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 2019, the Company had $0.3 million (2018: $0.1 million) derivative financial instruments disclosed within accounts and other receivables. The value of derivative financial instruments recorded in liabilities in 2019 and 2018 was less than $0.1 million.

At December 31, 2019, the fair value of forward foreign currency exchange contracts deferred in equity was nil (2018: loss of $0.4 million and 2017: loss of $0.7 million). During 2019, a gain of $0.1 million (2018: loss of $0.1 million and 2017: gain of $0.6 million) has been transferred to the consolidated income statement in respect of contracts that have matured in the year.

Aluminum forward purchase contracts Aluminum 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 2019 the Group purchased approximately 12,000 (2018: 11,500) metric tons of primary aluminum. The processed waste can be sold as scrap aluminum at prices linked to the LME price. Based on the 2019 level of aluminum purchases, a $100 increase in the LME price of aluminum would increase our Gas Cylinders segment's costs by approximately $1.2 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, 2019 and 2018, the Company held various forward foreign currency exchange contracts designated as hedges in respect of forward sales for U.S. dollars, euros and Japanese yen 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, euros and Canadian 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.



	December 31, 2019
Sales hedges	U.S. dollars	Euros	Japanese Yen
Contract totals/£m	0.1	7.6	0.1
Maturity dates	01/20	01/20 to 03/20	01/20
Exchange rates	1.2914	€1.1551 to €1.1750	JPY	142.86



Purchase hedges	U.S. dollars	Euros		Canadian dollars
Contract totals/£m	1.3	0.8		7.0
Maturity dates	03/20	03/20		01/20
Exchange rates	1.3228	€	1.1663	$1.7137 to $1.7664



	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

28.449

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.

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.

At December 31, 2019, the Company had no overdrafts, in 2018 $3.5 million were disclosed within other current liabilities with its carrying value being equal to its fair value. All of the balance at December 31, 2018 was subject to variable interest rate and subject to floating interest rate risk.

Bank loans At December 31, 2019, bank and other loans of $92.5 million (2018: $75.0 million) were outstanding. At December 31, 2019, bank and other loans are shown net of issue costs of $1.1 million (2018: $1.4 million), and these issue costs are to be amortized to the expected maturity of the facilities. This carrying value is equal to its fair value. At December 31, 2019, $17.5 million (2018: none) of the total $92.5 million (2018: $75.0 million) bank and other loans was variable interest rate debt and subject to floating interest rate risk, with the remainder being fixed rate debt.

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.

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.



In millions	Total		Level 1		Level 2		Level 3
Derivative financial assets:
Foreign currency contract assets	$	0.3	$	—	$	0.3	$	—
Interest bearing loans and borrowings:
Loan Notes due 2021	25.0		—		25.0		—
Loan Notes due 2023	24.9		—		24.9		—
Loan Notes due 2026	24.8		—		24.8		—
Revolving credit facility	16.7		—		16.7		—
Other financial liabilities:
Deferred contingent consideration	0.5		—		—		0.5



In millions	2019
Balance at January 1	$	0.9
Payments made during year	(0.5		)
Unwind of discount on deferred consideration	0.2
Remeasurement of deferred consideration (recognized in acquisition-related costs)	(0.1		)
Balance at December 31	$	0.5
Total losses for the period included in profit and loss for assets held at the end at December 31	0.1
Change in unrealized (gains) or losses for the period included in profit and loss for assets held at the end at December 31	$	0.1

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.