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Derivatives and Financial Instruments | 12 Months Ended
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Dec. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives and Financial Instruments | Derivatives and Financial Instruments The Company's financial instruments comprise bank and other loans, senior loan notes, derivatives, trade payables deferred and deferred contingent consideration. Other than derivatives, the main purpose of these financial instruments is to raise finance for the Company's operations. The Company also has various financial assets such as trade receivables and cash and cash equivalents, which arise directly from its operations. Derivative financial instruments We are exposed to market risk during the normal course of business from changes in currency exchange rates, interest rates and commodity prices such as aluminum prices. We manage exposures through a combination of normal operating and financing activities and through the use of derivative financial instruments such as foreign currency forward purchase contracts and aluminum forward purchase contracts. We do not use market risk-sensitive instruments for trading or speculative purposes. In 2018, the Company had $0.1 million (2017: $2.1 million) derivative financial instruments disclosed within accounts and other receivables and nil (2017: $0.3 million) within other non-current assets. There were no derivative financial instruments recorded in liabilities in 2018 (2017: $1.5 million in other current liabilities and $0.4 million in other non-current liabilities). At December 31, 2018, the fair value of forward foreign currency exchange contracts deferred in equity was a loss of $0.4 million (2017: loss of $0.7 million and 2016: loss of $3.1 million). During 2018, a loss of $0.1 million (2017: gain of $0.6 million and 2016: loss of $0.9 million) has been transferred to the consolidated income statement in respect of contracts that have matured in the year. Aluminum forward purchase contracts A luminum is traded on the London Metal Exchange ("LME") and therefore the Group is able to use LME derivative contracts to hedge a portion of its price exposure. In 2018 the Group purchased approximately 11,500 (2017: 12,500) metric tons of primary aluminum. The processed waste can be sold as scrap aluminum at prices linked to the LME price. The price risk on aluminum is mitigated by the use of LME derivative contracts. At December 31, 2018, the Company had hedged nil (2017: 32%) of its main primary aluminum requirements for 2019, being 3,300 (2018: 3,000) metric tonnes. Before hedging the risk, a $100 increase in the LME price of aluminum would increase our Gas Cylinders segment's costs by approximately $1.1 million. Forward foreign currency exchange contracts The Company incurs currency transaction risk whenever one of the Company's operating subsidiaries enters into either a purchase or sales transaction in a currency other than its functional currency. Currency transaction risk is reduced by matching sales and expenses in the same currency. The Company's U.S. operations have little currency exposure as most purchases, costs and sales are conducted in U.S. dollars. The Company's U.K. operations are exposed to exchange transaction risks, mainly because these operations sell goods priced in euros and U.S. dollars, and purchase raw materials priced in U.S. dollars. The Company also incurs currency transaction risk if it lends currency other than its functional currency to one of its joint venture partners. At December 31, 2018 and 2017, the Company held various forward foreign currency exchange contracts designated as hedges in respect of forward sales for U.S. dollars, euros and Australian dollars for the receipt of GBP sterling or euros. The Company also held forward foreign currency exchange contracts designated as hedges in respect of forward purchases for U.S. dollars by the sale of GBP sterling. The contract totals in GBP sterling and euros, range of maturity dates and range of exchange rates are disclosed below, with the value denominated in GBP sterling given that is the currency the majority of the contracts are held in. 10. Derivatives and Financial Instruments (continued) Fair value of financial instruments (continued)
|  | December 31, 2018 |
| Sales hedges | U.S. dollars |  | Euros |
| Contract totals/£m | 4.8 |  |  | 7.2 |  |
| Maturity dates | 01/19 to 07/19 |  |  | 01/19 to 07/19 |  |
| Exchange rates | $1.2519 to $1.3419 |  |  | €1.0949 to €1.1702 |  |
| Purchase hedges | U.S. dollars |  | Euros |  | Canadian dollars |  | Czech koruna |
| Contract totals/£m | 7.5 |  |  | 1.7 |  |  | 2.9 |  |  | 0.1 |  |
| Maturity dates | 01/19 to 07/19 |  |  | 01/19 to 06/19 |  |  | 01/19 to 03/19 |  |  | 01/19 |  |
| Exchange rates | $1.2609 to $1.3380 |  |  | €1.1074 to €1.1221 |  |  | $1.7039 to $1.7416 |  |  | CZK 28.4490 |  |
|  | December 31, 2017 |
| Sales hedges | U.S. dollars |  | Euros |  | Australian dollars |
| Contract totals/£m | 17.1 |  |  | 27.5 |  |  | 2.8 |  |
| Maturity dates | 01/18 to 07/19 |  |  | 01/18 to 07/19 |  |  | 06/18 |  |
| Exchange rates | $1.2433 to $1.3444 |  |  | €1.0949 to €1.1803 |  |  | $1.7667 |
| Purchase hedges | U.S. dollars |  | Euros |  | Australian dollars |
| Contract totals/£m | 12.5 |  |  | 0.1 |  |  | 1.7 |  |
| Maturity dates | 01/18 to 07/19 |  |  | 01/18 |  |  | 06/18 |  |
| Exchange rates | $1.2414 to $1.3389 |  |  | €1.1084 |  |  | 1.7161 |  |
The above contracts are held in GBP sterling, therefore the analysis in the table has been given in GBP sterling to avoid any movements as a result of translation. Fair value of financial instruments The following methods were used to estimate the fair values of each class of financial instrument: Cash at bank and in hand / overdrafts The carrying value approximates to the fair value as a result of the short-term maturity of the instruments. Cash at bank and in hand are subject to a right to offset in the U.S. Overdrafts At December 31, 2018, the Company had overdrafts of $3.5 million (2017: $4.2 million), which are disclosed within other current liabilities with its carrying value being equal to its fair value. All of the balance at December 31, 2018 and 2017 is subject to variable interest rate and subject to floating interest rate risk. Bank loans At December 31, 2018, bank and other loans of $75.0 million (2017: $111.3 million) were outstanding. At December 31, 2018, bank and other loans are shown net of issue costs of $1.4 million (2017: $1.7 million), and these issue costs are to be amortized to the expected maturity of the facilities. This carrying value is equal to to its fair value. At December 31, 2018, none (2017: $21.3 million) of the total $75.0 million (2017: $111.3 million) bank and other loans was variable interest rate debt and subject to floating interest rate risk, with the remainder being fixed rate debt. 10. Derivatives and Financial Instruments (continued) Fair value measurements Forward foreign currency exchange rate contracts The fair value of these contracts was calculated by determining what the Company would be expected to receive or pay on termination of each individual contract by comparison to present market prices. LME derivative contracts The fair value of these contracts has been calculated by valuing the contracts against the equivalent forward rates quoted on the LME. Deferred contingent consideration Disclosure of the basis of calculation of the fair value of deferred contingent consideration is included within Note 2 of the consolidated financial statements. Deferred consideration The deferred consideration is a fixed amount that was determinable at the date of the acquisition of the Specialty Metals business and paid in 2018. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly. Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data. The fair values of the financial instruments of the Group at December 31, 2018, were analyzed using the hierarchy as follows:
| In millions | Total |  | Level 1 |  | Level 2 |  | Level 3 |
| Derivative financial assets: |  |  |  |  |  |  |  |
| Foreign currency contract assets | $ | 0.1 |  |  | $ | — |  |  | $ | 0.1 |  |  | $ | — |  |
| Interest bearing loans and borrowings: |  |  |  |  |  |  |  |
| Loan Notes due 2021 | (24.8 | ) |  | — |  |  | (24.8 | ) |  | — |  |
| Loan Notes due 2023 | (25.9 | ) |  | — |  |  | (25.9 | ) |  | — |  |
| Loan Notes due 2026 | (26.4 | ) |  | — |  |  | (26.4 | ) |  | — |  |
| Other financial liabilities: |  |  |  |  |  |  |  |
| Deferred contingent consideration | (0.9 | ) |  | — |  |  | — |  |  | (0.9 | ) |
The following table presents the changes in Level 3 instruments for the year ended December 31, 2018.
| In millions | 2018 |
| Balance at January 1 | $ | 1.0 |  |
| Payments made during year | (0.8 | ) |
| Unwind of discount on deferred consideration | (0.2 | ) |
| Remeasurement of deferred consideration (recognized in acquisition-related costs) | 0.9 |  |
| Balance at December 31 | $ | 0.9 |  |
| Total losses for the period included in profit and loss for assets held at the end at December 31 | 0.7 |  |
| Change in unrealized (gains) or losses for the period included in profit and loss for assets held at the end at December 31 | $ | 0.7 |  |
The deferred contingent consideration relates to estimates of amounts payable in the future regarding acquisitions made in prior years. This deferred contingent consideration is based upon an estimate of the future profitability of the businesses versus targets agreed upon as part of the acquisitions.

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