The Company's financial instruments comprise bank and other loans, senior loan notes, derivatives and trade payables. 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 magnesium and 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. We do not use market risk-sensitive instruments for trading or speculative purposes. In 2022, the Company had $0.7 million (2021: $0.1 million) derivative financial instruments recorded within accounts and other receivables. The value of derivative financial instruments recorded in other current liabilities in 2022 was $0.4 million (2021: $0.1 million).

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 its joint venture partners.

At December 31, 2022 and 2021, the Company held various forward foreign currency exchange contracts designated as hedges in respect of forward sales for U.S. dollars, euros, Canadian dollars 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, Canadian dollars, Australian dollars and Chinese yuan 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 overleaf, with the value denominated in GBP sterling, given that it is the currency the majority of the contracts are held in.

December 31, 2022

Sales hedges

U.S. dollars

Euros

Canadian Dollars

Contract totals/£m

13.4

12.8

0.1

Maturity dates

01/23 to 03/23

01/23

Exchange rates

$1.1207 to $1.2083

€1.1234 to €1.1468

$1.6320

Purchase hedges

U.S. dollars

Euros

Canadian dollars

Australian dollars

Chinese yuan

Contract totals/£m

9.2

2.6

9.5

1.0

1.6

Maturity dates

01/23 to 04/23

01/23

01/23 to 03/23

Exchange rates

$1.1040 to $1.2084

€1.1437 to €1.2240

$1.6796 to $1.6239

$1.7787

¥8.3906 to ¥8.4126

December 31, 2021

Sales hedges

U.S. dollars

Euros

Japanese Yen

Contract totals/£m

5.0

9.8

0.1

Maturity dates

01/22 to 03/22

Exchange rates

$1.3455 to $1.3788

€1.1697 to €1.1906

¥155.2443 to ¥156.6793

Purchase hedges

U.S. dollars

Euros

Canadian dollars

Australian dollars

Chinese yuan

Contract totals/£m

4.5

3.5

7.5

0.9

1.5

Maturity dates

01/22 to 04/22

01/22 to 02/22

01/22

03/22

Exchange rates

$1.3451 to $1.3781

€1.1812 to €1.1662

$1.7172 to $1.6762

$1.8598

¥8.6126

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.

The carrying value approximates 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. and U.K.

At December 31, 2022, bank and other loans of $81.9 million (2021: $60.8 million) were outstanding. At December 31, 2022, bank and other loans are shown net of issue costs of $0.7 million (2021: $1.2 million), and these issue costs are to be amortized to the expected maturity of the facilities. This carrying value approximates to its fair value at December 31, 2022 and 2021 respectively. At December 31, 2022, $31.9 million (2021: $10.8 million) of the total $81.9 million (2021: $60.8 million) bank and other loans was variable interest rate debt and subject to floating interest rate risk, with the remainder being fixed rate debt.

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.


	December 31, 2022
In millions	Total		Level 1		Level 2		Level 3
Derivative financial assets:
Foreign currency contract assets	$	0.7	$	—	$	0.7	$	—
Derivative financial liabilities:
Foreign currency contract liabilities	0.4		—		0.4		—
Interest bearing loans and borrowings:

Loan Notes due 2023	25.0		—		25.0		—
Loan Notes due 2026	25.0		—		25.0		—
Revolving credit facility	31.9		—		31.9		—


	December 31, 2021
In millions	Total		Level 1		Level 2		Level 3
Derivative financial assets:
Foreign currency contract assets	$	0.1	$	—	$	0.1	$	—
Derivative financial liabilities:
Foreign currency contract liabilities	0.1		—		0.1		—
Interest bearing loans and borrowings:

Loan Notes due 2023	25.0		—		25.0		—
Loan Notes due 2026	25.0		—		25.0		—
Revolving credit facility	10.8		—		10.8		—