT (INCLUDING NON-CUR-
RENT INTEREST DEBT PAYABLE)
$    26,705   
$    239
$ 127
$  26,593
$   27,069
$   24,760
As of December 31, 2021, the annual maturities of non-current debt, gross of debt issuance and obtaining costs are as follows:
2022
2023
2024
2025
2026
2027 AND THEREAFTER
TOTAL
Bank loans(1)
$     237
$     283
$     457
$     785
$     417
$   2,767
$   4,946
Sustainability-linked bonds (2)
-
-
-
-
-
21,996
21,996
$     237
$     283
$     457
$     785
$     417
$ 24,763
$ 26,942
(1)	Interest on bank loans will be paid quarterly.
(2)	Interest on Sustainability-linked bonds will be paid semiannually.
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
110
NEMAK

Based on the expectation of decreased sales and generation of cash flow derived 
from COVID-19, Nemak decided to negotiate amendments with the banks with 
which it has committed credit line contracts (Note 4), to obtain flexibility in its 
financial obligations. The amendments to these contracts were made during the 
months of May and June of 2020, in such a way that Nemak was able to obtain 
flexibility in its financial obligations as of June 30, 2020 and until June 30, 2021. 
Derived from these amendments, Nemak paid a fee of US$0.49, which was 
recognized in the consolidated statement of income. The amendments included 
modifications to the restrictive and unrestrictive covenants as mentioned below. 
Some of the loan contracts and debt agreements contain restrictions, primarily 
regarding the compliance with certain financial ratios, including: 
a.	Interest coverage ratio: which is defined as EBITDA (See Note 27) for the period 
of the last four complete quarters (1) divided by financial expenses, net, for the 
last four quarters, which shall not be less than 3.0 times.
b.	Leverage ratio: which is defined as consolidated debt at that date, being the 
gross debt or net debt appropriate, divided by EBITDA (See Note 27) for the 
period of the last four complete quarters (1), which shall not be more than 
3.5, 4.75 and 3.5 times for the year ended December 31, 2021, 2020 and 2019, 
respectively.
(1)  As part of the amendments to the debt contracts, EBITDA for the period of the last four quarters ended did not include 
expenses related to COVID-19.
During 2021, 2020 and 2019, the financial ratios mentioned above were 
calculated in accordance with the established formulas in the debt contracts. 
In 2021, the Company issued 2 Senior Notes with the characteristic of 
“Sustainability-Linked Bonds”:
The first one was issued in June for US$ 500 with a fixed rate of 3.625% and a 
10-year maturity, and its use was to prepay the Senior Notes issued for the same 
amount in January 2018.
The second one was issued in July for EUR 500 with a fixed rate of 2.25% and a 
7-year maturity, and its use was to prepay the Senior Notes issued for the same 
amount in March 2017.
Both issuances were contracted without financial obligations and without joint 
and several obligors under an investment grade structure.
Both issuances incorporate a measurement for the year concluding December 
31, 2026 to achieve at least a 18% reduction of CO2 emissions, if the goal is not 
achieved, the interest coupons shall increase 25 basis points as of June 28, 2027, 
with respect to the Sustainability-Linked Bonds in dollars and as of July 20, 2027, 
with respect to the Sustainability-Linked Bond in euros. This goal is consistent 
with our sustainability commitment to reduce GHG emissions in 28% by 2030, 
which were approved by the Science-Based Targets initiative (SBTi) in 2021. 
At December 31, 2021, 2020 and 2019 and the date of issuance of these 
consolidated financial statements, the Company is in compliance with all 
obligations and affirmative and negative covenants contained in its credit 
agreements; such obligations, among other conditions are subject to certain 
exceptions, and require or limit the ability of the Company to:
•	 ­Provide certain financial information;
•	 ­Maintain books and records; 
•	 ­Maintain assets in appropriate conditions, except for those that cannot be 
expected to have a substantially adverse effect;
•	 ­Comply with applicable laws, rules and regulations, whose compliance may 
have a substantially adverse effect;
•	 ­Incur additional indebtedness, except if it is in compliance with affirmative 
and negative covenants in debt contracts;
•	 ­Pay dividends (only applicable to Nemak SAB), except if it is in compliance 
with affirmative and negative covenants in debt contracts;
•	 ­Grant liens on assets when the amount of secured obligations exceeds a 
percentage of total consolidated assets, as defined in each case;
•	 ­Enter into certain transactions with affiliates that are not in market conditions;
•	 ­Perform a consolidation or merger, except if the Company is the surviving one, 
and
•	 ­Carry out sale of assets, including sale and lease-back operations, whose 
value exceeds the amount determined in each case, except if it involves 
obsolete or abandoned assets, or such sale is performed according to 
ordinary course of business, fair market price and market conditions.
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
111
NEMAK

As of December 31, 2021, 2020 and 2019, there are no assets pledged as 
collateral for any of the subsidiaries, except for some assets, pledged as 
collateral in a long-term debt granted by a Brazilian government entity to 
promote investment (“BNDES”). As of December 31, 2021, the outstanding 
balance and the value of the pledged assets are approximately US$0.2 ($3.7) and 
US$0.2 ($3.7), respectively. As of December 31, 2020, the outstanding balance 
and the value of the pledged assets are approximately US$0.3 ($5.1) and US$0.3 
($5.1). As of December 31, 2019, the outstanding balance and the value of the 
pledged assets are approximately US$0.5 ($8.8) and US$0.6 ($11.0), respectively. 
On December 23, 2019, Nemak obtained financing with Bancomext for an amount 
of US$190 at a rate of LIBOR + 2.70% with a 10-year maturity, the resources 
were used to prepay the existing debt held with Bancomext of US$114.7 and with 
NAFIN of US$76.60.
16. LEASE LIABILITY
December 31
2021
2020
2019
CURRENT PORTION:
USD
$       234
$       212
$         70
MXP
-
-
86
EUR
153
186
169
Other currencies
54
24
47
CURRENT LEASE LIABILITY
$       441
$       422
$       372
NON-CURRENT PORTION:
USD
$       662
$       458
$       133
MXP
-
-
294
EUR
900
973
939
Other currencies
521
545
487
2,083
1,976
1,853
Less; Current portion of lease 
liability
(441)
(422)
(372)
NON-CURRENT LEASE LIABILITY
$    1,642
$    1,554
$    1,481
As of December 31, 2021, 2020 and 2019, changes in the lease liability related to 
the financing activities in accordance with the statement of cash flows consist of 
the following: 
2021
2020
2019
Lease liability as of January 1,
$           -
$          -
$      902
Financial lease reclassification 
-
-
705
Beginning balance
   1,976
1,853
1,607
New contracts
653
376
693
Write-offs
(95)
(9)
(2)
Adjustment to liability balance
-
-
15
Interest expense from lease liability
89
86
70
Lease payments
(698)
(298)
(380)
Exchange loss (income)
158
(32)
(150)
ENDING BALANCE
$   2,083
$   1,976
$   1,853
The total of future minimum payments of leases that include non-accrued 
interest is analyzed as follows:
DECEMBER 31, 2021
Less than 1 year
$            441
Over 1 year and less than 3 years
507
Over 3 year and less than 5 years
217
Over 5 years 
918
TOTAL
$         2,083
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
112
NEMAK

17.  OTHER LIABILITIES
December 31 
2021
2020
2019
CURRENT:
Other taxes and withholdings
$   144
$    216
$   409
Statutory employee profit sharing
214
170
167
Share-based payment (Note 20)
14
12
10
Derivative financial instruments
18
-
-
Others
2
 18
28
TOTAL
$   392
$    416
$   614
NON-CURRENT:
Other (1)
$   225
$    273
$   184
TOTAL
$   225
$    273
$   184
(1)	 It includes share-based payments (Note 20).
18. EMPLOYEE BENEFITS
In 2020, due to the COVID-19 pandemic (Note 2 g.), the Company carried out 	
labor terminations representing 9% of the total workforce, resulting in the 
recognition of US$36 for severance and other COVID-19 related expenses. In 
addition, Nemak received support from the European government for a total 
of US$24, recognized in the operating income. This support did not entail any 
commitment from the Company. The Company did not receive any government 
support during 2021. 
The valuation of employee benefits for retirement plans is based primarily on 
their years of service, current age and estimated salary at retirement date. 
Subsidiaries of the Company have established funds for the payment of 
retirement benefits through irrevocable trusts. 
Employee benefit obligations recognized in the consolidated statement of 
financial position are shown below:	
	
	
	
December 31 
2021
2020
2019
COUNTRY
Mexico
$      635
$      604
$      562
United States
7
38
29
Canada
110
168
184
Poland
216
243
171
Austria
204
228
220
Germany
182
174
139
Other
100
113
103
TOTAL
$   1,454
$   1,568
$   1,408
Below is a summary of the primary financial data of these employee benefits:
December 31
2021
2020
2019
OBLIGATIONS IN THE CONSOLIDATED STATEMENT 
OF FINANCIAL POSITION:
Pension benefits
$ 1,312
$ 1,426
$ 1,253
Post-employment medical benefits
142
142
155
Liability recognized in the consolidated state-
ment of financial position
1,454
1,568
1,408
CHARGE IN THE CONSOLIDATED STATEMENTS OF 
INCOME FOR:
Pension benefits
(141)
(195)
(84)
Post-employment medical benefits
(10)
(6)
(6)
(151)
(201)
(90)
REMEASUREMENTS FROM EMPLOYEE BENEFIT 
OBLIGATIONS RECOGNIZED IN OTHER 
COMPREHENSIVE INCOME FOR THE YEAR
Pension benefits
204
(40)
(117)
Post-employment medical benefits
7
26
(20)
211
(14)
(137)
REMEASUREMENTS ACCUMULATED IN STOCKHOLD-
ERS’ EQUITY
$  (141)
$  (352)
$   (338)
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
113
NEMAK

The Company manages post-employment medical benefits in Mexico and 
Canada. The accounting method, assumptions and frequency of valuations are 
similar to those used for benefits defined in pension schemes. 
Amounts recognized in the consolidated statement of financial position are 
determined as follows:
December 31 
2021
2020
2019
Present value of the obligations
$2,187
$2,220
$2,035
Fair value of plan assets
(733)
(652)
(627)
NET LIABILITIES IN THE CONSOLIDATED 
STATEMENT OF FINANCIAL POSITION
$1,454
$1,568
$1,408
The movement in the defined benefit obligation during the year was as follows:
2021
2020
2019
As of January 1 
$ 2,220
$ 2,035
$ 1,802
Current service cost
298
157
54
Interest cost
52
57
56
Contributions from plan participants
1
1
1
Remeasurements:
Actuarial remeasurements
(71)
341
172
Settlements
-
(4)
-
Benefits paid
(137)
(246)
(64)
Exchange differences
(176)
(121)
14
AS OF DECEMBER 31,
$ 2,187
$ 2,220
$ 2,035
The movement in the fair value of plan assets for the year was as follows:
2021
2020
2019
As of January 1
$ (652)
$ (627)
$ (564)
Interest income
(18)
(22)
(25)
Remeasurements – return from plan 
assets, net
(65)
(42)
(55)
Exchange differences
(22)
(41)
4
Contributions from plan participants
(7)
(5)
(8)
Employee contributions
(1)
(1)
(1)
Benefits paid
32
86
22
AS OF DECEMBER 31
$ (733)
$ (652)
$ (627)
The primary actuarial assumptions were as follows:
December 31 
2021
2020
2019
MEXICO:
Inflation rate
7.36%
3.15%
2.83%
Wage increase rate
4.50%
4.50%
4.50%
Future wage increase
3.50%
3.50%
3.50%
Medical inflation rate
7.00%
6.50%
6.50%
DISCOUNT RATE:
Mexico
7.75%
6.75%
7.00%
Canada
3.07%
2.79%
3.11%
Austria
1.00%
1.00%
2.00%
United States
2.35%
3.05%
3.05%
Germany
1.35%
1.60%
0.82%
Poland
3.20%
1.30%
3.30%
The sensitivity analysis of the main assumptions for defined benefit obligations 
discount rate were as follows:
	
Impact on defined benefit obligations
CHANGE IN ASSUMPTIONS
INCREASE IN 
ASSUMPTIONS
DECREASE IN 
ASSUMPTIONS
Discount rate
+1%
   $    (169)
$    200
PENSION BENEFIT ASSETS
Plan assets are comprised of the following:
2021
2020
2019
Equity instruments
$   496
$   440 
$   425
Short and long-term fixed-income 
securities
237
212
202
$   733
$   652  
$   627
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
114
NEMAK

19. STOCKHOLDERS’ EQUITY
At December 31, 2021, 2020 and 2019, the fixed, capital stock of $6,553, $ 6,599 
and $ 6,599, respectively, was represented by 3,055, 3,077 and 3,077 million 
registered common shares, “Class I” of the Series “A”, without face value, fully 
subscribed and paid, respectively.
As of December 31, 2019, the shares were represented as follows:
Number of shares
STOCKHOLDER
(IN MILLIONS)
AMOUNT
ALFA
       2,318
$ 4,971
Public investors
761
1,633
Repurchase of shares
(2)
 (5)
BALANCES AS OF DECEMBER 31, 2019
3,077
$ 6,599
As of December 31, 2020, the shares were represented as follows:
Number of shares
STOCKHOLDER
(IN MILLIONS)
AMOUNT
Controladora Nemak
       2,316
$ 4,966
Public investors
761
 1,633
Repurchase of shares
-
-
BALANCES AS OF DECEMBER 31, 2020
3,077       
$ 6,599 
As of December 31, 2021, the shares were represented as follows: 
Number of shares
STOCKHOLDER
(IN MILLIONS)
AMOUNT
Public investors
3,077
$ 6,599
Repurchase of shares
(22)
(46)
BALANCES AS OF DECEMBER 31, 2021
3,055
$ 6,553
The movement in outstanding shares for the year was as follows: 
NUMBER OF SHARES (IN MILLIONS) 
Shares as of January 1, 2019
3,079
Repurchase of shares
(2)
Shares as of December 31, 2019
 3,077
Repurchase of shares
-
Shares as of December 31, 2020 
3,077
Repurchase of shares
(22)
SHARES AS OF DECEMBER 31, 2021
3,055
The profit for the period is subject to the legal provision requiring at least 5% 
of the profit for each period to be set aside to increase the legal reserve until it 
reaches an amount equivalent to 20% of the capital stock. As of December 31, 
2021, 2020 and 2019, the legal reserve amounted to $1,188, $1,179 and $1,049, 
respectively, which is included in retained earnings.
On February 25, 2020, the Annual Ordinary Shareholders’ Meeting was held, 
at which the payment of a cash dividend of US$0.0164 per outstanding share 
was approved, equivalent to approximately US$51 ($954). However, taking into 
account the effects derived from COVID-19, the Company approved at the Annual 
Ordinary Shareholders’ Meeting held on June 19, 2020, to revoke the payments 
of the dividend declarations scheduled for July 1, October 1 and December 18, 
2020, equivalent to US$38 ($715).
Dividends paid as of December 31, 2020 and 2019 were US$13 ($306) ($0.10 
per share) and US$ 125 ($2,439) ($0.79 per share) which fully arise from the 
Net Tax Profit Account (CUFIN). The Company did not pay any dividends as of 
December 31, 2021. 
Dividends paid are not subject to income tax if paid from the CUFIN. Any 
dividends paid in excess of this account will cause a tax equivalent to 42.86% 
if they are paid in 2021. This tax is payable by the Company and may be 
credited against its income tax in the same year or the following two years 
or, if applicable, against the flat tax of the period. Dividends paid from profits, 
which have previously paid income tax are not subject to tax withholding or 
to any additional tax payment. As of December 31, 2021, the tax value of the 
consolidated CUFIN and value of the Capital Contribution Account (CUCA) 
amounted to $22,188 and $9,241, respectively.
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
115
NEMAK

The incentive is applicable provided that such dividends or profits were 
generated in 2014, 2015 and 2016 and are reinvested in the legal entity that 
generated such profits, and consists of a tax credit equal to the amount obtained 
by applying the dividend or profits distributed, which corresponds to the year in 
which such amounts are distributed as follows:
YEAR OF DISTRIBUTION OF 
DIVIDEND OR PROFIT
PERCENTAGE OF APPLICATION TO THE AMOUNT OF DIVIDEND 
OR PROFIT DISTRIBUTED.
2020
5%
2021
5%
2022 onwards
5%
The tax credit will be used against the additional 10% income tax that the entity 
must withhold and pay.
To apply the tax credit, the Company must meet the following requirements:
•	Must identify in its accounting records the corresponding records to the 
profits or dividends generated in 2014, 2015 and 2016 and the respective 
distributions.
•	Present in the notes to the consolidated financial statements information for 
the period in which profits were generated, dividends that were reinvested or 
distributed.
Entities distributing dividends or profits in respect of shares placed among the 
investing public should inform brokerage firms, credit institutions, investment 
firms, the people who carry out the distribution of shares of investment 
companies, or any other intermediary, the necessary details for these brokers to 
be able to make the corresponding withholding. For the years ended December 
31, 2021, 2020 and 2019, the Company generated taxable income (loss) of $85, 
$(933) and $2,493, respectively, which may be subject to this withholding.
In the case of a capital reduction, Mexican tax law establishes that any excess of 
stockholders’ equity over capital contributions be given the same tax treatment 
as applicable to dividends.
20.	 SHARE-BASED PAYMENTS
Nemak has a compensation plan referenced to the value of Nemak and ALFA’s 
shares for senior executives of Nemak and its subsidiaries. From 2021, the 
compensation plan is only referenced to the value of Nemak’s shares due to the 
Alfa spin-off in 2020. According to the terms of the plan, eligible executives will 
receive a cash payment conditional on the achievement of certain quantitative 
and qualitative metrics based on the following financial measures:
•	Improved share price 
•	Improvement in net income
•	Tenure of the executives in the Company
The bonus will be paid in cash over the next five years, i.e. 20% each year based 
on the average price per share in pesos for the month of December of each year. 
The average share´s price considered for the compensation´s measurement in 
Mexican pesos in 2021, 2020 and 2019 for Nemak was $6.07, $6.41 and $8.15 
and for Alfa was $15.39 and $15.72, in 2020 and 2019, respectively.
Short and long-term liability consists of the following:
December 31 
2021
2020
2019
Short-term
$      14
$      12
$      10
Long-term
35
31
27
TOTAL CARRYING AMOUNT
$      49 
$      43
$      37
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
116
NEMAK

21. EXPENSES CLASSIFIED BY NATURE
The total cost of sales and administrative expenses, classified by nature, were as 
follows:
December 31 
2021
2020
2019
Raw materials
$  (33,092)
$(24,699)
$(29,347)
Maquila (production outsourcing)
(5,058)
(5,254)
(6,068)
Employee benefit expenses (Note 24)
(15,938)
(15,630)
(17,166)
Personnel expenses
(63)
(54)
(157)
Maintenance
(3,928)
(3,760)
(4,263)
Depreciation and amortization
(6,718)
(6,826)
(6,079)
Freight charges
(473)
(451)
(498)
Advertising expenses
(14)
(9)
(10)
Consumption of energy and fuel
(3,615)
(3,253)
(3,679)
Travel expenses
(67)
(73)
(280)
Operating leases
(268)
(255)
(319)
Technical assistance, professional fees 
and administrative services
(1,243)
(1,070)
(1,293)
Other
(2,050)
(1,989)
(2,445)
TOTAL
$  (72,527)
$(63,323)
$(71,604)
22. OTHER (EXPENSES) INCOME, NET
2021
2020
2019
Gain on sale of property, plant and 
equipment
$       1
$         6
$        4
Impairment of property, plant and 
equipment
(141)
(133)
(915)
Other income (1)
251
(908)
116
TOTAL OTHER INCOME (EXPENSES), NET
$    111
$ (1,035)
$   (795)
(1) As of December 31, 2020, it primarily includes COVID-19 related items.
23. FINANCIAL RESULTS, NET
2021
2020
2019
FINANCIAL INCOME:
Interest income in short-term bank deposits
$        29
$        49
$          32
Intercompany financial income (Note 26)
5
4
46
Other financial income (1)
37
23
164
Total financial income
71
76
      242
FINANCIAL EXPENSES: 
Interest expense on bank loans (3)
(2,154)
(1,641)
   (1,534)
Other financial expenses (2)
(105)
(105)
(42)
Total financial expense
(2,259)
(1,746)
 (1,576)
EXCHANGE FLUCTUATION GAIN (LOSS), NET:
Exchange fluctuation gain
2,462
8,484
   5,336
Exchange fluctuation loss
(2,867)
(9,504)
(5,370)
Total exchange fluctuation loss, net
(405)
(1,020)
      (34)
FINANCIAL RESULTS, NET
$ (2,593)
$ (2,690)
$    (1,368)
(1)	It mainly includes interest on plan assets and other items.
(2)	It includes the financial cost of employee benefits.
(3) 	It includes debt prepayment costs of $576 of Senior Notes.
24.  EMPLOYEE BENEFIT EXPENSES
2021
2020
2019
Salaries, wages and benefits
$13,283
$13,137
$14,586
Contributions to social security
2,191
2,176
2,208
Employee pension benefits (Note 18)
298
157
54
Other contributions
166
160
318
TOTAL
$15,938
$15,630
$17,166
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
117
NEMAK

25.  INCOME TAXES
The Company is subject to income tax, whose rate is 30% in Mexico. The statutory 
income tax rates applicable to the main foreign subsidiaries were as follows: 
2021
2020
2019
Germany
30.0%
30.0%
30.0%
Austria
25.0%
25.0%
25.0%
Brazil
34.0%
34.0%
34.0%
China
25.0%
25.0%
25.0%
Spain
24.0%
24.0%
24.0%
Slovakia 
21.0%
21.0%
21.0%
United State of America
21.0%
21.0%
21.0%
Hungary
9.00%
9.0%
9.0%
Poland
19.0%
19.0%
19.0%
Turkey
25.0%
20.0%
22.0%
a) Income tax recognized in the consolidated statements of income:
2021
2020
2019
Current tax
$   (890)
$  (513)
$(2,331)
Deferred tax
(1,072)
332
1,187
INCOME TAX EXPENSED
$(1,962)
$  (181)
$(1,144)
b) The reconciliation between the statutory and effective income tax rates was as follows:
2021
2020
2019
Income before taxes
$ 2,047
$ (752)
$   3,637
Equity in losses of associates recogni-
zed through the equity method
22
29
(41)
Income before interests in 
associates
2,069
(723)
3,596
Statutory rate
30%
30%
30%
Taxes at statutory rate
(621)
217
(1,079)
(Add) less tax effect on:
Inflation adjustments
(527)
(254)
(199)
Non-deductible expenses
71
(330)
(134)
Tax loss recovery valuation reserve
(1,031)
-
-
Non-taxable exchange effects
49
286
220
Other 
97
(100)
48
TOTAL INCOME TAX EXPENSE
$(1,962)
$ (181)
$(1,144)
Effective rate
96%
24%
31%
c) The detail of the deferred income tax asset and liability is as follows:
December 31
2021
2020
2019
Inventories
$              -
$           43
$         (12)
Property, plant and equipment
(107)
(1,520)
(1,109)
Intangible assets
(47)
(181)
(108)
Asset valuation reserve
-
-
8
Provisions
202
1,236
1,042
Tax loss carryforwards
588
1,137
1,350
Other temporary differences, net
(511)
315
(114)
DEFERRED TAX ASSET
$         125
$      1,030
$     1,057
Inventories
$          (9)
$          (13)
$          (8)
Property, plant and equipment
(3,551)
(2,443)
(2,362)
Intangible assets
(588)
(1,392)
(1,414)
Debt issuance and obtaining costs
-
-
(56)
Provisions
1,583
1,495
1,161
Tax loss carryforwards
4
77
3
Other temporary differences, net
319
325
721
DEFERRED TAX LIABILITY
$    (2,242)
$   (1,951)
$   (1,955)
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
118
NEMAK

Tax losses as of December 31, 2021 expire in the following years:
EXPIRATION YEAR
AMOUNT
2022
$          42
2023
409
2024
499
2025 
442
2026 and thereafter
1,879
No maturity
2,856
$     6,127
Additionally, as of December 31, 2021, the Company holds tax loss carryforwards 
of $3,820 and has decided to reserve the total amount.
d) The tax charge/(credit) related to comprehensive income is as follows:
2021
2020
2019
BEFORE 
TAXES
TAX 
CHARGED/
(CREDITED)
AFTER 
TAXES
BEFORE 
TAXES
TAX 
CHARGED/
(CREDITED)
AFTER 
TAXES
BEFORE 
TAXES
TAX 
CHARGED/
(CREDITED)
AFTER 
TAXES
Translation 
effect of 
foreign 
entities 
$ (63)
$        -
$ (63)
$2,909
$        -
$2,909
$(1,846)
$       -
$(1,846)
Remeasu-
rements of 
obligations 
for emplo-
yee bene-
fits
211
(52)
159
(14)
1
(13)
(137)
 22
(115)
Derivative 
financial 
instru-
ments de-
signated as 
cash flow 
hedges
(28)
8
(20)
-
-
-
-
-
-
Other com-
prehensive 
income 
items
$120
$   (44)
$  76
$2,895
$        1
$2,896
$(1,983)
$     22
$(1,961)
26. TRANSACTIONS WITH RELATED PARTIES
Transactions with related parties during the years ended December 31, 2021, 
2020 and 2019, which were carried out in terms similar to those of arm’s-length 
transactions with independent third parties, were as follows:
December 31, 2021
Loans with related parties
ACCOUNTS 
RECEIVABLE
NON-
CURRENT 
AMOUNT
CAPITAL 
AND
INTEREST
CURRENCY
MATURITY 
DATE 
MM/DD/YYYY
INTEREST 
RATE
ACCOUNTS 
PAYABLE
ALFA
$        -
$        -
$      83
MXP
12/31/2022
6.42%
$        23
Associa-
tes
69
-
46
EUR
03/04/2022
4.35%
23
Affiliates 
18
-
-
MXP
-
Ford
1,215
-
-
-
TOTAL
$ 1,302
$       -
$   129
$       46
	
	
December 31, 2020
Loans with related parties
ACCOUNTS 
RECEIVABLE
NON-
CURRENT 
AMOUNT
CAPITAL 
AND
INTEREST
CURRENCY
MATURITY DATE 
MM/DD/YYYY
INTEREST 
RATE
ACCOUNTS 
PAYABLE
ALFA
$            -
$          -
$      80
MXP
08/16/2021
5.49%
$          -
Associa-
tes
73
-
41
EUR
03/04/2021
4.35%
43
Ford
882
-
-
-
TOTAL
$       955
$          -
$     121
$       43
 
December 31, 2019
Loans with related parties
ACCOUNTS 
RECEIVABLE
NON-
CURRENT 
AMOUNT
CAPITAL 
AND
INTEREST
CURRENCY
MATURITY DATE 
MM/DD/YYYY
INTEREST 
RATE
ACCOUNTS 
PAYABLE
ALFA
$         -
$        -
$      76
MXP
08/16/2020
4.98%
$        -
Associa-
tes
63
2
38
EUR
08/16/2020
8.50%
53
Ford
602
-
-
-
TOTAL
$     665
$       2
$   114
$      53
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
119
NEMAK

During 2019, the Company received the deposit of a loan from Alfa at the rate of 1 
month LIBOR + 3% with a maturity of December 23, 2019 for the amount of $706.
Sales revenues and other related parties:
Year ended December 31, 2021
FINISHED GOODS
INTEREST
OTHERS
ALFA
$            -
$      3
$      -
Ford
(19,506)
-
-
Associates
-
2
372
Affiliates
-
-
18
TOTAL
$ (19,506)
$      5
$ 390
	
	
	
Year ended December 31, 2020
FINISHED GOODS
INTEREST
OTHERS
ALFA
$            -
$      2
$      -
Ford
13,772
-
-
Associates
-
2
266
TOTAL
$  13,772
$      4
$ 266
Year ended December 31, 2019
FINISHED GOODS
INTEREST
OTHERS
ALFA
$           -
$    41
$     -
Ford
18,724
-
-
Associates
-
5
273
TOTAL
$  18,724
$    46
$ 273
Cost of sales and other expenses with related parties:
Year ended December 31, 2021
ADMINISTRATIVE
SERVICES
OTHER COSTS AND 
EXPENSES
DIVIDENDS
PAID
ALFA
$               45
$         -
$          -
Affiliates
51
39
-
TOTAL
$             96
$      39
$          -
Year ended December 31, 2020
ADMINISTRATIVE
SERVICES
OTHER COSTS AND 
EXPENSES
DIVIDENDS
PAID
ALFA
$              43
$         -
$     231
Affiliates
-
97
-
TOTAL
$             43
$      97
$     231
Year ended December 31, 2019
ADMINISTRATIVE
SERVICES
OTHER COSTS AND 
EXPENSES
DIVIDENDS
PAID
ALFA
$             -
$         -
$   1,825
Affiliates
78
-
-
Associates
-
166
-
Ford
-
-
119
TOTAL
$          78
$    166
$  1,944
For the years ended December 31, 2021, 2020 and 2019, wages and benefits 
received by senior management of the Company were $130, $132 and $142, 
respectively, an amount comprising base salary and other benefits associated 
with the Company’s share-based payment plans.
27. SEGMENT FINANCIAL INFORMATION
Segment information is presented consistently with the internal reporting 
provided to the chief executive officer who is the highest authority in operational 
decision-making, resource allocation and assessment of operating segment 
performance.
The Company manages and evaluates its operation through its primary operating 
segments, which are:
•	 North America; in which Mexican, Canadian and United States operations are 
grouped. 
•	 Europe operations include the plants in Germany, Spain, Hungary, Czech 
Republic, Austria, Poland, Slovakia, Russia and Turkey.
•	 Operating segments that do not meet the threshold established by the standard 
itself to be reported separately, such as Asia (including plants in China and 
India), South America (including plants in Brazil and Argentina), and other less 
significant operations, are added and shown under the “rest of the world”.
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
120
NEMAK

Transactions between operating segments are performed at market value and 
the accounting policies with which the financial information by segments is 
prepared, are consistent with those described in   Note 3.
The Company evaluates the performance of each of the operating segments 
based on income before financial results, income taxes, depreciation and 
amortization (“EBITDA”), considering that this indicator is a good metric to 
evaluate operating performance and the ability to meet principal and interest 
obligations with respect to indebtedness, and the ability to fund capital 
expenditures and working capital requirements. Nevertheless, EBITDA is not a 
measure of financial performance under IFRS and should not be considered as 
an alternative to net income as a measure of operating performance or cash 
flows as a measure of liquidity.
The Company has defined the Adjusted EBITDA by also adjusting for the impacts 
of asset impairment.
Below is the condensed financial information on these operating segments:
For the year ended December 31, 2021
NORTH 
AMERICA
EUROPE
REST OF 
THE WORLD
ELIMINATIONS
TOTAL
STATEMENT OF INCOME
Income by segment
$ 39,373
$  30,610
$   9,988
$  (2,893)
$ 77,078
Inter-segment income
(174)
(2,099)
(620)
2,893
-
Income from external 
customers
$ 39,199
$  28,511
$   9,368
$           -
$ 77,078
EBITDA
Operating income
$  1,754
$  2,614
$       294
$          -
$    4,662
Depreciation and 
amortization
3,756
2,347
615
-
6,718
Impairment
17
74
50
-
141
Adjusted EBITDA
$  5,527
$  5,035
$       959
$          - 
$  11,521
CAPITAL INVESTMENTS 
(CAPEX AND INTANGIBLES)
$ 4,215
$ 2,237
$      891
$         - 
$   7,343
For the year ended December 31, 2020
NORTH 
AMERICA
EUROPE
REST OF 
THE WORLD
ELIMINATIONS
TOTAL
STATEMENT OF INCOME
Income by segment
$ 34,586
$  25,023
$   8,461 
$    (1,745)       
$  66,325
Inter-segment income
(76)
(1,013)
(656)
1,745
-
Income from external 
customers
$ 34,510
$  24,010
$   7,805
$             -
$  66,325
EBITDA
Operating income
$   1,348
$      825  
$   (206)
$             -
$    1,967  
Depreciation and 
amortization
3,658
2,407
761
-
6,826
Impairment
117
12
4
-
133
Adjusted EBITDA
$   5,123
$   3,244 
$     559
$             -
$    8,926
CAPITAL INVESTMENTS 
(CAPEX AND INTANGIBLES)
$  3,452
$  1,875
$    328
$            -
$   5,655  
For the year ended December 31, 2019
NORTH 
AMERICA
EUROPE
REST OF 
THE WORLD
ELIMINATIONS
TOTAL
STATEMENT OF INCOME
Income by segment
$ 43,060
$ 28,413
$   7,304
$  (1,414)
$   77,363
Inter-segment income
(487)
(827)
(100)
1,414
-
Income from external 
customers
$ 42,573
$ 27,586
$   7,204
$           -
$   77,363
EBITDA
Operating income
$  3,121
$   2,170
$    (327)
$           -
$     4,964
Depreciation and 
amortization
3,246
2,045
788
-
6,079
Impairment
735
5
175
-
915
Adjusted EBITDA
$  7,102
$   4,220
$      636
$           -
$   11,958
CAPITAL INVESTMENTS 
(CAPEX AND INTANGIBLES)
$ 3,475
$  2,263
$     878
$          -
$    6,616
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
121
NEMAK

The reconciliation between “Adjusted EBITDA” and income (loss) before tax is as follows:
2021
2020
2019
Adjusted EBITDA
$11,521
$ 8,926
$11,958
Depreciation and amortization
(6,718)
(6,826)
(6,079)
Impairment
(141)
(133)
(915)
Operating income
4,662
1,967
4,964
Financial results, net
(2,593)
(2,690)
(1,368)
Equity in associates
(22)
(29)
41
INCOME (LOSS) BEFORE TAXES
$   2,047
$   (752)
$  3,637
For the year ended December 31, 2021
PROPERTY, PLANT AND 
EQUIPMENT, NET
GOODWILL
INTANGIBLE ASSETS AND 
RIGHT OF USE
North America 
$      28,027
$   2,199
$      3,798
Europe
20,051
3,897
2,972
Rest of the world
4,601
-
896
Total
$      52,679
$   6,096
$      7,666
For the year ended December 31, 2020
PROPERTY, PLANT AND 
EQUIPMENT, NET
GOODWILL
INTANGIBLE ASSETS AND 
RIGHT OF USE
North America 
$      26,582
$   2,130
$      3,622
Europe
20,754
4,064
3,224
Rest of the world
4,155
-
978
Total
$      51,491
$   6,194
$      7,824
For the year ended December 31, 2019
PROPERTY, PLANT AND 
EQUIPMENT, NET
GOODWILL
INTANGIBLE ASSETS AND 
RIGHT OF USE
North America 
$      25,313
$   2,013
$     3,540
Europe
19,894
3,522
3,210
Rest of the World
2,933
-
660
Total
$      48,140
$   5,535
$     7,410
Nemak’s clients are automotive companies, known as OEMs. The Company has 
the following global clients whose transactions represent more than 10% of the 
consolidated sales: Ford 24%, 23% and 25%, General Motors 16%, 19% and 19%, 
Stellantis(1)  9%, 11% and 12% and Volkswagen Group 14%, 15% and 14% in 2021, 
2020 and 2019, respectively.
(1) Stellantis” means Stellantis N.V. and its relevant subsidiaries in different countries, the new automotive group resulting 
from the merger of Fiat Chrysler Automobiles and PSA Group, effective as of January 2021.  
28. COMMITMENTS AND CONTINGENCIES
In the normal course of its business, the Company is involved in disputes 
and litigation. Although the outcome of the disputes cannot be predicted, as 
of December 31, 2021, the Company does not believe that there are current 
or threatened actions, claims or legal proceedings against it or affecting the 
Company that, if determined adversely to it, would significantly damage its 
individual or overall results of operations or financial position.
As of December 31, 2021, 2020 and 2019, the Company had the following 
contingency:
Nemak México, S.A. received a claim from the Canada Revenue Agency (CRA) 
for a tax credit for refunds of Goods and Services Tax (GST) and the Harmonized 
Sales Tax (HST) for an approximate total amount, including interest, of US$82. 
The CRA alleges that Nemak delivered certain assets in Canada that were subject 
to GST and HST. However, the Company filed an objection to the CRA’s Audit 
Division arguing that its clients acted as importers in Canada and that Nemak 
delivered the goods to them outside such country. Based on a face-to-face 
meeting with the CRA in which the evidences and arguments required to support 
our objection were presented, management and its legal advisors consider 
that the case will be adjudicated favorably, therefore it has not recognized any 
provision in its statement of financial position.
29. SUBSEQUENT EVENTS
In preparing the consolidated financial statements the Company has evaluated 
the events and transactions for recognition or disclosure subsequent to 
December 31, 2021 and through January 31, 2022, (issuance date of the 
consolidated financial statements), and has concluded that there are no 
subsequent events that require recognition or disclosure.
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
122
NEMAK

30. AUTHORIZATION TO ISSUE THE CONSOLIDATED FINANCIAL 
STATEMENTS
On January 31, 2022, the issuance of the accompanying consolidated financial 
statements was authorized by Armando Tamez Martínez, Chief Executive Officer 
and Alberto Sada Medina, Chief Financial Officer. 
These consolidated financial statements are subject to the approval of the 
Company’s shareholders’ meeting.
ARMANDO TAMEZ MARTÍNEZ
Chief Executive Officer
ALBERTO SADA MEDINA
Chief Financial Officer
N E M A K ,  S . A . B .  D E  C . V.  A N D  S U B S I D I A R I E S
2021 ANNUAL REPORT
123
NEMAK

2021 ANNUAL REPORT
124
NEMAK
For more information visit us at:
http://www.nemak.com
http://investors.nemak.com
      /NemakGlobal 
      /Nemak_Global
/nemakglobal
/company/nemakglobal
INVESTOR RELATIONS 
investor@nemak.com
Libramiento Arco Vial Km 3.8, 
García N.L., 66017, México 
+52 (81) 8748-5107
MEDIA RELATIONS 
inquiries@nemak.com 
Libramiento Arco Vial Km 3.8, 
García N.L., 66017, México 
+52 (81) 8748-5200
INDEPENDENT AUDITOR
GALAZ, YAMAZAKI, RUIZ URQUIZA, S.C.
Member of Deloitte Touche Tohmatsu Limited
Av. Juárez 1102, Piso 40
Col. Centro
Monterrey, Nuevo León
C.P. 64000, México
STOCK EXCHANGE AND SYMBOL
NEMAK S.A.B. DE C.V.
Trades on the Mexican Stock Exchange under the symbol NEMAK.