for Fiscal Year Ended December 31, 2018
EnPro Industries, Inc. (“EnPro or we”) is a diversified manufacturer of proprietary engineered products used in critical applications. EnPro businesses manufacture high quality products and provide high quality services that are critical to the systems and equipment of our customers.
We manage our business as three segments: a Sealing Products segment, an Engineered Products segment, and a Power Systems segment.
Our Sealing Products segment includes three operating divisions, Garlock, Technetics and Stemco, that serve a wide variety of industries where performance and durability are vital for safety and environmental protection. Our products are used in many demanding environments, such as those characterized by high pressure, high temperature and chemical corrosion, and many of our products support critical applications with a low tolerance for failure.
Our Engineered Products segment includes two high performance industrial products businesses: GGB and Compressor Products International (CPI). GGB designs, manufactures and sells self-lubricating, non-rolling, metal polymer, engineered plastics, and fiber reinforced composite bearing products, as well as aluminum bushing blocks for hydraulic applications. CPI designs, manufactures, sells and services components for reciprocating compressors and engines.
Our Power Systems segment is composed of our Fairbanks Morse business, which designs, manufactures, sells and services heavy-duty, medium-speed diesel, natural gas and dual fuel reciprocating engines.
EnPro is committed to the highest standards in all aspects of its business. EnPro’s Code of Business Conduct, governing all individuals associated with the business, emphasizes integrity, ethics, and fairness, and elaborates on many of the legal and ethical principles to which we must all adhere.
All directors, officers and employees of EnPro and its subsidiaries, in the United States and worldwide (collectively the "Company"), are required to conduct business activities and operations in an ethical manner and in compliance with applicable laws, regulations, Company policies, and the standards set forth in the Code of Business Conduct.
No other commitment is more important than our commitment to ethical behavior and sound corporate governance. These principles are our most important asset as we seek the trust of our investors, customers, employees and the communities where we operate.
Our people, processes and organizational culture are aligned to attain our goal of continuous improvement in every facet of our corporation. Recruiting, training, empowering and retaining exceptionally talented people enables them to reach their full potential and enables our company to achieve exceptional performance.
Our growth is supported by the targeted and opportunistic deployment of capital to make acquisitions and other investments that increase the value we deliver to our customers and to our shareholders. Our careful selection and integration of acquisitions and well-planned investments in our facilities and equipment enable us to expand product offerings and enter new markets.
The following sets out the tax strategy of our UK parent companies: Coltec Finance Company Limited, Compressor Products Holdings Limited and Garlock (Great Britian) Limited, their subsidiaries, and other affiliated entities (“UK Group”) in relation to their UK tax affairs and related risk. This document is published in accordance with Schedule 19, Finance Act 2016 and was approved by the board of directors of our UK parent companies.
The tax strategy covers all applicable UK taxes including corporation, VAT, withholding, customs duties, stamp duties, employee taxes and other relevant taxes.
The UK Group is committed to complying with all applicable UK tax laws, rules and regulations in the jurisdictions in which we operate. The UK Group actively seeks to identify, evaluate, monitor and manage tax risk. Where there is significant uncertainty or complexity in relation to a risk, we seek the advice of subject-matter experts from reputable accounting or law firms to minimize tax risk.
The tax strategy, the governance framework, and management of tax risk for the UK Group is ultimately the responsibility of the corporate tax team, supported by the Chief Financial Officer and the management within the UK Group. The tax function operates in compliance with Company policies and procedures and the internal control framework, and is subject to review by the Company’s Internal Audit Department and external auditors.
UK Tax Planning
The UK Group has a low tolerance to tax risk. The UK Group considers tax planning as part of its overall business strategy and takes advantage of tax incentives offered by governments in an effort to reduce the Company’s effective tax rate. These decisions are always aligned with business and commercial objectives and comply with applicable tax laws.
We strive to be fully compliant with tax legislation, ensuring that cross-border intercompany transactions are recorded in accordance with the arm’s length principle. We exercise sound tax practices in regard to other transactions to ensure compliance with applicable tax laws and regulations. We engage external tax advisors as necessary to minimize risk of uncertainty and/or disputes.
Relationship with HM Revenue & Customs (HMRC)
It is our goal to work collaboratively with HMRC and to ensure compliance with timely and accurate filing of returns and applicable disclosure requirements. We are committed to being open and transparent with the HMRC to minimize tax issues and resolve any tax disputes.
Dated: December 13, 2018