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   &lt;div align="left" style="font-size: 10pt; margin-top: 10pt"&gt;&lt;b&gt;11. Commitments and contingencies (&amp;#163; in millions)&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"&gt;We are involved in various litigation, claims and administrative proceedings arising in the
   normal course of business. Amounts recorded for identified contingent liabilities are estimates,
   which are regularly reviewed and adjusted to reflect additional information when it becomes
   available. We are indemnified by our former owner, Ingersoll Rand Company Limited, for certain
   matters as part of Ingersoll Rand&amp;#8217;s sale of the Company. While adverse decisions in certain of
   these litigation matters, claims and administrative proceedings could have a material effect on a
   particular quarter&amp;#8217;s or year&amp;#8217;s results of operations, subject to the uncertainties inherent in
   estimating future costs for contingent liabilities and the benefit of the indemnity from Ingersoll
   Rand, management believes that any future accruals, with respect to these currently known
   contingencies, would not have a material effect on the financial condition, liquidity or cash flows
   of the Company.
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"&gt;The previously reported tort claim brought against the Company in 2008 in the Prakhanong
   Provincial court, Thailand by Kaona Power Supply Co. Ltd was settled on July&amp;#160;13, 2010, with an
   immaterial payment by the Company.
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"&gt;In November&amp;#160;2007, Local 313 of IUE-CWA, the union that represents certain employees at the
   Company&amp;#8217;s Painted Post facility (the &amp;#8220;IUE&amp;#8221;) made an offer to have its striking members return to
   work under the terms of the previously expired union agreement. The Company rejected that offer
   and a lockout of the represented employees commenced.
   Approximately one week later, after reaching an impasse in negotiations, the Company exercised
   its right to implement the terms of its last contract offer, ended the lockout, and the employees
   represented by the IUE agreed to return to work under the implemented terms. Subsequently, the IUE
   filed several unfair labor practice (&amp;#8220;ULP&amp;#8221;) charges against the Company with Region 3 of the
   National Labor Relations Board (&amp;#8220;NLRB&amp;#8221;), asserting multiple allegations arising from the protracted
   labor dispute, its termination, contract negotiations and related matters.
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   &lt;div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"&gt;Region 3 of the NLRB decided to proceed to complaint on only one-third of the ULP allegations
   asserted by the IUE, while the remaining claims were dismissed. Notably, the NLRB found that many
   of the critical aspects of the Company&amp;#8217;s negotiations with the IUE were handled appropriately, that
   the union&amp;#8217;s strike was not an unfair labor practice strike and the Company&amp;#8217;s declaration of impasse
   and its unilateral implementation of its last offer were lawful.
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"&gt;The claims that proceeded to complaint before the NLRB included the Company&amp;#8217;s handling of the
   one week lockout, the negotiation of the recall process used to return employees to the facility
   after reaching impasse and lifting the lockout, and the termination of two employees who engaged in
   misconduct on the picket line during the strike. The trial of this matter took place before a NLRB
   Administrative Law Judge (the &amp;#8220;ALJ&amp;#8221;) in Elmira and Painted Post, N.Y. during the summer of 2009.
   On January&amp;#160;29, 2010, the ALJ issued his decision in which he found in favor of the union on some
   issues and upheld the Company&amp;#8217;s position on others. The Company continues to believe it complied
   with the law with respect to the allegations that led to the adverse ALJ ruling, and it has
   appealed these rulings to the NLRB in Washington, D.C. While the Company believes it should
   ultimately prevail with respect to these ULP allegations, several levels of appeal may be
   necessary. The Company anticipates that any impact arising from the ULP allegations will not have
   a material adverse effect on the Company&amp;#8217;s financial condition. The appellate process could
   reasonably take 3 to 5&amp;#160;years and potentially even longer to resolve with finality.
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"&gt;During the three months ended September&amp;#160;30, 2009, the Company received notification from the
   current plan trustees of one of its subsidiaries&amp;#8217; pension plans in the United Kingdom that the plan
   may not have been properly amended to achieve sex equalization. The third-party trustee at the time
   action was taken believes that it had taken the appropriate steps to properly amend the plan. If
   it is determined that sex equalization was not achieved, certain benefits would be recalculated by
   reference to a normal retirement date of 60 for both men and women, which we believe could
   result in a potential liability of up to approximately &amp;#163;4.0 ($6.1).
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      <ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 5
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