ITT Industries Limited - Limited company accounts 23.2

REGISTERED NUMBER: 00814151 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTOR AND

FINANCIAL STATEMENTS

FOR THE PERIOD 3 JULY 2022 TO 1 JULY 2023

FOR

ITT INDUSTRIES LIMITED

Page

Company Information

1

Strategic Report

2

to

4

Report of the Director

5

Report of the Independent Auditors

6

to

9

Statement of Comprehensive Income

10

Statement of Financial Position

11

Statement of Changes in Equity

12

Notes to the Financial Statements

13

to

22

DIRECTOR:

Mr R Patel

SECRETARY:

Mr R Patel

REGISTERED OFFICE:

Unit 4-Faraday Office Park

Rankine Road

Basingstoke

Hampshire

Hampshire

RG24 8QB

REGISTERED NUMBER:

00814151 (England and Wales)

AUDITORS:

Seymour Taylor Limited, Statutory Auditor

First Floor North

40 Oxford Road

High Wycombe

Buckinghamshire

HP11 2EE

The principal activity of the company continues to be the development, sale and service of a range of products in the field of industrial technology. The company consists of 2 separate divisions as follows -

- IP-Goulds Pumps who manufacture engineered fluid process equipment serving a diversified mix of customers in global infrastructure industries such as oil & gas, mining, power generation, chemical, pharmaceutical and other process markets and is an aftermarket service provider.

- Shared Services - the head office function of the company which centrally administers the group taxation, insurance, pensions, accounts consolidation, legal compliance, accounts receivable/credit control, payroll responsibilities and facility management.

The Directors report an operating loss before tax of £1.6m (2022: operating profit before tax of £1.1m).

The 2022 profit included a one time £3.2m profit on the development of the Basingstoke property.

The company's key measurements of effectiveness of its operations are:

2023

2022

£'000

£'000

Turnover

2,303

3,559

Operating (Loss) / Profit

(1,675)

1,106

Operating margin

(72.7%)

31.0%

Total net assets

11,334

13,404

IP-Goulds Pumps and Engineered Valves

ITT PRO Services® provides replacement parts, repair and upgrade services, reliability and maintenance programs, and asset management assistance to customers with the goals of extending equipment life, reducing Total Cost of Ownership (TCO), and increasing plant output. PRO Services includes ProSmart® wireless predictive monitoring and PumpSmart® variable speed drive systems.

ITT Goulds Pumps provides Pumps to the Chemical, Petrochemical, Power and general industry. Pure-flo Valves provides high quality hygienic valves to the Pharmaceutical Industry.

The division has a number of programs in its management system to run the business. The business operates in a highly competitive environment on price and service with many large competitors. On time delivery is monitored very closely and the division uses lean manufacturing tools and philosophies to reduce cost and improve service levels. The division uses a Goal Deployment Process (GDP) and Key Business Metrics (KBM) to track key metrics on a monthly basis. Value Based Commercial Excellence (VBCE) is used with the aim to maximise the value proposition of our products, this also includes work to adjust pricing to allow for the impact of the price movements of raw materials. IP-Goulds Pumps also invests heavily in its people and Value Based Leadership Development. (VBLD) is the tool used to develop people and talent.

The company continues to invest in talent to grow the business, and have increased the sales force to specifically target North Sea Oil and Gas companies.

Shared Services Division

The division provides a head office function to deal with all external reporting matters such as filing Accounts with Companies House and also liaises with customers to resolve any invoicing queries and collect outstanding balances.

PRINCIPAL RISKS AND UNCERTAINTIES

Competitive pressure in Europe and worldwide is a continued risk for the company, which could result in it losing sales to its key competitors. The company manages these risks by providing fast response times to customer requirements and reliable delivery dates, and maintaining strong relationships with customers, trying to meet their requirements with added value design solutions.

The company manages this competitive risk by providing value added services and delivering high quality products to its customers.

The company sources products from Europe, USA and Far East and is therefore exposed to movements in the Euro and US Dollar to Pound exchange rate. To mitigate the foreign exchange risk the company manages currency debtors and creditors to reduce exposure; the degree of risk does not justify financial hedging instruments.

Currency Fluctuation

The company will not speculate on currency fluctuations and is ensuring foreign exchange exposure is kept to a minimum by selling foreign currency on a monthly basis.

The company is exposed to commodity price due to fluctuating rates in respect of certain materials sourced from abroad. Some of these costs can be, and are passed on to customers which reduces the financial impact of the risk.

Duties and Border Control Issues

The company has followed all government guidance to ensure goods flow in and out of the UK as not to disrupt sales

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The company's activities expose it to a number of financial risks including price risk, credit risk, cash flow risk and liquidity risk.

Cash flow risk

The company's activities expose it to the financial risks of changes in foreign currency rates. The company does not use foreign exchange forward contracts or interest rate swap contracts to hedge these exposures.

Credit risk

The company's principal financial assets are bank balances and cash, trade receivables and amounts owed by group undertakings. The amounts in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event, which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

The company has no significant concentration of credit risk, with exposure spread over a large number of customers.

Liquidity risk

The company participates in the cash pooling arrangements of the wider ITT global group and thus the company is reliant on third party debt to support paying debts as they fall due. Accordingly the Directors have obtained a letter of support from ITT Industries Luxembourg Sarl, which is the parent company of ITT Industries Holdings Limited which in turn is the parent of ITT Industries Limited.

Price risk

The company is exposed to commodity price risk. The company does not manage its exposure to commodity price risk due to cost benefit considerations.

CORPORATE AND SOCIAL RESPONSIBILITY

The company places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the company.

The company and ITT globally fosters an open and transparent culture across the enterprise promoting empowerment and innovation supporting ITT's competitive advantage as an employer and supplier of choice through the Values, the Code of Conduct, and ethical leadership training.

The company recognises the importance of its environmental responsibilities. It employs an Environmental, Health and Safety coordinator to ensure that the company operates within group policies and implements initiatives designed to minimise the company's impact on the environment, including safe disposal of manufacturing waste, recycling and reducing energy consumption.

There are very stringent Environmental Health and Safety guidelines used throughout the company and standards are frequently reviewed through audits.

The company is fully committed to the CRC Energy Efficiency Scheme and continues to monitor and control carbon emissions through efficiency in power utilisation.

FUTURE DEVELOPMENTS

The group has considerable financial resources, and fully supports growing the UK business to become profitable and growing the oil and gas industries specifically. As mentioned above new sales personnel and an engineer have been recruited to target the after sales market. The Directors expect to see good performance in both sales and profitability with expansion of the existing customer base and with the ongoing development of the aftersales market.

ON BEHALF OF THE BOARD:

Mr R Patel - Director

28 March 2024

The director presents his report with the financial statements of the company for the period 3 July 2022 to 1 July 2023.

DIVIDENDS

No dividends will be distributed for the period ended 1 July 2023.

DIRECTORS

Mr R Patel has held office during the whole of the period from 3 July 2022 to the date of this report.

Other changes in directors holding office are as follows:

Mr S D Wilson - resigned 17 August 2022

Mr D Gajre - resigned 30 April 2023

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Seymour Taylor Limited, Statutory Auditor, will be re-appointed in accordance with section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

Mr R Patel - Director

28 March 2024

Qualified Opinion

We have audited the financial statements of ITT Industries Limited (the 'company') for the period ended 1 July 2023 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion, except for the effects of the matter described in the Basis for qualified opinion section, the financial statements:

- give a true and fair view of the state of the company's affairs as at 1 July 2023 and of its loss for the period then ended;

- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

- have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for qualified opinion on financial statements

We were not appointed as auditor of the company until after 2 July 2022 and thus did not observe the counting of physical inventories at the end of the year to 2 July 2022. Furthermore, the counting of physical inventories at the end of the period to 3 July 2021 was also not observed. We were unable to satisfy ourselves by alternative means concerning the quantities and condition of inventory held at 2 July 2022 and at 3 July 2021, with a carrying value of £59,168 and £303,071 respectively, by using other audit procedures. Consequently, we were unable to determine whether any adjustment to the valuation at those dates were necessary or whether there was any consequential effect on the cost of sales for the period ended 2 July 2022.

Our audit opinion on the financial statements for the year ended 2 July 2022 was modified accordingly. Our opinion on the current year's financial statements is also modified because of the possible effect of these matters on the comparability of the current year's figures and the corresponding figures.

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Director.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page five, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the director 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 the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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 (UK) 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, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities we considered the following:

- the nature of the industry and sector, control environment and business performance including the key drivers for directors' remuneration, bonus levels and performance targets;

- results of our enquiries of management about their own identification and assessment of the risks of irregularities;

- any matters we identified having made enquiries of management about their policies and procedures relating to:

- identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance;

- detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

- the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;

- the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and local tax legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements, but compliance with which may be fundamental to the company's ability to operate.

Audit response to risks identified

As a result of performing the above our procedures to respond to the risks identified included the following:

- reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

- enquiring of management and external legal advisors about actual and potential litigation and claims;

- performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

- obtained an understanding of provisions and held discussions with management to understand the basis of recognition or non-recognition of tax provisions; and

- in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Joanne Kingsnorth FCA (Senior Statutory Auditor)

for and on behalf of Seymour Taylor Limited, Statutory Auditor

First Floor North

40 Oxford Road

High Wycombe

Buckinghamshire

HP11 2EE

28 March 2024

TURNOVER

4

2,303

3,559

Cost of sales

1,931

2,978

GROSS PROFIT

372

581

Administrative expenses

5,498

5,093

(5,126

)

(4,512

)

Other operating income

3,451

5,618

OPERATING (LOSS)/PROFIT

6

(1,675

)

1,106

Exceptional item

7

-

14,031

(1,675

)

(12,925

)

Interest receivable and similar income

8

670

-

(1,005

)

(12,925

)

Interest payable and similar expenses

9

841

384

LOSS BEFORE TAXATION

(1,846

)

(13,309

)

Tax on loss

10

224

(223

)

LOSS FOR THE FINANCIAL PERIOD

(2,070

)

(13,086

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

(2,070

)

(13,086

)

FIXED ASSETS

Tangible assets

11

216

318

CURRENT ASSETS

Stocks

12

200

59

Debtors: amounts falling due within one year

13

12,941

14,466

Debtors: amounts falling due after more than one year

13

-

278

Cash at bank

651

1,185

13,792

15,988

CREDITORS

Amounts falling due within one year

14

2,671

2,895

NET CURRENT ASSETS

11,121

13,093

TOTAL ASSETS LESS CURRENT LIABILITIES

11,337

13,411

PROVISIONS FOR LIABILITIES

16

3

7

NET ASSETS

11,334

13,404

CAPITAL AND RESERVES

Called up share capital

17

10,001

10,001

Capital redemption reserve

18

529

529

Retained earnings

18

804

2,874

SHAREHOLDERS' FUNDS

11,334

13,404

The financial statements were approved by the director and authorised for issue on 28 March 2024 and were signed by:

Mr R Patel - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£'000

£'000

£'000

£'000

Balance at 4 July 2021

10,001

15,960

529

26,490

Changes in equity

Total comprehensive income

-

(13,086

)

-

(13,086

)

Balance at 2 July 2022

10,001

2,874

529

13,404

Changes in equity

Total comprehensive income

-

(2,070

)

-

(2,070

)

Balance at 1 July 2023

10,001

804

529

11,334

1.	GENERAL INFORMATION

ITT Industries Limited is a private company limited by shares and incorporated in England and Wales. The address of the company's registered office is Unit 4-Faraday Office Park, Rankine Road, Basingstoke, Hampshire, England, RG24 8QB. The registered number is 00814151.

The principal activity of the company is that of the development, manufacture and sale of a range of products in the field of industrial technology.

The presentation currency of these financial statements is Sterling (£), being the currency of the primary economic market in which the entity operates (its functional currency). All amounts in these financial statements have been rounded to the nearest £1,000 unless stated otherwise.

The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

- Section 7 'Statement of Cash Flows' - Presentation of a statement of cash flow and related notes and disclosures;

- Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instrument Issues' - Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

- Section 33 'Related Party Disclosures' - Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of ITT Inc. These consolidated financial statements are available from its registered office, 1133 Westchester Avenue, White Plains, NY 10604, United States of America.

Going concern

At the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company is dependent upon continued support from the parent company, ITT Industries Luxembourg S.A.R.L., who have provided written confirmation of their willingness to provide continued financial support to the company for the foreseeable future, defined as at least 12 months from the date of signing the financial statements for the year ended 1 July 2023. Based on this support, the director considers it appropriate to prepare these financial statements on the going concern basis.

Turnover

Turnover represents amounts receivable for goods and services provided in the normal course of business, net of trade discounts, VAT and other sales related taxes. revenue is recognised when contractual obligations have been completed.

Commission income comprises commission received from Industrial Process around the world. This income is for the sales and technical support supplied by the Industrial UK staff to the various global businesses.

Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold land and buildings - The period of the lease or economic life if shorter

Plant and equipment - 3 to 20 years straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Financial instruments

The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments' of FRS 102 to all of its financial statements.

Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Taxation

The tax expense represents the sum of the current tax expense and deferred tax expense. Current tax assets are recognised when tax paid exceeds the tax payable.

Current and deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited to other comprehensive income or equity, when the tax follows the transaction or event it relates to and is also charged or credited to other comprehensive income, or equity.

Current tax assets and current tax liabilities and deferred tax assets and deferred tax liabilities are offset, if and only if, there is a legally enforceable right to set off the amounts and the entity intends either to settle on the net basis or to realise the asset and settle the liability simultaneously.

Current tax is based on taxable profit for the year. Current tax assets and liabilities are measured using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based on tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax liabilities are recognised in respect of all timing differences that exist at the reporting date. Timing differences are differences between taxable profits and total comprehensive income that arise from the inclusion of income and expenses in tax assessments in different periods from their recognition in the financial statements. Deferred tax assets are recognised only to the extent that it is probable that they will be recovered by the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination and the amounts that can be deducted or assessed for tax. The deferred tax recognised is adjusted against goodwill.

Foreign exchange

Transactions in currencies other than the functional currency (foreign currency) are initially recorded at the exchange rate prevailing on the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of the transaction, or, if the asset or liability is measured at fair value, the rate when that fair value was determined.

Leases

Rentals payable under operating leases, including any lease incentives received, are charged to the profit or loss on a straight line basis over the term of the relevant lease.

Retirement benefits

For defined contribution schemes the amount charged to profit or loss is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments.

Cash and cash equivalents

Cash and cash equivalents are basic financial instruments and include cash in hand and deposits held at call with banks.

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Provisions

Provision is made on a current basis for any anticipated losses on incomplete contracts. Amounts provided for such anticipated losses in excess of related work-in-progress are deducted from stocks and work-in-progress in accordance with FRS 102 Sections 13 and 21. Warranty provisions are included in provisions for liabilities and charges.

3.	JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

4.

TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

Period

Period

3.7.22

4.7.21

to

to

1.7.23

2.7.22

£'000

£'000

United Kingdom

1,248

2,441

Europe

540

503

Central and South America

10

75

Africa and the Middle East

422

525

Far East

83

15

2,303

3,559

5.	EMPLOYEES AND DIRECTORS

Period

Period

3.7.22

4.7.21

to

to

1.7.23

2.7.22

£'000

£'000

Wages and salaries

3,757

3,427

Social security costs

395

448

Other pension costs

422

542

4,574

4,417

The average number of employees during the period was as follows:

Period

Period

3.7.22

4.7.21

to

to

1.7.23

2.7.22

Finance and administration

24

26

Sales and distribution

13

13

Production

7

7

44

46

Period

Period

3.7.22

4.7.21

to

to

1.7.23

2.7.22

£'000

£'000

Directors' remuneration

130

213

Directors' pension contributions to money purchase schemes

40

65

The number of directors to whom retirement benefits were accruing was as follows:

1

2

6.	OPERATING (LOSS)/PROFIT

The operating loss (2022 - operating profit) is stated after charging/(crediting):

Period

Period

3.7.22

4.7.21

to

to

1.7.23

2.7.22

£'000

£'000

Other operating leases

362

396

Depreciation - owned assets

102

124

Loss on disposal of fixed assets

1

-

Auditors' remuneration

25

35

Foreign exchange differences

97

(110

)

7.	EXCEPTIONAL ITEMS

During the comparative period the company wrote off the debt from its immediate parent company ITT Industries Holdings Limited on the basis that it is irrecoverable.

Period

Period

3.7.22

4.7.21

to

to

1.7.23

2.7.22

£'000

£'000

Administrative expenses

Intercompany balance write off

-

14,031

-

14,031

The intercompany balance with ITT Holdings has been written off this year also however has been included in administrative expenses as is not deemed to be exceptional in value as it was in the comparative year.

8.

INTEREST RECEIVABLE AND SIMILAR INCOME

Period

Period

3.7.22

4.7.21

to

to

1.7.23

2.7.22

£'000

£'000

Intercompany interest

670

-

9.

INTEREST PAYABLE AND SIMILAR EXPENSES

Period

Period

3.7.22

4.7.21

to

to

1.7.23

2.7.22

£'000

£'000

Intercompany interest

841

384

10.

TAXATION

Analysis of the tax charge/(credit)

The tax charge/(credit) on the loss for the period was as follows:

Period

Period

3.7.22

4.7.21

to

to

1.7.23

2.7.22

£'000

£'000

Deferred tax

224

(223

)

Tax on loss

224

(223

)