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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2022-03-31 compared with 2021-03-29 · 29 added, 41 removed, 5 unchanged (93% of the section changed)

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

principal market risks are our exposure to changes in interest rates and foreign currency exchange rates.

We have external

borrowings that are subject to the risk of higher interest charges associated with increases in interest rates.

As of December

31, 2020, we had £145.8 million ($199.0 million) and €93.1 million ($114.3 million) of senior bank debt that is subject

to a floating interest rate charge that can vary with the 3-month LIBOR and the 3-month EUROBOR rates.

If the floating interest

rates increased by 1%, the additional interest charge would be approximately $2.9 million.

If the floating interest rates increased

by 5%, the additional interest charge would be approximately $14.6 million.

above additional interest charges do not consider the interest rate swaps that the Company has entered into in connection with

the refinancing.

These swaps, which are effective until October 1, 2023 cover approximately 2/3rds of the debt level and have

been designed to negate the impact of any interest rate increases and should the interest rates move as above, then the actual

additional interest charge would be significantly less than shown.

principal market risks are our exposure to changes in foreign currency exchange rates.

the Company’s refinancing in May 2021, the external borrowings of £235.0 million ($316.7 million) are provided at a fixed

Therefore movements in rates such as LIBOR do not impact on the current borrowings and the only fluctuation that is expected to

be reported will be that solely caused by movements in the exchange rates between the Company’s functional currency and its reporting

Currency Exchange Rate Risk

operations are conducted in various countries around the world and we receive revenue and pay expenses from these operations in

a number of different currencies.

As such, our earnings are subject to movements in foreign currency exchange rates when transactions

are denominated in (i) currencies other than GBP, which is our functional currency, or (ii) the functional currencies of our subsidiaries,

which is not necessarily GBP.

Excluding intercompany balances, our Euro functional currency net liabilities total approximately

$99.5 million and our US Dollar functional currency net assets total approximately $2.8 million.

We use a sensitivity analysis

model to measure the impact of a 10% adverse movement of foreign currency exchange rates against the US Dollar.

A hypothetical

10% adverse change in the value of the Euro and the US Dollar relative to GBP as of December 31, 2020 would result in translation

adjustments of approximately $8.1 million and $0.3 million, respectively, recorded in other comprehensive loss.

operations are conducted in various countries around the world and we receive revenue and pay expenses from these operations in a number

of different currencies.

As such, our earnings are subject to movements in foreign currency exchange rates when transactions are denominated

in (i) currencies other than GBP, which is our functional currency, or (ii) the functional currencies of our subsidiaries, which is not

necessarily GBP.

Excluding intercompany balances, our Euro functional currency net assets total approximately $11.8 million and our US

Dollar functional currency net assets total approximately $13.8 million.

We use a sensitivity analysis model to measure the impact of

a 10% adverse movement of foreign currency exchange rates against the US Dollar.

A hypothetical 10% adverse change in the value of the

Euro and the US Dollar relative to GBP as of December 31, 2021, would result in favorable translation adjustments of approximately $1.0

million and $1.4 million, respectively, recorded in other comprehensive loss.

within our trading results are earnings outside of our functional currency.

Retained earnings earned in Euros and in US Dollars

in the period ended December 31, 2020 were €2.1 million and a loss of $12.6 million, respectively.

A hypothetical 10% adverse

change in the value of the Euro and the US Dollar relative to GBP as of December 31, 2020 would result in translation adjustments

of approximately $0.2million and $1.2 million, respectively, recorded in trading operations.

majority of the Company’s trading is in GBP, the functional currency, although the reporting currency of the Company is

the US Dollar.

As such, changes in the GBP:USD exchange rate have an effect on the Company’s results.

A 10% weakening of

GBP against the US Dollar would change the trading operational results by approximately $1.8 million and would result in translation

Retained gains earned in Euros and retained losses earned

in US Dollars in the twelve-months ended December 31, 2021, were €2.5 million and $13.3 million, respectively.

A hypothetical 10%

adverse change in the value of the Euro and the US Dollar relative to GBP as of December 31, 2021, would result in translation adjustments

of approximately $0.3 million favorable and $1.2 million unfavorable, respectively, recorded in trading operations.

majority of the Company’s trading is in GBP, the functional currency, although the reporting currency of the Company is the US

As such, changes in the GBP:USD exchange rate have an effect on the Company’s results.

A 10% weakening of GBP against the

US Dollar would change the trading operational results favorably by approximately $2.2 million and would result in favorable translation

adjustments of approximately $10.7 million, recorded in other comprehensive loss.

further information regarding the new external borrowings, see Note 4 to the Consolidated Financial Statements, “Long Term

and Other Debt”.

FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL DATA.

further information regarding the new external borrowings, see Note 13 to the Consolidated Financial Statements, “Long Term

and Other Debt”.

Financial Statements and Supplementary Data .

financial statements are set forth below following the signature page.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk