You are on page 1of 890

Spruce Point Capital

1
Disclaimer
Spruce Point Capital

This research presentation report expresses our research opinions, which we have based upon interpretation of certain facts and
observations, all of which are based upon publicly available information, and all of which are set out in this research presentation
report. Any investment involves substantial risks, including complete loss of capital. Any forecasts or estimates are for illustrative
purpose only and should not be taken as limitations of the maximum possible loss or gain. Any information contained in this report
may include forward looking statements, expectations, pro forma analyses and projections. You should assume these types of
statements, expectations, pro forma analyses and projections may turn out to be incorrect for reasons beyond Spruce Point Cap ital
Management LLC’s control. This is not investment advice nor should it be construed as such. Use of Spruce Point Capital
Management LLC’s research is at your own risk. You should do your own research and due diligence before making any investment
decision with respect to securities covered herein.

You should assume that as of the publication date of any presentation, report or letter, Spruce Point Capital Management LLC
(possibly along with or through our members, partners, affiliates, employees, and/or consultants) along with our subscribers has a
short position in all stocks (and/or are long puts/short call options of the stock) covered herein, including without limitat ion AMETEK
Inc. (“AME”), and therefore stand to realize significant gains in the event that the price of its stock declines. Following p ublication of
any presentation, report or letter, we intend to continue transacting in the securities covered therein, and we may be long, short, or
neutral at any time hereafter regardless of our initial recommendation.

This is not an offer to sell or a solicitation of an offer to buy any security, nor shall any security be offered or sold to any person, in
any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction. Spruce Point Capital
Management LLC is not registered as an investment advisor or broker/dealer.

To the best of our ability and belief, as of the date hereof, all information contained herein is accurate and reliable and d oes not omit
to state material facts necessary to make the statements herein not misleading, and all information has been obtained from public
sources we believe to be accurate and reliable, and who are not insiders or connected persons of the stock covered herein or who
may otherwise owe any fiduciary duty or duty of confidentiality to the issuer, or to any other person or entity that was breached by
the transmission of information to Spruce Point Capital Management LLC. However, Spruce Point Capital Management LLC
recognizes that there may be non-public information in the possession of AMETEK Inc. or other insiders of AMETEK Inc. that has not
been publicly disclosed by AMETEK Inc. Therefore, such information contained herein is presented “as is,” without warranty of any
kind – whether express or implied. Spruce Point Capital Management LLC makes no other representations, express or implied, as to
the accuracy, timeliness, or completeness of any such information or with regard to the results to be obtained from its use.
2
Brief Overview of Ametek
Spruce Point Capital

Business Description $ in mm except per share amounts


Stock Price $52.20 Valuation on Company Reported Metrics
Ametek is a global manufacturer of electronic Shares Outstanding 245.9 Metrics LTM Sept 14 2014E 2015E
instruments and electromechanical devices with Net Exercisable Options 2.2 EV/Sales 3.6x 3.5x 3.3x
operations in North America, Europe, Asia and Fully Diluted Shares 248.1 EV/EBITDA 13.8x 13.7x 12.5x
South America. The Company is listed on the Market Capitalization $12,953 Price/EPS 22.2x 21.7x 19.5x
New York Stock Exchange (symbol: AME). The Total Debt $1,636 Debt/EBITDA 1.6x 1.6x 1.4x
common stock of AMETEK is a component of the Less: Cash (1) $370
S&P 500 and the Russell 1000 Indices Total Enterprise Value $14,219
(1) $307.1m of cash is outside of the U.S.
The Company markets its products worldwide
Fiscal Year Ended Dec 31, LTM
through two operating groups, the Electronic
2008 2009 2010 2011 2012 2013 Sept '14
Instruments Group (“EIG”) and the
EIG $1,403 $1,147 $1,324 $1,647 $1,873 $2,035 $2,344
Electromechanical Group (“EMG”). EIG provides
EMG $1,128 $952 $1,147 $1,343 $1,462 $1,560 $1,596
monitoring, testing, calibration and display
devices for the process, aerospace, power and Total Sales $2,531 $2,098 $2,471 $2,990 $3,334 $3,594 $3,940
industrial markets. EMG produces engineered % growth 18.5% -17.1% 17.8% 21.0% 11.5% 7.8% 12.8%
electrical connectors for electronic applications; Gross Profit $801 $662 $824 $1,034 $1,180 $1,270 $1,397
precision motion control solutions; specialty % margin 31.6% 31.6% 33.3% 34.6% 35.4% 35.3% 35.5%
metals and alloys; and electric motors, blowers
EBITDA $496 $432 $555 $722 $851 $934 $1,030.6
and heat exchangers. End markets include
% margin 19.6% 20.6% 22.5% 24.2% 25.5% 26.0% 26.2%
aerospace and defense, medical devices, factory
automation, mass transit, petrochemical and Diluted EPS $1.03 $0.85 $1.18 $1.58 $1.88 $2.10 $2.35
other industrial markets. The Company grows Cash from Ops $247 $365 $423 $509 $612 $661 $723
primarily through strategic acquisitions focused Less: Capex ($44) ($33) ($39) ($51) ($57) ($63) ($73)
on markets in instrumentation and Less: Acquisitions ($463) ($73) ($539) ($474) ($748) ($414) ($824)
electromechanical devices. Adj Free Cash Flow ($260) $259 ($155) ($17) ($193) $183 ($175)
3
Source: Ametek
Ametek’s Historic Stock Price Rise
Spruce Point Capital
Defies Numerous Red Flags
Acquires
$60.00 Added to the 30.0
Beleaguered Zygo
S&P 500
for $280m
Index

Ametek Appears to Have Mislead


$50.00 Investors About the Results of 25.0
Dunkermotoren, its
Largest Deal Ever Completed. Its
French Auditor
CFO “Retires” and its Cost Savings
Theron Matthews, No Longer Audits
Estimates Explode Higher
Director of Operations Cameca
$40.00 at Chandler Engineering 20.0
Files Whistleblower Updates Equity Clawback
Language for Fraud and Ametek India Auditor Issues
Case Under Sarbanes
Financial Misstatements Qualified Opinion;
Oxley; Claims Improper
Notes Continued Failure of
Inventory and Revenue
Internal Controls Tied to Sales
$30.00 Booking 15.0
and Inventory Acct’g

“Lower of Cost or Announces Head of Audit


Market” Language FBI Charged
Departure of Committee
Dropped From Chris Stehm, Former
Electronics Quietly Resigns
Inventory Disclosure Controller and Head
$20.00 Division President Accountant at 10.0
Approx 50/50 LIFO
vs. FIFO Accounting Chandler Engineering,
Management and Later VP Finance
Adjusts and Accounting at
Operating Ametek’s HCC Division
$10.00 Income Bonus w/ Wire Fraud 5.0
Accelerates Target for
Change From ‘Excess
LIFO to FIFO Inventory’

$0.00 0.0

Volume Stock Price 4


Executive Summary

Proprietary and Confidential – May Not Be Distributed or Copied Without Spruce Point Capital Management, LLC Consent
Spruce Point Sees 30 - 50% Downside Risk
Spruce Point Capital
in Ametek For the Following Reasons:
Ametek Is An Aggressive Roll-up, Aiding EBITDA Margin Overstatement: With Limited Organic Growth, Ametek is
1 Under Pressure as its Strategy Appears to be Hitting a Brick Wall. It Underinvests in R&D and Buys What it Cannot
Develop. This Strategy Inherently Benefits its Margins and EPS, Which We Have Evidence that Suggests Are Overstated
By Up to 600bps. It Has Among the Highest Goodwill/Intangibles to Assets of Industrial Peers at 69% and Appears to Be
Using Aggressive Purchase Price Acct’g to Amortize Costs Too Slowly. Its Cumulative Cash Flow After Acquisition is
Negative and its Dependence on External Debt is Rising; Foreign Financial Filings Also Point to Funding Issues
Ametek Appears to Have Misled Investors: About the Performance of its Largest Acquisition Ever in 2012. Curiously,
2 its CFO “Retired” Quickly After and Equity Clawback Language Was Modified to Cover Acts of Fraud. We’ve Found
Other Instances Where Ametek Grossly Overestimated the Performance of its Acquisitions
A Whistleblower Case and FBI Indictment Appear Linked: A Whistleblower in 2009 Claimed He Observed Revenue
and Inventory Acct’g Irregularities. Curiously, in 2013 the FBI Charged Ametek’s VP of Finance For Embezzlement By
3 Submitting Phony Travel Expenses. The Two Individuals Worked Together at Ametek Chandler During the Same Period
Inventory Acct’g Changes Enable EPS Inflation: Ametek Has Surreptitiously Changed From LIFO to FIFO and
Dropped the “Lower of Cost or Market” Provision. Mgmt Has Made Quiet Adjustments to its Bonus Target for Obsolete
4 Inventory, (Yet Has Never Disclosed to Investors a Single Inventory Write-down!). It Appears Ametek is Spinning a
Story of Superior Procurement and Supply Chain Cost Savings as a Cookie Jar To Cover its Expanding Margins
E&Y Has Been Ametek’s Auditor Since the 1930s: Three Non-E&Y Auditors Abroad Appear to Have Concerns. In
France, Two Auditors Appear to Have Resigned. In India, its Auditor Issued a Qualified Opinion and Noted Inventory,
5 Sales and Travel Expense Issues! The Chairman of Ametek’s Audit Committee Mysteriously Retired in 2011 and its
Current Head of Internal Audit Is Not Even a Currently Licensed CPA Despite the Company’s Claim
Concerns With the “Asia Growth” Story: Ametek’s Head of Asia Recently Retired and Our Review of Some Key
Businesses Found Substantial Red Flags About its Success in the Region, Including Filing Delinquencies, an
6 Insolvent Operation, and Declining Financial Performance at its Oldest Asian Operating Entity
Massive Overvaluation, Insider Alignment w/Shareholders Is Broken: Insiders Own Just 2% and Ownership
Declines Every Year. Ametek Trades at a Huge Premium to the Sum of its Acquired Businesses on the Belief it Can
7 Add Superior Lasting Value Through Operational Improvements, Which Result in Abnormally High EBITDA Margins
and Continued 15%+ Growth Through Acquisitions. We Believe These Assumptions Need to Be Challenged 6
Evidence Suggesting Ametek’s EBITDA
Spruce Point Capital
Margins May Be Overstated By 400 – 600 bps
1. Ametek’s voracious acquisition strategy has resulted in a balance sheet bloated with goodwill + intangible assets: currently 69% of total assets!
I. Its fastest growing intangible asset category is “customer relationships,” which is unusual given it tends to announce its acquisition rational as acquiring
‘complementary’ products or “expanding penetration” further in existing markets to current customers. Few businesses enjoy nearly two decade
relationships, yet Ametek amortizes customer relationships over an avg period of 19 yrs, which appears very high relative to industrial peers
II. We estimate this accounting maneuver adds ~5% to the overstatement of its EBITDA and 2.5% to EPS
2. Ametek underinvests in self-funded R&D, and acquires what it does not build internally. In various deals we’ve analyzed, it has acquired companies where
the seller’s have borne the cost of R&D investment. Therefore, Ametek is essentially capitalizing the acquired R&D on its balance sheet vs. funding and
expensing R&D internally. We estimate Ametek’s underinvestment in R&D flatters its EBIT margins by approximately 200bps
3. A peer analysis of industrial competitors on gross margin vs. EBITDA margin suggests Ametek is an extreme outlier. Given its relatively low consolidated
gross margin, it has an unusually high EBITDA margin. A peer regression suggests its EBITDA margin should be closer to 20 – 21%, not 26%
4. We’ve obtained over 14 public financial statements across 10 countries of Ametek’s business entities. In total, we find the average EBITDA margin of these
targets to be approximately 21%. Our analysis shows evidence of recent margin contraction, not margin expansion across these operating businesses
5. Inventory accounting assumptions greatly affect both Gross and EBITDA margins. We have observed significant red flags warranting caution:
I. Ametek does not discuss factors affecting its Cost of Sales or Gross Margin in its SEC Filings, which is suspicious and opaque for its investors
II. A whistleblower case in 2009 claimed irregular revenue booking and accounting designed to understate the true cost of inventory. While the case was
never proven, we observe that Ametek’s Chandler Instruments, where the irregularities were noted, recently had its former Financial Controller and Chief
Accountant charged with embezzlement of submitting phony travel expenses by the FBI in October 2013!
III. Ametek’s consolidated inventory accounts dropped the “Lower of Cost or Market” provision, and it has quietly changed its mix from LIFO to FIFO. These
changes accelerated around the time of the whistleblower complaint. Its inventory turnover had also been steadily declining from 2011 to Q2’14
IV. Ametek’s management mysteriously added language in its Proxy Statement to adjust its operating income bonus target for ‘excess/obsolete inventory,’
yet it has never disclosed an inventory write-down to investors. Furthermore, management is also awarded annual bonuses tied to working capital
management. Inventory valuation is a critical component in the calculation of working capital
V. In India, where Ametek markets over 30 of its global products, the local auditor noted issues of “continuing failure to correct a major weakness in the
internal control system.” Specific problems: highlighted ageing and valuation of inventory, travel expenses, and poor working capital management
VI. Ametek notes an usually high amount of off-balance sheet inventory purchase obligations, approx. 75% of current inventory. An analysis of peers
suggests that 45% is industry best practice. Ametek also uses inventory consignment strategies designed to keep inventory off its balance sheet
VII. Ametek repeatedly raises its estimated supply chain and procurement cost savings. We think this could be a cookie jar used as a cover to explain the
margin increases. We note the savings estimates exploded in size in mid 2012, a period we believe Ametek was strained from a botched acquisition in
Germany and facing cash flow issues from its European businesses. Its CFO resigned shortly after the German acquisition was announced and its equity
clawback language was changed to explicitly cover fraud and intentional conduct 7
Aggressive Acquisition and Financial Strategy
Spruce Point Capital
is Core to Facilitating Margin Overstatement
Facing challenges in its core vacuum motors market, Ametek embarked on an aggressive acquisition strategy. Since 2000, Ametekhas
invested $4.6bn for over 60 acquisitions; cumulative operating cash flows, after capital expenditures and recurring acquisitions has been
-$627m. This aggressive roll-up strategy has allowed Ametek to beat Wall Street EPS estimates an astounding 95% of the time in the past
decade, a result that trounces its industrial peers’ ability to satisfy Wall Street, and appears too good to be true
Goodwill and Intangibles / Assets = 69% is the highest among industrial peers, signaling possible overpayment
Quality and actionable acquisition targets appear to be shrinking in number and valuations rising; latest deals to acquire Zygo (Nasdaq:
ZIGO) and Amptek are recent examples of paying richly for no growth businesses
Since 2010, Ametek has acquired 11 companies from private equity (“PE”) firms for $1.8bn.Questionable what added value Ametek can
bring to the table, especially to PE-owned targets. PE firms are known to streamline costs and accelerate growth opportunities for portfolio
companies
No demonstrated revenue synergies from acquisitions >> organic growth essentially 1% p.a. in 2012 and 2013
Appears to be hitting a wall in terms of cost cutting and working capital efficiency gains
Underinvests in R&D + capex. Acquisitions must be accounted for in evaluating true cash flow
Ametek conducts minimal share buybacks (essentially to offset share dilution) and its dividends paid are effectively debt-funded when
viewed in context of its capital allocation preference for deals
Dependence on short-term debt was rising with ~75% of its credit revolver having to cover short-term debt obligations utilized at the end of
Q2’14. We believe Ametek’s main European funding and holding entities, Ametek Netherlands B.V and Ametek European Holdings, both
of which stopped filing financials in 2012, showed limited cash holdings and declining equity. Ametek’s recent need to raise $700m in
private placement notes in Oct. ‘14 illustrates our concerns that its ‘strong operating cash flow’ to fund deals is not as it appears. By
accessing the private placement market, Ametek was able to avoid SEC registration and scrutiny of its financial filings, which we believe
are cryptic and provide an incomplete picture for investors to fully assess its condition. For example, Ametek does not even discuss factors
affecting its gross margins
Warning Signs of a Stressed Financial Model Have Appeared: Whistleblower Case and FBI Indictment
In a 2009 whistleblower case, Matthews vs. Ametek, claimed Ametek was booking revenue and inventory improperly at Chandler
Engineering. In 2013, the FBI indicted Chris Stehm, former Chandler Chief Accounting Officer and VP of Finance at its HCC division for
embezzlement. The two men worked together, with Matthews even warning Stehm he observed things that “looks, smells, and tastes like
fraud.” Curiously, Ametek set-up a CV/BV tax structure in 2006. We pulled the public filing for Ametek International C.V. in the
Netherlands, and found none other than Chandler listed as its only Limited Partner. We do not understand the significance of Chandler, a
8
tiny business based in Oklahoma, but it appears to play a significant financial role within the organization.
Highly Suspect and Aggressive Accounting
Spruce Point Capital
Appears to Bolster Margins and EPS
Ametek Appears to Use Aggressive Acquisition Accounting To Bolster EBITDA Margins and EPS:
Ametek has allocated >$1.0 billion of deal values to “customer relationships” and amortizes these costs over 19yrs vs. 10yrs (median
of peers). Customer relationships account for 80% of its intangible asset allocation vs. 50% for peers. We believe Ametek is really
purchasing technology and products it does not develop internally, and according to most of its own deal commentary, is buying
complimentary products to sell to existing customers
We estimate the impact of amortizing costs too slowly adds 130bps to EBITDA margins and overstates EPS by approximately 2.5%.
Furthermore, we estimate that if Ametek were to boost its R&D expenditure to 6% (peer average) instead of capitalizing costs via
acquisitions, its EBITDA margins would contract by ~200bps and its EPS would be 4 – 5% lower
Ametek Is Primarily a Manufacturer and its Inventory Accounting is Highly Suspect:
Ametek’s margins continue to expand to record levels, despite inventory turns that have declined since 2011. AME has
surreptitiously been changing from LIFO to FIFO in a material way. In 2005 the FIFO/LIFO split was 50/50%, and now it’s 80/20%,
In an inflationary env’t, this classic accounting switch bolsters reported EPS. AME also doesn’t appear to apply “Lower of Cost or
Market - LCM” GAAP accounting; its SEC filing curiously omit this LCM language!
Ametek holds a high % of raw materials in inventory relative to peers given its claims of lean/JIT manufacturing. It reports
significant fixed-price off-balance sheet purchase commitments (75% of inventory); unusually high relative to its peers that report
~45%. This would make sense if Ametek had a high degree of customer demand visibility; in our opinion, unlikely given its cyclical
end markets. Ametek uses inventory consignment strategies w/suppliers, and may be using tactics to understate inventory
Management’s operating income bonuses have been adjusted for the past 3yrs for a mysterious “estimated tax benefit realized
through the disposal of excess/obsolete inventory,” yet Ametek claims to have never taken an inventory write-down or charge! In
our opinion, Ametek may be using its ever-expanding ‘sourcing cost savings’ as a cookie jar to bolster margins
Warning: Ametek’s Non-Ernst & Young Auditors Abroad Appear to Have Accounting Reservations
Ametek’s relationship with its auditor E&Y goes back to the 1930s. Ametek entered India in 2009, and has most recently received
a “qualified” audit opinion from its local auditor. The auditor noted changes to inventory valuation that made the impact on the
financials indeterminable, along with continuing failure to strengthen internal controls tied to sales of goods and services. In
France, Ametek’s statutory auditors for both its Cameca and Antavia businesses have resigned. Historically, each has been
audited by both E&Y and an affiliate of Deloitte and Touche
9
Opaque Disclosures and Questionable
Spruce Point Capital
Oversight Amplify Our Concerns
Opaque SEC Financial Disclosures and Non-Transparent, Complex Business Model
In light of our concerns about inventory accounting, we observe that Ametek does not discuss any factors affecting its cost of
sales or gross margin in any of its recent SEC filings. Unusually high spread between its relatively (low) gross and (high) EBITDA
margins are difficult to evaluate in the absence of more information; Ametek is an extreme outlier to peers
It has jammed all its acquisitions into just two reporting segments, even though it appears some businesses such its Maintenance
Repair and Operations (MRO) and Specialty Metals units have nothing to do with Electronics or Testing Equip.
Because Ametek makes frequent and small acquisitions relative to its large size, it does not regularly disclose the EBITDA or EPS
impact of acquisitions and can hide under the cover of “immateriality”
Ametek’s income statement is “too clean;” and doesn’t separately identify recurring acquisition costs by segment like its peers.
The company rarely has any one-time items or inventory charges - a remarkable achievement for a company its size!
Warning Signs With Management, Audit and Governance Concerns
Ametek’s senior management has been in place for a long time. However, we note significant leadership role changes in 2012
involving its CFO, Treasurer and COO all occurred after Ametek announced the acquisition of Dunkermotoren, its largest in
history. After reviewing its German financial statements, it appears management shamefully misled investors about the
performance of the target. In light of our concerns about the integrity of the financial statements, we observe that Ametek changed
its “equity clawback” language to include the word “fraud,” and sharply boosted supply cost saving estimates shortly after
Ametek’s auditor since the ‘30s is E&Y. At the whistleblower deposition, E&Y admitted that it doesn’t audit all of Ametek. Its Audit
Chairman mysteriously departed in 2011 and its newly promoted VP of Internal Audit, is not even a CPA, despite it claiming
otherwise. We also note that three of Ametek’s foreign auditors have distanced themselves from the company
Ametek has been touting its major growth opportunities in Asia, yet its long time VP of Asia resigned in Jan 2014. Curiously,
Ametek’s initial JV formed in Taiwan to enter China appears to have gone dark, while its main Asian operating entity out of
Singapore was delinquent in its filings for most of 2014. Recent results from the entity suggest a progressive decay of the business
Insiders own under 2% of the company. Key division heads and a corporate development officer have all sold shares this year.
The management team as a whole owns less and less of the company each year.
Ametek’s classified board may be asleep at the wheel! Ametek’s board is among the smallest, oldest, and most entrenched among
industrial peers we reviewed. Board members have been particularly aggressive sellers of shares in 2014. 10
Irrational and Unsustainable Valuation
Spruce Point Capital
Premium to its Acquired Assets and Peers
Ametek Trades at an Irrational Premium to Its Acquired Assets
Since 2000, Ametek has purchased over 60 businesses at an estimated average EV/Sales and EBITDA multiples of 1.7x
and 9.0x, respectively. The notion that they’ve seamlessly acquired and integrated these businesses, while extracting
perpetual margin increases and missing just 1 quarter of EPS expectations in a decade seems too good to be true
In light of our numerous concerns, Ametek trades at an unjust valuation premium to peers at 3.5x, 13.5x, and 22x 2014E
revenue, EBITDA and EPS, respectively. We think a conglomerate discount is more appropriate, not a premium!
Investors’ seemingly believe that Ametek’s conglomerate-like structure can add superior lasting value to acquired
businesses, above and beyond what private ownership can achieve. Many of Ametek’s acquired companies were flipped
from private equity; these prior owners are supposed to add value through cost cutting and supplying growth opportunities.
What lasting incremental benefits Ametek can add are a question open for debate
In contrast to the optimistic sell-side analyst views that Ametek is a proven acquirer capable of delivering steady EPS growth
of 15%+ per year, we believe Ametek’s model is showing signs of strain and that its valuation premium is unwarranted.
Ametek has failed to demonstrate revenue synergies, underinvests in R&D, and will become increasingly challenged to
meet earnings targets in the absence of fresh acquisitions. It also appears to be covering its issues by repeated boosts to
cost procurement savings estimates. With Ametek recently having stretched its short-term debt obligations to 75% of
revolver capacity at Q2’14, it raised $700m of external debt. We believe this illustrates that its reportedly “strong operating
cash flow” for acquisitions and debt repayment cannot be relied upon as an indicator of the company’s financial health

If Ametek Were to Be Valued Correctly, Its Share Price Would Be 30 - 50% Lower
Given our concerns about aggressive acquisition and inventory accounting, Ametek’s true EBITDA margin may be 400-
600 bps lower than reported. Our opinion is also supported by our review of at least 14 of its operating entities, which
suggest EBITDA margins closer to 20 - 21%. Furthermore, our plot of large cap industrial peers’ gross vs. EBITDA
margins would also suggest Ametek’s EBITDA margins are closer to 20% - 21% to be on trend.

If Ametek were valued in line w/ peers at 2x and 10-11x ‘14E revenues and EBITDA, its stock would be worth $27-$36/share,
implying 30 - 50% downside from its current share price 11
30% – 50% Downside in Ametek’s Shares
Spruce Point Capital

In our opinion, Ametek’s EBITDA margins appear overstated and are likely a few hundred basis points lower than the 26%
indicated in its filings, potentially up to 400 – 600 bps lower. This estimate is supported by our peer regression analysis,
evaluation of various Ametek foreign filings, and pro forma amortization analysis. If Ametek were to be valued closer to peers at
2x and 10-11x EV / 2014E Sales and EBITDA, respectively, its share price would have downside to $27 - $36 per share.
$ in millions $ in millions
True EBITDA Margin: 20% 21% 22% 23% 24% 25% 26% 2014E Revenues
14E Adj. EBITDA $799.0 $839.3 $879.6 $920.0 $960.3 $1,001 $1,041 $3,797 $3,874 $3,953 $4,034 $4,115 $4,197 $4,281
Implied Enterprise Value Implied Enterprise Value
9.00x $7,191 $7,554 $7,917 $8,280 $8,643 $9,006 $9,369 1.75x $6,644 $6,780 $6,918 $7,060 $7,201 $7,345 $7,492
EV/'14E EBITDA

EV/'14E Sales
10.00x $7,990 $8,393 $8,796 $9,200 $9,603 $10,007 $10,410 2.00x $7,594 $7,749 $7,907 $8,068 $8,229 $8,394 $8,562
11.00x $8,789 $9,232 $9,676 $10,120 $10,564 $11,007 $11,451 2.25x $8,543 $8,717 $8,895 $9,077 $9,258 $9,443 $9,632
12.00x $9,588 $10,072 $10,556 $11,040 $11,524 $12,008 $12,492 2.50x $9,492 $9,686 $9,883 $10,085 $10,287 $10,492 $10,702

Less: Debt ($1,636) ($1,636) ($1,636) ($1,636) ($1,636) ($1,636) ($1,636) Less: Debt ($1,636) ($1,636) ($1,636) ($1,636) ($1,636) ($1,636) ($1,636)
Plus: Cash $370 $370 $370 $370 $370 $370 $370 Plus: Cash $370 $370 $370 $370 $370 $370 $370
FD Shares 248.1 248.1 248.1 248.1 248.1 248.1 248.1 FD Shares 248.1 248.1 248.1 248.1 248.1 248.1 248.1
Implied Stock Price Implied Stock Price
9.00x $23.90 $25.30 $26.80 $28.30 $29.70 $31.20 $32.70 1.75x $21.70 $22.20 $22.80 $23.30 $23.90 $24.50 $25.10
EV/'14E EBITDA

EV/'14E Sales

10.00x $27.10 $28.70 $30.30 $32.00 $33.60 $35.20 $36.90 2.00x $25.50 $26.10 $26.80 $27.40 $28.10 $28.70 $29.40
11.00x $30.30 $32.10 $33.90 $35.70 $37.50 $39.30 $41.00 2.25x $29.30 $30.00 $30.70 $31.50 $32.20 $33.00 $33.70
12.00x $33.50 $35.50 $37.40 $39.40 $41.30 $43.30 $45.20 2.50x $33.20 $33.90 $34.70 $35.50 $36.40 $37.20 $38.00
Implied Downside From Current Price Implied Downside From Current Price
9.00x -54% -51% -48% -46% -43% -40% -37% 1.75x -58% -57% -56% -55% -54% -53% -52%
EV/'14E EBITDA

EV/'14E Sales

10.00x -48% -45% -42% -38% -35% -32% -29% 2.00x -51% -50% -48% -47% -46% -45% -43%
11.00x -42% -38% -35% -31% -28% -24% -21% 2.25x -44% -42% -41% -39% -38% -37% -35%
12.00x -36% -32% -28% -24% -21% -17% -13% 2.50x -36% -35% -33% -32% -30% -28% -27%

12
Signs of An Aggressive,
“Too Good To Be True”
Financial Strategy

Proprietary and Confidential – May Not Be Distributed or Copied Without Spruce Point Capital Management, LLC Consent
Early Warning: Email From Whistleblower
Spruce Point Capital
Matthews to Ametek Financial Controller

Financial Controller –
Remember This Name!

SOX Whistleblower Case: Matthews v. Ametek (2009)

Matthews claims Ametek’s Chandler Engineering in


Oklahoma improperly booked revenue to mislead investors,
and improperly accounted for inventory in an attempt to
under-report costs and inventory balances

Source: Matthews v. Ametek, legal docket


Publicly available via Freedom of Information Act (FOIA) request with the DOL/OSHA 14
Ametek’s Ability to Never Disappoint
Spruce Point Capital
Wall St. = Too Good To Be True?
We analyzed over 10 years of quarterly EPS results for a broad set of diversified and cyclical industrial peers.
Ametek’s predictable and stable financial results defy logic – the company has missed Wall St. estimates just once
(by a fraction of cent), and even beat estimates during every quarter of the great financial crisis. These remarkable
results deserve further scrutiny!

Beats Meets Misses % % % Avg.


EPS Est. EPS Est. EPS Est. Beats Meets Misses Surprise

AMETEK 42 1 1 95.5% 2.3% 2.3% 3.4%


Danaher 39 0 5 88.6% 0.0% 11.4% 2.4%
Eaton 37 0 7 88.4% 0.0% 11.6% 6.3%
Hubbell 36 3 5 81.8% 6.8% 11.4% 7.1%
Thermo Fisher 35 1 8 79.5% 2.3% 18.2% 4.0%
Parker Hannifan 35 0 9 79.5% 0.0% 20.5% 13.0%
Rockwell Auto. 35 1 9 77.3% 2.3% 20.5% 7.1%
Emerson 32 0 12 72.7% 0.0% 27.3% 3.9%
Agilent 23 2 13 60.5% 5.3% 34.2% 2.9%

Source: Bloomberg Earnings Surprise Analysis: AME<Equity> SURP 15


Superior Financial Model, Outlier or
Spruce Point Capital
Accounting Gimmickry?
EBITDA is a big driver of firm valuation, and subject to numerous business decisions and accounting assumptions by management. In
our opinion, Ametek’s EBITDA margin is being artificially enhanced by its overly aggressive acquisition strategy designed to
circumvent R&D expense, and amortize costs too slowly to earnings. Furthermore surreptitious inventory accounting changes from
LIFO to FIFO appear to also inflate its EPS. Ametek appears to be an extreme outlier relative to peers. Were Ametek to fall
closer to trend, its EBITDA margins would be closer to 20 - 21% or 500 - 600bps lower.

30.0%
AME

25.0% FEIC: FEI Company


DHR DH: Danaher
EBITDA Margins

RXN FEIC RXN: Rexnord


MTD OXIG: Oxford Instruments
20.0% HUB EMR
ROK KEYS SXS: Spectris Plc
BRKR: Bruker Bioscience
TDY: Teledyne Tech
OXIG SXS RBC: Regal-Beloit
ETN TDY PH: Parker-Hannifan
15.0% PH BRKR ETN: Eaton Plc
KEYS: Keysight Tech.
AIMC EMR: Emerson Electric
RBC AIMC: Altra Industrial Motion
10.0% ROK: Rockwell Automation
MTD: Mettler-Toledo
HUB: Hubbell Inc.

5.0%
20.0% 30.0% 40.0% 50.0% 60.0%
Note: Bubble size represents relative size of enterprise value Gross Margins
Source: Company financial filings 16
Presentation of Ametek’s Financials,
Spruce Point Capital
Extremely Simple for a Complex Company
Ametek’s presentation of its Income Statement is extremely simplified for a complex and diverse company
assembled from over 60 acquisitions. Inventory charges and other one-time items are never separately
identified. “Other net expense” are primarily explained as acquisition costs and currency effects.

Source: Ametek’s 10K (here) 17


Ametek’s Secret Sauce: Create a Complex Roll-up
Spruce Point Capital

Dynamics of an Effective Roll-up(1) Observations of Ametek’s M&A Strategy


• Ametek uses cash acquisitions to fuel its growth, and believes it will continue
Ametek’s target acquisitions do not receive its stock. All
to play an important part of its business strategy. Since 2000 through Q3’14,
deals are cash financed. Furthermore, Ametek does not
repurchase its own shares beyond a token amount. Ametek has completed over 60 acquisitions totaling $4.6 billion (See
Insiders are significant net sellers of stock Appendix for complete list). Recent operating cash flow may be illusory. To
illustrate, Ametek recently raised $700m of long-term debt to pay down
revolver debt that it could not pay down with operating cash flow
• Its goodwill and intangibles amount to $4.5 billion (~69% of assets),
indicating it places a substantial premium on its ability to extract synergies
from deals. Industrial peer average goodwill+intangibles to assets is ~40%
• Ametek targets businesses with revenues between $50-$200m, which are
often private companies with limited financial disclosures. Ametek typically
discloses only the revenue contribution of its targets. We estimate it has paid
~1.7x revenues for its targets vs. its current revenue multiple of 3.5x and 9.0x
EBITDA vs. its current valuation of 14.5x. The large spread in value reflects
the market’s perception of Ametek’s ability to continue its growth and to
extract substantial value from deals
• Ametek’s capex and funded R&D margins are 1.7% and 2.6%, which is
dramatically lower than industrial peer averages at 3.0% and 6.0%,
respectively. Given the underinvestment in its business, we must analyze its
Ametek has extracted limited/no revenue synergies from financial performance after acquisitions since it is essentially buying R&D and
acquisitions (see slides 28-29). Rather, it has relied on new products it would otherwise develop internally
heavy cost cutting and aggressive accounting to achieve
earnings growth. We view this as an unsustainable
• Since 2000, Ametek has burned -$627m after capital expenditures and cash
strategy fraught with issues and inherent limitations acquisitions. Viewed from this perspective, cumulative dividends paid of
$411m and share repurchases of $270m have effectively been debt-financed
1) Paul F Kocourek, Steven Y Chung, and Matthew G McKenna, “Strategic Rollups:
Overhauling the Multi-Merger Machine,” Strategy & Business, second quarter 2000
18
Ametek is a Roll-Up w/Limited Organic Growth; Financial
Performance Needs to Adjust For Recurring Acquisitions
Spruce Point Capital

• The roll-up strategy flatters income statement figures like EBITDA and EPS, along with operating cash flow metrics for a period of time due
to the inherent financial statement mechanics of acquisition accounting (which run through the Investing section of the Statement of Cash
Flows), so Ametek is able to inherit a new income and operating cash flow (“OCF”) stream upon deal closing, without any OCF outlay
• Moreover, as Ametek liquidates the working capital of the acquired company in the normal course of business – collecting on receivables
or selling inventory – it can realize an unsustainable OCF boost that has virtually nothing to do with the performance of its business
• We believe this strategy has significantly aided Ametek’s ability to never disappoint Wall Street with an earnings miss. Therefore, it’s
extremely important to dig beneath the surface to critically analyze what’s really going on at Ametek

AME’s Earnings to Cash Flow Appears High Free Cash Flow Adjusted for Capex/M&A is Negative
$ in mm $ in mm
FBI Indicts
VP of Finance $800
$700 Cash from Operations
CFO Retires Deal pace
begins to dramatically
After accelerates
depart from Net Income,
$600 Dunkermotoren $600
aided by cost cutting,
aggressive acquisitions and Snafu
$500 potentially aggressive
$400
inventory accounting (note:
$400 whistleblower
allegations in 2009)
$200
$300

$200 $0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD
$100
($200)

$0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD ($400)
Cash from Operations Capex Acquisitions FCF After Capex and Acquisitions
Net Income Cash from Operations

Source: Ametek financials


19
Diminishing Returns to Ametek’s Strategy
Are Rapidly Becoming Evident
Spruce Point Capital

• We believe Ametek appears to be underinvesting in its business and using acquisitions to create the appearance of superior cash flow
generation. As such, cumulative free cash flow after capex and acquisitions is a key metric for analyzing Ametek, and presents a
better picture of its financial performance over time. In this case, it demonstrates that Ametek appears to be hitting a wall with its
aggressive acquisition strategy and has burned -$627m since FY 2000. We believe that Ametek’s deal pace has accelerated post-
financial crisis, and its true operating cash flow may be struggling.
$ in mm
Notice How the Slope of the Curve
$5,500 Flattens, Inventory Turnover $500.0
Declines, Capital Required for
Acquisitions and Multiples Paid Rise,
Short-term Credit Utilization Swells;. $450.0
Period of Post Financial Crisis.
Company Restructures, Ametek raises $700m in Debt
$4,500
Inventory Turns Peak at 5.5x in $400.0
2011. Deal-Making Activity
Accelerates After Whistleblower
Complaint (2009). Head of Audit $350.0
$3,500
Committee Resigns (2011),
CFO Resigns (2012). Ametek’s $300.0
Early Gains From the Short-Term Debt Swells, and it
Strategy Are Evident Issues $800m of Long-Term
$2,500 with Slow and Steady Debt in 2007-2008 $250.0
Appreciation of
Financial Results $200.0
$1,500
$150.0

$100.0
$500

$50.0

($500) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q1'14 Q2'14 Q3'14 $0.0

Cumulative Cash from Ops. Cumulative Cash for Acquisitions Cumulative Capex
Cumulative FCF after Acquisitions Short Term Debt

Source: Ametek financials 20


Note: Short-term credit usage = Short Term Debt Outstanding / ( Revolver and A/R Facility Capacity )
Ametek Never Discusses or Discloses Drivers
Spruce Point Capital
of its Gross Profit Margins

2013 Management, Discuss and Analysis (MD&A)


Total international sales for 2013 were $1,984.5 million or 55.2% of net sales, an increase of $276.9 million or 16.2%, compared with
international sales of $1,707.6 million or 51.2% of net sales in 2012. The $276.9 million increase in international sales resulted from the
acquisitions mentioned above, primarily driven by Dunkermotoren and Micro-Poise, and includes the effect of foreign currency translation.
Both reportable segments of the Company maintain strong international sales presences in Europe and Asia. Export shipments fr om the
United States, which are included in total international sales, were $1,037.0 million in 2013, an increase of $174.4 million or 20.2%,
compared with $862.6 million in 2012. Export shipments improved due to increased exports from the 2013 and 2012 acquisitions noted
above, excluding Creaform and Dunkermotoren.

New orders for 2013 were a record at $3,621.9 million, an increase of $86.8 million or 2.5%, compared with $3,535.1 million in 2012. The
increase in orders was primarily attributable to 2013 and 2012 acquisitions. As a result, the Company’s backlog of unfilled orders at December
31, 2013 was $1,140.0 million, an increase of $27.7 million or 2.5%, compared with $1,112.3 million at December 31, 2012.

Segment operating income for 2013 was $861.5 million, an increase of $72.2 million or 9.1%, compared with segment operating income of
$789.3 million in 2012. The increase in segment operating income resulted primarily from the acquisitions mentioned above, as well as the
benefits of the Company’s lower cost structure through Operational Excellence initiatives. Segment operating income, as a percentage of net
sales, increased to 24.0% in 2013, compared with 23.7% in 2012. The increase in segment operating margins resulted primarily from the
benefits of the Company’s lower cost structure through Operational Excellence initiatives.

Selling, general and administrative (“SG&A”) expenses for 2013 were $398.2 million, an increase of $17.7 million or 4.7%, com pared with
$380.5 million in 2012. As a percentage of net sales, SG&A expenses were 11.1% for 2013, compared with 11.4% in 2012. Selling expenses
increased $14.8 million or 4.4% for 2013 primarily driven by the increase in net sales noted above. Selling expenses, as a percentage of net
sales, decreased to 9.8% for 2013, compared with 10.1% in 2012. Base business selling expenses decreased approximately 2% for 2013
compared to 2012, primarily due to cost containment initiatives.

Ametek Never Discusses and Omits Factors Affecting its


Cost of Goods Sold or Gross Margins in its MD&A of its 10K’s/10Q’s 21
Warning Indicator: Margins Always Expand
Spruce Point Capital

• Ametek’s margins are continually expanding, and experienced only a brief hiccup during the great financial crisis. Ametek would have
you believe this a result of; 1) continuous cost cutting ability and operational improvements and 2) its strategy shift to ac quire higher
margin businesses that are differentiated
• We believe this story is too good to be true and have evidence that margins are being enhanced by: 1) underinvesting in R&D
expense, 2) aggressive acquisition accounting which amortizes costs too slowly, 3) changes in inventory accounting method and
potentially the avoidance of recording inventory charges 4) Suspicious boosts to supply chain cost estimates after its CFO ‘retired’
• We’ve collected publicly filed foreign financial statements for 15 of Ametek’s operating entities, and the majority have shown
evidence of margin contraction, not margin enhancement!

Gross Margins Starting To Show Stress EBITDA Margins Always Expand


37.0% Sign of Issues Mounting; 27.0%
Acquiring Lower Quality
Financial 26.0% Financial
Companies
crisis crisis
35.0% 25.0%

24.0%

33.0% 23.0%

22.0%

31.0% 21.0%

20.0%

29.0% 19.0%

18.0%
27.0% 17.0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q1'14 Q2'14 Q3'14 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q1'14 Q2'14 Q3'14

Source: Ametek SEC filings


22
Warning: Inventory Turnover Had Been
Spruce Point Capital
Persistently Declining
A persistently declining inventory turnover is at odds with a healthy, growing company and supports our belief
that Ametek may be experiencing inventory accounting issues. Ametek gives investors limited insights to
evaluate the factors affecting Cost of Goods/Services that drive inventory turns. It is unclear to what degree
product/service mix shifts are affecting results

5.50x

5.40x

5.30x

5.20x

5.10x

5.00x

4.90x

4.80x
2011 2012 2013 Q1'14 Q2'14
Source: Ametek Company Financials
23
Note: Inventory Turnover = LTM Cost of Sales / Average (Beginning and Ending Period Inventory)
Summary: Foreign Operating Subsidiaries
Spruce Point Capital
Show Margin Contraction
• We’ve examined public documents of businesses that contribute ~$731m of revenue (~20% of Ametek’s $3.6 billion total in 2013)
• We find that on average:
• Its operating businesses have an EBITDA margin of ~21% and;
• Are experiencing both contracting Gross Margins of ~0.2% and EBITDA margins of ~1.3%
• Paradoxically, Ametek’s corporate EBITDA margin continues to expand and is in the 26% range. However, few businesses we examined have
EBITDA margins anywhere close to this level. We have excluded Zygo and Amptek from our analysis because the results have not yet been
fully consolidated on an annual basis into Ametek’s financials

i n l oca l a nd forei gn currency (mi l l i ons )


Last Public Foreign US$ LTM YoY YoY Ch. LTM LTM YoY Foreign US$ LTM YoY Yoy Change
Reporting LTM LTM Gross Change Gross Operating Operating Change in LTM LTM EBITDA Change EBITDA
Company Country Period Sales Sales Margin in Sales Margin Income Margin Op. Income EBITDA EBITDA Margin in EBITDA Margin
Dunkermotoren GmbH Germany 2012 € 136.4 $168.6 57.8% -3.0% -0.4% € 6.2 4.6% -29.5% € 24.4 $30.2 17.9% -10.9% -1.7%
Zygo Corporation (1) US 2013 $162.8 $162.8 46.7% 3.3% 0.3% $15.4 9.5% -25.7% $26.8 $26.8 16.5% -13.4% -3.2%
SPECTRO Analytical Germany 2012 € 108.3 $133.8 53.8% 4.8% 2.3% € 25.0 23.1% 23.5% € 28.3 $35.0 26.1% 23.6% 4.0%
Taylor Hobson Limited UK 2013 £54.8 $82.4 49.9% 1.3% -2.1% £13.2 24.1% -9.8% £14.2 $21.4 25.9% -8.7% -1.1%
Cameca SAS France 2013 € 59.1 $75.5 50.9% 5.5% -3.2% € 9.0 15.3% -7.4% € 9.4 $12.0 15.8% -6.8% -2.1%
AMETEK Airtechnology Group UK 2012 £47.5 $72.4 22.2% 7.8% -1.9% £5.1 10.8% -3.3% £6.6 $10.0 13.8% -5.1% -1.9%
Atlas Material Testing (2) Germany 2012 € 32.0 $39.6 56.0% Decline -- € 1.6 4.9% -47.0% € 2.9 $3.5 9.0% -35.5% --
AEM Limited UK 2013 £25.3 $38.0 46.2% 9.0% -1.0% £5.7 22.4% 21.7% £6.4 $9.6 25.4% 18.1% 2.0%
Amptek US 2013 $29.2 $29.2 -- -3.6% -- -- -- -- $13.1 $13.1 44.9% 7.2% 4.5%
Land Instruments UK 2013 £18.3 $27.5 41.0% -9.6% 2.7% £1.9 10.5% -26.3% £2.2 $3.3 12.2% -16.1% -2.0%
Lloyd Instruments UK 2012 £18.0 $27.5 60.3% -31.4% 8.9% £8.1 29.4% 0.3% £8.7 $13.3 48.3% 0.0% 14.1%
Muirhead Aerospace Ltd UK 2013 £16.4 $24.6 41.8% 16.6% -3.4% £3.4 20.9% 7.5% £3.7 $5.6 22.7% 6.9% -1.8%
Ametek Denmark A/S Denmark 2013 -- -- -- -- -- DKK 33.3 -- -11.3% DKK 33.6 $5.8 -- -11.4% --
Antavia SAS France 2013 € 15.4 $19.7 46.3% 11.0% -1.3% € 3.0 19.3% 24.0% € 3.2 $4.1 20.6% 11.7% 0.1%
Grabner Instruments Austria 2013 € 9.6 $12.3 74.2% 7.6% -0.5% € 2.4 25.0% -8.0% € 2.5 $3.2 26.3% -6.9% -4.0%
AMETEK Instruments India India 2012 $7.7 $7.7 -- 63.0% -- -- -- -- $1.1 $1.1 14.6% 19.9% -5.3%
AMETEK Nordic AB Sweden 2013 SEK 15.9 $2.4 81.4% 12.3% -3.3% SEK 2.3 14.8% 39.5% SEK 2.4 $0.4 15.2% 27.4% 1.7%
Total Implied EBITDA Margin and Average YoY Change (3) $731.9 -0.2% $152.6 20.9% -0.9% -1.3%
Sources: Public Foreign Financial Filings
(1) ZYGO results through 12/31/13. EBITDA also adds back stock compensation
(2) Estimated 2012 results
(3) Our average implied EBITDA margin is an estimation which is limited by our financial data and we recognized that it includes data from 2012 and 2013. Excludes ZYGO, Amptek and Lloyd Instruments from 2012, which had an unusual 24
EBITDA margin increase despite a 30% decline in sales. Currencies converted at average annual exchange rates provided by the IRS
Ametek Appears To Underinvest
Spruce Point Capital
In Its Businesses
There are clear indications that Ametek underinvests in its businesses from a capital expenditure and research and
development perspective. As a result, we argue that Ametek’s financial performance (esp. its operating cash flow) needs to be
evaluated after the cost of acquisitions. Ametek’s recurring acquisition strategy is geared toward acquiring products and assets
it believes complement its existing businesses. If Ametek were to invest in its business directly through greater R&D expense,
its margins would be significantly lower.

Capital Expenditures / Sales R&D Expense / Sales


8.0%
14.0%
7.0%
12.0%
6.0%
10.0%
5.0%
4.0% 8.0%

3.0% 6.0%

2.0% 4.0%
1.0% 2.0%
0.0% 0.0%

2011 2012 2013 Average


2011 2012 2013 Average

Source: Company filings


Note: Includes net company funded R&D expense; Agilent is pro forma for Keysight Technologies spin-off 25
Ametek Appears To Underinvest in R&D
Spruce Point Capital

Current Ametek Job Openings

Just 1 out of 202


jobs (<0.5%) are
classified as R&D

Source: Ametek Job Openings (here)


Note: As of 10/30/2014 26
Pro Forma Impact of Expensing vs.
Capitalizing Research and Development Costs
Spruce Point Capital

$ millions
2005 2006 2007 2008 2009 2010 2011 2012 2013 • Ametek extracts significant
Total Revenues $1,434 $1,819 $2,137 $2,531 $2,098 $2,471 $2,990 $3,334 $3,594 earnings benefits from
continually buying vs.
Actual Net R&D Expense $34.8 $42.0 $52.9 $57.5 $50.5 $56.8 $78.0 $84.9 $93.9
developing many of its own
Target R&D Margin 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0%
products.
Target R&D Expense $86.1 $109.2 $128.2 $151.9 $125.9 $148.3 $179.4 $200.1 $215.6
R&D Underinvestment ($51.3) ($67.2) ($75.3) ($94.4) ($75.4) ($91.5) ($101.4) ($115.2) ($121.7) • R&D that would need to be
Amortization Add-back (1) $3.2 $7.4 $12.1 $18.0 $22.7 $28.4 $34.8 $42.0 $49.6 expensed, is instead
Net R&D Expense ($48.1) ($59.8) ($63.2) ($76.4) ($52.7) ($63.0) ($66.6) ($73.2) ($72.2) capitalized on the balance
sheet and amortized over a
Reported EBITDA $269.9 $351.4 $433.9 $489.4 $428.0 $545.9 $712.2 $842.7 $916.3 period ranging up to 19yrs
% margin 18.8% 19.3% 20.3% 19.3% 20.4% 22.1% 23.8% 25.3% 25.5% (more on this later)
Less: Net R&D Expense ($48.1) ($59.8) ($63.2) ($76.4) ($52.7) ($63.0) ($66.6) ($73.2) ($72.2)
Pro Forma EBITDA $221.8 $291.6 $370.7 $413.0 $375.3 $482.9 $645.6 $769.5 $844.1 • If we assume that Ametek
% margin 15.5% 16.0% 17.3% 16.3% 17.9% 19.5% 21.6% 23.1% 23.5% targeted a 6% R&D margin
(peer average), we
Margin Enhancement 3.4% 3.3% 3.0% 3.0% 2.5% 2.6% 2.2% 2.2% 2.0% estimate its EBITDA
% Decline in EBITDA -17.8% -17.0% -14.6% -15.6% -12.3% -11.5% -9.4% -8.7% -7.9% margins would be 200bps
lower and its EPS 4% lower
Effective Tax Rate 31.2% 31.0% 32.2% 32.6% 30.2% 30.7% 30.9% 30.7% 28.7%
After-tax R&D Net Expense ($15.0) ($18.5) ($20.4) ($24.9) ($15.9) ($19.3) ($20.6) ($22.5) ($20.7)
Diluted Shares 237.6 239.9 242.1 241.7 242.7 241.3 243.2 244.0 246.1

Reported Diluted EPS $0.57 $0.76 $0.94 $1.02 $0.85 $1.18 $1.58 $1.88 $2.10
less: After-tax R&D impact ($0.06) ($0.08) ($0.08) ($0.10) ($0.07) ($0.08) ($0.08) ($0.09) ($0.08)
Pro forma EPS $0.51 $0.68 $0.86 $0.92 $0.78 $1.10 $1.50 $1.79 $2.02
% change -11.0% -10.2% -8.9% -10.1% -7.7% -6.8% -5.4% -4.9% -4.0%

1) Cumulative benefit based on a 16yr amortization period


27
Warning:
Spruce Point Capital
No Organic Growth Revenue in 2012
Ametek failed miserably to achieve its organic revenue goals in 2012, driven by a
horrific miss of 9.3% in its Electromechanical Group, which represents 43% of sales.

CEO

Former CFO

CFO

COO

President
Electromechanical Group

President
Electronic Instruments

Source: Ametek Proxy (here) 28


Warning: And Again.....No Organic
Spruce Point Capital
Revenue Growth in 2013 Too!
Ametek failed even more miserably to achieve its organic revenue goals in 2013. The company lowered the
bar by reducing the organic revenue growth goal to 3.62% from 5.27% in 2012. While the Electromechanical
Group’s growth improved to 0.8%, the Electronic Instruments’ growth plummeted from 4.32% to -0.2%.

CEO

CFO

COO

President
Electromechanical Group

President
Electronic Instruments

Source: Ametek Proxy (here) 29


Warning: Limited Opportunity for Further
Spruce Point Capital
Working Capital or Cost Efficiencies
Ametek presents itself with an unusually low consolidated SG&A margin, and has working capital
management in line with its peers. We are skeptical of its incredibly low cost base and its ability to extract
further cost savings or working capital efficiencies to extract added benefits.

Working Capital / Sales Sales, General and Admin Expense / Sales


30.0% 40.0%

35.0%
25.0%
30.0%
20.0%
25.0%

15.0% 20.0%

15.0%
10.0%
10.0%
5.0% 5.0%

0.0% 0.0%

2011 2012 2013 Average


2011 2012 2013 Series5

Working Capital = Inventory + Acct’s Receivable – Acct’s Payable


Source: Company filings
Note: Agilent is pro forma for Keysight Technologies Spin-off 30
Warning: Revolver Debt Dependency Was Rising
Spruce Point Capital
For a Year Despite “Strong Operating Cash Flows”

$ i n mi l l i ons
Reported Leverage At Various Assumed EBITDA Margins
LTM EBITDA Margin 26.2% 25.0% 24.0% 23.0% 22.0% 21.0% 20.0%
In our opinion, we estimate
LTM EBITDA $1,031 $985.1 $945.7 $906.3 $866.9 $827.5 $788.1 EBITDA margins closer to 20-
Current Debt $1,637 $1,637 $1,637 $1,637 $1,637 $1,637 $1,637 21% which makes Ametek’s
Debt/EBITDA 1.6x 1.7x 1.7x 1.8x 1.9x 2.0x 2.1x
leverage closer to 2.0x. Its
debt covenant is 3.25x

$ in millions
Ametek’s dependency on using its revolver
Q3'13 Q4'13 Q1'14 Q2'14 Amptek PF Q2'14 Q3'14
as a bridge for deals had been rising for
Short Term Debt $125.7 $164.9 $273.3 $454.4 $68.2 $522.6 $163.2 over a year. The company has
LT Debt $1,118.1 $1,135.1 $1,141.7 $1,148.2 $1,148.2 $1,473.5
approximately $195m of long-term debt
coming due in 2015. While Ametek lists
Total Debt $1,243.7 $1,300.0 $1,415.0 $1,602.6 $1,670.8 $1,636.7 $369.6m of cash on its balance sheet,
$307.1m is listed as being outside of the
Credit Facility $700 $700 $700 $700 $700 $700 U.S. as of 9/30/14. A majority of Ametek’s
ST Debt / Facility 18% 24% 39% 65% 75% 23% earnings and cash flow is derived from
foreign entities, and would be taxed upon
Note: short-term debt includes current portion of LT debt repatriation.

Short-term debt to
Revolver capacity
Source: Company filings reached dangerously
Note: Assumes Amptek acquisition was funded with the credit facility high levels in Q2’14 31
A Closer Look Into Ametek’s Main
Spruce Point Capital
Foreign Holding Companies

Stopped Reporting
Financials in 2012.
Dwindling Cash and
Equity Value

Last Financials Available in


2012; Currently Past Due
on Updated Financials; Two
Directors Recently
Resigned in 2014

Asian Head and Director


Resigned in 2014. Financial
Filings Delinquent for Most
of 2014. Amekai Appears
Insolvent

Source: Company Subsidiary List Ex. 21 (here) 32


Note: Subsidiary list under AMETEK European Holdings Limited is truncated
Signs of Financing Problems in Europe at Ametek?
Spruce Point Capital
A Closer Look at Ametek Holdings B.V.
Spruce Point Observations
• Ametek Holdings B.V. (Netherlands) is one of two main original
parties to Ametek Inc’s credit agreement dated Sept 22, 2011
• The Dutch entity stopped filing public financial statements
after 2012: a period where we believe organic growth struggled, its
largest acquisition wasn’t going according to plan, its CFO resigned
Almost out and the company boosted its supply chain cost saving assumptions
• The entity’s ‘liquid middelen’ or cash has fallen dramatically from
of Cash!
2010-2012, despite its ‘financiele vaste active’ or current financial
assets rising sharply. We suspect this is partially explained by the
use of cash for the acquisition of Dunkermotoren in April 2012
• Overall, “eigen vermogen” or shareholder of equity at Ametek
Holdings B.V. fell from EUR 833m to EUR 822m and its working
capital at year end was in a negative financial position
• On 7/18/13 Ametek amended its credit facility to include a special
carve-out for AMETEK Material Analysis Holdings GmbH, as a
borrower. This entity controls Cameca, Spectro, Dunkermotoren
and EM Test
• On 8/7/13, Ametek announced the acquisition of Controls
Southeast for $160m. On 8/17/13, Ametek announced Q2 earnings:
“We are very pleased with our results this quarter given the
continued soft economic environment. We delivered record
operating performance as a result of the strength in our long-cycle
businesses combined with our Operational Excellence initiatives.”
No Equity In H1’13 Ametek reported record operating cash flow of $284.9m
Growth • We have evidence that suggests Cameca and Dunkermotoren
Sources: have struggled significantly from an operational point of view, and
Dutch public information (here) terminated the CEOs of both companies. Cameca’s 2nd auditor,
Ametek 2011 Credit Agreement (here) required by statutory law in France, recently departed
2013 Credit Amendment #1 (here)
Ametek Q2’13 Press Release (here) 33
Signs of Financing Problems in Europe at Ametek?
Spruce Point Capital
A Closer Look at Ametek European Holdings Ltd.
• Ametek European Holdings Limited is past due in filing current
financials. The last filed financials are for year end 2012
• It holds as investments multiple subsidiary businesses in Asia
and Europe including Dunkermotoren, Cameca, Antavia,
Spectro Analytical, Muirhead, Taylor Hobson and others
• Recently, Robert Mandos and John Mockler have resigned as Not the sign of healthy company with the value of
directors in April and September 2014, respectively subsidiary investment holdings rising less than 1%;
cash holdings fall to virtually 0 and equity shrinks

Sources:
UK Public filings (here)
34
Signs of Financing Problems in Asia?
Spruce Point Capital
A Closer Look at Ametek Singapore
• Ametek Singapore is the company’s oldest Asian operation. We obtained its 2013 financials, which weren’t filed until late September 2014. We
believe Ametek Singapore was late in holding its Annual General Meeting, potentially as a result of its Director Lee Meng Kee having resigned
• Top line revenues decreased by 12.6% while other income, which is primarily investment income from its main operating subsidiaries including China,
declined by 15% from $10.7m to $9.1m
• Overall, profitability fell from $13.4m to $12.2m or 8%. More importantly, operating cash flow plummeted from $28.6m to $7.3m, -75%, while the dividend
paid to its holding company, Ametek European Holdings Limited, declined from $19.1m to $10.1m or -47%
• Responding to an analyst question about emerging market performance on the Q4’13 conference call, the CEO said “Yes, it's actually amazing.
We were very delighted in the quarter when we looked at our international businesses, actually, believe it or not, both in Eu rope and in Asia. In Asia, the
organic growth was up about 25%, in Asia. So a truly outstanding quarter.” The performance from Ametek’s Singapore entity (which conducts
business in Taiwan, China, Malaysia and India), suggests that full year results were disappointing, not spectacular

Note: Figures in Singapore Dollars


Source: www.bizfile.gov.sg and Q4’13 earnings conf call (here)
35
Where’s the Strong Operating Cash Flow?
Spruce Point Capital
Ametek’s $700 Debt Private Placement

To illustrate our point that Ametek’s ‘strong operating cash flows’ may not be as advertised, we
note that it raised $700 million through a private placement announced on October 1 st, 2014

Why Do We Think Ametek Used the Private Placement Market to Issue Debt?

• No SEC registration is required, which means that Ametek could avoid scrutiny and review of its financial
statements by the SEC. We note that the last comment letters Ametek received from the SEC date back
over 4 years to 2010
• No credit ratings are required by agencies such as S&P or Moody’s
• Ametek could structure a financing solution to meet its cash flow gaps. In this case, Ametek decided to
tap $500m of debt for immediate usage to pay down its ballooning credit facility. The remaining $200m of
debt will be tapped in 2015 when the company has needs to fund its maturing debt obligations
• Ametek was able to issue the debt to a syndicate of insurance companies at a ridiculously low average
rate of 3.88%

Covenants state that Ametek will not permit:


a) Consolidated Debt to EBITDA – at any time to exceed 3.50 times EBITDA for the four consecutive
fiscal quarters then most recently ended; or
b) Interest Coverage -- the ratio of (i) EBITDA to (ii) Interest Expense, in each case for the four
consecutive fiscal quarters then most recently ended, to be less than 2.5 to 1.00

Source: Private Placement Announcement (here) 36


Ametek’s Recent Job Reviews Show
Spruce Point Capital
Cautionary Signs
“A lack of decentralized organic growth. With most of the focus on meeting acquisition synergy metrics
organic growth can eventually fall by the wayside. This creates a feeling for the smaller newly acquired
companies of being "gutted" over a few years/decade after the full synergies have been met and it is time
for new investment into the business. This focus stifles these companies prematurely and can drive talent
out of the organization.” -- Sept 7, 2014

“Some business units are not on stable footing.” -- Sept 18, 2014

“Ametek is too short term focused.” -- Jan 27, 2014

“Big corporate mentality. If sales do not meet forecast, expect layoffs/furloughs to recover for shareholder
benefit.” -- Dec 29, 2013

“horrible benefits, low moral, management doesn't work with employees. Company is much too money
hungry and does not reinvest in its people. Only in other companies (which are bought and then dissolved
into Shanghai)” -- Nov 14, 2013

“Tremendous amount of pressure from upper management to meet the monthly/quarterly/annual numbers
at seemingly any cost.” -- Sept 7, 2013

“Layoffs and pay cuts are used to meet the unrealistic/inflated profitability goals. Of course morale suffers
as a result of these cost cutting measures. There is a general lack of honesty throughout the entire Ametek
organization.” -- Nov 5, 2012
Source: Glassdoor reviews (here) 37
Is Management, the Board and
Auditors Looking Out For
Shareholders?

Proprietary and Confidential – May Not Be Distributed or Copied Without Spruce Point Capital Management, LLC Consent
Early Warning: Email From Whistleblower
Spruce Point Capital
Matthews to Ametek Financial Controller

Financial Controller –
Remember This Name!

SOX Whistleblower Case: Matthews v. Ametek (2009)

Matthews claims Ametek’s Chandler Engineering in


Oklahoma improperly booked revenue to mislead investors,
and improperly accounted for inventory in an attempt to
under-report costs and inventory balances

Source: Matthews v. Ametek, legal docket


Publicly available by FOI DOL/OSHA request 39
Whistleblower Case: Matthews v. Ametek
Spruce Point Capital

The Whistleblower Claim The Outcome


Theron Matthews, former Director of Operations at Ametek’s
The case was litigated for over 2yrs and ultimately dismissed
Chandler Engineering business employed from 2007-2008, filed
during what the judge described as a “long and contentious”
a whistleblower complaint in May 2009 for being terminated on
discovery process. Ultimately, the judge’s decision to dismiss
the basis of reporting what he believed to be serious
was based on Matthews’ refusal to produce documents
irregularities in the areas of revenue recognition and inventory
related to his new employment.
accounting that were contrary to GAAP. He aired his concerns
in an email to Ametek’s CEO, and claims he was terminated as
In rendering his decision, ALJ judge Patrick Rosenow made
a result of his actions. Matthews claimed that:
the following statement:
• In Q4’2007, Ametek received over $3m in bookings or
orders that, under GAAP, should have been reported in “...in spite of hours spent in conference calls and dozens of
2007. After putting the 2008 budget in place, the $3m was letters, motions, objections, responses, and rulings, I am still
reported, distorting the financial condition of the company. unable to say that both sides have had a full and fair
The deviation decreased backlog, which is reported on opportunity to complete the discovery to which they are
quarterly statements to the SEC. Ametek made shipments entitled under the applicable rules. In that regard, it would
of goods on sale in March 2008, but reported the income in be fair to note that Respondent’s (Ametek) Counsel
February 2008 appeared to fully exhaust his client’s entitlement to
• Ametek manipulated the value of its inventory by affirmative discovery and similarly raise all available
intentionally deviating from the standard cost method protective motions in an attempt to foreclose some of
of calculating total inventory value. Ametek set the Complainant’s (Matthews) discovery requests. In many
standard cost below the actual cost, resulting in higher ways, Respondent (Ametek) may have been more
inventory turns, which are viewed by analysts as a sign of a proactive and even aggressive than Complainant
healthy and well run business. (Matthews) in the exercise of its rights to discovery.”
Source:
Matthews v. Ametek, legal docket, Publicly available via Freedom of Information Act (FOIA) request
Dept of Labor, Administrative Review Board (here) 40
Three and Half Years Later:
Spruce Point Capital
FBI Charges Chris Stehm w/Fraud
Is Ametek a company with good or faulty financial
controls? Is Chris Stehm the fall guy for broader
FBI ANNOUNCEMENT issues at Ametek, or simply just a rogue
employee? Note: That Ametek’s Indian Auditor
October 21, 2013 also noted issues with controls of travel expense

PHILADELPHIA, PA— Christopher Stehm, 51, of Mason, Ohio, was charged today by information with defrauding his
employer, Berwyn-based Ametek Inc., of at least $659,731, announced United States Attorney Zane David Memeger. According
to the information, Stehm was the chief accounting officer at two different offices of the company when he
submitted phony claims for expense reimbursements, many of which he supported with doctored receipts. Stehm is
charged with two counts of wire fraud and two counts of filing false tax returns.

Stehm was the controller for Ametek’s Chandler division in Broken Arrow, Oklahoma, from about January 2006
through March 2010. In April 2010, Ametek promoted Stehm to be the vice president of finance at its HCC
division in Cincinnati, Ohio, and Stehm held that position until November 2012. In both positions, Stehm was
his office’s chief accounting officer. According to the information, throughout his employment at Ametek, Stehm used a
variety of methods to obtain “reimbursements” for expenses that he either never incurred or that were wholly personal in
nature. These methods allegedly included cutting off the tops of receipts or “whiting out” portions of receipts that Stehm
submitted with his expense reimbursement claims to make them appear to be business-related. Stehm also allegedly used
copies of the same receipts to support multiple expense reimbursement claims.

Ametek is a publicly traded company (symbol AME on the New York Stock Exchange) that manufactures electronic instruments
and electromechanical devices for sale in numerous countries. The company is headquartered in Berwyn, Pennsylvania, but it
has offices in numerous locations in the U.S. and overseas.

Source:
FBI Press Releases (here)
US Court for Eastern District of Pennsylvania (here) 41
What is Going on at Chandler?
Spruce Point Capital

Chandler Instruments, a small company acquired in 2003 with sales of ~$30m at the time, appears to have a large
significance to Ametek. In 2006, Ametek appears to have reorganized many of its holdings around a Netherlands
CV/BV tax structure by creating Ametek International CV. Why did it choose Chandler Instruments as its partner in the
transaction – a company where its former Controller/Chief Accounting Officer has been charged by the FBI of
embezzlement and its former Director of Operations claimed he witnessed accounting irregularities? We note that
Chandler’s own website indicates that it does not have any local sales representative in the Netherlands. (1)

Ametek International
C.V.
Formed 2006

Ametek Holdings B.V.


Formed 1992

At Least 70 entities
including Holdco and
Source: Publicly available at http://www.kvk.nl/zoeken/handelsregister/
(1) Chandler’s sales contacts (here)
Opcos (2)
(2) Ametek subsidiary list (here) 42
Ametek Appears To Have Misled Investors
Spruce Point Capital
About its Largest Acquisition Ever in 2012
Ametek To Acquire Dunkermotoren (Germany) Business Commentary From Its German Filing
On April 26, 2012 Ametek said, “The privately held manufacturer has expected 2012 sales “Overall, Dunkermotoren could not reach the turnover of EUR
of approximately €155 million ($200 million) ” But, according to German public 140.1m from the previous year. Sales amounted to EUR 136.4M,
filings, Ametek may have already known that Dunkermotoren’s business was which is about 3% below the planned levels. The good level of
deteriorating when they made this statement. Actual 2012 revenues came in at the first quarter could not be sustained in the subsequent
EUR 136.4m, or 12% less than expected. Revenues declined 3% YoY!! quarters. The global economy also influenced the regional
distribution of sales. In Germany, sales remained broadly stable.
With a slight decline in the fourth quarter, sales declined in
Germany for the year by approx. 1%. Exports to other European
countries were about 6% lower than last year, the same applies to
exports to Asia. Positive Sales developments in North America,
here were 9% increase was recorded.”

Ametek Spins a Misleading Story to Wall Street


Matt McConnell - Citigroup - Analyst
Great, thank you. I wonder if I could slip in a quick follow-up on
Dunkermotoren. I know it has been probably two or three quarters
since that closed. Could you give an update on how that integration
has been going and maybe profitability? I think it was a 1-point drag
to the EMG margin. Was that roughly in line with your expectation?
AMETEK, Inc. - Chairman, CEO
Yeah, it’s now performing very good. I’m very, very pleased
with the operating team there. We just did a review recently
and that team has embraced the Ametek culture, and they’re
Profit Increased,
very good and their profit margins are lower – there’s no question.
but mostly because We knew that when we acquired them. As we do with most
Ametek repaid acquisitions, we’re going to continue to work and improve those
some of its debts margins, and your analysis is right – it was about 100 basis points
improvement.
Source: Q4 2012 Ametek Earnings Conf Call (here)
Source: Dunkermotoren’s public German financials (Google Translated); Available (here) 43
Note: Dunkermotoren’s key leadership would all leave in 2013
Ametek’s CFO Conveniently “Retires” Fast!
Spruce Point Capital
New COO Appointed
Days After
Robert R. Mandos, Jr. Elected Executive Announcing David A. Zapico Named Executive Vice President and Chief
Vice President & Chief Financial Officer Dunkermotoren! Operating Officer
BERWYN, Pa., May 1, 2012 /PRNewswire/ -- AMETEK, Inc.
BERWYN, Pa., Dec. 18, 2012 /PRNewswire/ -- AMETEK, Inc.
(NYSE: AME) today announced that the Board of Directors has
(NYSE: AME) today announced the election of David A. Zapico as
elected Mr. Robert R. Mandos, Jr., as Executive Vice President
Executive Vice President and Chief Operating Officer, effective
and Chief Financial Officer, effective July 1, 2012. Mr. Mandos
January 1, 2013.
currently serves as Senior Vice President and Comptroller of
AMETEK. He replaces John J. Molinelli who has announced
Mr. Zapico has held a variety of engineering and general
his retirement after 43 years with AMETEK, including 18 years
management positions since joining AMETEK's Process &
as Chief Financial Officer.
Analytical Instruments Division in 1990 as a Product Engineer. He
William J. Burke Elected Senior Vice President, was promoted to Division Vice President of the Process
Comptroller & Treasurer Instruments Business Unit for the Process & Analytical Instruments
Division in 1996. In 1999, Mr. Zapico was named Vice President
BERWYN, Pa., May 1, 2012 /PRNewswire/ -- AMETEK, Inc. and General Manager of AMETEK's Aerospace and Power
(NYSE: AME) today announced that the Board of Directors has Instruments Division. In 2003, he was named President, Electronic
elected William J. Burke as Senior Vice President, Comptroller & Instruments.
Treasurer, effective July 1, 2012. Mr. Burke currently serves as
Vice President and Treasurer.

Mr. Burke, a 25 year AMETEK veteran, served in a number of


financial, operational and business unit management roles prior to
being named Vice President, Investor & Corporate Relations in
1999. He was named Vice President – Investor Relations &
Treasurer in 2007.
Sources:
New CFO elected (here)
New VP Controller appointed (here)
New COO appointed (here) 44
Just Before the CFO Leaves, “Clawback
Spruce Point Capital
Policy” Language is Altered
Clawback Policy (March 2012) Clawback Policy Prior to 2012

The Company reserves the right to recover, or clawback, If we are required to prepare an accounting restatement
from a current or former executive officer any wrongfully- due to misconduct, any participant who is determined
earned performance-based compensation, including stock- by a Court of competent jurisdiction to have engaged
based awards, upon the determination by the in, or failed to prevent, the misconduct, will be required to
Compensation Committee of the following: repay proceeds from the sale of shares issued upon
• There has been restatement of Company financials, due exercise of a stock option or stock appreciation right, or
to the material noncompliance with any financial reporting vesting of restricted stock or stock unit, occurring during
requirement (other than a restatement caused by a the 12-month period following the first public issuance or
change in applicable accounting rules or interpretations), filing with the Securities and Exchange Commission of the
and such executive officer engaged in fraud or financial statements required to be restated.
intentional illegal conduct which materially contributed to
the need for such restatement,
• The cash incentive or equity compensation to be Pay Close Attention!
recouped was calculated on, or its realized value affected
by, the financial results that were subsequently restated, Ametek changed its language to explicitly call out
“current or former executive officers ” and lists “fraud
• The cash incentive or equity compensation would have or intentional illegal misconduct” as a factor. Also
been less valuable than what was actually awarded or Ametek subtly makes it more difficult to clawback
paid based upon the application of the correct financial equity from these officers by changing from “a Court
of competent jurisdiction” to “the determination of the
results, and
Compensation Committee.”
• The pay affected by the calculation was earned or
awarded within three years of the determination of the Who would you rather be judged by...your
buddies on the Board or the U.S. legal system?
necessary restatement.
Sources:
Proxy Statement – March 2012 (here) 45
Prior Proxy Statement (here)
Cozy U.S. Auditor Relationship May Hinder
Spruce Point Capital
Adequate Oversight of Ametek
 Ametek appears to have a special relationship with its auditor. In its proxy, the company notes that “Ernst & Young LLP
and its predecessor has served continuously as our independent auditors since our incorporation in 1930”
 During the period of the whistleblower allegations/investigation and significant reported growth in its business, we
observe that Ametek’s audit fees did not increase. Ironically, E&Y had no issues extracting increased audit fees from
other large industrial clients during this time period
 Curiously, Ametek noted an increase in “Audit-related fees paid” during this time period, which now included payments to
its auditor for “due diligence in connection with acquisitions.” For 2013, Ametek paid E&Y $4.96m of audit fees, an
amount barely larger than the $4.76m paid in 2008. Ametek has used ‘tax fees’ as way to increase payments to E&Y
$ in millions
Fiscal Yr Audit Fee '09-'11 CAGR M&A
Company Auditor 2009 2010 2011 Audit Fee Sales Deals
Eaton E&Y $15.0 $15.7 $17.1 6.8% 16% 14
Danaher E&Y $10.6 $12.3 $16.6 25.1% 24% 47
Agilent PWC $5.7 $7.4 $7.5 15.0% 22% 2
Ametek E&Y $4.3 $4.2 $4.2 -0.6% 19% 12
Mettler-Toledo PWC $2.8 $3.0 $3.5 10.2% 16% 4
Teledyne E&Y $2.1 $2.2 $2.3 3.2% 8% 8
Note: 2011 language change to Audit-related fees –
Ametek “include fees for audits of employee benefit plans and
due diligence in connection with acquisitions”
Audit-related Fees $0.05 $0.26 $0.33
Tax Fees $0.10 $1.30 $0.72 Note spike in tax fees in 2010: “relate to federal and state tax
advice, acquisition tax planning, assistance with international tax
All Other $0.00 $0.00 $0.00 compliance and international tax consulting”

Source: Proxy filings 46


E&Y Lavishes Its Client With A
Spruce Point Capital
Very Prestigious Award....
EY announces winners for the EY Entrepreneur Of The Year™ 2014 Greater Philadelphia Award

Philadelphia, 13 June 2014

EY is pleased to announce the winners of the EY Entrepreneur Of The Year™ Award in Greater Philadelphia. This group of
leading entrepreneurs was selected by an independent judging panel made up of previous winners of the award, leading CEOs,
private capital investors and other regional business leaders. The winners were revealed at a special gala on June 12, at the
Terrace Ballroom of the Pennsylvania Convention Center, in Philadelphia.

“EY has honored outstanding entrepreneurs for the past 28 years,” said Mike Nichols, EY Entrepreneur Of The Year Program
Director for Greater Philadelphia. “These business leaders are accomplished entrepreneurs who have contributed a tremendous
amount to the community.”

The EY Entrepreneur Of The Year 2014 Greater Philadelphia Award winners are:

Frank Hermance - Chairman and Chief Executive Officer, AMETEK, Inc.


Gerri Henwood - Chief Executive Officer, Recro Pharma, Inc.
Ari Jacoby - Co-Founder and Chief Executive Officer, Solve Media
Ryan Caplan - Chief Executive Officer, ColdLight Solutions, LLC
Jeffrey Bartos - Chief Executive Officer, Mark Group, Inc.
Mark Casale - Chairman, CEO & President, Essent Group Ltd.
J. Jeffrey Fox - Chief Executive Officer, Source4Teachers
Nick Auger, Anthony Bucci and Matt Kull - Co-Founders, RevZilla Motorsports

In addition to recognizing the regional award winners, Michael Cardone Jr., Owner and Chief Strategy Officer of Cardone
Industries, was presented with the EY Entrepreneur Of The Year Lifetime Achievement Award for his sustained business and
philanthropic leadership. Jeffrey Brown, CEO of Brown’s Super Stores, was the recipient of the EY Entrepreneur Of The Year
Social Entrepreneur Award for his commitment to the community.

Source: E&Y Press Release (here) 47


Exercise Caution When Auditor Awards
Spruce Point Capital
Are Lavished on Client CEO’s
Lets GOWEX: Billion Dollar Scheme Satyam: Billion Dollar Scheme TechnoDyne: $450m Scheme
Jenaro Garcia Martin Ramalinga Raju Padma and Reddy Allen
E&Y Spanish Entrepreneur of YearTM 2011 E&Y Tech Entrepreneur of YearTM 2011 E&Y Entrepreneur of YearTM 2010

Gowex CEO (here) Source: Satyam CEO (here) Source: TechnoDyne (here)

Lexi Holdings - £100m Scheme InnoVida Holdings: $50m Scheme IT Factory: $186m Scheme
Shaid Luqman Claudio Osorio Stein Bagger
E&Y Entrepreneur of the YearTM 2004 E&Y Entrepreneur of the YearTM 2007 E&Y Danish Entrepreneur of the YearTM 2007

48
Lexi Holdings CEO (here) InnoVida Holdings CEO (here) IT Factory CEO (here)
Ametek’s Structure Makes it Difficult
Spruce Point Capital
to Audit in its Entirety

Ametek is comprised of dozens of


disparate businesses scattered across
the world

The average revenue of an acquired


company in the past 10yrs is
approximately $100m

Ametek’s structure makes it difficult to


audit because no single business is
necessarily material to the whole
enterprise

In this deposition from the


whistleblower case, Ametek’s head
outside auditor from E&Y explains the
process of how it develops its audit

In the case of Chandler Engineering, it


noted that no audit was performed
during the period accounting
irregularities were claimed as it was
not deemed a significant business

Source: Ametek vs. Matthews, deposition document 49


Publicly available via DOL FOIA Request
Who Internally at Ametek is Working
Spruce Point Capital
With Outside Auditors?
Our Audit of Ametek’s Head of Audit Services Uncovered a
AMETEK Names Robert J. Amodei Vice President, Audit Services
Problem > His Claim of Being a CPA is False! We also spoke
BERWYN, Pa., July 25, 2014 /PRNewswire/ -- AMETEK, Inc. (NYSE: to the PA State Board of Accountancy and were informed
AME) today announced that the Board of Directors has elected Robert that all persons holding themselves out as CPAs who are
J. Amodei as Vice President, Audit Services. He most recently has physically located in PA are required to have a current
served as Director, Operational Accounting in AMETEK's Corporate licensure in the state. We believe it could be improper for
Office. Ametek to identify him as a CPA in the press release
announcing his promotion to VP of Audit Services at
"I am pleased to announce Rob's promotion to Vice President, Audit Ametek’s Corporate Office
Services. Rob has done an outstanding job for AMETEK over an
extended period of time," commented Frank S. Hermance, AMETEK
Chairman and Chief Executive Officer. "Rob has been instrumental in
overseeing AMETEK's compliance with Sarbanes-Oxley and has
played a key role in the Company's acquisition due diligence process."

Mr. Amodei joined AMETEK in 1989 as part of its Financial


Management Development Program, where he held several rotational
assignments within the Company. Upon completion of the program,
he was named Senior Auditor in 1992. From 1995 to 1998, Mr.
Amodei held a number of financial and accounting roles within our
Chemical Products Division, including Plant Controller. In 1998, he
was named Manager, Audit Services, and in 2000, was promoted to
Director, Audit Services. In 2001, Mr. Amodei was named Division
Vice President and Controller, Floorcare & Specialty Motors, North
America, a position he held until his promotion to Director, Operational
Accounting in 2005.

Mr. Amodei holds a Bachelor of Science degree in Finance with a


Minor in Accounting from St. Joseph's University. He is also a
Certified Public Accountant and a member of both the American
and Pennsylvania Institutes of Certified Public Accountants.

Source: Ametek press release (here) Source: PA State License Check (here) 50
Why Did Ametek’s Audit Committee
Spruce Point Capital
Chairman Mysteriously Resign in 2011?
• We also observe that Ametek appears to have deliberately obscured the retirement/resignation of its Audit Committee Chairman – Mr. Gordon
Sheldon. Mr. Sheldon had served as the Audit Committee chairman since at least 2001, according to previous proxy statement filings, and served on
its Board since 1989. Mr. Gordon resigned from the Board on May 3, 2011 according to the proxy statement filed on March 19, 2 012. We observe
that Ametek did not file an 8-K or include any public disclosure that Mr. Sheldon would not stand for re-election and would resign. In
contrast, in February 2011 Ametek did make an 8-K filing that David P. Steinmann would not stand for re-election.(1)

• Prior to Mr. Gordon’s departure, we observe that the Audit Committee expanded from 3 members to 5 members in 2011. Mr. Conti, who was
appointed to the Board on July 30, 2010 joined the Audit Committee and is now the Chairman. Mr. Conti is an accounting professional by background.
In our opinion, these Audit Committee changes may suggest that Ametek was trying to modify its audit oversight in the wake of the Matthews
Whistleblower case

Audit Committee Expands From 3 to 5

Source:
(1) Steinmann resignation (here)
Proxy Statement – Filed 3/19/12 (here)
Proxy Statement – Filed 3/28/11 (here) 51
Auditor Reminder...Pay Close Attention!
Spruce Point Capital

Throughout the world, Ernest and Young has audited Ametek’s financial statements

According to Ametek’s Proxy Statement, “Ernst & Young LLP and its predecessor has
served continuously as our independent auditors since our incorporation in 1930”

There’s a place in the world we found Ametek is not audited by Ernst & Young or a
big global audit firm...

In India, where Ametek entered in 2009, its financials are audited by a


local/independent firm S.V. Ghatalia & Associates

52
Ametek Moves into India w/Great Promise...
Spruce Point Capital

Q3’2009 Earnings Conference Call To Discuss Move Into India

“At the end of the third quarter, we announced that we have acquired Unispec Marketing
and Thelsha Technical Services, two privately owned and affiliated businesses
headquartered in Mumbai, India. These acquisitions provide us with an established sales
distribution and service network with a total of 11 offices across India serving the quality
control and the analytical instruments markets.

Unispec Marketing currently represents our SPECTRO Analytical Instruments business in


India, while its Thelsha Technical Services affiliate provides an installation and wholesale
service for those instruments. This acquisition provides AMETEK an immediate sales
distribution in service infrastructure in India that otherwise would have taken several years
to build. We plan to leverage this distribution structure across other AMETEK business units
to increase sales to this very important market

We have the financial and managerial capacity to continue to do acquisitions.


Our balance sheet is strong and our cash flow and financing facilities provide us with ample
liquidity to pursue this strategy.”

Source: Q3’2009 Earnings Conference Call (here) Next Slide Please!


53
Ametek India 3 Years Later...2012 Auditor’s
Spruce Point Capital
Report Highlights Major Concerns

Special Note:
The Chris Stehm
FBI embezzlement
case center around
submission of
fraudulent
travel claims

Source: Publicly available at http://www.mca.gov.in/ 54


“Continuing Failures” Cited Tied to
Spruce Point Capital
Inventory Acct’g and Audit Systems

Inadequate!

Delays in
Payment of
Taxes!

Continuing
failure for
ascertaining
aging of
inventory and
collection of
receivables!
Described as
a Major
Source: Publicly available at http://www.mca.gov.in/ Weakness 55
Funding Issues and Bad Working Capital
Spruce Point Capital
Practice Noted in India

Ametek often cites its


superior working capital
practices to its investors.
However, we note it
received a citation for
funding issues from
using short-term bank
borrowing for long-term
investment and funding
of losses.

Source: Publicly available at http://www.mca.gov.in/ 56


Ametek’s Indian Auditor Notes the Exact Same
Spruce Point Capital
Issues the Whistleblower Claimed
Ametek India’s 2013 Form 23AC continued to list the same unresolved issues and specifically listed its opinion as
qualified and containing adverse remarks!

Spruce Point Note: Our review of Ametek Singapore Private Limited, the immediate holding
company, along with Ametek European Holdings Limited (the holding company above Ametek
Singapore) does not state the inventory valuation method used. Furthermore, both entities
stopped filing financial statements in 2012. Regardless, why after 5yrs of starting its India
operations does Ametek not appear to have control procedures in place?

Source: http://www.mca.gov.in/ 57
Ametek India: Qualified Audit Opinion!
Spruce Point Capital

Source: Publicly available at


http://www.mca.gov.in/ 58
Ametek India Markets Many of its Products
Spruce Point Capital

Ametek India markets


many of Ametek’s products
and brands, yet its auditor
noted it lacked internal
control for sales of goods,
services, and inventory!

Source: Publicly available at http://www.mca.gov.in/ 59


Insider Ownership Declines Year After Year
Spruce Point Capital

Alignment of insiders’ interest with public shareholders’ interests appears to be rapidly eroding.
Insiders (management and its directors) own only 2% of the company. Insiders own less and less
of the company every single year. We view this as an alarming trend to carefully consider.

2/5/2007 3/7/2008 2/2/2009 2/1/2010 3/18/2011 3/16/2012 1/31/2013 1/31/2014


Outstanding Shares 6,899,924 6,186,845 5,726,439 5,593,988 5,289,752 4,493,964 3,621,259 3,390,177
Options to Acquire 2,907,504 2,727,554 3,032,771 2,599,380 2,226,668 2,110,215 1,475,554 1,474,207
Supplemental Exec Retirement Plan 469,577 493,261 476,885 494,098 522,638 552,245 452,719 466,306
Insider Total Beneficial Ownership 10,277,006 9,407,660 9,236,095 8,687,466 8,039,057 7,156,424 5,549,532 5,330,690
Shares Outstanding 239,042,061 239,517,380 240,227,168 240,122,572 241,271,336 241,091,172 243,281,716 245,067,108
Reserved for issuance under incentive plans 14,307,422 19,575,000 18,000,000 15,525,000 12,450,000 23,100,000 19,898,922 18,200,000
Total Shares 253,349,483 259,092,380 258,227,168 255,647,572 253,721,336 264,191,172 263,180,638 263,267,108

Insiders Ownership / Total Shares 4.1% 3.6% 3.6% 3.4% 3.2% 2.7% 2.1% 2.0%

Adjusted for 3:2 stock split on Nov 2010 and May 2012
Source: Ametek Proxy Statements

60
Insiders Sales Are Rampant...
Spruce Point Capital

Source: Bloomberg; AME <equity> GPTR 61


Insiders Racing to the Exit With
Rapid Sales in 2014
Spruce Point Capital

Person, Title Sale Date Shares Sold Sale Price


Key senior executives were
William Eginton, SVP Corp. Development 2/24/2014 10,000 $53.07
the largest sellers of stock
Elizabeth Varet, Director 2/27/2014 2,000 $52.99
in early 2014. Many
Tim Jones, President Electromechanical Group 3/4/2014 20,000 $53.60
Directors have followed
Elizabeth Varet, Director 3/6/2014 1,000 $53.75
with numerous stock
Elizabeth Varet, Director 3/7/2014 1,000 $54.26
liquidations. Having sold
Elizabeth Varet, Director 3/17/2014 1,000 $53.61
stock at an avg. price of
James Malone, Director 5/12/2014 400 $53.21
$52.83 and near the high
Charles Klein, Director 5/16/2014 3,000 $52.67 prints of the year
Elizabeth Varet, Director 6/20/2014 1,820 $54.00
James Malone, Director 6/20/2014 1,250 $53.98
Steve Kohlhagen, Director 8/7/2014 3,550 $51.12
Steve Kohlhagen, Director 8/8/2014 3,401 $50.91
Elizabeth Varet, Director 8/18/2014 1,000 $52.07
Elizabeth Varet, Director 8/18/2014 1,000 $52.14
Elizabeth Varet, Director 9/2/2014 1,000 $53.20
Elizabeth Varet, Director 9/4/2014 1,000 $53.28
James Malone, Director 9/4/2014 12,464 $52.98
Elizabeth Varet, Director 9/5/2014 4,908 $53.10
John Hardin, President EIG 9/5/2014 10,000 $53.00
James Malone, Director 9/10/2014 1,755 $52.85
Elizabeth Varet, Director 9/11/2014 1,000 $52.75
Charles Klein, Director 11/4/2014 8,167 $51.47
Steven Kohlhagen, Director 11/6/2014 3,436 $51.43
Total/Avg Sale: 94,151 $52.83
62
Is Ametek’s Board Equipped to Look Out
Spruce Point Capital
For Shareholders’ Interests?
We wonder if Ametek’s Board of Directors is fully equipped to question management’s decisions, and oversee the best
interest of shareholders’
• First, we observe that Ametek has among the smallest sized Board among its peer group consisting of just 9 members
(includes its CEO and a recently appointed director on Sept 4, 2014). Secondly, Ametek has among the oldest Board, with
an average age of 65 years old and, lastly, the average length of tenure per Board member is 13 years (15yrs excluding the
recent appointee).
• It’s easy to see why Ametek’s Board is so entrenched and wouldn’t want to go anywhere! Directors receive restricted stock
with just a 2yr vesting period. Board members have been racing to sell stock this year. Collectively, the entire Board group
(excluding the CEO) owns approximately 0.36% of the stock
• Ametek also makes nice retirement benefits available to its Board, encouraging them to stick around. For example, Directors
who first became elected prior to January 1, 1997 participate in a retirement plan. Under this plan, each non-employee
Director who has provided at least three years of service receives an annual retirement benefit equal to 100% of that
Director’s highest annual rate of cash compensation during the Director’s service with the Board. Also, Directors who first
became members of the Board prior to July 22, 2004 participate in Ametek’s Death Benefit Program

Mettler
$ in millions Danaher Emerson Eaton Rockwell Ametek Toledo Hubbell Average*
Enterprise Value $52,413 $47,437 $40,147 $15,183 $14,302 $8,044 $7,195 $28,403
LTM Revenues $19,562 $24,540 $22,393 $6,557 $3,798 $2,435 $3,258 $13,124
Board Members 10 13 12 10 9 9 12 11
Average Age 62 61 61 62 65 60 60 61
Avg. Length of Tenure 18 9 9 8 13 11 9 11
* excludes Ametek

Source: Company filings.


63
Signs of Aggressive
Inventory Accounting

Proprietary and Confidential – May Not Be Distributed or Copied Without Spruce Point Capital Management, LLC Consent
Warning: It’s All About the Inventory
Spruce Point Capital

Ametek is obsessive about touting its “Operational Excellence” and its “Working Capital Efficiency.” Ametek regularly
highlights its “Working Capital to Sales” metric on its quarterly earnings conference calls, and management bonuses
are tied to this metric. One lever the company can pull to make itself more working capital efficient is by minimizing its
investment in inventory. We note the following paraphrased quote from the indicted former VP of Finance below.

Source: Ametek vs. Matthews Whistleblower Case


Publicly available by FOIA Request 65
Warning: Inventory Turnover Has Been
Spruce Point Capital
Persistently Declining
A persistently declining inventory turnover is at odds with a healthy, growing company and supports our belief
that Ametek may be experiencing inventory accounting issues. Ametek gives investors limited insights to
evaluate the factors affecting Cost of Goods/Services that drive inventory turns.

5.50x

5.40x

5.30x

5.20x

5.10x

5.00x

4.90x

4.80x
2011 2012 2013 Q1'14 Q2'14
Source: Ametek Company Financials
Note: Inventory Turnover = LTM Cost of Sales / Average ( Beginning and Ending Period Inventory) 66
Reminder: Ametek Never Discusses or
Spruce Point Capital
Discloses Drivers of its Gross Profit Margins

2013 Management, Discuss and Analysis (MD&A)


Total international sales for 2013 were $1,984.5 million or 55.2% of net sales, an increase of $276.9 million or 16.2%, compared with
international sales of $1,707.6 million or 51.2% of net sales in 2012. The $276.9 million increase in international sales resulted from the
acquisitions mentioned above, primarily driven by Dunkermotoren and Micro-Poise, and includes the effect of foreign currency translation.
Both reportable segments of the Company maintain strong international sales presences in Europe and Asia. Export shipments fr om the
United States, which are included in total international sales, were $1,037.0 million in 2013, an increase of $174.4 million or 20.2%,
compared with $862.6 million in 2012. Export shipments improved due to increased exports from the 2013 and 2012 acquisitions noted
above, excluding Creaform and Dunkermotoren.

New orders for 2013 were a record at $3,621.9 million, an increase of $86.8 million or 2.5%, compared with $3,535.1 million in 2012. The
increase in orders was primarily attributable to 2013 and 2012 acquisitions. As a result, the Company’s backlog of unfilled orders at December
31, 2013 was $1,140.0 million, an increase of $27.7 million or 2.5%, compared with $1,112.3 million at December 31, 2012.

Segment operating income for 2013 was $861.5 million, an increase of $72.2 million or 9.1%, compared with segment operating income of
$789.3 million in 2012. The increase in segment operating income resulted primarily from the acquisitions mentioned above, as well as the
benefits of the Company’s lower cost structure through Operational Excellence initiatives. Segment operating income, as a percentage of net
sales, increased to 24.0% in 2013, compared with 23.7% in 2012. The increase in segment operating margins resulted primarily from the
benefits of the Company’s lower cost structure through Operational Excellence initiatives.

Selling, general and administrative (“SG&A”) expenses for 2013 were $398.2 million, an increase of $17.7 million or 4.7%, com pared with
$380.5 million in 2012. As a percentage of net sales, SG&A expenses were 11.1% for 2013, compared with 11.4% in 2012. Selling expenses
increased $14.8 million or 4.4% for 2013 primarily driven by the increase in net sales noted above. Selling expenses, as a percentage of net
sales, decreased to 9.8% for 2013, compared with 10.1% in 2012. Base business selling expenses decreased approximately 2% for 2013
compared to 2012, primarily due to cost containment initiatives.

Ametek Never Discusses and Omits Factors Affecting its


Cost of Goods Sold or Gross Margins 67
High Level Indications of Potential
Spruce Point Capital
Inventory Accounting Shenanigans
Ametek appears to be engaging in classic inventory accounting shenanigans to leave costs on the balance sheet and
artificially boost profits
• First, we observe that Ametek no longer states its inventory at “lower of cost or market” according to the change in its
inventory footnote language from its Annual Reports. If inventory declines in value below original cost, GAAP prescribes that
the inventory must be written down to market to report the loss. By removing the lower of cost or market condition, it
appears that Ametek could be avoiding write-down charges. We observe that, in recent years, Ametek appears to have
never taken an inventory write-down charge
• Secondly, we observe that Ametek has systematically and materially changed its inventory accounting methods from
LIFO to FIFO over the past decade. The choice of First-in/First-out (FIFO) vs. Last-in/Last-out (LIFO) has a pronounced
impact on a company’s reported Net Income. In a general inflationary environment, FIFO results in lower Cost of Goods
Sold, and higher Net Income. Conversely, in the same inflationary environment, LIFO results in higher Cost of Goods Sold,
and lower Net Income. Therefore, Ametek’s choice of shifting to FIFO over LIFO represents a move towards more
aggressive accounting treatment that bolsters Net Income

Ametek FY 2004 Inventory Disclosure Ametek FY 2013 Inventory Disclosure

Inventories are stated at the lower of cost or market, The Company uses the first-in, first-out (“FIFO”) method
cost being determined for more than half of inventories of accounting, which approximates current replacement
by the last-in, first-out (LIFO) method of inventory cost, for approximately 80% of its inventories at
valuation, and market on the basis of the lower of December 31, 2013. The last-in, first-out (“LIFO”)
replacement cost or estimated net proceeds from sales method of accounting is used to determine cost for the
remaining 20% of its inventory at December 31, 2013

2004 Annual Report (here) 2013 Annual Report (here)

68
Material and Systematic Change to More
Spruce Point Capital
Aggressive FIFO Accounting
• Ametek appears to be deliberately and systematically changing its inventory accounting policy from LIFO (conservative) to FIFO (aggressive). This
policy change has accelerated post-financial crisis. While it’s possible that some of this shift is the result of integrating acquired companies under FIFO,
we don’t believe it can entirely be explained by this. Under IFRS, LIFO is not allowed, but Ametek has made only two meaningful foreign acquisitions
(Dunkermotoren and EM Test) – adding ~$220m of sales. In the case of Dunkermotoren, its 2012 public financials show that it reports under German
GAAP, and listed just €13.6m of inventories. Furthermore, according to our review of Ametek’s peers, and an empirical study on inventory policy choice
by the American Institute of CPAs (AICPA), approximately 50% of companies reported using LIFO or Average Cost (1). As a result, we find it difficult to
believe that all acquired companies are brought into Ametek and kept as using LIFO
• As per Financial Accounting Standards (FAS) 154, accounting policy changes that are made voluntarily require retrospective application to prior periods’
financial statements. If Ametek is simply covering up an accounting error or mistake, then its historical financials would also have to be restated (2)

100% Notice Ametek


90% 21% 20% re-accelerates the
31% 26%
80% 38% 38% 34%
50% 45% change to FIFO
70% starting in 2009,
60%
during a period of
50%
financial distress
40% 79% 80%
66% 69% 74% and when a
30% 62% 62%
50% 55% whistleblower
20%
claimed inventory
10%
accounting
0%
2005 2006 2007 2008 2009 2010 2011 2012 2013
irregularities
Inventory Accounted Under FIFO Inventory Accounted Under LIFO
Note: Spruce Point Capital Management is not an accounting firm and does not offer definitive accounting guidance. Consult your own Accounting experts on any matter related to
accounting interpretations
1) FASB Statement 154 (here)
69
2) AICPA study - 2009 (here)
Management Paying Itself Bonuses on
Spruce Point Capital
Adjustments for Excess Inventory....Really!
A hint of the severity of the inventory issue first appeared in 2010 through Ametek’s Proxy Statement. Management kindly
adjusted its operating income bonus performance target for the ‘tax benefit realized through the disposal of excess and
obsolete inventory.’ Unfortunately, investors have been completely left in the dark surrounding the magnitude of the issue.
The company made no disclosures of this excess inventory in its 10K, 10Q or on its conference calls.

Diluted earnings per share (EPS) — We believe that the paramount objective of a principal executive officer is to increase stockholder return
significantly, and that for a large, well established industrial corporation, EPS is typically a key metric affecting share price. Therefore, we believe EPS is
an excellent measure of our executive officers’ performance.

Sales — Sales growth is key to the long-term vitality of a business and we believe this is an indicator of our executive officers’ performance. This
measure is applied either on a Companywide basis, or, for our group presidents, with regard to their respective operating groups. We define our sales
measure as actual sales compared to budgeted sales without giving effect to (i) increases in revenues from businesses that we acquired during the year
and (ii) foreign currency adjustments.

Group operating income — This measure applies to our group presidents with regard to their respective operating groups, and reflects adjustments
deemed appropriate by the Compensation Committee. We believe this measure is a reliable indicator of operating group performance. Adjustments to
operating unit income in 2010 included estimated tax benefits pertaining to the disposal of excess and obsolete inventory and the inclusion of
specified financing costs related to acquisitions. We increased operating unit income by the estimated tax benefit realized through the disposal of
excess and obsolete inventory. We reduced operating unit income by the estimated amount of interest cost we incur on funds borrowed to finance an
acquisition where the results of operations of the acquired business are included in the unit’s operating results. We believe that reducing the operating
unit income derived from an acquired business by these interest costs better reflects the contribution of the acquisition to the operating unit’s
performance.

Group operating working capital — This measure represents inventory plus accounts receivable less accounts payable as a percentage of sales. We
use this measure to encourage our group presidents to manage our working capital in a manner that increases cash available for investment. Working
Capital is reported at the Corporate and Group level. A lower working capital percentage is an indicator of a group president’s and the CFO’s success in
increasing our cash resources.

Discretionary — A small portion of each executive’s award is based on discretionary factors that are deemed appropriate by the Compensation
Committee. In the case of the group presidents, these factors take into account acquisition activity of their respective operating groups

Source: Proxy Statement (here) 70


And the Problem Appears Big Enough to Still
Spruce Point Capital
Be Ongoing Three Years Later....
From the 2013 Proxy Statement
The target goal for each non-discretionary measure in 2013 was derived from our 2013 budget. Consistent with past practice, the Compensation
Committee can make adjustments on a case-by-case basis, such as for group operating income, as described below.

Diluted earnings per share (EPS) – We believe that the paramount objective of a principal executive officer is to increase stockholder return
significantly, and that for a large, well-established industrial corporation, EPS is typically a key metric affecting share price. Therefore, we believe EPS is
an excellent measure of our executive officers’ performance.

Organic revenue growth – Revenue growth is key to the long-term vitality of a business and we believe this is an indicator of our executive officers’
performance. This measure is applied either on a Companywide basis, or, for our group presidents, with regard to their respective operating groups. We
define our organic revenue growth measure as actual revenue compared to prior-year revenue without giving effect to (i) increases in revenues from
businesses that we acquired during the year and (ii) foreign currency effects.

Operating income – This measure applies to our chief operating officer and group presidents with regard to corporate and their respective operating
groups, and reflects adjustments deemed appropriate by the Compensation Committee. We believe this measure is a reliable indicator of corporate and
operating group performance. Adjustments to operating unit income in 2013 included estimated tax benefits pertaining to the disposal of excess
and obsolete inventory and the inclusion of specified financing costs related to acquisitions. We increased operating unit income by the estimated
tax benefit realized through the disposal of excess and obsolete inventory. We reduced operating unit income by the estimated amount of interest
cost we incur on funds borrowed to finance an acquisition where the results of operations of the acquired business are included in the unit’s operating
results. We believe that reducing the operating unit income derived from an acquired business by these interest costs better reflects the contribution of
the acquisition to the operating unit’s performance.

Operating working capital – This measure represents inventory plus accounts receivable less accounts payable as a percentage of sales. We use this
measure to encourage our executives to manage our working capital in a manner that increases cash available for investment. Operating working capital
is reported at the Corporate and Group level. A lower working capital percentage is an indicator of the executives’ success in increasing our cash
resources.

Discretionary – A portion of each executive’s award, ranging from 10% to 20%, is based on discretionary factors that are deemed appropriate b y the
Compensation Committee. In the case of the chief operating officer and group presidents, these factors take into account acquisition activity of the
Company and their respective operating groups.

Source: Latest Proxy Statement (here) 71


Benchmarking Peer Inventory
Spruce Point Capital
Accounting Policies

We analyzed a broad array of Ametek’s peers to benchmark inventory accounting policies. We observe that Ametek is the
only company we’ve analyzed that explicitly avoids the “Lower of Cost or Market” language in its SEC filings, and has been
changing inventory accounting methods in the last 5 years

Applies Lower Last 5yrs Change


of Cost or Market of Inventory Primary Secondary
to Inventory Value Acct'g Method Acct'g Method Acct'g Method
Emerson Yes No Avg Cost FIFO
Danaher Yes No FIFO LIFO
Agilent Yes No FIFO --
Hubbell Yes No LIFO (85%) FIFO (15%)
Eaton Yes No LIFO FIFO
Bruker Yes No FIFO Avg Cost
Mettler-Toledo Yes No FIFO --
FEI Company Yes No FIFO --
National Instrument Yes No FIFO --

Ametek No Yes FIFO LIFO

Source: Compa ny SEC fi l i ngs


72
Indications of Inventory Shenanigans
Spruce Point Capital

Ametek carries a substantial amount of ‘Raw Materials and purchased parts’ as a percentage of its reported inventory. This
appears at odds with its claim of being an efficient and lean manufacturer. We note that on average, its peers carry just 31%
of inventory in the form of raw materials.

Ending Inventory Balances - 12/31/13


$ i n mi l l i ons
Mettler Emerson Altra Thermo Parker
Ametek Toledo Electric Bruker Eaton Danaher Industrial Hubbell Fisher Hannifan
Raw Materials and parts $291.2 $98.2 N/A $189.7 $955.0 $610.6 $56.8 $122.3 $347.4 $111.4
Work-in-Process $85.5 $38.1 N/A $196.5 $428.0 $287.0 $18.4 $87.2 $157.7 $777.7
Finished Goods $76.1 $74.1 $678.0 $155.3 $1,115.0 $885.9 $68.4 $259.4 $989.4 $559.5
Demo Units/Other -- -- -- $48.3 -- -- -- -- -- --
Total Gross Inventory $452.8 $210.4 $1,895.0 $589.8 $2,498.0 $1,783.5 $143.7 $468.9 $1,494.5 $1,448.6
Less: Adjustments ($23.3) -- -- -- ($116.0) -- -- ($83.2) -- --
Ending Inventory, Net $429.5 $210.4 $1,895.0 $589.8 $2,382.0 $1,783.5 $143.7 $385.7 $1,494.5 $1,448.6

% of Gross Inventory Average 1


Raw Materials and parts 64% 47% N/A 32% 38% 34% 40% 26% 23% 8% 31%
Work-in-Process 19% 18% N/A 33% 17% 16% 13% 19% 11% 54% 23%
Finished Goods 17% 35% 36% 26% 45% 50% 48% 55% 66% 39% 44%
Demo Units 0% 0% 0% 8% 0% 0% 0% 0% 0% 0% 1%

1. Excludes Ametek. Source: Company Annual Reports


73
Indications of Inventory Shenanigans:
Spruce Point Capital
A Closer Look at Purchase Commitments

• Buried deep within the


financial statements,
public company’s must
produce a table
showing contractual
obligations over the
next few years
• In this case, Ametek is
reporting that it has
committed to
purchasing $335m of
fixed-price inventories,
with a majority coming
due within one year
• To assess the
reasonableness of this
reported amount, we
compare it with current
inventory amounts,
historical figures, and
across Ametek’s peer
group

Source: Ametek 2013 10-K filing (here) 74


Closer Look at Purchase Commitments (cont’d)
Spruce Point Capital

• On average, our analysis suggests that peer companies commit to purchasing approximately 45% of their current
inventory on a forward basis. Intuitively in our opinion, this appears to be sensible strategy to ensure adequate raw
material supplies, ensure price stability, and ‘hedge’ approximately half of costs against inflationary cost pressures
• On the other hand, Ametek appears to commit to purchase approximately 75% of current inventories forward.
This could be viewed from a variety of perspectives: 1) Ametek has an aggressive inventory purchasing strategy; 2) it has
superior ability to forecast customer demand and manage inventory (in the cyclical industries it operates in) or
3) its actual inventory balances are much higher than reported to investors.

$ in millions
Total Inventories Fixed Price Purchase Obligations Purch. Obligations / Inventories
FY 2011 FY 2012 FY 2013 FY 2011 FY 2012 FY 2013 FY 2011 FY 2012 FY 2013
Eaton $1,701 $2,336 $2,382 $869 $1,108 $1,236 51.1% 47.4% 51.9%
Thermo Fisher $1,330 $1,444 $1,495 $243 $275 $291 18.3% 19.0% 19.5%
Danaher $1,781 $1,813 $1,784 $960 $899 $1,032 53.9% 49.6% 57.8%
Emerson $2,105 $2,125 $1,895 $1,176 $1,220 $1,087 55.9% 57.4% 57.4%
Agilent (1) $898 $1,014 $1,066 $385 $450 $400 42.9% 44.4% 37.5%
Keysight Tech -- -- $502 -- -- $208 -- -- 41.4%
Hubbell $318 $342 $386 $181 $213 $181 56.9% 62.2% 47.0%
Mettler Toledo $241 $199 $210 $99 $94 $75 40.8% 47.2% 35.7%

Max: 56.9% 62.2% 57.8%


Average: 45.7% 46.8% 43.5%
Min: 18.3% 19.0% 19.5%

Ametek $380 $429 $453 $276 $326 $335 72.4% 75.9% 74.0%

Source: SEC financial filings


75
Note: Agilent includes Keysight results for all years
Aggressive Supplier Deals the Culprit?
Spruce Point Capital

• Ametek has noted on its Floorcare and Specialty motors website, that “We compete in a very competitive continuously
evolving market that has seen significant price erosion in recent years”
• According to a letter published to its vendors and potential vendors, Ametek offers advantaged payment terms to its vendors
that can consign inventory
• What is inventory consignment? Consigned inventory is inventory available to a manufacturer such as Ametek, which is
immediately available for use, but title to the inventory and the risk remains with the supplier until the inventory is consumed
• There are various pros and cons to inventory consignment strategies to a manufacturer
Benefits
1. Reduces working capital tied up in the inventory. Keeping inventory off its balance sheet would allow a company to
improve its reported inventory turnover, and other key financial metrics
2. Risk remains with the supplier until consumed. As a result, the inventory would not appear on the manufacturer’s
balance sheet since title is not held
Negatives
1. Suppliers may feel pressured that the manufacturer is using too much leverage to accept the terms
2. Added time and financial costs of managing the consignment process include storage, logistics and warehousing of
the inventory
3. Specialized accounting systems may have to be designed to accommodate any added complexity of the particular
consignment strategy

Aggressive consignment strategies and advantaged payment terms to suppliers may be another culprit for why Ametek’s
off-balance sheet purchase commitments vastly exceed its reported inventory balance. Ametek may be using this strategy
to bolster its reporting financial results. While we don’t know this for sure, in our opinion it is one plausible explanation.

Source: Ametek website


76
Remember What the Indian Auditor Said....
Spruce Point Capital

Spruce Point Note: Our review of Ametek Singapore Private Limited, the immediate holding
company, along with Ametek European Holdings Limited (the holding company above Ametek
Singapore) does not state the inventory valuation method used. Furthermore, both entities
stopped filing financial statements in 2012. Regardless, after 5yrs of starting its India
operations, Ametek still does not appear to have control procedures in place!

Source: Publicly available at http://www.mca.gov.in/ 77


How We Think Ametek “Covers its Tracks”
Spruce Point Capital
> > Cookie Jar Accounting?
• Ametek has pitched investors on its “Operational Excellence” strategy, commitment to lean manufacturing, and its Six Sigma approach to
business. On every quarterly conference call, the company articulates its estimation of its ability to achieve costs from strategic
procurement/global sourcing, and operational improvements
• We’ve reviewed every call since 2009, and graphed Ametek’s annual guidance on estimated sourcing and operational cost savings vs. its
quarterly realized benefit. Curiously, its estimation of annual sourcing benefits exploded higher right after its CFO retired. The explanation
was due to “weakness in its markets” and not that it had uncovered miraculous cost saving synergies from its previously announced large
acquisition of Dunkermotoren (more on the problems facing Dunkermotoren in the next section!).
• Ametek’s sourcing benefit estimation has tripled since 2009 from $20m annual to $70m as of Q3’14, yet its total COGS have only grown
62% over the same period. In our opinion, this growing estimation appears to be providing Ametek a cookie jar to justify its ever-expanding
margins, even in the face of “weak markets” and evidence of underlying business issues. See appendix for complete details.

$ in millions

$80.0 7/24/12: Ametek Cites “Softening Sourcing savings $140.0


We Are Seeing” as rationale for estimation exploding faster
$70.0 increased sourcing savings, not cost than realized benefits
synergies from the Dunkermotoren $120.0
acquisition announced in May. The
$60.0 CFO also “retired” in May.
$100.0
$50.0
$80.0
$40.0
$60.0
$30.0
$40.0
$20.0

$10.0 $20.0

Source: $0.0 $0.0


Ametek
earnings
conference
calls Realized Quarterly Sourcing Benefit (LHS) Estimated Annual Sourcing Benefit (LHS) Other Operational Savings (RHS) 78
Even the Analysts Appear Confused About its
Spruce Point Capital
Limitless Opportunities to Cut Costs
When pressed for clarity by an analyst about its big increase in sourcing cost reductions, the CEO provides an answer that sounds
elegant, but offers little in terms of specifics. A recent study by the McKinsey Global Institute on Global Manufacturing noted that the
post-financial crisis period has made the manufacturing sector more uncertain, volatile and with greater supply-chain risks, increasing
costs and forcing companies to become more productive. On the other hand, Ametek says it is able to get more cost efficient as it
grows in size, scale and complexity. We are skeptical of this claim.

R. Scott Graham, Jefferies LLC, Research Division

Just wanted to ask about this $90 million maybe in a little bit of different way it was asked previously. I don't know if
you're counting this differently because I remember you were saying at some point in the last 2 years that $60
million was the baseline target. And when things were -- the economy was better, that was the number; and when
the economy was weaker, you pushed that number up. Or -- did you at that point not include acquisition cost
takeout? Or is this $90 million just a big acceleration off of some of the value engineering [ph] and other things you
talked about?

Ametek CEO:

Now basically, Scott, we have included acquisitions continually in terms of providing that metric. I think the key
answer to your question is that the company has just gotten larger so that there are more opportunities to take cost
out. And we view this cost journey as a never-ending kind of activity that we expect our businesses every year,
independent of where they are on the maturity curve, to be looking at cost improvements in their business. And the
number is definitely larger, but I think if you stood it up aside the growth of the business, it's not that much different
than what it has been historically on a percentage basis.

Source: Q4’13 earnings call (here)


79
Mckinsey Global Manufacturing Report (here)
Signs of Deal Desperation and
Aggressive Acquisition Accounting

Proprietary and Confidential – May Not Be Distributed or Copied Without Spruce Point Capital Management, LLC Consent
Ametek: The Undisputed King of
Spruce Point Capital
Goodwill and Intangible Assets
Ametek aggressively marks its acquisitions with high goodwill and intangible assets relative
to peers. This is a possible sign of overpaying for acquisitions and/or ways to minimize
allocations to tangible and intangible assets such as inventory or purchased technology.

80%
69%
70%
61% 62%
60%
52% 52% 54%
50% 46%

40% 33% 35% 36% 37% 37%


32%
30% 27%

20% 16%
13%
10%

0%

Source: Company filings 81


Detailed Look at Acquisition Accounting
Spruce Point Capital

• Closer scrutiny of Ametek’s goodwill and intangible assets requiring amortization is warranted
• Large amounts allocated to goodwill and to ‘customer relationships’
• The level of financial disclosure is low surrounding working capital, with key components such as inventory and accounts
payable not separately identified

Allocation of Total Deal Purchase Purchase Prices Per Year


$ i n mi l l i ons
2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD 2014 Limited
Allocation to
Property, Plant and Equipment $40.9 $16.5 $34.4 $26.2 $4.8 $23.3 $13.6 $52.3 $12.3 $61.8 PP&E and
Technology.
Goodwill $221.4 $112.4 $170.5 $271.1 $17.4 $313.5 $238.1 $384.7 $213.5 $267.4
Indefinite Lived Trademarks -- -- -- -- -- $80.6 $63.0 $96.6 $44.0 $52.7 Large
allocation to
Customer Relationships -- -- -- -- -- $159.7 $178.9 $233.0 $133.4 $175.8 goodwill and
Purchased Technology -- -- -- -- -- $36.0 $18.1 $35.2 $33.9 $46.6 customer
relationships
Other -- -- -- -- -- $0.0 $0.0 $1.7 $0.0 $0.8
Total Intangibles $40.0 $22.1 $81.7 $136.7 $36.1 $276.3 $260.0 $366.5 $211.3 $275.9
Lack of
Deferred Inc Tax -- -- -- -- -- ($80.6) ($37.0) ($102.9) ($58.8) ($70.9)
Disclosure on
Net Working Cap and Other* $38.4 $26.6 $14.0 $29.0 $14.6 $6.1 $0.2 $47.1 $36.0 $39.4 Inventories;
Grouped in
Total Purchase Price $340.7 $177.6 $300.6 $463.0 $72.9 $538.6 $474.9 $747.7 $414.3 $573.6 Net Working
Capital

*Acct's Receivable -- -- -- -- -- -- $28.3 $61.1 $31.2 $33.9


Source: Ametek Annual Reports
* Accounts receivable, whose fair value, contractual cash flows and expected cash flows are approximately equal

82
Examples of Good Acquisition Accounting
Spruce Point Capital
SEC Disclosures
• Many of Ametek’s peers give better disclosures for marking of asset and liability valuations, especially on matters of
working capital and inventory

Danaher’s 2013 Acquisitions Agilent’s Varian Acquisition

Source: Company Annual Reports


83
Ametek Aggressively Marks Intangible
Spruce Point Capital
Asset Valuation >> Bolsters EPS
• Customer lists are the fast growing and largest proportion of Ametek’s intangibles subject to amortization
• We also observe that Ametek amortizes customer lists over 19yrs, which is 3yrs longer than purchased technology
• This creates an incentive for management to mark more of its deal costs to customer lists which spreads out the
expense and hit to earnings over a longer period

Definte-Lived Intangible Assets Subject to Amortization


$ in millions
Amortization Fiscal Yr Ended December 31st
Period 2008 2009 2010 2011 2012 2013 CAGR
Patents 16 $51.0 $54.2 $52.4 $53.0 $54.3 $55.3 2%
Purchased Technology 16 $69.0 $75.6 $107.2 $124.8 $163.2 $198.5 24%
Customer Lists 19 $203.4 $319.8 $479.9 $657.2 $897.1 $1,037.7 39%
Other acquired intangibles 3-20yrs $38.4 $25.1 $25.9 $24.9 $25.9 $28.3 -6%
Total definite-lived intangibles $361.9 $474.6 $665.5 $859.8 $1,140.5 $1,319.8 30%

Patents 14% 11% 8% 6% 5% 4%


Purchased Technology 19% 16% 16% 15% 14% 15%
Customer Lists 56% 67% 72% 76% 79% 79%
Other acquired intangibles 11% 5% 4% 3% 2% 2%
% of Total 100% 100% 100% 100% 100% 100%
Source: Company filings
Note: figures are gross amounts

84
Peer Analysis Supports View That Ametek
Aggressively Marks Customer Relationships
Spruce Point Capital

• We analyzed a broad array of Ametek’s peers to see what % of intangibles are being allocated to customer relationships
and lists. Our analysis shows that, on average, peers allocated ~50% to this category vs. the ~80% that Ametek allocates
• Danaher, a peer at 73%, may not be comparable since they put other intangibles into their customer relationship category

Eaton % of Total Teledyne Technologies % of Total


$ in millions Amort. Period 2012 2013 2012 2013 $ in millions Amort. Period1 2012 2013 2012 2013
Customer Relationships 16yrs $3,838.0 $3,859.0 58% 58% Proprietary Technology 10yrs $176.3 $191.3 62% 62%
Patents and Technology 17 $1,626.0 $1,588.0 25% 24% Customer lists/relationships 10 $91.1 $100.5 32% 32%
Other acquired intangibles $1,160.0 $1,155.0 18% 17% Patents $0.7 $0.7 0% 0%
Total definite-lived intangibles $6,624.0 $6,602.0 100% 100% Non-compete Agreements $0.9 $0.9 0% 0%
Trademarks $3.3 $3.3 1% 1%
Danaher % of Total Backlog $12.3 $12.9 4% 4%
$ in millions Amort. Period 2012 2013 2012 2013 Total definite-lived intangibles $284.6 $309.6 100% 100%
Customer Relationships and other 14yrs $3,528.1 $3,640.0 73% 73%
Patents and Technology $1,289.2 $1,376.5 27% 27%
Total definite-lived intangibles $4,817.3 $5,016.5 100% 100% Regal-Beloit % of Total
$ in millions Amort. Period 2012 2013 2012 2013
Agilent % of Total Customer Relationships 3-14yrs $244.9 $253.8 54% 57%
1
$ in millions Amort. Period 2012 2013 2012 2013 Technology/IPRD 3-9 $147.5 $133.0 33% 30%
Purchased Technology 8-9yrs $1,019.0 $849.0 63% 60% Trademarks 3-20 $32.7 $32.6 7% 7%
Customer Relationships 4 $401.0 $391.0 25% 27% Patents and Engineering 10 $16.6 $16.6 4% 4%
Trademark/Tradename 12 $176.0 $168.0 11% 12% Non-compete Agreements 3-5 $8.2 $8.3 2% 2%
Backlog $14.0 $14.0 1% 1% Total amortizable intangibles $449.9 $444.3 100% 100%
Total amortizable intangibles $1,610.0 $1,422.0 100% 100%
Mettler-Toledo % of Total
Bruker Corp % of Total $ in millions Amort. Period1,2 2012 2013 2012 2013
$ in millions Amort. Period 2012 2013 2012 2013 Customer Relationships 18yrs $96.6 $98.4 67% 67%
Customer relationships 5-12yrs $15.3 $18.0 9% 10% Proven Technology/Patents 10 $43.0 $43.2 30% 29%
Existing Technology/Patents 3-10yrs $151.5 $157.9 91% 90% Tradenames (finite life) 15 $4.0 $4.3 3% 3%
Trade names 5-10yrs $0.2 $0.2 0% 0% Other $0.7 $0.8 1% 1%
Total amortizable intangibles $167.0 $176.1 100% 100% Total amortizable intangibles $144.3 $146.7 100% 100%
Source: Company filings; Note: Gross Historical Cost
1. Inferred from recent acquisitions.
2. Weighted-average life for relationships and patents 85
Pro Forma Impact of Aggressive
Amortization Assumptions
Spruce Point Capital

• Based on a peer analysis, we estimate an appropriate amortization period for customer relationships to be 10yrs, not the 19yrs Ametek
uses on average
• Furthermore, we estimate the compounded effect of Ametek’s aggressive amortization assumptions has provided approximately a 130
basis point improvement to its EBIT margins and a 5% improvement to EBIT. We estimate the impact to EPS to be ~2.5%
$ i n mi l l i ons
2007 2008 2009 2010 2011 2012 2013
Customer Relationships
Total Revenues $2,137 $2,531 $2,098 $2,471 $2,990 $3,334 $3,594 Company Amortization Yrs
Reported Customer Lists $118.0 $203.4 $319.8 $479.9 $657.2 $897.1 $1,037.7 Mettler Toledo 18.0
Annual Addition $38.1 $85.3 $116.5 $160.1 $177.2 $239.9 $140.6 Eaton 16.0
Annual Amort Expense (1) $2.0 $4.5 $6.1 $8.4 $9.3 $12.6 $7.4
Danaher 14.0
Cummulative Expense $2.0 $6.5 $12.6 $21.1 $30.4 $43.0 $50.4
Teledyne 10.0
Pro Forma Adjusted EBIT Parker Hannifan 10.0
Annual Amort. Expense (2) $3.8 $8.5 $11.6 $16.0 $17.7 $24.0 $14.1
Regal Beloit 8.5
Cummulative $3.8 $12.3 $24.0 $40.0 $57.7 $81.7 $95.8
Bruker 8.5
AME Reported EBIT $432.7 $366.1 $482.2 $635.9 $745.9 $815.1
FEI Co. 7.5
% margin 17.1% 17.4% 19.5% 21.3% 22.4% 22.7%
Deduct: Incremental Amort. ($5.8) ($11.4) ($18.9) ($27.3) ($38.7) ($45.4) Agilent 4.0
Pro Forma EBIT $426.8 $354.7 $463.2 $608.6 $707.2 $769.7 Average 10.7
% margin 16.9% 16.9% 18.7% 20.4% 21.2% 21.4% Median 10.0
% Decline in EBIT -1.4% -3.1% -3.9% -4.3% -5.2% -5.6%
Margin enhancement 0.2% 0.5% 0.8% 0.9% 1.2% 1.3% Source: company filings, midpoint of
ranges where provided
Effective Tax Rate 32.6% 30.2% 30.7% 30.9% 30.7% 28.7%
After-tax impact ($1.9) ($3.4) ($5.8) ($8.4) ($11.9) ($13.0)
Diluted Shares 241.7 242.7 241.3 243.2 244.0 246.1
Reported Diluted EPS $1.02 $0.85 $1.18 $1.58 $1.88 $2.10
less: After-tax Amort. Impact ($0.01) ($0.01) ($0.02) ($0.03) ($0.05) ($0.05)
Pro forma EPS $1.01 $0.83 $1.15 $1.55 $1.83 $2.05
% change -0.8% -1.7% -2.0% -2.2% -2.6% -2.5%
(1) Assumes amortization period of 19yrs as per Ametek's 10k filing
(2) Assumes 10yr amortization period 86
Desperation for Deals: Zygo Acquisition
Spruce Point Capital
Underscores Struggle for Fresh Targets
On April 11, 2014 Ametek announced the acquisition of Zygo (Nasdaq: ZIGO) for an enterprise value of $280 million. 1
• Headquartered in Middlefield, CT, Zygo is a provider of optical metrology solutions, high precision optics, and optical
assemblies for use in a wide range of scientific, industrial, and medical applications
• In our opinion, the acquisition highlights the struggles that Ametek is having in identifying quality acquisition
targets to continue its growth strategy. We note that Ametek’s press release failed to outline any specific revenue
or cost synergies in this transaction that would be accretive to EPS
• Ametek paid a $19.25/share, 31% stock price premium, 1.7x, 10x, and 33x trailing sales, EBITDA, and EPS, respectively.
• Valuation paid for Zygo appears rich given significant issues / problems:
1. No Revenue Growth: FY 2011: $150.1m > FY 2013: $149.4m
2. Margin Contraction:
a. Gross Margin: FY 2011: 47% > FY 2013: 44%
b. Operating Profit: FY 2011: 14% > FY 2013: 8%
c. Profit Margin: FY 2011: 13% > FY 2013: 5%
3. Management Turmoil: On October 21, 2013 the Chairman/CEO Chris Koliopoulos stepped down; three weeks
later, David Basila, VP of Business Development also ceased employment with the company2
4. Accounting Issues: Zygo received a Nasdaq notice that it was no longer in compliance with listing rules due to a
delinquency in filing its 10Q.3 In its last earnings release, Zygo reported numerous errors in its income tax expense,
but explained them as not being material. However, in its recent earnings report, the restated diluted EPS fell by
50% from $0.08c to $0.04c (we hardly think a 50% reduction is immaterial)4

Sources:
1) Deal Announcement (here)
2) CEO resignation (here) and VP resignation (here)
3) Nasdaq notification (here)
4) Zygo Q2’14 Earnings report (here) 87
Latest Amptek Deal – Another Example of
Spruce Point Capital
Overpaying for (No) Growth
On August 5, 2014 Ametek announced the acquisition of both Amptek Inc concurrent with its Q2’14 earnings. In its recent
10Q filing, Ametek would later disclose that Amptek was acquired for ~$115m and has estimated sales of $30m
• Headquartered in Bedford, MA, Amptek provides instrumentation and detectors used in non-destructive materials
analysis applications. Commenting on the acquisition, the CEO said “Amptek provides us with attractive sensor and
detector technology as well as strong R&D development capabilities which will help to accelerate future technology
developments for our served markets“
• We’ve done further diligence on Amptek and discovered that it was owned by JZ Capital Partners, a publicly traded
entity in London. A closer look reveals that Amptek had no revenue growth from 2012 to 2013! In fact, revenues declined
modestly from $30.2m to $29.2m. Its EBITDA, a number inherently susceptible to accounting assumptions, appears
unusually high at 45% of revenues
• In our opinion, the Amptek deal further highlights Ametek’s desperation to acquire revenues at any cost.
Having paid 3.9x revenues and 8.8x EBITDA for a business with no recent sales growth appears extremely rich,
and may be detrimental to shareholder value

Source: JZ Capital 2013 and 2014 Annual Reports (here) and (here) 88
Ametek’s Largest Deal Ever: Dunkermotoren
Spruce Point Capital
Major Issues and Deception
Ametek Press Release Spruce Point Observations
April 26, 2012 Ametek announced that it would acquire Dunkermotoren, a leader in
advanced motion control solutions for a wide range of industrial automation • Where was Ametek to purchase this business in 2009
applications. Dunkermotoren had expected 2012 sales of ~ €155m (~US$200m). and why did they pay $100m more for it in 2012?
Ametek acquired the business from Triton, a European private equity firm for • Triton’s commentary suggests it invested substantial
~€250m ($320 million) or 1.61x EV/Sales. R&D to grow the business. None of this R&D will
accurately flow through Ametek’s income statement,
enabling the overstatement of EPS
Ametek’s deal Commentary: “Dunkermotoren is a global leader in highly engineered
advanced motion control solutions for niche applications. It is an excellent strategic • In the purchase price allocation, we observe Ametek
and highly complementary fit with our Precision Motion Control business. It attributed the smallest amount to purchased technology
expands our leadership position in niche rotary and linear motion applications. In of $16.4m, and is amortizing it over 15yrs, so just
addition, it broadens our manufacturing capabilities in both Europe and China, and $1.1m/yr of amortization expense will hit future earnings
greatly expands our presence in key industrial end markets."
Dunkermotoren Purchase Price Allocation
Triton Press Release $ in millions
Amortized Years
Triton bought Dunkermotoren in Nov 2009 when it was a non-core business of
the telecommunications provider Alcatel-Lucent. Property, Plant and Equip. $34.0 Yes Various
Triton paid EUR 145m to acquire the business, which was producing EUR 100m Goodwill $140.5 No
of sales (EV/Sales:1.45x)
Customer Relationships $103.7 Yes 16-20
Triton’s deal commentary: "Despite a challenging market environment, we have
Purchased Technology 16.4 Yes 15.0
doubled investment in R&D and managed to improve the company's ability
to innovate. In addition we have supported targeted acquisitions in the field Indefinite Lived Trademarks 44.5 No
of technology and a rapid expansion of sales operations and technology Total Intangibles $164.6
centres in the US, China and Europe. The company has extended its product
range and sales network and enhanced customer proximity, all of which has Deferred Inc Tax (19.2)
strengthened Dunkermotoren's ability to compete in the long term” Net Working Cap and Other (2.7)
Total Purchase Price $317.2
Triton to Acquire Dunkermotoren from Alcatel Lucent Announcement
Triton Sale to Ametek Announcement 89
Source: Q1-Q3 2012 Ametek 10Q SEC Financials
Ametek Deal Announcement
Dunkermotoren’s German Filings
Spruce Point Capital
Tell a Different Story
Dunkermotoren’s 2012 German Public Filings Business Commentary From German Filing
On May 21, 2012 Ametek said, “The privately held manufacturer has expected 2012 “Overall, Dunkermotoren could not reach the turnover of EUR
sales of approximately €155 million ($200 million)” But, according to public filings, 140.1m from the previous year. Sales amounted to EUR 136.4M,
Ametek would have already known that Dunkermotoren’s business was which is about 3% below the planned levels. The good level of
deteriorating when they made this statement. Actual 2012 revenues came in at the first quarter could not be sustained in the subsequent
EUR 136.4m, or 12% less than expected. Revenues declined 3% YoY!! quarters. The global economy also influenced the regional
distribution of sales. In Germany, sales remained broadly stable.
With a slight decline in the fourth quarter, sales declined in
Germany for the year by approx. 1%. Exports to other European
countries were about 6% lower than last year, the same applies to
exports to Asia. Positive Sales developments in North America,
here were 9% increase was recorded.”

Ametek Spins a Misleading Story to Wall St.


Matt McConnell - Citigroup - Analyst
Great, thank you. I wonder if I could slip in a quick follow-up on
Dunkermotoren. I know it has been probably two or three quarters
since that closed. Could you give an update on how that integration
has been going and maybe profitability? I think it was a 1-point drag
to the EMG margin. Was that roughly in line with your expectation?
AMETEK, Inc. - Chairman, CEO
Yeah, it’s now performing very good. I’m very, very pleased
with the operating team there. We just did a review recently
and that team has embraced the Ametek culture, and they’re
Profit Increased,
very good and their profit margins are lower – there’s no question.
but mostly because
Ametek repaid We knew that when we acquired them. As we do with most
some of its debts acquisitions, we’re going to continue to work and improve those
margins, and your analysis is right – it was about 100 basis points
improvement.
Source: Dunkermotoren’s public German financials (Google Translated);
Available https://www.bundesanzeiger.de Source: Q4 2012 Ametek Earnings Conf Call (here) 90
So Much for the Dunkermotoren Team “Embracing
Ametek’s Culture”.... Struggles Continue in 2013
Spruce Point Capital

German Article on Dunkermotoren – Aug 8th, 2013 English Interpretation


Manfred Bergsch wird Leiter der Geschäftsführung

Bonndorf - Manfred Bergsch ist ab sofort neuer Leiter der Geschäftsführung bei der “Manfred Bergsch is now the new head of
Dunkermotoren GmbH. Das teilte die Unternehmensleitung bei einem Pressegespräch mit. management (CEO) at Dunkermotoren,
Die Organisation ist soweit stabil, dass wir uns gemeinsam mit Ametek entschlossen announced at a press conference”
haben, die bisherigen Geschäftsführer freizustellen“, so Uwe Lorenz, der den
Geschäftsführerposten von Volker Brunner übernommen hat und bereits vorher im
Leitungsteam der Firma tätig war. Die drei bisherigen Geschäftsführer von Dunkermotoren, “The three former managing directors of Dunker
Nikolaus Gräf, Volker Brunner und Frank Guckelberger hatten gekündigt. engines , Nikolaus Graf, Volker Brunner and
Frank Guckelberger were terminated.”
Manfred Bergsch war bisher Aufsichtsratsvorsitzender der Dunkermotoren GmbH. „In der
Rolle als Geschäftsführer kann ich die Firma aber besser begleiten.“ Bergsch selbst
betrachtet sein Engagement als Leiter der Geschäftsführung als ein vorübergehendes. Er
ist gleichzeitig Geschäftsführer der Spectro Analytical Instruments in Kleve, die seit 2005
zum Ametek-Konzern gehört. „Ich werde ab jetzt aber drei Tage die Woche hier sein“,
versicherte er. Derzeit laufe die Suche nach einem ständigen Leiter der Geschäftsführung
über Ametek. Ob die Position des Leiters des Rechnungs- und Finanzsektors (bisher Frank “It is not known what will happen to the Head of Finance
Guckelberger) künftig auch Geschäftsführungsfunktion habe, wisse man noch nicht. and Accounting position (previously Frank
Bergsch lobte den Zustand der Firma: „Das ist eine motivierte und erfolgreiche Mannschaft, Guckelberger).”
die Dinge wirklich bewegen will. Das macht wirklich Spaß hier.“

Der Leiter der Geschäftseinheit, in der Dunkermotoren organisiert ist, Matt French, war aus
den USA nach Bonndorf gekommen. Daran sehe man, wie wichtig Dunkermotoren für
Ametek sei, erläuterte Bergsch. Der Konzern hat 16 solche Einheiten und 70 Firmen. „Ich IT WOULD TAKE 1 YEAR FOR THE
bin froh, dass wir eine solch stabile Managementsituation haben, die es ermöglicht hat, die
bisherigen Geschäftsführer freizugeben“, so French. COMPANY TO FINALLY ANNOUNCE
MARKUS ROTH AS ITS NEW CEO1
Manfred Bergsch ist 58 Jahre alt, verheiratet, hat zwei Kinder und drei Enkel. Seit 29
Jahren ist er bei Spectro Analytical Instruments, dort hat er als Servicetechniker
angefangen. Er war drei Jahre in den USA tätig und ist seit 2006 Alleingeschäftsführer

Source:
Public German Article (here) translated by Google Translate
1) New CEO Appointed (here) 91
Insights from Cameca: Failed Revenue
Spruce Point Capital
Expectations and Now Covering Tracks?
Ametek Announces Acquisition of Cameca Observations and Commentary
August 13, 2007: PAOLI, Pa.--(BUSINESS WIRE)--AMETEK, Inc. (NYSE:AME) announced Observations:
that it has acquired CAMECA SAS, a manufacturer of high-end elemental analysis systems • Ametek estimated Cameca’s sales at €60m for 2008. According to
used in advanced laboratory research, semiconductor and nanotechnology applications. public filings we obtained, its 2008 actual results were €45m
CAMECA, based in Paris, France, was purchased from an investment group led by the (25% below plan), with virtually no revenue growth in 2009.
Carlyle Group for approximately €82 million ($112 million). CAMECA has estimated According to public filings, Cameca still had not hit €60m of
annual sales of €60 million ($82 million). “CAMECA is an excellent acquisition that revenues by year end 2013!
significantly broadens our technical capabilities in differentiated, high-end analytical
instrumentation. Its global customer base includes many of the world’s leading • Its CEO resigned according to a French filing made on 3/31/14
semiconductor manufacturers and academic, government, and industrial research facilities and one of its auditors appears to have resigned too
engaged in nano-science and other materials science research” “CAMECA is an excellent
acquisition that significantly broadens our technical capabilities in differentiated, high-end Years Would Pass Until Ametek Started Touting Cameca on
analytical instrumentation. Its global customer base includes many of the world’s leading Earnings Conference Calls...Why?
semiconductor manufacturers and academic, government, and industrial research facilities
engaged in nano-science and other materials science research,” states Frank S. Hermance, • Q1’2012 (here): “Europe is an interesting story for us. Overall, our
AMETEK Chairman and Chief Executive Officer. organic growth in Europe was quite good. It was up actually about
7% in the first quarter. And we saw very, very strong performance in
our Aerospace businesses. And also one of our companies in France,
CAMECA, which makes a very high-end analytic type instrumentation,
saw excellent, excellent sales”
• Q3’2012 (here): “Interestingly though, at the very high end of our
business, it’s absolutely the opposite, where I think you’re familiar
with our CAMECA business and that business tends to go counter-
cyclical to the semiconductor cycle and when things are weaker in
semiconductor, basically the semiconductor companies put more
investment in RD&E. So that business is just doing incredibly well for
us”
• Q1’2013 (here): “Actually, our strongest organic growth was in
Europe, and the reason for that was really twofold. One was that we
have our commercial and some of our business in regional aircraft,
European businesses were very strong and the MRO business in
Europe was very strong. That was one factor. And the second factor
was CAMECA, which is one of our highest, and EIG businesses had
Sources: Cameca acquisition announcement
Cameca public filings: here
very large shipments into Europe in the first quarter.”
92
Cameca’s Gains Appear To Be Hitting A Wall
Spruce Point Capital

We’ve obtained Cameca’s historical financial filings and presented the results below for ease of display. Our observations
mirror many of our concerns about Ametek’s current predicament. Cameca appears to have hit a wall in terms of margin
expansion, while its revenue growth has severely disappointed.

Cameca’s Income Statement – FY Ended 12/31 Observations and Commentary

euros in millions
2007 2008 2009 2010 2011 2012 2013 CAGR 2013 Net Revenues of €59.1m are still
below the forecasted revenues of €60.0m
Net Turnover (Sales) € 45.0 € 45.8 € 32.0 € 44.0 € 48.8 € 55.9 € 59.1 4.6% announced in 2007! Revenue growth
% growth -- 1.7% -30.1% 37.4% 10.8% 14.6% 5.8% slowed significantly in 2013.
Cost of Materials+ other pruchases € 26.0 € 23.3 € 15.7 € 20.2 € 24.4 € 25.6 € 29.0 1.8%
Gross Profit € 19.0 € 22.5 € 16.3 € 23.8 € 24.4 € 30.3 € 30.1 8.0%
% margin 42.2% 49.1% 51.0% 54.1% 50.0% 54.2% 50.9% Claims of continuous improvements
and ability to strategically source and
Salaries and Wages € 12.6 € 13.4 € 13.0 € 12.5 € 13.6 € 13.9 € 14.4 2.3%
drive input costs lower is not evident in
% margin 28.0% 29.2% 40.5% 28.5% 28.0% 24.9% 24.4% Cameca’s gross margins, which have
Depreciation and Amort. € 0.2 € 0.2 € 0.3 € 0.3 € 0.3 € 0.3 € 0.3 9.4% been largely stagnant since 2008
Operating Taxes/Levies € 1.0 € 1.1 € 0.9 € 1.1 € 1.1 € 1.4 € 1.8 9.6%
Provision for Current Asset Charges € 0.2 € 0.4 € 0.4 € 0.7 € 0.3 € 0.7 € 0.3 9.7%
Research and development expenses,
Provision for Operating Liablities € 0.6 € 2.0 € 1.3 € 3.6 € 3.8 € 4.2 € 4.1 39.6%
listed in the footnotes of the financials,
Other Expenses € 0.3 € 0.1 € 0.1 € 0.1 € 0.1 € 0.1 € 0.2 -7.9% have held stable at ~€4.8m per year.
EBIT € 4.2 € 5.3 € 0.4 € 5.5 € 5.2 € 9.7 € 9.0 13.6% This also underscores our belief that
% margin 9.3% 11.6% 1.4% 12.5% 10.6% 17.4% 15.3% the company underinvests in R&D
EBITDA € 4.4 € 5.5 € 0.7 € 5.8 € 5.4 € 10.0 € 9.4 13.5%
% margin 9.7% 12.1% 2.2% 13.1% 11.1% 18.0% 15.8% EBITDA margins peaked in 2012 and
No te: We exclude items belo w net revenues such as pro ductio n o f invento ried pro ducts and large reversals o f amo rtizatio n and pro viso ns are significantly below Ametek’s
corporate margin of 26%

Sources: Cameca public filings: here 93


Cameca’s Auditor Resignation....
Spruce Point Capital
Trouble Brewing?
2011 Financials Have 2 Auditors Latest 2013 Financials Shows Auditor Departure

By French Commercial Code


(article L823-2), Cameca
must have two statutory
auditors.(1) Cameca’s latest
filing in 2013 has just one
auditor - Constantin
Associates has been omitted.

Cameca public filings (here) 94


1) Dual Statutory Audit Rule (here)
Trouble Brewing at Cameca....
Spruce Point Capital

Recent public filings in France and UK indicate troubles at Cameca. Its CEO recently departed, and its UK subsidiary
was declared insolvent. Furthermore, according to Ametek’s recent private placement filing, Schedule 5.15 indicates
$13.1 m of previously undisclosed capital lease debt assumed by Cameca. This may indicate an unwillingness by
Ametek to internally fund the business.

Cameca’s French Filings Show Cause For Concern Cameca’s UK Subsidiary Recently in Liquidation

Sources: Cameca French (here) and UK (here) filings


Private Placement Filing (here)
95
Another French Auditor Disappearance
Spruce Point Capital
at Ametek’s Antavia SAS

Antavia is a French MRO company that employs 70


people to support efficiently its worldwide customers
such as Boeing and Airbus. Umeco, based in England,
acquired Antavia for £8.7m in October 2006 to create
its first repair and overhaul base in mainland Europe.
Approximately 1 year later in October 2007, Ametek
acquired Umeco’s MRO division (which included
Antavia and AEL Ltd) for approximately £36m ($73m),
which together had estimated annual sales of
approximately £28m ($57m)

Our review of recent filings, indicates that Antavia


produced €15.4m of revenue in 2014, and increase of
11% from 2013. We calculate its EBITDA to be €3.2m
or 20.6% of revenue.

However, we believe that Antavia’s financial


results should be viewed cautiously. We
observe that its second auditor, Deloitte Marque
& Gendrot, mysteriously disappeared from
signing the audit opinion after 2012.

As we highlighted earlier, Ametek’s Antavia must have


two statutory auditors by French Commercial Law

Sources: Antavia SAS public filings: here No


Ametek acquires Umeco MRO (here)
Umeco acquires Antavia (here)
Signature 96
Insights From the Acquisition of
Spruce Point Capital
Land Instruments Int’l Ltd.
Land Instruments Acquisition Sounds Promising
According to the Announcement

On June 16, 2006 Ametek announced it acquired Land


Instruments International Limited (“Land Instruments”), a
global supplier of high-end analytical instrumentation. With
its headquarters in Dronfield, United Kingdom, Land
Instruments had annual sales of approximately £22
million ($41 million). It was acquired from an investor group
led by 3i plc
• According to Ametek, “Land Instruments is an excellent
addition to our high-end process and analytical
instruments business. It offers an extensive range of Spruce Point Commentary
infrared temperature measurement, combustion efficiency • Land’s revenue did not appear to hit the target of £22m stated in the press
and emissions monitoring instruments.” release. We estimate on a calendarized basis, Land produced
• “Land Instruments offers a full range of on-line optical ~£15m of revenues, or 31% less than expected
temperature measurement instrumentation for industrial Commentary from Land’s 2006 Annual Report
applications, including spot thermometers, line scanners • “Turnover for the 9 month period ended 31 December 2006 was 30% lower
and thermal imagers. These instruments, which measure than for the 12 month period ended 31 March 2006. After adjusting for the
temperatures up to 3000 degrees Celsius, are widely different length in reporting periods, turnover for the 9 month period ended
used by the metal, glass and mineral processing 31 December 2006 was broadly comparable with the prior period.”
industries. The addition of Land Instruments’ high • “Operating profit before exceptional items decreased by 64% during the
temperature monitoring and control systems expands period. After adjusting for the different length in reporting periods, the
AMETEK’s on-line process monitoring capabilities, adding operating profit before exceptional items was 50% lower than in the
to our existing strengths in on-line composition and prior period, reflecting reduced margins arising from a change of mix
moisture analysis,” continued Mr. Hermance” in products and pricing pressure. The company incurred exceptional
costs of £990,000 in the period, arising from the write off of a loan to a loss
making subsidiary (now in liquidation), curtailment of the Employee Benefit
Sources: Trust and redundancy costs, details of which are set out in note 3 to the
Land Instruments Acquisition Announcement (here) financial statements.” 97
Land’s UK public filings accessible at www.companieshouse.gov.uk
Years Later and Land Instruments
Spruce Point Capital
Is Still Struggling...
Observations From Recent Performance

Spruce Point Commentary


• Land’s revenue in 2013 is still 17% below its £22m
estimated revenue at acquisition in 2006, and its
operating profit margin has contracted by 467bps over
the past 3 years
2012 Commentary from Land’s Annual Report
• “Core markets underwent significant retrenchment
during 2012. This negatively impacted both volumes and
pricing. These effects were partially offset by the
improved penetration of new market sectors and new
product launches. Cost reduction and other commercial
activities were successfully initiated to address the
market challenges, leaving the business well positioned
to deliver strong performance in 2013 and beyond.”
2013 Commentary from Land’s Annual Report
• “The Company’s core market business, while stabilizing
in 2013, continued to show some sales deterioration
against the previous year. This was partly due to lack of
growth in these mature markets, but was also due to a
more selective targeting of sales opportunities, which
was a contributing factor to the higher underlying
operating profit performance noted below”

Source:
Land’s UK public filings accessible at www.companieshouse.gov.uk
98
Insights from Taylor Hobson UK filings:
Spruce Point Capital
No Growth, Margins Shrinking
Recent Zygo/Luphos Deal Synergistic
w/Taylor Hobson?

On June 16, 2004 Ametek announced it acquired Taylor


Hobson Holdings Ltd. (“Taylor Hobson”) manufacturer of
ultra-precision measurement instrumentation for a variety
of markets, including optics, semiconductors, hard disk
drives and nanotechnology research. Taylor Hobson was
acquired from funds advised by Permira for a purchase
price of GBP 51m (~US$ 95m). Taylor Hobson had
expected 2004 sales of ~GBP 38 million (~$US 70m) (1)
• Ametek recently cited Taylor Hobson in its Q2’14
conference call, saying, “During the second quarter, we
closed the acquisition of Zygo Corporation and 2013 Commentary from the Annual Report
acquired Luphos, a technology acquisition which is • “Financial performance in our Leicester division returned to just
highly synergistic with Zygo and our Taylor Hobson below 2011 levels with an overall decrease in sales of 11% from
and metrology businesses” the peak 2012. Sales to the Far East in particular were much
• We wanted to investigate Taylor Hobson further, so weaker than last year, the relative decrease due to the
pulled its recent UK financial filings. Again, we found unusually high sales to our Japanese sister-company in 2012.
evidence of a struggling company with only 1.3% Most product lines were affected with core surface and
revenue growth, gross margins contraction of roundness products bearing the brunt. Sales in our Solartron
200bps to 49.8% from 51.9% and operating margin ISA division were up 54% on the previous year as a result of
contraction of 295bps from 27.07% to 24.12% increased activity in all product and geographic sectors. Asia
and the Americas saw particularly strong growth.”
• Our take: Taylor Hobson’s financials show it is
struggling, while Zygo’s business appears challenged • “At the operating profit level, we made 24.1% (2012: 27.1%).
and under margin pressure. We are skeptical of Whilst this was down on the previous year, the return remains
Ametek’s ability to drive ‘synergies’ between two no very respectable in the context of reduced volumes, adverse
growth companies with contracting margins foreign exchange movements and increased R&D investment.”
1) Note: Ametek acquired the Solartron Group (2005) with sales declared at GBP 25m (US$50m),
and is holding Solartron Metrology as a 100% subsidiary of Taylor Hobson. Source:
Taylor Hobson Deal Announcement UK public filings accessible at www.companieshouse.gov.uk 99
Solartron Deal Announcement
Insights from the Acquisition of
Spruce Point Capital
Muirhead Aerospace
Ametek Announces Acquisition of Muirhead Aerospace

On Nov 3rd 2008, Ametek announced the acquisition of


UK-based, Muirhead Aerospace Limited, a leading
manufacturer of motion technology products and a
provider of avionics repair and overhaul services for the
aerospace and defense markets. Muirhead Aerospace
was a subsidiary of Esterline Technologies Corporation, a
NYSE-listed company (NYSE:ESL), and has estimated
2008 sales of approximately $54 million (£33 million).
Key Deal Commentary From Ametek:
Spruce Point Commentary
“Muirhead Aerospace expands AMETEK’s penetration in
motion control products for the aerospace and defense • Muirhead’s revenues do not appear to have achieved the estimated results
markets, including actuators and other specialized linear articulated in the press release. Even with the benefit of the 14 month period
from Nov 1, 2099 to Dec 31, 2009, revenues only achieved £31.2m
motors, complementing our existing technical motor
capabilities. Muirhead Aerospace’s motion control Annual Report Commentary
products are used in many applications including fuel • “The company performed well in the 14 months to 31 December 2009 despite
controls, flight controls, power systems and guidance a difficult economic environment. The impact of the global economic
systems on a wide variety of aircraft, land vehicles, ships downturn however was greater than anticipated and the business needed to
and missiles” align its cost structure with market conditions as a result. The restructuring,
“Additionally, Muirhead Aerospace further strengthens coupled with a rebranding exercise following its acquisition by Ametek Inc
resulted in operational restructuring costs of £925k
AMETEK’s position as a leading independent provider of
MRO services to the European aviation industry. It • Adjusting for this, operating profits for the lengthened period and the 14
provides avionics repair services to a wide variety of month financial position were considered to be satisfactory. The company
commercial, business jet and defense customers,” continues to seek out new opportunities in its repair and overhaul business.
We continue to be cautiously optimistic about the near term economic outlook
and our differentiated business continues to enjoy a healthy order book. This
Source:
UK public filings accessible at www.companieshouse.gov.uk gives us good reason to be confident that 2010 should be another good year
Muirhead deal announcement (here)
100
Muirhead Aerospace’s Recent Performance:
Spruce Point Capital
Margins in Persistent Decline
Observations From Recent Performance Muirhead Aerospace Financial Performance

Spruce Point Commentary


• December 31 2009, as part of a group re-organization,
Muirhead sold the trade and assets of its motion business for pounds in millions
a consideration of GBP 18.9m to Airscrew Limited, a fellow 2010 2011 2012 2013
subsidiary of Ametek Inc. Subsequent to this transaction,
January 8, 2010 Airscrew Limited changed its name to Sales £11.4 £11.0 £14.1 £16.4
AMETEK Airtechnology Group Limited (see next slide for % growth -- -3.3% 27.9% 16.6%
details)
Gross Profit £5.5 £5.7 £6.4 £6.8
• While Muirhead’s revenues have expanded since 2010, its
margin 48.5% 52.0% 45.2% 41.8%
margins have contracted. Gross Margins peaked in 2011 at
52% and have contracted to 41.8% in 2013. EBITDA margins Operating Profit £2.6 £2.4 £3.2 £3.4
also hit a 4 year low in 2013 at 22.7%. These margins are margin 22.6% 21.5% 22.7% 20.9%
significantly below Ametek’s parent level margins in the 26%
range. These margin contractions directly call into question
Depreciation and Amort. £0.2 £0.2 £0.3 £0.3
Ametek’s “Operational Excellence” and continued ability to EBITDA £2.7 £2.6 £3.5 £3.7
raise its margins margin 24.0% 23.2% 24.7% 22.7%
• We also note that Muirhead invested virtually nothing in its
R&D for the four years we reviewed

Muirhead Annual Report Commentary


• 2011: “Despite the general downturn in the UK economy with
particular emphasis on defence spending programme
reductions and curtailments, the operating profits of the
company were considered good”
• 2013: “Muirhead continued to show strong year on year
growth in both sales and operating profit...the increased level
UK public filings accessible at www.companieshouse.gov.uk
of turnover was largely derived from government contracts” 101
Insights from AMETEK Airtechnology:
Spruce Point Capital
Margin Contraction
Observations From Recent Performance

Spruce Point Commentary


• AMETEK Airtechnology has not filed updated financials since 2012.
In 2014, three of its directors resigned: Robert Mandos, John
Mockler, and Jason Fenn
• While revenues increased 7.7% from 2011 to 2012, gross margins
contacted from 24.1% to 22.2% (190bps), while Operating profit
(EBIT) margins contracted from 12.0% to 10.8% (120bps)

AMETEK Airtechnology 2012 Annual Report Commentary


• “The level of order intake in 2012 reduced by £1.7m or 3.9% to
£42.6m. A reduction of orders in our track ball product line which Margin contraction!
benefited from a large multi-year in 2011 drove this reduction. We
continue to invest heavily in new product development to ensure
we are well placed to achieve our long term growth objectives.
During 2012 we spent £3.2m on research, development and
engineering to support our New Product investment programs. New Margin contraction!
Product investment for 2012 was 6.8% of sales (2011 8.4%). The
level of enquiries and the future prospects remain encouraging.”
• “The company operates in a competitive env’t, and our customers
have the ability to switch supply sources if they judge that the
competitor product offers better value. Further, it is becoming
apparent that a trend is developing with our defence and industrial
markets whereby customers are placing orders close to if not within
stated lead times. This business believes this change in
procurement behavior is as a direct result of our customers coming
to terms with reduced defence budgets and general tightening of
spending within industrial and commercial markets driven
principally by continuing concerns over the robustness of economic Source: UK public filings accessible at www.companieshouse.gov.uk
Note: During 2012 the company recorded £0.9m provision to reflect additional costs associated
growth in developed and developing economies.” with a development program which will not be recoverable under the terms of the contract 102
Recent Problems at
Spruce Point Capital
Ametek Airtechnology?

Financial Accounts Overdue Recent Director Resignations

Source: UK public filings accessible at www.companieshouse.gov.uk


103
Insights from Lloyd Instruments:
Spruce Point Capital
Dramatic Revenue Decline in 2012
Overview of Lloyd Instruments

Lloyd Materials Testing (formerly Lloyd Instruments) is an


AMETEK, Inc. company and part of AMETEK Test &
Calibration Instruments. It manufactures testing machines and
testing systems, polymer test equipment and texture analysis
instruments.
Originally known as JJ Lloyd Instruments, the company has
been around for over 40 years.
Spruce Point Commentary
• Llyod instruments has not yet filed 2013 financials, so we cannot
assess its recovery vs. 2012’s dramatic revenue decline
• Echoing our concerns about underinvestment in R&D, we
observe that Lloyd’s invested just GBP 168k in R&D on GBP
18m of revenues – a small amount
Lloyd’s 2012 Annual Report Commentary
• “Turnover has decreased by 31.5% to £18,049,000. This was
due to funding issues, unfavorable European economic climate
and increased competitive activity in our AMETEK Advanced
Measurement Technology Division and a change in business
processes for the Lloyd Instruments Division, with sales to
certain markets being replaced by a commission arrangement”
• “A favorable product mix resulted in an improvement in gross
margin in our AMETEK Advanced Measurement Technology
Division which was offset by the effect of the changed business
structure in the Lloyd Instruments Division”

Source:
UK public filings accessible at www.companieshouse.gov.uk 104
Insights from SPECTRO Analytical
Spruce Point Capital
Instrument’s German Filings
Ametek Press Release Recent Business Commentary
June 14, 2005 – SPECTRO Analytical Instruments is pleased to announce that it
• “The year 2012 showed a stable trend over the
has been acquired by AMETEK, Inc. (NYSE: AME) a leading global manufacturer
previous year, although in the sale of analyzers no
of electronic instruments and electric motors. SPECTRO was acquired from an
overall volume growth was achieved. A significant
investor group led by German Equity Partners BV for approximately €80 million
increase in sales was achieved but in the service and
($98 million). With its headquarters in Kleve, Germany, SPECTRO has annual
aftermarket business.”
sales of approximately €85 million ($104 million). "We are very excited about the
acquisition of SPECTRO," comments AMETEK Chairman and Chief Executive • “The upward trend after the crisis of 2009 remains
Officer Frank S. Hermance. "SPECTRO is a highly differentiated business which stable and is expected to continue to moderate. This
significantly expands our elemental analysis capabilities, bringing new technologies further assumes the outlook for the next 3 years is a
and market opportunities to AMETEK. With this acquisition, our high-end analytical market growth of around 3-5% per year.”
businesses now total nearly $375 million in annual revenue.” • “A major reason for the stable demand for our
products is due to the continued stable conditions on
$ in millions 2008 2009 2010 2011 2012 the metal producing markets and the secondary
Sales € 104.5 € 74.7 € 91.9 € 103.3 € 108.3 industries associated with it”
COGS € 53.8 € 39.6 € 45.1 € 50.1 € 50.0
Gross Profit € 50.6 € 35.1 € 46.8 € 53.2 € 58.2 Spruce Point Observations
% margin 48% 47% 51% 52% 54% • Revenues have been largely stagnant and grown
R&D € 4.5 € 4.3 € 4.5 € 5.0 € 5.0 under 1% per annum for the past 5 years. 2012
% margin 4.3% 5.8% 4.9% 4.9% 4.6% revenues finally exceeded pre-recession levels
Distribution Costs € 20.8 € 15.8 € 18.8 € 20.4 € 20.2 • SPECTRO is one of the few businesses with EBITDA
% margin 19.9% 21.1% 20.5% 19.8% 18.7% margins comparable to Ametek’s corporate EBITDA
G&A € 5.0 € 5.2 € 4.7 € 4.9 € 4.7 margin
% margin 4.8% 7.0% 5.1% 4.7% 4.4% • SPECTRO mirrors our concern that Ametek may be
D&A € 2.4 € 3.1 € 2.4 € 2.7 € 3.3 underinvesting in R&D among its businesses. We
EBIT € 17.8 € 6.7 € 16.5 € 20.2 € 25.0 observe that its R&D margin has largely been flat,
% margin 17.1% 9.0% 17.9% 19.6% 23.1% while the company reports “no volume growth”
EBITDA € 20.3 € 9.8 € 18.8 € 22.9 € 28.3 Source:
% margin 19.4% 13.1% 20.5% 22.2% 26.1% http://www.spectro.com/pages/e/p060080.htm
105
https://www.bundesanzeiger.de (Google Translation)
Insights from Atlas Material Testing’s
Spruce Point Capital
German Operations
Ametek Press Release Observations and Commentary

PAOLI, Pa., Nov. 9, 2010 /PRNewswire-FirstCall/ -- AMETEK, Inc. (NYSE: AME) today • Observations: Atlas’ German operation appears to
announced that it has acquired Atlas Material Testing Technology LLC, the world's leading account for ~50% of its total revenues with EBITDA
provider of weathering test instruments and related testing and consulting services, from margins in the 9-10% range
Industrial Growth Partners for approximately $159 million in cash. Atlas is headquartered • Translated Commentary: For 2012, we expect revenue of
in Chicago with additional manufacturing operations in Germany and a network of outdoor and about EUR 32 million and a profit on ordinary activities of
laboratory testing facilities around the globe. It has expected 2011 sales of approximately $85 approximately EUR 2.0 million. Thus, sales would indeed
million. Atlas' products include weather exposure test systems, corrosion-testing instruments, be higher than in 2010 but lower than 2011, the hitherto
specialty lighting systems, and large-scale weathering test chambers. In addition, Atlas offers most successful year in company history. For 2013, we
indoor laboratory and outdoor testing services, photovoltaic and solar testing, and expect revenue and profit on ordinary activities at
consulting. Its customers include testing laboratories and leading aerospace, paint, coating, approximately the same level as in the 2012
polymer, plastic, solar/photovoltaic, pharmaceutical, LED and automotive manufacturers.
• The continuing weakness of the U.S. dollar against the
Atlas' products and services are used by their customers in both new product development EURO and EURO erstarktem again after overcoming the
and quality assurance applications, to assess product performance, reliability and compliance crisis in some European Member States on the one hand,
with industry standards and specifications. These instruments test the effects of weathering
we expect continued pressure on prices for our
by simulating exposure to sunlight, temperature, moisture and corrosion. products. Approximately 30% of our revenue is
denominated in USD. On the other hand, we expect a
ATLAS Material Testing Technology GmbH
further improvement in the economy with positive effects on
the demand for our products.
• The main focus in the 2012 financial year was the
development of new products in the low-end range and test
equipment for the solar industry. In this context,
cooperation with the American parent company has
intensified and led to a lively exchange of technical know-
how. The use of these synergies will in future lead to a
significant cost reduction and acceleration in the
development area. In 2013, the parent company has
decided to shift the entire production gradually until 2014 to
Chicago. Our company will then buy the products and sell
as before.
• From this displacement, approximately 10 to 12 employees
would be affected. Currently still negotiations with the
Sources: German Public Filings (here); (Google translation) 106
Atlas acquisition announcement works council on the release procedures.
Insights From Grabner Instruments (Austria)
Spruce Point Capital

Grabner Instruments was acquired by Chandler Engineering in 2002. In 2003, Chandler reorganized its ownership in a
separate company named Chandler Instruments LLC. Ametek acquired Chandler Instruments Company, LLC, a manufacturer
of measurement instrumentation for the oil and gas industry, for approximately $50 million. With its headquarters in Tulsa, OK,
Chandler had 2003 expected sales of approximately $30 million.

Grabner develops and manufactures automatic petroleum testing equipment. Grabner Instruments’ are fully automated,
portable, rugged and fast & easy to operate fuel and oil analyzers for the quality control in the laboratory as well as for f ast on-
site tests in mobile laboratories

Grabner Instruments Financial Summary Spruce Point Observations


Euro in millions
• Grabner appears to be a small, but
2008 2009 2010 2011 2012 2013 CAGR niche business with EBITA margins
Sales €8.7 €5.6 €6.5 -- €9.0 €9.6 2.1% close to the parent level margins
% growth -- -35.7% 17.4% -- -- 7.6%
• Long-term revenue growth rate of
Cost of materials/services €1.5 €1.1 €1.4 -- €2.3 €2.5 10.1%
2% p.a. is not impressive, and may
Gross Profit €7.1 €4.5 €5.1 -- €6.7 €7.1 0.0%
be more of a function of price
% margin 82.3% 79.9% 77.9% -- 74.7% 74.2% -
increases than volume growth
Personnel Expenses €2.8 €3.0 €2.6 -- €3.0 €3.2 2.1%
• More notably, gross margins and
Depr+Amortization €1.1 €1.1 €0.2 -- €0.1 €0.1 -33.4%
EBITDA margins have declined
Other Operating Expenses €1.3 €0.9 €1.0 -- €1.0 €1.5 2.3%
sharply since 2008, which directly
EBIT €1.9 -€0.4 €1.3 -- €2.6 €2.4 4.6%
contradicts management’s claims of
Add: Depr/Amort €1.1 €1.1 €0.2 -- €0.1 €0.1 -33.4%
its ability to extract continual
EBITDA €3.0 €0.6 €1.5 -- €2.7 €2.5 -3.3%
improvements from cost cutting
% margin 34.4% 11.6% 23.0% -- 30.3% 26.2% -

Note: Grabner’s income statement was not filed in 2011


Sources: Grabner public filings (here).
107
Insights from Ametek Denmark –
Spruce Point Capital
Margin Erosion and Plunging Return Metrics
• We obtained public documents on Ametek Denmark: Part of Ametek Measurement and Calibration Technologies (“AMCT”) and
comprises R+D, production and worldwide sales of temperature, pressure and signal calibration instruments as well as developm ent
and production of temperature sensors sold primarily in Denmark. The division AMCT, which Ametek Denmark is part of, handles
sales, service and calibration in the US and Canada. The affiliated companies in Germany and France handle sale, service and
calibration in those markets.
• The business does not report revenues or COGS, However, Gross Profit and Operating Profit fell by 3.1% and 11.3% respectively in
2013. Return on Net Assets and on Equity plunged to a 4 year low. Cash flow from operations fell from DKK 29.3m to 4.6m
• Selected Commentary: “In 2013, the export share of Ametek Denmark was 86% compared with 85% in 2012. Gross Profit for the year
was a net decrease primarily due to a change in product mix and also a drop in the US Dollar. In 2014, Ametek Denmark expects a
moderate increase in gross profit and in earnings due to the expected general pick-up of the global market, continuing introduction of
new productions and expansion in existing and new market areas”

Key Return Metrics


Plunge to 5yr Low
Sources: Public Financial Filings of Ametek Denmark (here) 108
Insights from Ametek Nordic AB (Sweden)
Spruce Point Capital

• We obtained public documents on Ametek Nordic AB:


Handles the marketing, sales and distribution of electronic instruments Income Statement
such as spectrometers in Sweden. According to its website www.ametek-
nordic.se it markets the Spectro and Spectum brands. Spectro is a
member of AMETEK Materials Analysis Division.
• Spruce Point’s Observations:
1. Revenues peaked in 2011 at SEK 14.1m (down 27.5%) and are still
below 2010 revenue levels
2. Its EBITDA improved to SEK 2.4m in 2013, and its EBITDA margin
stood at 15% -- significantly below the parent level EBITDA of 26%

Financial Summary
“D&A”

“Operating Profit (EBIT)”

“Net Revenues”
“Profit after
financial items”
“Total Assets”

Sources: Public Financial Filings of Ametek Nordic AB available in Sweden (here) 109
Insights into Ametek’s Specialty Metal Products
Spruce Point Capital

Ametek Specialty Metal Products is a collection of 4 business units, and include three acquisitions in recent years (Coining,
Reading Alloys, and Hamilton Precision Metals). These companies produce metal powders, master alloys, clad metals,
specialty wire products, metal strip, engineered shaped components, thermal management products, foil, and precision strip &
coined parts. These materials are used in a variety of applications, including automotive, aerospace, micro-electronics,
appliance, lock & hardware, telecommunications, marine, medical and general industrial.

Reading Alloys Metal Strip, Engineered Shapes/Wire Spruce Point Observations

Acquired April 2008 with estimated Based in Wallingford, CT Products


sales of $80m at the time • We estimate Ametek’s SCP
include metal strip (nickel/cobalt),
division does approximately
shaped and profile wires, engineered
Specialty titanium master alloys and $200m of annual revenues
Shaped components and thermal
highly engineered metal powders used management products. Wallingford has • Specialty metal business are
in the aerospace, medical implant, recently been in violation of state generally commodity-like in
military and electronics markets environmental compliance reporting1 nature, have extreme
competition, characterized by
capital intensity, high operating
Hamilton Precision Metals Metal Alloy Powders/Clad Materials costs, and low returns on capital
Acquired June 2007 for $42m and Stainless steel powders; nickel and cobalt • Ametek paid 1.7x revenues for
had estimated sales of $25m alloy powders. Hamilton Precision Metals and
2.3x revenues for Coining. In the
Produces precision metal strip and Acquired Coining in May 2011 for $148m absence of additional information,
foil for medical, electronic and and had estimated sales of $65m. Coining these appear to be rich multiples
instrumentation market manufactures solder preforms and brazing paid for specialty metals
preforms used for joining applications in businesses

Source: Company announcements


microelectronics packaging and assembly
1) Ametek environmental non-compliance (here) 110
Specialty Metals Business Don’t
Spruce Point Capital
Carry High Valuations
According to our review of publicly traded specialty metal and engineered performance materials companies, they have
struggled to grow revenues and generate free cash flow in the current environment

We believe the two best small-cap comparables for Ametek’s Specialty Metals business are:
1. Haynes Int’l (developer, manufacturer and marketer of high-performance nickel and cobalt-based alloys used in corrosion
and high-temperature applications)
2. Luxfer Holding (a global materials technology company specializing in the design, manufacture and supply of high-
performance materials for various end market)

Specialty metals and engineered performance materials companies trade for approximately 1.0x and 7.0-7.5x forward sales
and EBITDA, respectively.
($ i n mi l l i ons , except per s ha re fi gures )
Stock % of Last 12 Months Enterprise Value/
Price 52-wk Ent. Total YoY Gross EBITDA FCF P/E EBITDA Sales
Name Ticker 11/12/2014 High Value Sales Sales Margin Margin Margin 2014E 2015E 2014E 2015E 2014E 2015E

Allegheny Technologies ATI $32.37 70% $4,838 $4,090 5.9% 6.2% 4.3% 4.5% NM 19.7x 17.0x 8.2x 1.1x 1.0x
Carpenter Technology CRS $51.99 78% $3,304 $2,224 -1.2% 16.4% 13.1% -4.6% 21.4x 17.6x 9.7x 8.1x 1.5x 1.3x
Globe Specialty Metals GSM $18.78 85% $1,411 $753 -0.5% 15.6% 14.7% 3.0% 25.0x 16.6x 10.4x 7.9x 1.7x 1.5x
RTI Metals RTI $23.58 65% $876 $782 3.0% 22.2% 13.4% -1.8% 23.1x 15.8x 7.5x 5.8x 1.1x 1.0x
Materion MTRN $38.66 97% $839 $1,125 -9.5% 17.7% 9.1% 2.7% 24.9x 16.3x 9.1x 7.4x 0.7x 0.7x
Haynes Int'l HAYN $46.83 79% $529 $451 2.0% 16.3% 4.0% 4.1% 54.8x 15.0x 16.1x 6.9x 1.1x 0.9x
Luxfer Holdings LXFR $15.61 71% $475 $481 -0.9% 23.9% 14.8% -0.4% 12.7x 9.9x 6.5x 6.1x 0.9x 0.9x

Max $4,090 5.9% 23.9% 14.8% 4.5% 54.8x 19.7x 17.0x 8.2x 1.7x 1.5x
Average $1,415 -0.2% 16.9% 10.5% 1.1% 27.0x 15.9x 10.9x 7.2x 1.2x 1.1x
Min $451 -9.5% 6.2% 4.0% -4.6% 12.7x 9.9x 6.5x 5.8x 0.7x 0.7x

Source: Company financials, Wall St. estimates


111
Insights into Ametek’s Floor Care and
Spruce Point Capital
Specialty Motors Business
Segment Overview: Ametek’s specialty motors and motor-blowers are used in a wide range of products, such as floor care products,
ranging from hand-held, canister and upright vacuums to central vacuums for residential use to commercial floor care equipment;
household and personal care appliances; fitness equipment; electric materials handling vehicles; and sewing machines. Additionally, its
products are used in outdoor power equipment, such as electric chain saws, leaf blowers, string trimmers and power washers.

Spruce Point Observations: Over decade ago, floor care and motor products contributed ~20% of Ametek’s total company sales ( 6.5%
as of 2013). This market has gotten intensely competitive with deflationary price effects as noted on Ametek’s own website. In our opinion,
part of Ametek’s motivation for its acquisition strategy has been to rapidly diversify away from the floor care and motor market. This can be
seen in the bottom left chart, where % of EMG revenues coming from floor care and specialty motor markets has decreased from 44% in
2005 to just 15% in 2013. The segment’s revenue implied from these percentages can be seen on the bottom right chart. We estimate
current segment revenues of ~$230 million, which appear to have structurally declined from over $300 million pre-financial crisis

Electromechanical Group (EMG) Sales Breakdown Implied Floor Care and Specialty Motors Revenues
$ in millions
100%
15% 15% $350 15%
90% 24% 22% 18%
31% 27%
80% 35%
$300
10%
44%
70% 35% 31% 5%
60% 27% 31% 37% $250
29% 33% 0%
50% 27%
18% $200 -5%
40%
30% $150 -10%
49% 50% 54%
20% 47% 45%
38% 38% 40% 40% -15%
10% $100
-20%
0%
$50
2005 2006 2007 2008 2009 2010 2011 2012 2013 -25%

Floor care and Specialty Motor Markets and Products $0 -30%


2005 2006 2007 2008 2009 2010 2011 2012 2013
Engineered Materials, Interconnects and Packaging Markets and Products
Technical Motors and Systems
Source: Ametek SEC Filings. Ametek FSM website (here) 112
Growth and Margins in the Floor Care and
Spruce Point Capital
Specialty Motors Business Not So Good...
Spruce Point Observations: We believe Ametek has faced pressure in its floor care and specialty motor business from Asia. As a result, we’ve looked
at both Techtronic Industries (HK: 0669) and Johnson Electric (HK: 0179) for additional insights

Techtronic Industries: Leader in Power Tools, Outdoor Power Equipment, and Floor Care for consumers, professionals, and industrial users in the
home improvement, repair and construction industries. 6yr revenue CAGR for floor care is 2.5% and power equipment 5.6%. Corporate EBITDA margins
are in the 10% range, with floor care ~8%. Key floor care brands include Hoovers, Oreck, Vax and DIrt Devil

Johnson Electric: Leader in motion products, control systems and flexible interconnects. Its industrial products segment serves a broad range of end
markets, including floor care. 6yr revenue CAGR for its Industry Products segment is 0%! Its corporate EBITDA margins are approximately 15%. The
company has noted commoditized pressures in its Industry Products segment. The company expects margins to contract in 2014.

Techtronic Industries Financial Performance Johnson Electric


$ i n mi l l i ons
$ i n mi l l i ons
FY Ended December 31st
2008 2009 2010 2011 2012 2013 FY Ended March 31st
2009 2010 2011 2012 2013 2014
Power Equipment $2,388.6 $2,183.2 $2,401.9 $2,662.7 $2,864.6 $3,143.9
% growth 14.5% -8.6% 10.0% 10.9% 7.6% 9.8% Auto Products $905.0 $933.7 $1,149.6 $1,272.8 $1,303.9 $1,436.8
Floor care (1) $1,023.7 $891.7 $981.1 $1,004.3 $987.8 $1,155.8 growth -21.8% 3.2% 23.1% 10.7% 2.4% 10.2%
% growth 4.9% -12.9% 10.0% 2.4% -1.6% 17.0% Industry Products $654.0 $579.0 $726.8 $753.8 $685.9 $660.8
growth -1.5% -20.3% 0.0% 3.7% -9.0% -3.7%
Total Sales $3,412.2 $3,074.9 $3,383.0 $3,667.0 $3,850.0 $4,299.7
Other $269.0 $208.2 $226.4 $114.2 $69.9 $30.2
% growth 7.4% -9.9% 10.0% 8.4% 5.0% 11.7%
Total Sales $1,828.0 $1,741.0 $2,104.0 $2,140.8 $2,059.7 $2,097.6
Total Gross Profit $1,052.1 $961.0 $1,089.0 $1,193.6 $1,289.2 $1,472.3 growth -17.7% -4.8% 20.9% 1.7% -3.8% 1.8%
% margin 30.8% 31.3% 32.2% 32.5% 33.5% 34.2%
Gross Profit $425.7 $481.5 $579.7 $584.4 $577.7 $618.9
EBITDA (2) % margin 23.3% 27.7% 27.6% 27.3% 28.0% 29.5%
Floor care $7.5 $43.3 $82.3 $76.6 $78.1 $96.2
Total EBITDA $136.1 $197.9 $322.5 $314.3 $304.3 $321.8
% margin 0.7% 4.9% 8.4% 7.6% 7.9% 8.3%
% margin 7.4% 11.4% 15.3% 14.7% 14.8% 15.3%
Power Equip $212.3 $180.3 $191.5 $268.0 $319.0 $355.3
% margin 8.9% 8.3% 8.0% 10.1% 11.1% 11.3%

(1) Floor care includes acquisition of ORECK brand in H2 2013 (includes ~$31m of sales)
(2) Segment EBIT plus depreciation and amortization
Source: Johnson Electric (here)
113
Source: TTI Group (here)
Summary: Foreign Operating Subsidiaries
Spruce Point Capital
Show Margin Contraction
• We’ve examined public documents of businesses that contribute ~$732m of revenue (~20% of Ametek’s $3.6 billion total in 2013)
• We find that on average:
• Its operating businesses have an EBITDA margin of ~21% and;
• Are experiencing both contracting Gross Margins of ~0.2% and EBITDA margins of ~1.3%
• Paradoxically, Ametek’s corporate EBITDA margin continues to expand and is in the 26% range. However, the only meaningful large business
with margins close to this level is its Spectro unit. We have excluded Zygo and Amptek from our analysis because the results have not yet
been fully consolidated on an annual basis into Ametek’s financials

i n l oca l a nd forei gn currency (mi l l i ons )


Last Public Foreign US$ LTM YoY YoY Ch. LTM LTM YoY Foreign US$ LTM YoY Yoy Change
Reporting LTM LTM Gross Change Gross Operating Operating Change in LTM LTM EBITDA Change EBITDA
Company Country Period Sales Sales Margin in Sales Margin Income Margin Op. Income EBITDA EBITDA Margin in EBITDA Margin
Dunkermotoren GmbH Germany 2012 € 136.4 $168.6 57.8% -3.0% -0.4% € 6.2 4.6% -29.5% € 24.4 $30.2 17.9% -10.9% -1.7%
Zygo Corporation (1) US 2013 $162.8 $162.8 46.7% 3.3% 0.3% $15.4 9.5% -25.7% $26.8 $26.8 16.5% -13.4% -3.2%
SPECTRO Analytical Germany 2012 € 108.3 $133.8 53.8% 4.8% 2.3% € 25.0 23.1% 23.5% € 28.3 $35.0 26.1% 23.6% 4.0%
Taylor Hobson Limited UK 2013 £54.8 $82.4 49.9% 1.3% -2.1% £13.2 24.1% -9.8% £14.2 $21.4 25.9% -8.7% -1.1%
Cameca SAS France 2013 € 59.1 $75.5 50.9% 5.5% -3.2% € 9.0 15.3% -7.4% € 9.4 $12.0 15.8% -6.8% -2.1%
AMETEK Airtechnology Group UK 2012 £47.5 $72.4 22.2% 7.8% -1.9% £5.1 10.8% -3.3% £6.6 $10.0 13.8% -5.1% -1.9%
Atlas Material Testing (2) Germany 2012 € 32.0 $39.6 56.0% Decline -- € 1.6 4.9% -47.0% € 2.9 $3.5 9.0% -35.5% --
AEM Limited UK 2013 £25.3 $38.0 46.2% 9.0% -1.0% £5.7 22.4% 21.7% £6.4 $9.6 25.4% 18.1% 2.0%
Amptek US 2013 $29.2 $29.2 -- -3.6% -- -- -- -- $13.1 $13.1 44.9% 7.2% 4.5%
Land Instruments UK 2013 £18.3 $27.5 41.0% -9.6% 2.7% £1.9 10.5% -26.3% £2.2 $3.3 12.2% -16.1% -2.0%
Lloyd Instruments UK 2012 £18.0 $27.5 60.3% -31.4% 8.9% £8.1 29.4% 0.3% £8.7 $13.3 48.3% 0.0% 14.1%
Muirhead Aerospace Ltd UK 2013 £16.4 $24.6 41.8% 16.6% -3.4% £3.4 20.9% 7.5% £3.7 $5.6 22.7% 6.9% -1.8%
Ametek Denmark A/S Denmark 2013 -- -- -- -- -- DKK 33.3 -- -11.3% DKK 33.6 $5.8 -- -11.4% --
Antavia SAS France 2013 € 15.4 $19.7 46.3% 11.0% -1.3% € 3.0 19.3% 24.0% € 3.2 $4.1 20.6% 11.7% 0.1%
Grabner Instruments Austria 2013 € 9.6 $12.3 74.2% 7.6% -0.5% € 2.4 25.0% -8.0% € 2.5 $3.2 26.3% -6.9% -4.0%
AMETEK Instruments India India 2012 $7.7 $7.7 -- 63.0% -- -- -- -- $1.1 $1.1 14.6% 19.9% -5.3%
AMETEK Nordic AB Sweden 2013 SEK 15.9 $2.4 81.4% 12.3% -3.3% SEK 2.3 14.8% 39.5% SEK 2.4 $0.4 15.2% 27.4% 1.7%
Total Implied EBITDA Margin and Average YoY Change (3) $731.9 -0.2% $152.6 20.9% -0.9% -1.3%
Sources: Public Foreign Financial Filings
(1) ZYGO results through 12/31/13. EBITDA also adds back stock compensation
(2) Estimated 2012 results
(3) Our average implied EBITDA margin is an estimation which is limited by our financial data and we recognized that it includes data from 2012 and 2013. Excludes ZYGO, Amptek and Lloyd Instruments from 2012, which had an unusual 114
EBITDA margin increase despite a 30% decline in sales. Currencies converted at average annual exchange rates provided by the IRS
Estimating the EBITDA Contribution From
Spruce Point Capital
Ametek’s Remaining Businesses
• We’ve compiled all of our revenue and EBITDA estimates for Ametek’s businesses in the following table. We’ve placed all of our known items in the
grey columns (foreign entity financials, deals disclosed with EBITDA multiples paid), along with our estimates of EBITDA contributions for Ametek
Specialty Metals, Floor care and Motors. Corporate general and administrative costs along with depreciation and amortization are also factored into
our analysis. This represents a fixed cost without any revenue contribution that must be accounted for
• This allows us to estimate the contribution from all of Ametek’s other businesses by subtracting its consolidated 2013 reported results in column (6)
from the sum of columns (1) – (5). We estimate the remaining portion of Ametek’s businesses must contribute approximately $2.1bn and $670 -
$692m of EBITDA, which implies an average EBITDA margin of approximately 32.0 – 33.0%

$ in mm 14 Foreign Disclosed Floor care / Specialty Corporate All Other 2013 Reported
Entities Deals specialty motors Metals G&A and D&A Businesses Total
(1) (2) (3) (4) Expenses (5) (6)
Estimated ~$732m ~$331m ~$230m ~$200m -- ~$2,101 bn $3,594 bn
Revenues 20.4% 9.2% 6.4% 5.6% 58.5% 100%
% of total

Estimated ~$153m $75m $23 - $35m $20 - $30m ($45.6m) $670 - $692m $916m
EBITDA between ~22.8% between between between 25.5%
% margin 20 – 21% 10 – 15% 10 – 15% 32.0 – 33.0%

Comments From global Includes Micro- Margin ranges Margin ranges Annual Report, We estimate 2013 reported
entity public Poise, EM Test, based on Asian based on Note 15 shows Ametek’s amounts on a
filings Reichert Tech, floor care and publicly traded corporate remaining consolidated
TMC, and motion control Specialty Metals administrative businesses basis
O’Brien. Sales peers peers expenses of (over 30) would
disclosed in $46.4m and have to produce
press releases, D&A of $0.8m. 32 – 33% EBITDA
and EBITDA The net cost has margins to reach
multiples paid no associated the 2013 reported
on conference revenue corporate EBITDA
calls (See contribution margin of 25.5%.
Appendix)
Sources: Ametek SEC and Foreign Filings; Earnings conf calls 115
What’s the Chance the Rest of Ametek’s
Spruce Point Capital
Businesses Have >30% EBITDA Margins?
• According to our research, Amptek is the only acquired company with an EBITDA margin above 30%. Amptek’s previous owner reported
margins of 45%
• To assess the chance that Ametek’s remaining businesses contribute 32 – 33% EBITDA margins, we try to get a sense of how common
it is for a business to produce such high margins
• To accomplish this, we’ve analyzed all of the industrial businesses in the Russell 3000 index (ex: transportation, leasing, staffing and
service companies) and plotted their frequency of occurrence in the chart below
• In total, we identified 289 companies, with just 3% reporting EBITDA margins greater than 30%. This makes it extremely unlikely that all
of its remaining businesses have the necessary EBITDA margin profile to hit its consolidated margin

Percent of Industrial Companies in the Russell 3000 Top EBITDA Margins –


by EBITDA Margin Russell 3000 Industrials

35.0% Com pany Exchange/Ticker EBITDA Margin


TransDigm Group Incorporated NYSE:TDG 44.2%
29.5% US Ecology, Inc. Nasdaq:ECOL 35.4%
30.0%
26.7% Waste Connections Inc. NYSE:WCN 34.3%
Roper Industries Inc. NYSE:ROP 33.1%
25.0% Allison Transmission Holdings, Inc. NYSE:ALSN 32.9%
19.8% Sun Hydraulics Corp. Nasdaq:SNHY 31.7%
20.0% Precision Castparts Corp. NYSE:PCP 31.4%
Copart, Inc. Nasdaq:CPRT 30.8%
15.0% Stericycle, Inc. Nasdaq:SRCL 29.3%
Graco Inc. NYSE:GGG 28.7%
8.7% Republic Services, Inc. NYSE:RSG 28.7%
10.0%
6.9% Covanta Holding Corporation NYSE:CVA 28.2%
3M Company NYSE:MMM 26.4%
5.0% 3.1% 2.8%
2.4% Ametek Inc. NYSE:AME 26.2%
Thermon Group Holdings, Inc. NYSE:THR 26.2%
0.0% Douglas Dynamics, Inc. NYSE:PLOW 25.2%
< 0% 0-5% 5-10% 10-15% 15-20% 20-25% 25-30% >30% RBC Bearings Inc. NasdaqGS:ROLL 25.1%
EBITDA margin

Sources: Capital IQ 116


A Closer Look Into Ametek’s
Asia Growth Story....

Proprietary and Confidential – May Not Be Distributed or Copied Without Spruce Point Capital Management, LLC Consent
A Closer Look into Ametek Asia
Spruce Point Capital

Source: Ametek Subsidiaries as of 12/31/13 (here) 118


Head of Ametek Asia “Retires” In 2014;
Spruce Point Capital
Problems Brewing in Asia?

BERWYN, Pa., Jan. 14, 2014 /PRNewswire/ -- AMETEK, Inc. (NYSE: AME) today announced the appointment of Volker
Dreisbach as Vice President, Asia. He replaces Lim Meng Kee, who retires after 21 years with the Company.

"Volker brings extensive international experience to his new position, and we expect him to play a key role in the continued
growth and success of our Asian businesses," notes Frank S. Hermance, AMETEK Chairman and Chief Executive Officer.
"Volker previously served as Division Vice President for AMETEK's Materials Analysis Division and was responsible for all of
our Electronic Instruments Group businesses in Asia.“

Volker has 31 years of experience with AMETEK and its SPECTRO Analytical Instruments business, where he most recently
served as Managing Director, Asia Pacific, and as Director of International Sales and President of SPECTRO USA. AMETEK
acquired SPECTRO, a global leader in high-end analytical instruments, in 2005. "Meng Kee, whom Volker replaces, was
instrumental in AMETEK's growth and success in China and across Asia. Under his leadership, our Asian sales grew from $16
million in 1992 to now approximately $700 million," adds Mr. Hermance.

Meng Kee joined AMETEK in 1992 as General Manager of AMETEK Singapore – AMETEK's first Asian operation. He played a
key role in 1995 in the formation of AmeKai, AMETEK's first Asian joint venture. He was elected a Corporate Vice President in
1999 and added responsibility for AMETEK Motors Shanghai.

Let’s Take A Closer Look At Ametek Singapore


and its first JV Amekai
Source: Ametek press release (here) 119
Unusual Time For Asia Head To Retire...
Spruce Point Capital
Just As Business is “Booming?”

Recent Conference Call Comments About Asia Are Bullish

“Organic sales in Asia were up mid-teens on a percentage basis in the second quarter, with broad-
based strength across our businesses.”

“If you look at the BRIC countries, just another cut, the BRIC countries were up 21% overall and
about 13% organically. China, just is superb. China was up organically, almost 25% and in total I
think it was a number like 35%“

“So, all the efforts and you’ve heard me talking about the expansion in the BRIC countries, the
expansion in Asia, they are really coming to fruition now and it’s just an exciting time and even
though, many of our peer companies are talking about issues in China and issues in Asia”

“We are simply outgrowing the market from both a product point of view and also we got very strong
distribution capability there now. In Asia, we have approximately 300 people who are engaged in
selling our products and that doesn’t include people who in some cases were distributors, not direct
sales.”

Source: Q2’2014 Earnings Conf Call (here)


120
So Much Growth For Ametek in Asia....
Spruce Point Capital
That Hiring is Non-Existent
Ametek Career Search

Just 1 Single Job


Opening in Asia out
of Shanghai, China.
No Job Openings in
Brazil, Russia
India, Hong Kong,
Malaysia!

Ametek Career Website (here)


121
Here’s What it Really Takes to Win in China
Spruce Point Capital

Mettler Toledo (MTD) is a global manufacturer and marketer


of precision instruments for use in laboratory, industrial and
food retailing applications. The Company has strong
worldwide leadership positions. A significant majority of its
instrument sales are in segments in which it is the global
leader. The company described China as “challenging” on
its recent conference call and is committing significant
resources to hire people to grow further. Mettler is hiring for
a significant amount of Sales Consulting jobs, since
business in China is very relationship driven.

Mettler Career Website (here) and Q3’14 conf call (here) 122
Ametek’s Main Singapore Entities Were
Spruce Point Capital
Not in Compliance for Most of 2014

Source: www.bizfile.gov.sg
Note: As of Aug 2014
123
Is Ametek Singapore Hiding Big Problems?
Spruce Point Capital

• We obtained Ametek Singapore’s 2013 financials, which weren’t filed until late September 2014. We believe Ametek Singapore wa s late in
holding its Annual General Meeting, potentially as a result of its Director Lee Meng Kee having resigned
• Top line revenues decreased by 12.6% while other income, which is primarily investment income from its main operating subsidiaries including China,
declined by 15% from $10.7m to $9.1m
• Overall, profitability fell from $13.4m to $12.2m or 8%. More importantly, operating cash flow plummeted from $28.6m to $7.3m, -75%, while the dividend
paid to its holding company, Ametek European Holdings Limited, declined from $19.1m to $10.1m or -47%
• Responding to an analyst question about emerging market performance on the Q4’13 conference call, the CEO said “Yes, it's actually amazing.
We were very delighted in the quarter when we looked at our international businesses, actually, believe it or not, both in Eu rope and in Asia. In Asia, the
organic growth was up about 25%, in Asia. So a truly outstanding quarter.” The performance from Ametek’s Singapore entity (which conducts
business in Taiwan, China, Malaysia and India), suggests that full year results were disappointing, not spectacular

Note: Figures in Singapore Dollars 124


Source: www.bizfile.gov.sg and Q4’13 earnings conf call (here)
Ametek Singapore’s 2011-2012 Results
Spruce Point Capital
Further Illustrate Declining Trends
Spruce Point Observations

• Top line revenues increased, which we believe relates to


additions to its MRO business. However, we note that this
new revenue reduced gross margins by 186 basis points1
• Other income (dividends) dropped dramatically from
$17.1m to $10.7, or by 37%. We believe this drop is directly
attributable to its main operating subsidiaries, particularly
its China operating entity
• The main subsidiaries include:
• Ametek Commercial Enterprises (Shanghai)
• Ametek Instruments India Pte Ltd
• Ametek Engineered Materials Sdn Bhd (Malaysaia)
• Amekai Singapore Pte Ltd
• Amekai Taiwan Co. Ltd
• Overall, profitability fell from $19.0m to $13.4m or 29.4%,
while dividend income rose from $17.1m to $19.2m
• Responding to a question about China on the Q3’12
earnings conf call, the company responded: “China did well
for us. If you look at our total Asia sales, they were about
19% of our company and China in rough numbers is half of
that. And they performed, not as strong as it had a year and
half ago when we were seeing organic growth rates out of
China that were 20% plus but we are now more in that
single digit category. But again if you look at it from a
worldwide basis it’s surely stronger than the U.S. and we
are going to continue to invest in that part of the world.”
Note: Figures in Singapore Dollars
Source: www.bizfile.gov.sg 1. Q2’12 Earnings call (here)
2. Q3’12 Earnings call (here) 125
Amekai Taiwan Co. Ltd...Ametek’s First
Spruce Point Capital
Asian Joint Venture Appears Insolvent!
Website Does
Not Work

Address:
2-FLoor, No. 214 Alley 1
Lane 138, Chang-An Street
Pan-Chiao, Taipei Taiwan

Liabilities > Assets


= Insolvency?

Source: Google Maps.


Source: www.bizfile.gov.sg http://www.ametek.com/locations/amekai-taiwan-location.aspx 126
Amekai Taiwan Co., Ltd.
Spruce Point Capital
No Longer Even Registered in Taiwan

Source: http://gcis.nat.gov.tw/

127
And of Course...Ametek India
Doesn’t Make Money and Has Acct’g Issues!
Spruce Point Capital

While revenues grew 63%


YoY, EBITDA grew just 20%
with EBITDA margins
declining from 19.9% to
14.6% > 530bps!

Losses increased by 31%!


Source: http://www.mca.gov.in/ 128
Sell-Side Analyst Misperceptions
and Variant Valuation View

Proprietary and Confidential – May Not Be Distributed or Copied Without Spruce Point Capital Management, LLC Consent
Ametek Has Many Bullish Analysts
Spruce Point Capital

Ametek has attracted a roster of smaller sell-side brokers, that generally have bullish opinions on the
stock. However, a few analysts appear reluctant to upgrade the stock to a buy given its rich valuation. We
do not believe any analysts have incorporated of our accounting concerns and unique research insights.

Broker Rating Price Target Ratings Distribution


Langenberg & Co Buy $63

Jefferies Buy $61

Janney Montgomery Buy $61

Keybanc Buy $60

RBC Outperform $60 33%


Oppenheimer Buy $59

Longbow Buy $55 67%


Atlantic Equities Buy $58

Baird Neutral $53

Morgan Stanley Hold / Equal weight $52


Buys Hold
Wells Fargo Outperform

Average Price $59


% Implied Upside 13%
% Max Upside 21% Source: Bloomberg; may not reflect all recent price changes 130
Analysts’ Views Are Too Rosy and
Spruce Point Capital
Regurgitate Ametek’s Own Story
Wall St. Analysts’ Views of Ametek Spruce Point’s Quick Rebuttal
“AME aims to grow EPS 15% annually via a mixture of organic AME’s EPS growth is heavily financially engineered with
growth and acquisitions. In normal growing economies, AME aggressive accounting assumption for acquisitions and
targets 15% annual EPS growth, with roughly one-third via suspect inventory accounting. It has demonstrated
organic growth and two-thirds from acquired companies” almost no organic growth in recent years

“Mgmt’s track record for closing attractive deals within the When you overpay for low margin, low/no growth assets,
company’s sweet spot ($50-$200m) is impressive.” of course your closure rate will be impressive! AME
seems to be running out of quality/actionable targets
“Strong cash flow qualities underlying AME's businesses AME’s cash flow is obscured by its dozens of deals. Free
support continued strategic growth, debt reduction and the cash flow after capex and acquisitions is negative. ST
dividend. AME has ~$800M of liquidity available from cash debt has been rising (to effectively pay its dividend), and
and existing credit lines. AME maintains adequate resources its liquidity is misleading given significant cash trapped
to fund its stated acquisition strategy” abroad which would be taxable upon repatriation
Strong evidence that mgmt has not executed flawless
“Management are seasoned operators and have demonstrated M&A and misguided sales estimates on key deals. Its
an impressive ability to expand segment margins. Proactive margin expansion is likely to be overstated given our
cost reductions in 2009 drove margin rebound in 2010/2011, analysis of various operating entities. Cost cuts appear to
aided by operating leverage from core volume growth. Further be hitting a wall, and margins have been aided by
cost actions amid sluggish global growth drove margin aggressive inventory acct’g changes and amortizing
expansion in CY12.” expenses too slowly
AME’s record of missing only one quarterly earnings
“Best-in-class Industrial. We view AME’s premium vs. the estimate in a decade is a major red flag. Its valuation is
sector as sustainable given best-in-class combination of EPS at a substantial premium to what it has paid for its
growth/volatility and M&A story” underlying businesses 131
Spruce Point’s Variant View: Ametek Deserves a
Spruce Point Capital
Conglomerate Discount, Not a Premium
Ametek is a Poorly Constructed, Opaque and Complex Company Trading at an Irrational Premium to Peers. Its
Financials Are Littered With Red Flags Pointing To Inflation of Earnings, and Are at High Risk of Restatement

1. Ametek has acquired over 60 businesses in the past decade for $4.6bn, consuming -$627m in net cash flow at an average
revenue multiple of 1.7x. Yet, its current trading revenue multiple is 3.5x, which is a significant premium to the sum of its parts
2. Ametek has not demonstrated an ability to extract revenue synergies from acquisitions that are often touted as
“complementary” products for existing customers. Organic growth in 2012 and 2013 were 1.1% and 1.2%, respectively. Pricing
power in its businesses appears low
3. To continue its historical growth rate, Ametek will have to continue acquiring at a rapid pace, and face many challenges
a. Competition intensifying for a shrinking pool of actionable targets in the sub $200m enterprise value range it targets
b. Multiples for private companies in its markets are rising; Ametek had to pay rich EV/sales and EBITDA multiples for
newly acquired targets such as Zygo (1.7x / 9x) and Amptek (3.9x / 10x), respectively
c. Agilent’s recently spun-out Electronic Measurement Technology unit (FY ‘13 Revenues: $2.9bn) will be newly capitalized
and incentivized to growth through acquisitions
4. SEC financial disclosures are weak:
a. Ametek cannot adequately explain its gross margins to investors, or its operating margin improvements; margin
improvements are continually attributed to “endless cost cuts and savings” with few tangible examples ever given
b. Ametek has jammed all its acquisitions into just two operating segments. Once companies are acquired, very little
disclosure is given about their continued performance
Evidence supports the view that Ametek’s EBIT/EBITDA margins are overstated and aggressive accounting is at work:
a. Ametek appears to use aggressive acquisition accounting; marking significant intangible assets as customer relations,
and amortizing them over 19yrs. Over $1 billion has been allocated to this account!
b. A whistleblower complaint, a “qualified” audit opinion, and surreptitious conversion from LIFO to FIFO, all point to
creative inventory accounting being used to inflate margins and earnings
c. We’ve acquired foreign filings for 14 operating entities constituting ~$732m of revenue, few have EBITDA margins close
to the consolidated margin of 26%. Many units have been experiencing decreasing margins, not increasing!
5. Insider ownership alignment with shareholders is weak, and getting worse! Insiders have been net sellers every single year
132
Ametek’s Extreme Valuation
Spruce Point Capital
Premium is Not Justified
($ i n mi l l i ons , except per s ha re fi gures )
Stock % of '14E-'15E LTM Enterprise Value
Price 52-wk Ent. Revenue EPS Gross EBITDA FCF P/E EBITDA Sales Debt/
Name Ticker 11/12/2014 High Value Growth Growth Margin Margin Margin 2014E 2015E 2014E 2015E 2014E 2015E Capital

Danaher DHR $82.36 99% $57,948 5.5% 9.2% 52.4% 22.1% 15.3% 22.4x 20.5x 12.9x 11.9x 2.9x 2.8x 11%
Emerson EMR $64.05 91% $47,684 3.7% 8.6% 41.4% 21.5% 12.1% 16.7x 15.4x 9.1x 9.0x 1.9x 1.9x 36%
Eaton ETN $67.64 85% $40,173 2.8% 16.1% 30.4% 14.5% 5.3% 14.7x 12.7x 11.1x 10.5x 1.8x 1.7x 35%
Parker Hannifan PH $128.57 99% $19,561 2.6% 14.0% 23.3% 14.2% 8.7% 17.7x 15.5x 9.8x 9.1x 1.5x 1.4x 25%
Rockwell Automation ROK $112.44 86% $15,119 5.0% 9.2% 41.6% 20.2% 13.5% 17.8x 16.3x 11.0x 10.0x 2.3x 2.1x 32%
Mettler-Toledo MTD $284.70 99% $8,814 4.5% 11.2% 54.2% 21.4% 12.1% 24.5x 22.0x 16.3x 15.1x 3.5x 3.4x 36%
Hubbell HUB $112.50 88% $6,571 4.3% 10.1% 33.3% 18.4% 10.0% 21.0x 19.1x 11.2x 10.4x 2.0x 1.9x 23%
Keysight Tech. KEYS $30.83 93% $5,610 2.7% 2.0% 55.4% 21.5% 15.1% 12.1x 11.9x 9.1x 8.6x 1.9x 1.9x 56%
Rexnord RXN $27.25 88% $4,453 5.1% 18.6% 36.3% 19.9% 9.8% 18.0x 15.1x 10.4x 9.6x 2.1x 2.0x 77%
Teledyne TDY $106.67 100% $4,516 4.7% 2.4% 37.6% 15.8% 10.5% 19.4x 18.9x 12.3x 11.2x 1.9x 1.8x 27%
Spectris PLC SXS.Lon $30.26 71% $3,798 5.6% 8.3% 57.7% 19.0% 10.3% 15.8x 14.6x 10.8x 10.0x 2.1x 2.0x 14%
Regal-Beloit Corp RBC $71.47 89% $3,640 4.4% 18.4% 24.5% 13.6% 6.7% 16.6x 14.0x 8.1x 7.5x 1.1x 1.1x 24%
FEI Company FEIC $83.09 74% $3,047 9.7% 35.2% 47.1% 21.6% 12.5% 27.6x 20.4x 15.2x 11.7x 3.2x 2.9x 0%
Bruker BRKR $18.42 74% $3,125 4.5% 20.0% 44.9% 13.2% 7.6% 24.6x 20.5x 12.6x 10.8x 1.7x 1.6x 30%
Oxford Instruments OXIG.Lon $17.29 58% $1,195 8.5% 11.4% 43.4% 16.4% 6.0% 15.9x 14.3x 11.1x 9.8x 1.8x 1.6x 65%
Altra Industrial AIMC $31.95 81% $1,063 2.8% 17.2% 30.0% 14.9% 7.4% 17.8x 15.1x 9.2x 8.4x 1.3x 1.3x 48%

Max 9.7% 35.2% 57.7% 22.1% 15.3% 27.6x 22.0x 16.3x 15.1x 3.5x 3.4x 77%
Average 4.8% 13.2% 40.8% 18.0% 10.2% 18.9x 16.7x 11.3x 10.2x 2.1x 2.0x 34%
Min 2.6% 2.0% 23.3% 13.2% 5.3% 12.1x 11.9x 8.1x 7.5x 1.1x 1.1x 0%

Ametek Inc. AME $52.20 100% $14,219 6.1% 11.2% 35.5% 26.1% 15.8% 21.7x 19.5x 13.7x 12.5x 3.5x 3.3x 32%

Source: Company financials, Wall St. estimates.


Ametek’s Margins
Vastly Superior
133
Ametek’s Extreme Valuation
Spruce Point Capital
Premium is Not Justified
Enterprise Value / 2015E Revenues Enteprise Value / 2015E EBITDA

4.0x 15.0x

3.5x 13.0x
3.0x
Average
11.0x
2.5x
Average
9.0x
2.0x
7.0x
1.5x
5.0x
1.0x
3.0x
0.5x
1.0x
0.0x
OXIG.…

SXS.L…

TDY
SXS.Lon

FEIC
TDY

KEYS
FEIC
KEYS

AME
ROK
AME

ETN
ETN

AIMC
ROK

BRKR
AIMC

BRKR

DHR
DHR

EMR

OXIG.Lon
PH
RXN

HUB
EMR

MTD
PH

HUB
RXN

MTD

RBC
RBC

-1.0x

2015E Revenue Growth 2015E EPS Growth

40.0%
12.0%
35.0%
10.0%
30.0%
8.0%
25.0%

6.0% Average 20.0%


Average
15.0%
4.0%
10.0%
2.0%
5.0%

0.0% 0.0%
TDY

FEIC
KEYS

SXS.Lon
AME
ROK
ETN
AIMC

BRKR

DHR
EMR

RXN

OXIG.Lon
PH

HUB

MTD
RBC

134
Public Investors Paying a Big Premium to
Spruce Point Capital
Own Quick Flipped Private Equity Deals
Ametek appears to be the buyer of last resort for many private equity firms looking to flip their investments after a 3 – 5
year holding period. With each private equity firm claiming to add operational expertise and strong financial controls to
its portfolio companies, we question what additional value Ametek can extract from these acquisitions.
$ in millions
Private Equity Sponsor Enterprise LTM EV/
Announced Location Target (Year Invested) Target Description Value Sales Sales
Edgewater Growth (2012) x-ray detectors used to identify the composition of materials
8/8/2014 Bedford, MA Amptek Bouler Capital; JZ Capital using x-ray fluorescence (XRF) within the metal $115.0 $29.2 3.94x
Merit Capital Partners; high precision test and measurement instrumentation, esp in
2/10/2014 Irvine, CA VTI Instruments Alerion Capital Group (2008) Aerospace $74.0 $38.0 1.95x
power protection equipment used by the medical, retail and
12/4/2013 Waukegan, IL Powervar Pfingsten Partners (2006) telecommunication industries $128.0 $70.0 1.83x
Industrial Growth manufacturer of custom-engineered thermal
8/7/2013 Chalotte, NC Controls SouthEast Partners (2010) solutions $160.0 $50.0 3.20x
engineered advanced motion control solutions for niche
5/21/2012 Bonndorf, Germany Dunkermotoren Triton Partners (2009) applications $320.0 $168.6 1.90x
Industrial Growth manufacturer of fluid and gas handling solutions, sample
1/26/2012 St Louis, MO O'Brien Corp Partners (2009) conditioning equipment and process analyzers $175.0 $80.0 2.19x
Equipment used to perform electrical immunity and
10/25/2011 Reinach, Switzerland EM Test Riverside Company (2008) electromagnetic compatibility testing $93.0 $41.0 2.27x

Micro-Poise American Industrial integrated test and measurement solutions for the tire
10/23/2012 Streetsboro, OH Measurement Systems Partners (2007) industry $170.0 $125.0 1.36x
instruments used by ophthalmologists, optometrists, and
10/17/2011 Depew, NY Reichert Technologies Beecken Petty O'Keefe (2007) opticians for vision correction and the screening $150.0 $55.0 2.73x
Atlas Material Industrial Growth weathering test instruments and related testing and
11/9/2010 Chicago, IL Testing Technology Partners (2007) consulting services $159.0 $85.0 1.87x
linear actuators and lead screw assemblies for diverse
7/1/2010 Waterbury, CT Haydon Enterprises Harbor Group (2007) industrial end markets $270.0 $85.0 3.18x
Technical Services manufacturer of engineered interconnect solutions for the
6/1/2010 Arlington, MN for Electronics Pfingsten Partners (2006) medical device industry $89.5 $50.0 1.79x

Average: $158.6 $73.1 2.35x


Total: $1,903.5 $876.8 --

Source: Company filings; public information


135
30% – 50% Downside in Ametek’s Shares
Spruce Point Capital

In our opinion, Ametek’s EBITDA margins appear overstated and are likely a few hundred basis points lower than the 26%
indicated in its filings, potentially up to 400 – 600 bps. This estimate is supported by our peer regression analysis, evaluation
of various Ametek foreign filings, and pro forma amortization analysis. If Ametek were to be valued closer to peers at 2x and
10-11x EV / 2014E Sales and EBITDA, respectively, its share price would have downside to $27 - $36 per share.
$ in millions $ in millions
True EBITDA Margin: 20% 21% 22% 23% 24% 25% 26% 2014E Revenues
14E Adj. EBITDA $799.0 $839.3 $879.6 $920.0 $960.3 $1,001 $1,041 $3,797 $3,874 $3,953 $4,034 $4,115 $4,197 $4,281
Implied Enterprise Value Implied Enterprise Value
9.00x $7,191 $7,554 $7,917 $8,280 $8,643 $9,006 $9,369 1.75x $6,644 $6,780 $6,918 $7,060 $7,201 $7,345 $7,492
EV/'14E EBITDA

EV/'14E Sales
10.00x $7,990 $8,393 $8,796 $9,200 $9,603 $10,007 $10,410 2.00x $7,594 $7,749 $7,907 $8,068 $8,229 $8,394 $8,562
11.00x $8,789 $9,232 $9,676 $10,120 $10,564 $11,007 $11,451 2.25x $8,543 $8,717 $8,895 $9,077 $9,258 $9,443 $9,632
12.00x $9,588 $10,072 $10,556 $11,040 $11,524 $12,008 $12,492 2.50x $9,492 $9,686 $9,883 $10,085 $10,287 $10,492 $10,702

Less: Debt ($1,636) ($1,636) ($1,636) ($1,636) ($1,636) ($1,636) ($1,636) Less: Debt ($1,636) ($1,636) ($1,636) ($1,636) ($1,636) ($1,636) ($1,636)
Plus: Cash $370 $370 $370 $370 $370 $370 $370 Plus: Cash $370 $370 $370 $370 $370 $370 $370
FD Shares 248.1 248.1 248.1 248.1 248.1 248.1 248.1 FD Shares 248.1 248.1 248.1 248.1 248.1 248.1 248.1
Implied Stock Price Implied Stock Price
9.00x $23.90 $25.30 $26.80 $28.30 $29.70 $31.20 $32.70 1.75x $21.70 $22.20 $22.80 $23.30 $23.90 $24.50 $25.10
EV/'14E EBITDA

EV/'14E Sales
10.00x $27.10 $28.70 $30.30 $32.00 $33.60 $35.20 $36.90 2.00x $25.50 $26.10 $26.80 $27.40 $28.10 $28.70 $29.40
11.00x $30.30 $32.10 $33.90 $35.70 $37.50 $39.30 $41.00 2.25x $29.30 $30.00 $30.70 $31.50 $32.20 $33.00 $33.70
12.00x $33.50 $35.50 $37.40 $39.40 $41.30 $43.30 $45.20 2.50x $33.20 $33.90 $34.70 $35.50 $36.40 $37.20 $38.00
Implied Downside From Current Price Implied Downside From Current Price
9.00x -54% -51% -48% -46% -43% -40% -37% 1.75x -58% -57% -56% -55% -54% -53% -52%
EV/'14E EBITDA

EV/'14E Sales

10.00x -48% -45% -42% -38% -35% -32% -29% 2.00x -51% -50% -48% -47% -46% -45% -43%
11.00x -42% -38% -35% -31% -28% -24% -21% 2.25x -44% -42% -41% -39% -38% -37% -35%
12.00x -36% -32% -28% -24% -21% -17% -13% 2.50x -36% -35% -33% -32% -30% -28% -27%

136
Valuation Multiples Near All-Time Highs
Spruce Point Capital

Despite our concerns about Ametek’s business and its financial earnings quality, its stock is trading near all-time
valuation multiples. In our opinion, investors should carefully consider if its valuation premium is warranted.

Historic EV/Sales and EV/EBITDA Valuation (trailing) Historic Price/EPS Valuation (trailing)

16.0x 4.0x 28.0x

15.0x 26.0x
3.5x
24.0x
14.0x
3.0x 22.0x
13.0x
20.0x
12.0x 2.5x
18.0x
11.0x
2.0x 16.0x
10.0x
14.0x
1.5x
9.0x
12.0x
8.0x 1.0x
10.0x
2006 2007 2008 2009 2010 2011 2012 2013 Current
2006 2007 2008 2009 2010 2011 2012 2013 Current
EV/EBITDA EV/Sales

Source: Bloomberg Average Multiples


137
Appendix

Proprietary and Confidential – May Not Be Distributed or Copied Without Spruce Point Capital Management, LLC Consent
List of Ametek Acquisitions (2011-2014)
Spruce Point Capital

$ in millions
Private Equity Enterprise LTM LTM EBITDA Enterprise Value / LTM
Announced Location Target Sponsor Target Description Segment Value Sales EBITDA Margin Revenues EBITDA
Technology utilizing multi-wavelength laser
8/5/2014 Germany Luphos interferometry Electronic Instruments $12.7 -- -- -- -- --
provider of x-ray detectors used to identify the
Edgewater Growth (2012) composition of materials using x-ray fluorescence (XRF)
8/5/2014 Bedford, MA Amptek Bouler Capital; JZ Capital within the metal Electronic Instruments $115.0 $29.2 $13.1 44.9% 3.94x 8.78x
4/11/2014 Middlefield, CT Zygo Corp metrology solutions and optical systems Electronic Instruments $280.0 $162.9 $28.9 17.7% 1.72x 9.69x
Merit Capital/ Alerion high precision test and measurement instrumentation,
2/10/2014 Irvine, CA VTI Instruments Capital Group esp in Aerospace Electronic Instruments $74.0 $38.0 -- -- 1.95x --
test and measurement instruments for electromagnetic
1/3/2014 Switzerland Teseq Group compatibility testing. Electronic Instruments $92.0 $53.0 -- -- 1.74x --
power protection equipment used by the medical, retail
12/4/2013 Waukegan, IL Powervar Pfingsten Partners and telecommunication industries Electronic Instruments $128.0 $70.0 -- -- 1.83x --
developer and manufacturer of portable 3D
measurement technologies and a provider of 3D
10/29/2013 Lévis, Québec Creaform engineering services Electronic Instruments $120.0 $52.0 -- -- 2.31x --
8/7/2013 Chalotte, NC Controls SouthEast Industrial Growth Partners manufacturer of custom-engineered thermal solutions Electronic Instruments $160.0 $50.0 -- -- 3.20x --
development of Stirling cycle cryocoolers and externally
1/3/2013 Athens, OH Sunpower Inc heated Stirling engine technology for various markets Electronic Instruments N/A N/A -- -- -- --
high-end pressure measurement technology and
manufactures high-end portable digital pressure
1/3/2013 San Luis Obispo, CA Crystal Engineering calibrators and digital test gauges Electronic Instruments N/A N/A -- -- -- --
Aero Components / repairs and overhauls fuel, hydraulic, pneumatic, power
12/17/2012 Miami, FL Avtech Avionics generation and heat exchanger components Electromechanical Group ~$80 N/A -- -- -- --
Micro-Poise American Industrial integrated test and measurement solutions for
10/23/2012 Streetsboro, OH Measurement Systems Partners the tire industry Electronic Instruments $170.0 $125.0 $22.6 18.1% 1.36x 7.52x
engineered advanced motion control solutions for
5/21/2012 Bonndorf, Germany Dunkermotoren GmbH Triton Partners niche applications Electromechanical Group $318.5 $168.6 $34.0 20.2% 1.89x 9.37x
manufacturer of fluid and gas handling solutions, sample
1/26/2012 St Louis, MO O'Brien Corp Industrial Growth Partners conditioning equipment and process analyzers Electronic Instruments $179.3 $80.0 $19.9 24.9% 2.24x 9.01x
custom active piezoelectric vibration cancellation
Techinical systems for life sciences, photonics and semiconducter
1/3/2012 Peabody, MA Manufacturing Corp equipment Electronic Instruments $48.9 $30.0 $7.5 25.1% 1.63x 6.50x
instruments used by ophthalmologists, optometrists,
10/17/2011 Depew, NY Reichert Technologies Beecken Petty O'Keefe and opticians for vision correction and the screening Electronic Instruments $150.0 $55.0 $15.0 27.3% 2.73x 10.00x
Equipment used to perform electrical immunity and
10/25/2011 Switzerland EM Test electromagnetic compatibility testing Electronic Instruments $93.0 $41.0 $10.3 25.2% 2.27x 9.00x
supplier of custom-shaped metal preforms,
microstampings and bonding wire solutions for
River Associates interconnect applications in microelectronics packaging
5/9/2011 Montvale, NJ Coining Holding Investments and assembly Electromechanical Group $148.0 $65.0 -- -- 2.28x --
fine-featured catheter and other medical components
4/28/2011 Montevideo, MN Avicenna Technology for leads, guide wires and custom medical assemblies Electromechanical Group $35.0 $25.0 -- -- 1.40x --

Source: Press releases, SEC filings, Earnings Calls, Public information 139
List of Ametek Acquisitions (2008-2010)
Spruce Point Capital

$ in millions
Private Equity Enterprise LTM LTM EBITDA Enterprise Value / LTM
Announced Location Target Sponsor Target Description Segment Value Sales EBITDA Margin Revenues EBITDA
Atlas Material weathering test instruments and related testing and
11/9/2010 Chicago, IL Testing Technology Industrial Growth Partners consulting services Electronic Instruments $159.0 $85.0 -- -- 1.87x --
American Reliance direct current power supplies and electronic loads for
8/19/2010 N/A Power Division the automated
linear actuatorstest
andequipment
lead screw market
assemblies for the Electronic Instruments N/A N/A -- -- -- --
medical, industrial equipment, aerospace, analytical
7/1/2010 Waterbury, CT Haydon Enterprises Harbor Group instrument, computer peripheral and semiconductor Electromechanical Group $270.0 $85.0 -- -- 3.18x --
Technical Services manufacturer of engineered interconnect solutions for
6/1/2010 Arlington, MN for Electronics Pfingsten Partners the medical device industry Electromechanical Group $89.5 $50.0 -- -- 1.79x --
Imago Scientific
4/1/2010 Madison, WI Instruments (1) manufacturer of 3D atom probes Electronic Instruments $6.0 $7.0 -- -- -- --

1/26/2010 Tampa, FL Sterling Ultra Precision reseller of machine tools for the ophthalmic lens market Electronic Instruments $3.2 N/A -- -- -- --
manufacturer of highly engineered pressurized gas
components and systems for commercial and military
12/1/2009 Baldwin Park, CA Ameron Global aerospace customers Electromechanical Group $32.7 $20.0 -- -- 1.64x --
electrical and electromechanical, hydraulic and
1/1/2009 Miami, FL High Standard Aviation pneumatic repair services to the aerospace industry Electromechanical Group $40.2 $31.0 -- -- 1.30x --
manufacturer of motion technology products and a
provider of avionics repair and overhaul services for A&D
11/3/2008 United Kingdom Murihead Aerospace markets Aerospace/Defense ~$64 $54.0 -- -- 1.20x --
Programmable power AC/DC programmable power supplies used to test
7/28/2008 San Diego, CA business of Xantrex electrical and electronic products Electronic Instruments $120.0 $80.0 -- -- 1.50x --
manufacturer of high-speed digital imaging systems
used for motion capture and analysis in numerous test
6/12/2008 Wayne, NJ Vision Research and measurement applications Electronic Instruments N/A $37.0 -- -- -- --
pecialty titanium master alloys and highly engineered
metal powders used in the aerospace, medical implant,
4/14/2008 Robesonia, PA Reading Alloys military and electronics markets Electromechanical Group N/A $80.0 -- -- -- --
heat-transfer repair services to the commercial
2/26/2008 Tulsa, OK Drake Air aerospace industry Electronic Instruments N/A $15.0 -- -- -- --
customized motors and motion control solutions for the
medical, life sciences, industrial automation,
2/26/2008 Minneapolis, MN Motion Control Group semiconductor and aviation markets Electromechanical Group N/A $26.0 -- -- -- --
2/20/2008 N/A Newage Testing manufacturer of hardness testing equipment Electronic Instruments N/A N/A -- -- -- --

1) Information based on public article


Source: Press releases, SEC filings, Earnings Calls, Public information 140
List of Ametek Acquisitions (2006-2007)
Spruce Point Capital

$ in millions
Private Equity Enterprise LTM LTM EBITDA Enterprise Value / LTM
Announced Location Target Sponsor Target Description Segment Value Sales EBITDA Margin Revenues EBITDA
12/14/2007 San Diego, CA California Instruments programmable alternating current (AC) power sources Electronic Instruments ~$38 $22.0 -- -- 1.73x --
10/18/2007 United Kingdom Umeco R&O European MRO business joins Ametek A&D division $73.0 $57.0 -- -- 1.28x --
8/13/2007 Paris, France Cameca SAS Carlyle high-end elemental analysis systems Electronic Instruments $112.0 $82.0 -- -- 1.37x --
precision metal strip and foil for medical, electronic and
6/14/2007 Lancaster, PA Hamilton Precision Metals instrumentation markets Electromechanical Group $42.0 $25.0 -- -- 1.68x --
Advanced Industries
6/5/2007 Witchita, KS B&S Aircraft Parts & Acces. aircraft power management and 3rd party MRO Electronic Instruments ~'$20 $25.0 -- -- 0.80x --
4/18/2007 Westerly, RI Seacon Phoenix undersea electrical
Halmar Robicon interconnect
silicon controlledsubsystems
rectifier power controller Joins HCC Industries in EMG $38.0 $17.0 -- -- 2.24x --
and related Power Control Systems technology and
4/18/2007 N/A Siemens' Power Control products Electronic Instruments -- -- -- -- -- --

12/13/2006 Tulsa, OK Southern Aeroparts 3rd Party MRO services to the commercial aerospace Electronic Instruments ~$40 $17.0 -- -- 2.35x --

manuf'ter of engineered hermetic microelectronic packages


12/12/2006 N/A General Ceramics for electronic apps in the A&D, telco, and industrial markets Electromechanical Group -- -- -- -- -- --
11/6/2006 Keene, NH Precitech manufacturer of ultra-precision machining systems Electronic Instruments $13.0 $19.0 -- -- 0.68x --
on-line optical temperature measurement instrumentation
6/15/2006 Dronfield, UK Land Instruments Int'l for industrial applications Electronic Instruments $45.7 $41.0 -- -- 1.11x --
PennEngineering
5/15/2006 Harleysville, PA Motion Tech. highly engineered motors for niche applications Technical&Industrial Products unit $64.0 $55.0 -- -- 1.16x --
2/18/2006 Coral Springs, FL Pulsar Technologies communications equipment for the electric utility market Electronic Instruments $14.4 $10.0 -- -- 1.44x --

141
Source: Press releases, SEC filings, Earnings Calls, Public Information
List of Ametek Acquisitions (2000-2005)
Spruce Point Capital

$ in millions
Private Equity Enterprise LTM LTM EBITDA Enterprise Value / LTM
Announced Location Target Sponsor Target Description Segment Value Sales EBITDA Margin Revenues EBITDA
manufacturer of engineered hermetic connectors,
10/10/2005 Los Angeles, CA HCC Industries terminals, headers and microelectronic packages Electromechanical Group $162.0 $104.0 -- -- 1.56x --
manufacturer of precision pumping systems for
9/7/2005 N/A Quizix the oil and gas market Electronic Instruments -- -- -- -- -- --
9/26/2005 England Solartron Group analytical and metrology instruments Electronic Instruments $75.0 $50.0 -- -- 1.50x --
6/13/2005 Kleve, Germany SPECTRO German Equity Ptnrs Atomic Spectroscopy analytical instrumentation Electronic Instruments $98.0 $104.0 -- -- 0.94x --
6/30/2004 Leicester, UK Taylor Hobson ultra-precision measurement instrumentation Electronic Instruments GBP 55m GBP 38m -- -- 1.67x --

7/20/2004 Garden City, NY Hughes-Treitler heat exchangers and thermal management subsystems Electronic Instruments $48.0 $32.0 1.67x
measurement instrumentation for the
9/4/2003 Tulsa, OK Chandler Instruments oil and gas industry Electronic Instruments $49.0 $30.0 -- -- 1.63x --
uninterruptible power supply systems for the process
5/9/2003 Columbus, OH Solidstate Controls Marmon Industrial and power generation industries Electronic Instruments $34.0 $45.0 -- -- 0.76x --
supplier of motors, fans and environmental control
1/13/2003 London, England Airtechnology Candover Partners systems for the aerospace and defense markets Electromechanical Group $80.0 $46.4 -- -- 1.72x --
2/1/2002 Oak Ridge, TN IRAS PerkinElmer manufacturer of advanced analytical instrumentation Electronic Instruments $63.0 $50.0 -- -- 1.26x --
analytical instrumentation which complements the
7/9/2001 Mahwah, NJ EDAX Panta Electronics Company's process and analytical instruments Electronic Instruments $37.0 $34.0 -- -- 1.09x --
magnet motors for the global floor care and
5/22/2001 Wisconsin GS Electric SPX Corp other markets Electromechanical Group $32.0 $65.0 -- -- 0.49x --
9/13/2000 Rochester, NY Rochester Instrument electric power generation market Electronic Instruments $21.0 $33.0 -- -- 0.64x --
Switch Division, Industrial Battery Charger business,
8/8/2000 Various Prestolite Electric Prestolite and Direct-Current (DC) motor business Electromechanical Group $60.0 $71.0 -- -- 0.85x --

Deal Averages: 1.7x 8.7x

Source: Public Information

Compare average valuation paid for acquisitions vs. Ametek’s current


valuation of 3.8x and 14.5x LTM Sales and EBITDA!

142
Source: Press releases, SEC filings, Earnings Calls, Public Information
Ametek’s Sourcing and Operational
Spruce Point Capital
Improvement Expectations
$ in millions
Total Annual Total Annual Total Annual Total Qtrly Total Annual
Cost Savings Sourcing Operational Realized Realized
Expectations Expectations Expectations Sourcing Sourcing
Q1'09 $115.0 $20.0 $95.0 $4.4
Q2'09 $135.0 $20.0 $115.0 $5.4
Q3'09 $135.0 $20.0 $115.0 $6.0
Q4'09 $135.0 $22.0 $113.0 $6.0 $21.8

Q1'10 $75.0 $22.0 $53.0 $6.0


Q2'10 $75.0 $25.0 $50.0 $7.0
Q3'10 $75.0 $27.0 $48.0 $7.0
Q4'10 $75.0 $27.0 $48.0 $7.0 $27.0

Q1'11 $50.0 $27.0 $23.0 $7.0


Q2'11 $50.0 $28.0 $22.0 $7.0
Q3'11 $50.0 $29.0 $21.0 $8.0
Q4'11 $50.0 $30.0 $20.0 $8.0 $30.0

Q1'12 $60.0 $40.0 $20.0 $10.0


Q2'12 $75.0 $47.0 $28.0 $12.0
Q3'12 $80.0 $48.0 $32.0 $13.0
Q4'12 $85.0 $49.0 $36.0 $14.0 $49.0

Q1'13 $95.0 $54.0 $41.0 $14.0


Q2'13 $100.0 $54.0 $46.0 $16.0
Q3'13 $100.0 $54.0 $46.0 $16.0
Q4'13 $100.0 $62.0 $38.0 $16.0 $62.0

Q1'14 $90.0 $60.0 $30.0 $17.0


Q2'14 $95.0 $65.0 $30.0 $18.0
Q3'14 $100.0 $70.0 $30.0 $19.0 $54.0
Source: Ametek earnings
conference calls Total $545.0 $260.0 $285.0 $243.8
143
. '~

·. ·. ·. .. ..
Company Registration No; 00620201 (Englan·d and Wales)

'';: . i·~·:
. •.

AEM LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2013

II 1111 II II 1111 1111 II


*L3E39CUG*
LD4 12/08/2014 #66
AEM LIMITED · ·. ·.

COMPANY INFORMATION

i.';-·: i._y.

Directors DB Coley
JG Smith
J W Hardin
A Harding
E Speranza (Appoi.nted 31 March 2014)

Secretaries DB Coley ..
KE Sena

Company number 00620201

Registered office PO Box 36


· 2 New Star Road
Leicester
LE4 9JQ

Auditors Ernst & Young LLP


One Cambridge Business Park
Cambridge
CB4 OWZ

Business address Taylor's End,


Stansted Airport
Stansted
Essex
CM241RB

·Bankers NatWest
1 Granby Street
Leicester
LE1 6EJ
AEM LIMITED
·. ·. ·.

CONTENTS

'';:.

Page

Strategic report 1- 2

Directors' report . 3-4

Independent auditors' report 5-6

Profit and loss account 7

Balance sheet 8

Notes to the financial statements 9 - 21


·.
AEM LIMITED ·. ·. ·. ·.

STRATEGIC REPORT
FOR THE YEAR ENDED 31.. DECEMBER 2013
i~- ~':: i~-,· :

The directors present their strategic report for the year ended 31 December 2013.

Principal activities and review of the business


The principal activity of the company continued to be that of repair, overhaul, modification and testing of aircraft
components and the supply of first aid and medical kits and equipment to the aviation industry.

The company's key financial indicators for the year were.as follows:

2013 2012 Change


£'QOO £'000 %
Sales 25,262 23, 181 8.98
Operating profit 5,671 4,659 21.72
Operating profit as a % of sales 22.45% 20.10%
Net current assets (excluding debtors falling due
after more than one year) 11,230 8,316 35.04
Shareholders' funds 11,414 8,088 41.12

Operating profit for the 12 month period ended 31 December 2013 showed a 22% increase on the prior 12
month period with turnover up by 9%. Despite the general downturn in the UK economy the company, through
diversification and a strong presence in overseas markets, recorded strong levels of profitability and met
AMETEK expectations for all of its main key performance indicators.

We remain confident, given the actions taken in 2013 to enhance capability and production facilities at our
Ramsgate location that we will continue to see growth and increased profitability in 2014.

Principal risks and uncertainties


The company operates in a competitive and global environment and whilst the economic downturn has
undoubtedly affected the airline industry as a whole, the company, )IVith its increasing global spread of MRO
(Maintenance, Repair and Overhaul) businesses under the AMETEK brand, is now of significant mass and
diversification. Consequently, it is much better placed to minimise the effects of this market decline and well
placed to take further advantage of any market fall-out.

Financial risk management


The company's principal financial instruments comprise trade debtor, trade creditor and inter-company loans
and balances. The company does not enter into derivative transactions and it is, and has been throughout the
period under review, the company's policy that no trading in financial instruments shall be undertaken.

The main risks arising from the company's financial instruments are interest rate risk and foreign currency risk.

Interest rate risk


It is AMETEK group policy not to enter into interest rate swaps.

-1-
·. ·. ·.
AEM LIMITED .··

STRATEGIC REPORT (CONTINUED)


FOR THE YEAR ENDED 31 DECEMBER 2013
i'.·::

Foreign currency risk


The company has transactional and translated currency exposure arising from sales, purchases and loans in
foreign currencies. It is AMETEK group policy not to actively hedge against foreign currency transactions and
balances.

On behalf of the board

JG Smith
Directo{3 '::..'v L...o ,
...................~ 4

-2-
·. ·.
AEM LIMITED

DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2013

The directors present their report for the year ended 31 December 2013.

Results and dividends


The results for the year are set out on page 7.

The total distribution of dividends for the year ended 31 December 2013 was £1,810,000 (2012: £3,521,000).

Market value of land and buildings


In the opinion cif the directors, the market value of freehold land and buildings is not considered to be materially
different to the net book value as disclosed in th~ fixed asset note.

Research and development


The company continues to invest in a programme of research and development across all business areas,
researching and adding new capabilities considered strategic to support the markets it serves.

Post balance sheet events


The company has declared and paid dividends amounting to £1,000,000 since the year end.

Future developments
The company will continue fo expand its presence in the Far East market by utilising the AMETEK MRO facility in
Singapore and seek to develop strategic partnerships wi~h other AMETEK companies.

Going concern
The company's business activities, together with the factors likely to affect its future development, its financial
position, financial risk management objectives and details of the company's exposure to risk are described in the
strategic report on page 1.

After making enquiries, the directors have a reasonable expectation that the company has adequate resources to
continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going
concern basis in preparing the financial statements.

Directors
The following dire,ctors have held office since 1 January 2013:

DB Coley
A Imrie (Resigned 31 March 2014)
JG Smith
J W Hardin
A Harding
. E Speranza (Appointed 31 March 2014)

Directors' insurance
AMETEK Inc. has indemnified one or more directors of the company against liability in respect of proceedings
brought by third parties, subject to the conditions set out in the Companies Act 2006 .. Such qualifying third party
indemnity provision was in force during.
the year and remains in place to the date of this report. )

Environment
The group operates under recognised environmental procedures and best practice, fully recognising and
complying with its responsibilities to the environment and current legislation. In furtherance to this.. the company
operates an environmental policy in accordance with ISO 14001.

-3-
·. ·.
AEM LIMITED

DIRECTORS' REPORT (CONTINUED)


FOR THE YEAR ENDED 31 DECEMBER 2013
i'::. .:....,.

Financial instruments
Details of financial instruments are provided in the strategic report on page 1.

Auditors
The auditors, Ernst & Young LLP, are deemed to be reappointed under section 487(2) of the Companies Act
2006.

Statement of directors' responsibilities


The ·directors are responsible for preparing the Strategic Report, the Directors' Report and the financial
statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the
directors have 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 directors must not approve the financial statements unless they are 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 directors are required to:

- select suitable accounting policies and then apply them consistently;


- make judgements and accounting estimates that are reason.able and prudent; ·
- state whether applicable UK Accounting Standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the ·
company will continue in business.

The directors are 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 them to ensure that the financial statements comply with the Companies Act 2006. They are 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 of disclosure to auditors


So far as the directors are aware, there is no relevant audit information of which the company's auditors are
unaware. Additionally, the directors have taken all the necessary steps that they ought to have taken as directors
in order to make themselves aware of all relevant audit information and to establish that the company's auditors
are aware of that information.

On behalf of the board

JG Smith
~ ..,.-:.°'<" ~,
Director
0
......................... \ 4

-4-
•, ·, •,

. AEM LIMITED

INDEPENDENT AUDITORS' REPORT


TO THE MEMBERS OF AEM LIMITED
i;;. i~·,-.

We have audited the financial statements of AEM Limited for the year. ended 31 December 2013 .set out on
pages 7 to 21. The financial reporting framework that has been applied in their preparation is applicable law
. and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

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 an auditors' report 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. ·

Respective responsibilities of directors and auditors


As explained more fully in the Statement of Directors' Responsibilities set out on page 4, the directors are
responsible for the preparation of the financial· statements and for being satisfied that they give a true and
fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with
applicable law and .International Standards on Auditing (UK and Ireland). Those standards require us to
comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements


An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient
to give reasonable assurance that the financial statements are free from material misstatement, whether
caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to
the company's circumstances and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the directors; and the overall presentation of
·the financial statements. ·

In addition, we read all the financial and non-financial information in the Annual Report and Financial
Statements to identify material inconsistencies with the audited financial statements and to identify any
information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we become aware of any apparent material
misstatements or inconsistencies we consider the fmplications· for our report.

Opinion on financial statements


In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2013 and of its profit
for the year 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.

·Opinion on other matter prescribed by the Companies Act 2006


In our opinion the information given in the Strategic Report and Directors' Report for the financial year for
which the financial statements are prepared is consistent with the financial statements.

-5-
AEM "LIMITED ·. .. ..
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF AEM LIMITED

Matters on which we are required to report by exception


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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.

-6-
·. ·.
AEM LIMITED

PROFIT AND LOSS ACCOUNT


FOR THE·YEAR ENDED 31 DECEMBER 2013
~';:: ~:·:.

2013 2012
Notes £'000 £'000

Turnover 2 25,262 23, 181

·Cost of sales (13,580) (12,239)

.Gross profit 11,682 10,942

Distribution costs (1,369) (1,380)


Administrative expenses (4,642) (4,903)

Operating profit 3 5,671 4,659

Investment income 4. 160 25


Interest receivable 5 35 39
Amounts written off investments 6 (160)
Interest payable 7 (637) (637)

Profit on ordinary activities before


taxation 5,069 4,086

Tax on profit on ordinary activities 8 10 945

Profit for the year 21 5,079 5,031


-- --
The profit and loss account has been prepared on the basis that all operations are continuing operations.

There are no recognised gains and losses other than those passing through the profit and loss account.

-7-
·.
AEM LIMITED

BALANCE SHEET
AS AT.31DECEMBER2013
i;:: ':· .. ,.. ..
~ i·~·:: \....

2013 2012
Notes £'000 £'000 £'000 £'000

Fixed assets
Intangible assets 10 5,603 5,532
Tangible assets 11 4,619 4,907
Investments 12 160

10,222 10,599
· . Current assets
Stocks 13 4,106 4,292
Debtors 14 9,963 6,662
Cash at bank and in hand 1,221 1,875

15,290 12,829
Creditors: amounts falling due within
one year 16 (4,060) (4,053)

Net current assets 11,230


-- - 8,776

Total assets less current liabilities 21,452 19,375

Creditors: amounts falling due after


more than one year 17 (10,022) (11,287)

Provisions for liabilities 18 (16)

11,414 8,088

Capital and reserves


Called up share capital 20 3,000 3,000
Profit and loss account 21 8,414 5,088

Shareholders' funds 22 11,414 8,088

Approved by the Board and ~uthorised for issue on ... ~... ~~·l·~;-V l..o\4

. . .~. G\.
·JG Smith
Director

Company Registration No. 00620201

-8-
·. AEM LIMITED ·. ·. ·. ·.

NOTES TO THE FINANCIAL STATEMENTS


FOR THE YEAR ENDED 31.DECEMBER 2013.
\··::

1 Accounting policies

1.1 ·Accounting convention


The financial statements are prepared under the historical cost convention.

The company has taken advantage of the exemption in Financial Reporting Standard No 1 (Revised 1996)
from the requirement to produce a cash flow statement on the grounds that it is a subsidiary undertaking
where 90 percent or more of the voting rights are controlled within the group. ·

1.2 Compliance with accounting standards


The financial statements are prepared in accordance with applicable United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting Practice), . which have been applied
consistently (except as otherwise stated).

1.3 Turnover
Turnover. represents the amounts receivable by the company for goods supplied and services provided,
excluding VAT and trade discounts. In the case of goods, invoices are ra.ised on delivery to and, where
required, formal acceptance by customers.

1.4 Goodwill
Goodwill is the difference between the cost of an acquired entity and the aggregate of the fair value of that
entity's identifiable assets and liabilities.

Positive goodwill is capitalised and classified as an asset on the balance sheet. It is reviewed for
impairment at the end of the first full financial period following the acquisition and each year thereafter to
ensure that the carrying value is still recoverable. The goodwill recognised is considered to have an
indefinite useful economic life. No amortisation is therefore charged to the profit and loss account unless
events or changes in circumstances indicate that the carrying value may not be recoverable.

The financial statements depart ·from the specific requirements of the Companies Act 2006 to amortise
goodwill over a finite period for the overriding purpose of giving a true and fair view. As the useful
econornic life of goodwill is considered to be indefinite (see note 10), it is not possible to quantify the effect
of this departure.

1.5 Licences, patents and knowhow


Patents are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in
equal annual instalments over their estimated useful lives.

1.6 Research and development


Research expenditure is written off to the profit and loss account in the year in which it is incurred.

-9-
·. ·. ·.
AEM LIMITED .

NOTES TO THE FINANCIAL STATEMENTS(CONTINUED)


FOR THE YEAR ENDED·31DECEMBER2013
\":;.-. i:.·:.

1 Accounting policies {Continued)

1.7 Tangible fixed assets and depreciation


Tangible fixed assets. are s_tated at cost less accumulated depreciation. The carrying values of tangible
fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying
value may not be recoverable.

Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write
off the cost, less estimated residual value based on prices prevailing at the date of acquisition of each
asset evenly over its expected useful life, as follows:

Buildings 2% per annum


Short leasehold property Over the life of the lease
Plant and machinery 10-15% per annum (aircraft rotable spares 14%)
Fixtures, equipment and computers 20- 33% per annum
Motor vehicles · 25-33% per annum

No depreciation is charged on freehold land.

1.8 Leasing
Rentals payable under operating leases are charged against income on a straight line basis over the lease
term.

1.9 Investments
Fixed asset investments are stated at cost and are reviewed for impairment if events or changes in
circumstances indicate that the carrying value may not be recoverable.

1.10 Stock and work in progress


Stock and work in progress are valued at the lower of cost and net realisable value. Cost includes
materials, direct labour and an attributable proportion of overheads based on normal levels of activity.

1.11 Pensions
The company administers a defined contribution pension scheme. Contributions are charged in the profit
and loss account as they become payable in accordance with the rules of the scheme.

1.12 Deferred taxation


Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at
the balance sheet date where transactions or events have occurred at that date that will result in an
obligation to pay more, or a right to pay less or to receive more tax, with the following exception:

- deferred tax assets are recogni$ed only to the extent that the directors consider that it is more likely than
not that there will be suitable taxable profits from which the future reversal of the underlying timing
differences can be deducted. '

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the
periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted
at the balance sheet date.

1.13 Foreign currency translation


Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of
exchange ruling at the balance sheet date. Transactions in foreign currencies. are recorded at the rate
ruling at the date of the transaction. All differences are taken to profit and loss account.

- 10 -
·. ·. ·. ·.
AEM LIMITED

NOTES TO THE FINANCIAL STATEMENTS(CONTINUED)


FOR THE YEAR ENDED 31 DECEMBER 2013
0 0 ~

1 Accounting policies (Continued)

1.14 Share-based payments


The cost of equity-settled transactions with employees is measured by reference to the fair value at the
date at which they are granted and is recognised as an expense over the vesting period, which ends on
the date on which relevant employees become fully entitled to the award. Fair value is determined using
an appropriate pricing model. No expense is recognised for awards that do not ultimately vest.
f
At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent
to which the vesting period has expired and management's best estimate of the achievement or otherwise
of non market conditions that impact on the number of equity instruments that will ultimately vest. The
movement in cumulative expense since the previous balance sheet date is recognised in the profit and
loss account for the year (as part of wages and salaries) with a corresponding reserve transfer to the profit
and loss reserve.

There are no n<?n-equity settled share-based· payments.

1.15 Related party transactions


The company is a wholly owned subsidiary of AMETEK Inc., the consolidated accounts of which are
publicly available. Accordingly, the company has taken advantage of the exemption in FRS 8 from
disclosing transactions with other wholly owned members or investees of the AMETEK Inc. group.

2 Turnover.

Geographical market
Turnover
2013 2012
£'000 £'000

Europe and Middle East 22,690 19,782


Asia and Africa 1,615 2,666
Americas (excl USA) 102 30
USA 855 703

25,262 23,181
-- --

- 11 -
AEM LIMITED

NOTES TO THE FINANCIAL STATEMENTS(CONTINUED)


FOR THE YEAR ENDED 31 DECEMBER 2013
'';:. ''::. i~·:. \·~·· '~·:

3 Operating profit 2013 2012


£'000 £'000
Operating profit is stated after charging:
Amortisation of intangible assets 9
Depreciation of tangible assets 736 768
Loss on disposal of tangible assets 3
Loss on foreign exchange transactions 89
Research and development 299 307
Operating lease rentals 246 288
Hire of plant and machinery 37 33
Fees payable to the compa~y's auditor for the audit of the company's
annual accounts 20 23
Redundancy - exceptional restructuring cost 30 72

and after crediting:


Profit on disposal of tangible assets (8)
Profit on foreign exchange transactions (29)
-- --

4 Investment income 2013 2012


£'000 £'000

Income from shares in group undertakings 160 25


-- --

5 Interest receivable 2013 2012


£'000 £'000

Interest receivable from group undertakings 35 39


-- --

6 Amounts written off investments 2013 2012


£'000 £'000

Amounts written off fixed asset investments:


- loss on liquidation of investments 160
-- --

7 Interest payable 2013 2012


£'000 £'000

Interest payable to group undertakings 637 637


-- --

- 12 -
·. ·.
. AEM LIMITED

NOTES TO THE.FINANCIAL STATEMENTS(CONTINUED)


FOR THE YEAR ENDED 31 DECEMBER 2013
'i.' \·;:. i';:.

8 Taxation
2013 2012
£'000 £'000
Domestic _current year tax
Adjusfment for prior years (765)

Total current tax (765)

Deferred tax
Origination and reversal of timing differences (16) (181)
. Effects of changes in tax rates and laws 6 1

(10) (180)

(10) (945)

Factors affecting the tax charge for the year


Profit on ordinary activities before taxation 5,069 4,086
-- --
Profit on ordinary activities before taxation multiplied by standard rate of UK
corporation tax of 23.25% (2012 - 24.50%) 1, 178 1,001

Effects of:
(Income not taxable)/ Non deductable expenses (48) 3
Depreciation in advance of capital allowances 11 168
Adjustments to previous periods (765)
Amount written off investments 37
Dividend income not taxable . (37)
Group relief not charged (1, 149) (1, 184)
Other timing differences 8 12

(1,178) (1,766)

Current tax credit for the year (765)


-- --
The company has received the benefit of tax losses amounting to £4,944,000 (2012: £4,833,000) from
certain subsidiary undertakings without making any payment.

Factors that may affect future tax charges


The standard rate of Corporation Tax in the UK reduced from 24% to 23% with effect from 1 April 2013.
Accordingly the company's profits for this accounting period are taxed at a blended rate of 23.25%.

The standard rate has fallen to 21 % with effect from 1 April 2014 and will fall further to 20% with effect
from 1 April 2015. These rates were enacted during the period and as such any deferred tax balances
have been stated at a rate of 20%.

- 13 -
AEM .LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31 DECEMBER 2013
i;·. '':'- l~·:. ....
;~

9 Dividends 2013 2012


£'000 £'000

Ordina_ry final paid 1,810 3,521


-- --

10 Intangible fixed assets


Licences, Goodwill Total
patents and
knowhow
£'000 £'000 £'000
Cost
At 1 January 2013 5,558 5,558
Additions 80 80

At 31 December 2013 80 5,558 5,638

Amortisation
At 1 January 2013 26 26
Charge for the year 9 9

At 31 December 2013 9 26 35

Net book value


At 31 December 2013 71 5,532 5,603
-- -- --
At 31 December 2012 5,532 5,532
-- --
The directors consider that the specialised nature of the· acquired businesses give grounds for regarding
the goodwill premiums as durable and for assigning an indefinite life. The businesses operate in a long
standing ·and highly regulated industry and the related products, customer base and business names
provide a benefit to the company which is considered to have indefinite durability.

The financial statements depart from the specific requirements of s396 of the Companies Act 2006 to
amortise goodwill over a finite period for the overriding purpose of giving a true and fair view. As the
useful economic life of goodwill is considered to be indefinite, it is not possible to quantify the effect of this
departure.

-14 -
AEM LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE.YEAR ENDED 31DECEMBER2013
··~·:. i ....... i;: ':~'

11 Tangible fixed assets


Freehold Short Plant and Fixtures, Motor Total
land and leasehold machinery fittings & vehicles
buildings property equipment
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2013 2,725 17 6,389 1, 108 58 10,297
Additions 231 181 17 19 448
Disposals (548) (14) (28) (590)

At 31 December 2013 2,956 17 '6,022 1, 111 ·49 10, 155

Depreciation
At 1 January 2013 737 9 3,673 913 58 5,390
On disposals (548) . (14) (28) (590)
Charge for the year 45 666 9 16 736

At 31 December 2013 782 9 3,791 908 46 5,536

Net book value


At 31 December 2013 2,174 8 2,231 203 3 4,619
-- -- -- -- --
At 31 December 2012 1,988 8 2,716 195 4,907
-- -- -- -- -- --

Included in the cost of land and buildings is freehold land of £267,000 (2012: £267,000) which is not
depreciated.

Included within additions in the year to plant and machinery are assets under construction of £136,000
(2012: £58,000) and within additions in the year to land and buildings of £184,000 (2012: £210,000).

- 15 -
·. ·.
AEM LIMITED

NOTES TO THE FINANCIAL STATEMENTS(CONTINUED)


FOR THE YEAR ENDED 31 DECEMBER 2013
i.~·:
. .
i;.·. i·:;:

12 Fixed asset investments

Shares in
subsidiary
undertakings
£'000
Cost
At 1 January 2013 185
Disposals (185)

At 31 December 2013

Provisions for diminution in value


At 1 January 2013 25
On disposals (25)

At 31 December 2013

Net book value


At 31 December 2013

At 31 December 2012 160

The company held investments in Aviation Windings Limited and Aeromedic Innovations Limited at 1
January 2013. These companies were liquidated during the year.

13 Stocks and work in progress 2013. 2012


£'000 £'000

Raw materials and consumables 2,921 2,424


Work in progress 1,014 . 1,287
Finished goods and goods for resale 171 581

4,106 4,292
-- --

- 16 -
·.
·AEM LIMITED .

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FORi·:;:. THE YEAR ENDED 31, DECEMBER l013
\~;: .. i'::: ''::. i~-:

14 Debtors 2013 2012


£'000 £'000

Trade debtors 3,287 3,288


Amounts owed by group undertakings 6, 151 2,455
Corporation tax 237 628
Other debtors 102 33
Prepayments.and accrued income 127 209
Deferred tax asset (see note 15) 59 49

9,963 6,662
-- --
Amounts falling due after more than one year and included in the debtors above are:
2013 2012
£'000 £'000

Amounts owed by group undertakings . 460

15 Deferred tax asset

The deferred tax asset (included in debtors, note 14) is made up as follows:
2013
£'000

Balance at 1 January 2013 . (49)


Profit and loss account (10)

Balance at 31 December 2013 (59)


--
2013 2012
£'000 £'000

Decelerated capital allowances (24) (18)


Share based payment (21) (31)
Other timing differences (14)

(59) (49)
-- --
The effect of future changes in tax rate is not considered to have a material effect on the deferred tax
balance.

- 17 -
·. ·. ·. ·. ·.
AEM LIMITED.··

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED_·31 DECEMBER 2013
i~·.", \:;:.

16 Creditors: amounts falling due within one year 2013 2012 .


£'000 £'000

Trade creditor!? 3,215 3,201


Amounts owed to group undertakings 206 281
Taxes and social security costs 154 166
Other creditors 164 94
Accruals and deferred income 321 311

4,060 4,"053
-- --

17 Creditors: amounts falling due after more than one year 2013 2012
£'000 £'000

Amounts owed to group undertakings 10,022 11,287


-- --

Included within amounts owed to group undertakings is a loan totalling £9,800,000 (2012: £9,800,000).
The loan has a rolling 5 year notice period. Interest is charged at a rate of 6.5%.

18 Provisions for liabilities

Warranty
£'000

Profit and loss account 16

Balance at 31 December 2013 16

The provision relates to a possible claim by a customer and is likely to be utilised in 2014.

19 Pension and other post-retirement benefit commitments


Defined contribution
The company administe_rs a defined contribution pension scheme for the benefit of the employees. The
assets of the scheme are held separately from those of the company in an independently administered
fund. The pension cost charge represents contributions payable by the company to the fund and there
were no amounts due to the scheme at the year end (2012: £Nil).

2013 2012
£'000 £'000

Contributions payable by the company for the year 254 256

- 18 -
AEM LIMITED

NOTES TO THE FINANCIAL STATEMENTS(CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2013
\ ...... \'.·.:. i~-... i·:;.·. .
.....

20 Share capital 2013 2012


£'0.00 £'000
Allotted, called up and fully paid
3,000,000 Ordinary shares of £1 each 3,000 3,000
-- --

21 Statement·of movements on profit and loss account


Profit and loss
account

. £'000

Balance at 1 January 2013 5,088


Profit for the year 5,079
Share based payment transactions 57
Dividends paid (1,810)

Balance at 31 December 2013 8,414


--

22 Reconciliation of movements in shareholders' funds 2013 2012


£'000 £'000

Profit for the financial year 5,079 5,031


Dividends (1,810) . (3,521)
Share based payment transactions 57 69

Net addition to shareholders' funds 3,326 1,579


Opening shareholders' funds 8,088 6·,509

Closing shareholders' funds 11,414 8,088


-- --

23 Contingent liabilities

The company has issued bank guarantees to the value of £10,000.(2012: £10,000).

- 19 -
•, •,
AEM LIMITED

NOTES TO THE FINANCIAL STATEMENTS(CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2013
\';:. ~-~·::

24 Financial commitments

At 31 December 2013 the company was committed to making the following payments. under
non-cancellable operating leases in the year to 31 December 2014:

Land and buildings Other


2013 2012 2013 2012
£'000 £'000 £'000 £'000
Operating leases which expire:
Within one year 13 21
Between two and five years 248 21 33
In over five years 235

235 248 34 54
--

25 Capital commitments 2013 2012·


£'000 £'000
At 31 December 2013 the company had capital commitments as follows:

Contracted for but not provided in the financial statements 510


--

26 Directors' remuneration 2013 2012


£'000 £'000

Remuneration for qualifying services 248 232


Company pension contributions to defined contribution schemes 16 15
-- --
The number of directors for whom retirement benefits are accruing under defined contribution schemes
amounted to 3 (2012 - 3).
The number of directors who exercised share options during the year was 2 (2012 - 1).
The number· of directors who received shares under long term incentive schemes during the year was 4
(2012 - 4).

Remuneration disclosed above includes the following amounts paid to the


highest paid director:
Remuneration for qualifying services 137 122
Company pension contributi.ons to defined contribution schemes 9 8

The highest paid director has exercised share options during the year.
The highest paid director received shares under a long term incentive scheme during the year.

J W Hardin is a US based director within the AMETEK group and does not provide any qualifying services
to AEM Limited.

- 20 -
•,
AEM LIMITED •, •,

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED).


FOR THE YEAR ENDED 31 DECEMBER 2013

27 Employees

Number of employees
The average monthly number of employees (including directors) during the year was:
2013 ·2012
. Number Number

Sales, administration and distribution 62 64


Manufacturing 155 147

217 211

Employment costs 2013 2012


£'000 £'000

Wages and salaries 6,3p1 5,902


Social security costs 622 576
Other pension costs 254 256

7,177 6,734

Included in wages and salaries is a total expense for share-based payments in relation to equity-settled
transactions of £57,000 (2012: £69,000), of which £27,000 (2012: £40,000) relates to restricted shares
and £30,000 (2012: £29,000) relates to share options.

Further details of the share-based payment arrangements applicable are given in the group financial
statements of the ultimate parent entity AMETEK Inc.

28 · Control

The immediate parent company is AMETEK Aerospace and Defense Group UK Limited, a company
registere<;f in England and Wales.The ultimate parent company is AMETEK Inc, a company incorporated in
the United States of America.

AMETEK Inc. prepares group financial statements which include the company and are the smallest and
largest consolidated accounts that the company is included in, copies of which can be obtained from P 0
Box 36, 2 New Star Road, Leicester LE4 9JQ.

29 Post balance sheet events

The company has declared and paid dividends amounting to £1,000,000 since the year end.

- 21 -
'

Company Reg1strat1on No 00499805 (England and Wales)

AMETEK AIRTECHNOLOGY GF.tOUP LIMITED

DIRECTORS' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2012

111111111111111111
"A2ECYYGJ"
A06 08/0812013 #295
COMPANIES HOUSE

AMETEK AIRTECHNOLOGY GROUP LIMITED

COMPANY INFORMATION

Directors J A Mockler
DB Coley
J A Fenn (Appointed 26 Apnl 2012)
RR Mandos (Appointed 1 July 2012)
R Vogel (Appointed 1 August 2012)

Secretaries DB Coley
KE Sena

Company number 00499805

Registered office P 0 Box 36


2 New Star Road
Leicester
LE4 9JQ

Auditors Ernst & Young LLP


Wessex House
19 Threef1eld Lane
Southampton
S014 3QB

Business address 111 Windmill Road,


Sunbury on Thames
Middlesex
TW16 7EF

Bankers NatWest
1 Granby Street
Leicester
LE1 6EJ

Sohc1tors Blake Lapthorn


New Kings Court
Tollgate
Chandler's Ford
Eastleigh
Hampshire
S053 3LG

' AMETEK AIRTECHNOLOGY GROUP LIMITED

CONTENTS

Page

Directors' report 1-4

Independent auditors' report 5-6

Profit and loss account 7

Statement of total recognised gains and losses 8

Balance sheet 9

Notes to the financial statements 10 - 28


AMETEK AIRTECHNOLOGY GROUP LIMITED

DIRECTORS' REPORT
FOR THE YEAR ENDED 31DECEMBER2012

The directors present their report and financial statements for the yea; ended 31 December 2012

Principal act1v1t1es and review of the business


The principal act1v1ty of the company continued to be that of the design and manufacture of products for the
aerospace, defence and rail industries, the design and manufacture of spec1ahst prec1s1on and motion control products
and the design, manufacture and sale of track balls and other cursor controlled products

The company's key financial indicators for the year were as follows

2012 2011 Change


£'000 £'000 %

Sales 47,489 44,068 7 76


Operating profit before exceptional items 6,012 5,297 13 50
Exceptional items 891
Operating profit after exceptional items 5, 121 5,297 (3 32)
Operating profit as a % of sales 10 78% 12 02%
Net current assets 21,986 20,367 7 95
Shareholders' funds 20,280 19,966 1 57

The level of order intake in 2012 reduced by £1 7m or 3 9% to £42 6m A reduction of orders in our track ball product
hne which benefited from a large multi-year order in 2011 drove this reduction We continue to invest heavily in new
product development to ensure we are well placed to achieve our long term growth obiect1ves During 2012 we spent
£3 2m on research, development and engineering to support our New Product investment programs New Product
investment for 2012 was 6 8% of sales (2011 8 4%) The level of enquires and the future prospects remain
encouraging

In 2012 the continued strength of the short term order book coupled with a strong performance in our 011 & Gas sector
resulted in increased sales of £3 4m or 7 8% to £47 Sm

During 2012 the company recorded a £0 9m prov1s1on to refiect add1t1onal costs associated with a development
program which will not be recoverable under the terms of the contract Adjusting for this, the business recorded a
13 5% increase in its operating profit This improvement was driven by the increased level of sales, supported by
strong margins and a reduced cost base We remain focused on operational excellence and have earned on with the
1mplementat1on of lean in1!1at1ves to ensure we can hold our compet1t1ve pos1t1on in our markets We continue to
aggressively pursue cost reductions through local and parent company Global Sourcing and Strategic Procurement
lmt1at1ves

The company's net current assets increased by £1 6m or 7 9%, this increase was driven by a reduction in the level of
trade creditors which reduced £1 6m and higher intercompany debtors following the introduction of cash pooling
processes

Despite d1v1dend payments of £4 3m Shareholders funds increased 1 6% reflecting the profit generated in the year

-1-
AMETEK AIRTECHNOLOGY GROUP LIMITED

DIRECTORS' REPORT (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

Principal risks and uncertainties


The company operates 1n a compet1t1ve global environment, and our customers have the ability to switch supply
sources 1f they iudge that the competitor product offers better value Further, 1t 1s becoming apparent that a trend 1s
developing w1th1n our defence and industrial markets whereby our customers are placing orders close to 1f not within
stated lead times The business believes this change in procurement behaviour 1s as a direct result of our customers
coming to terms with reduced defence budgets and a general tightening of spending within industrial and commercial
markets driven principally by continuing concerns over the robustness of economic growth in developed and
developing economies

The business 1s responding to these risks by continuing to focus on the quality and rel1ab11ity of our products in order to
provide good value over the product life, to monitor competitor act1v1ty to maintain our compet1t1veness and to improve
the ag1l1ty of our operations allowing us to improve our responsiveness

The company 1s considered to have acceptable d1vers1ficat1on between its Commercial, Military and Industrial market
sectors and therefore unlikely to be overly exposed by a downturn in any one of these markets
The company does not have a natural hedge in the Euro and USD currencies and 1s therefore impacted by exchange
rate fluctuations

Financial instruments
The company's principal financial instruments comprise trade debtor, trade creditor and 1ntercompany balances The
company does not enter into derivative transactions and 1t 1s, and has been throughout the period under review, the
company's policy that no trading in financial instruments shall be undertaken The main risk arising from the company's
financial instruments 1s foreign currency risk The company has transactional and translat1onal currency exposures
arising from sates and purchases in foreign currencies It 1s AMETEK group policy not to actively hedge against foreign
currency transactions and balances

Results and d1v1dends


The results for the year are set out on page 7

The total d1stnbut1on of d1v1dends paid in the year ended 31 December 2012 was £4,254,000 (2011 £2,000,000)

Research and development


Research and development 1s directed towards product development and new products aligned to market needs

Post balance sheet events


The company has declared and paid d1v1dends amounting to £1,200,000 since 31 December 2012

Future developments
The company continues to seek out new opportunities within its Rat•, lndustnal, 01\ & Gas and Commercial Aerospace
markets outside of the UK to complement the strong pos1t1on within the European Aerospace & Defence markets We
remain oplim1st1c about the near term economic outlook and our d1fferenttated business continues to enioy a healthy
order book This gives us good reason to be confident that 2013 should be another good year

Going concern
The company's business act1v1t1es, together with the factors likely to affect its future development, its financial pos1t1on,
financial risk management objectives and details of the company's exposure to risk are described in this report

After making enqumes, the directors have a reasonable expectation that the company has adequate resources to
continue in operational existence for the foreseeable future Accordingly, they continue to adopt the going concern
basis in preparing the financial statements

-2-
AMETEK AIRTECHNOLOGY GROUP LIMITED

DIRECTORS' REPORT (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

Directors
The following directors have held office since 1 January 2012

J A Mockler
DB Coley
J A Fenn (Appointed 26 Aprrl 2012)
RR Mandos (Appointed 1 July 2012)
R Vogel (Appointed 1 August 2012)
J J Molrnellr (Resigned 1 July 2012)
C E Lohwasser (Resigned 1 August 2012)
L M Smrth (Resrgned 30 Aprrl 2012)

Directors' insurance
AMETEK Inc has indemnified one or more directors of the company agarnst lrabilrty rn respect of proceedings brought
by third parties, subiect to the conditions set out rn the Companies Act 2006 Such qualrfyrng thrrd party rndemnrty
provrsron was in force durrng the year and remains rn place to the date of th rs report

Employee involvement
Employees are involved rn rmprovrng the company performance through the Lean Manufacturrng rnrtrabves that have
been set up throughout the organrsatron Communrcatron wrth employees rs prrncrpally vra iornt consultatrve meetrngs
and quarterly revrews

Disabled persons
The company grves full consrderatron to applrcatrons for employment from drsabled persons where the requrrements of
the JOb can be adequately fulfilled by a handrcapped or drsabled person Where exrsting employees become drsabled,
rt rs the company's policy wherever practrcable to provrde continuing employment under normal terms and condrtrons
and to provrde trarning and career development and promotron to drsabled employees wherever approprrate

Auditors
The audrtors, Ernst & Young LLP, are deemed to be reappointed under sectron 487(2) of the Companies Act 2006

-3-
AMETEK AIRTECHNOLOGY GROUP LIMITED

DIRECTORS' REPORT (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

Statement of directors' respons1b1htles


The directors are responsible for preparing the Directors' Report and the financial statements m accordance with
applicable law and regulations

Company law requires the directors to prepare financial statements for each financial year Under that law the directors
have elected to prepare the financial statements m accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and applicable law) Under company law the directors must not
approve the financial statements unless they are 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 directors
are required to

- select suitable accounting policies and then apply them consistently,


- make judgements and accounting estimates that are reasonable and prudent,
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed
and explained m the financial statements,
- prepare the financial statements on the going concern basis unless 1t 1s inappropriate to presume that the company
will continue m business

The directors are responsible for keeping adequate accounting records that are suff1c1ent to show and explain the
company's transactions and disclose with reasonable accuracy at any time the financial position of the company and
enable them to ensure that the financial statements comply with the Companies Act 2006 They are also responsible
for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of
fraud and other 1rregularit1es

Statement of disclosure to auditors


So far as the directors are aware, there 1s no relevant audit 1nformat1on of which the company's auditors are unaware
Add1t1onally, the directors have taken all the necessary steps that they ought to have taken as directors m order to
make themselves aware of all relevant audit information and to estat:lish that the company's auditors are aware of that
information

On behalf of the board

l\6\1~
difFen
ecto

-4-
AMETEK AIRTECHNOLOGY GROUP LIMITED

INDEPENDENT AUDITORS' REPORT


TO THE MEMBERS OF AMETEK AIRTECHNOLOGY GROUP LIMITED

We have audited the financial statements of AMETEK A1rtechnology Group L1m1ted for the year ended 31
December 2012 set out on pages 7 to 28 The financial reporting framework that has been applied in their
preparation 1s applicable law and United Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice)

This report 1s 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 1n an auditors' report and for no other purpose To
the fullest extent permitted by law, we do not accept or assume respons1b1l1ty 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

Respective respons1b1llties of directors and auditors


As explained more fully in the Statement of Directors' Respons1b1l1t1es set out on page 4, the directors are
responsible for the preparation of the financial statements and for being sat1sf1ed that they give a true and
fair view Our respons1b11ity 1s to audit and express an opinion on the financial statements in accordance with
applicable law and International Standards on Aud1t1ng (UK and Ireland) Those standards require us to
comply with the Auditing Practices Board's Ethical Standards for Auditors

Scope of the audit of the financial statements


An audit involves obtaining evidence about the amounts and disclosures in the f1nanc1al statements sufficient
to give reasonable assurance that the financial statements are free from material misstatement, whether
caused by fraud or error This includes an assessment of whether the accounting policies are appropriate to
the company's circumstances and have been consistently applied and adequately disclosed, the
reasonableness of s1gn1f1cant accounting estimates made by the directors, and the overall presentation of
the financial statements

In add1t1on, we read all the financial and non-financial information in the Directors' Report and Financial
Statements to 1dent1fy material incons1stenc1es with the audited financial statements If we become aware of
any apparent material misstatements or inconsistencies we consider the 1mplicat1ons for our report

Opinion on financial statements


In our opinion the financial statements
give a true and fair view of the state of the company's affairs as at 31 December 2012 and of its profit
for the year 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

Opinion on other matter prescribed by the Companies Act 2006


In our opinion the information given in the Directors' Report for the financial year for which the financial
statements are prepared 1s consistent with the financial statements

-5-
AMETEK AIRTECHNOLOGY GROUP LIMITED

INDEPENDENT AUDITORS' REPORT (CONTINUED)


TO THE MEMBERS OF AMETEK AIRTECHNOLOGY GROUP LIMITED

Matters on which we are required to report by exception


We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you 1f, in our opinion
adequate accounting records have not been kept, or returns adequate for our audit have not been
received from branches not v1s1ted by us, or
the financial statements are not in agreement with the accounting records and returns, or
certain disclosures of directors' remuneration specified by law are not made, or
we have not received all the information and explanations we require for our audit

tM~-1 '--( ~ UJ
David Marshall (Senior Statutory Auditor)
for and on behalf of Ernst & Young LLP
Statutory Auditor
Southampton

-6-
AMETEK AIRTECHNOLOGY GROUP LIMITED

PROFIT AND LOSS ACCOUNT


FOR THE YEAR ENDED 31DECEMBER2012

2012 2011
Notes £'000 £'000

Turnover 2 47,489 44,068

Cost of sales (36,969) (33,469)


--
Gross profit 10,520 10,599

D1stnbut1on costs (1,532) (1,863)


Adm1nistrat1ve expenses (3,867) (3,439)
-- --
Operating profit 3 5, 121 5,297

Interest receivable and s1m1lar income 4 76 83


Other finance income 14 597 481
-- --
Profit on ordinary act1v1bes before
taxation 5,794 5,861

Tax on profit on ordinary act1v1t1es 5 151 1,284


-- --
Profit for the year 17 5,945 7,145
=
The profit and loss account has been prepared on the basis that all operations are continuing operations

-7-
AMETEK AIRTECHNOLOGY GROUP LIMITED

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES


FOR THE YEAR ENDED 31DECEMBER2012

2012 2011
£'000 £'000

Profit for the financial year 5,945 7,145


Actuarial loss on pension scheme (1,544) (1,553)
Tax on items taken directly from equity 100 128

Total recognised gains and losses relating to


the year 4,501 5,720
-- --

- B-
AMETEK AIRTECHNOLOGY GROUP LIMITED

BALANCE SHEET
AS AT 31 DECEMBER 2012

2012 2011
Notes £'000 £'000 £'000 £'000

F1xed assets
Intang1ble assets 7 14, 176 15,029
Tangible assets 8 5,622 5,899
-- --
19,798 20,928
Current assets
Stocks 9 14,076 13,870
Debtors 10 15,800 14,346
Cash at bank and in hand 162 1,200
-- --
30,038 29,416
Creditors amounts falling due within
one year 11 (8,052) (9,049)
-- --
Net current assets 21,986 20,367
--
Total assets less current liabilities 41,784 41,295

Creditors. amounts falling due after


more than one year 12 (23,423) (23,423)

--
18,361 17,872
Pension asset 14 1,919 2,094
--
20,280 19,966
-
---

Capital and reserves


Called up share capital 16 480 480
Profit and loss account 17 19,800 19,486
--
Shareholders' funds 18 20,280 19,966
=
Approved by the Board and authorised for issue on \~"$' ?-e,:,

Company Reg1strat1on No. 00499805

-9-
AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS


FOR THE YEAR ENDED 31DECEMBER2012

1 Accounting pohc1es

11 Accounting convention
The financial statements are prepared under the historical cost convention

The company has taken advantage of the exemption in Financial Reporting Standard No 1 (Revised 1996)
from the requirement to produce a cash flow statement on the grounds that 1t 1s a subs1d1ary undertaking
where 90 percent or more of the voting rights are controlled within the group

1.2 Comphance with accounting standards


The financial statements are prepared in accordance with applicable United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting Practice), which have been applied
consistently (except as otherwise stated)

1.3 Turnover and revenue recognition


Turnover represents the amounts receivable by the company for goods supplied and services provided,
excluding VAT and trade discounts In the case of goods revenue 1s recognised when the risks and
rewards of ownership of the goods has passed to the buyer This 1s usually determined with reference to
the INCO terms of goods shipped

14 Goodwill
Goodw1ll 1s the difference between the cost of an acquired entity and the aggregate of the fair value of that
entity's 1dent1fiable assets and liabilities

Positive goodwill arising on acqu1s1t1ons 1s capitalised and classified as an asset on the balance sheet and
amortised on a straight line basis over its useful economic life up to a maximum of 20 years It 1s reviewed
for 1mpa1rment at the end of the first full financial period following the acqu1s1t1on and in other periods 1f
events or changes in circumstances indicate that the carrying value may not be recoverable

15 Licences, patents and knowhow


Licences, patents and knowhow are stated at cost less accumulated amort1sat1on and are amortised over
the period during which the company expects to benefit from them

1.6 Research and development


Research expenditure ts wntten off to the profit and loss account in the year in which 1t 1s mcurred

17 Tangible fixed assets and deprec1at1on


Tangible fixed assets are stated at cost less accumulated deprec1at1on The carrying values of tangible
fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying
value may not be recoverable

Depreciation 1s provided on all tangible fixed assets, other than freehold land and assets 1n the course of
construction, at rates calculated to write off the cost, less estimated residual value based on prices
prevailing at the date of acqu1s1t1on of each asset evenly over its expected useful life, as follows

Freehold buildings 2% - 5% per annum


Leasehold property term of the lease
Plant and machinery 6% - 33% per annum
Fixtures, fittings & equipment 12 5% - 33% per annum
Motor vehicles 20% to 33% per annum

- 10 -
AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

1 Accounting policies {Continued)

18 Leasing
Rentals payable under operating leases are charged against income on a strarght line basrs over the lease
term

19 Stock and work in progress


Stock and work in progress are valued at the lower of cost and net realisable value Cost rncludes all costs
incurred in brrngrng each product to rts present loacatron and condrtron as follows

- raw materrals, consumables and goods for resale are at purchase cost on a frrst-in, first-out basrs

-work rn progess and frnrshed goods are stated at cost of drrect materrals and labour plus attrrbutable
overheads on a normal level of actrvrty

Net realrsable value rs based on estrmated sellrng prrce less any further costs expected to be rna.irred to
completron and drsposal

1 1O Pensions
The company operates both defined benefrt and defrned contrrbutron pensron schemes These are
accounted for rn accordance wrth FRS 17 "Accountrng for Retrrement Benefits"

Defined contnbution pension scheme


Contrrbutrons to the defrned contrrbutron pensron scheme are recognrsed in the profrt and loss account rn
the perrod rn whrch they are payable

Defined benefit pension scheme


The company operates a defined benefit pensron scheme for rts employees The assets of the scheme are
held separately from those of the company Pensron scheme liabrlrtres are measured on an actuarral basrs
using the projected unrt method and are drscounted at the current rate of return on a hrgh quality corporate
bond of equrvalent term and currency to the liabrlity Pensron scheme assets are measured using market
values at the balance sheet date The pensron scheme asset/defrcrt rs recognrsed in full on the balance
sheet The deferred tax relating to a defined benefit asset/liabrlrty rs offset against the defined benefit
asset/liabrlity and not included wrth other deferred tax assets or liabrlitres

Increases in the present value of the scheme lrabrlitres expected to arrse from employee service rn the
perrod are charged to operating profit The expected return on scheme assets less the rncrease in the
present value of scheme liabrlrtres arrsrng from the passage of trme are rncluded in other interest and
shown ad1acent to interest payable/receivable Actuarral gains and losses are recognrsed rn the statement
of total recognrsed garns and losses

1.11 Deferred taxation


Deferred tax 1s recognrsed in respect of all t1m1ng differences that have orrgrnated but not reversed at the
balance sheet date where transactions or events have occurred at that date that wrll result in an obligation
to pay more, or a rrght to pay less or to receive more tax, wrth the following exception

- deferred tax assets are recognised only to the extent that the directors consider that rt rs more likely than
not that there wrll be suitable taxable profits from which the future reversal of the underlying timing
differences can be deducted

Deferred tax 1s measured on an undrscounted basis at the tax rates that are expected to apply m the
perrods in whrch trming differences reverse, based on tax rates and laws enacted or substantively enacted
at the balance sheet date

- 11 -
AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

1 Accounting policies (Continued)

1 12 Foreign currency translation


Monetary assets and liab1lit1es denominated in foreign currencies are translated into sterling at the rates of
exchange ruling at the balance sheet date Transactions in foreign currencies are recorded at the rate
ruling at the date of the transaction All differences are taken to profit and loss account

1 13 Share-based payments
The cost of equity-settled transactions with employees 1s measured by reference to the fair value at the
date at which they are granted and 1s recognised as an expense over the vesting period, which ends on
the date on which the relevant employees become fully entitled to the award Fair value 1s determined
using an appropriate pricing model No expense 1s recognised for awards that do not ultimately vest

At each balance sheet date before vesting, the cumulative expense 1s calculated, representing the extent
to which the vesting period has expired and management's best estimate of the achievement or otherwise
of non-market cond1t1ons that impact on the number of equity instruments that will ultimately vest The
movement in cumulative expense since the previous balance sheet date 1s recognised in the profit and
loss account for the year (as part of wages and salaries) with a corresponding transfer to the profit and
loss reserve

There are no non-equity settled share-based payments

1 14 Related party transactions


The company 1s a wholly owned subs1d1ary of AMETEK Inc, the consolidated accounts of which are
publicly available Accordingly, the company has taken advantage of the exemption in FRS 8 from
disclosing transactions with other wholly owned members or investees of the AMETEK Inc group

2 Turnover
Turnover
2012 2011
£'000 £'000
Class of business
Products for aerospace, defence and rail systems 27,805 26,031
Prec1s1on and motion control products 15,332 13,985
Track balls and other cursor controlled products 4,352 4,052
--- ---
47,489 44,068
= =
Geographical market
Turnover
2012 2011
£'000 £'000

Europe 37,304 34,457


Asia 2,016 3,073
Americas (excl USA) 380 365
USA 7,789 6,173

47,489 44,068
=
- 12 -
AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

3 Operating profit 2012 2011


£'000 £'000
Operating profit 1s stated after charging
Amort1sat1on of goodwill 823 822
Amort1sat1on of licences, patents and knowhow 88 73
Deprec1at1on of tangible assets 545 737
Loss on disposal of tangible assets 66 54
Loss on foreign exchange transactions 384
Research and development 4,306 3,752
Hire of plant and machinery 192 177
Other operating lease rentals 374 373
Auditors' remuneration 88 82

and after crediting


Profit on foreign exchange transactions (12)
--
Operating profit also includes £529,000 (2011 £153,000) in respect of redundancy costs incurred during
the year Restructuring costs of £44,000 were included in 2011 In 2012, operating profit 1s stated after
charging £891,000 exceptional write off in respect of add1t1onal costs associated with a development
program, which will not be recoverable under the terms of the contract

4 Interest receivable and s1m1lar income 2012 2011


£'000 £'000

Interest receivable from group undertakings 75 82


Other interest 1 1

76 83
--

- 13 -
AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

5 Taxation
2012 2011
£'000 £'000
Domestic current year tax
Adjustment for prior years (8) (1,295)

Total current tax (8) (1,295)

Deferred tax
Origination and reversal of timing differences (130) (6)
Effects of changes in tax rates and laws 12 13
Deferred tax charge on defined benefit pension scheme (25) 4

(143) 11

Total tax charge (151) (1,284)

Factors affecting the tax charge for the year


Profit on ordinary act1v1t1es before taxation 5,794 5,861
-- --

Profit on ordinary act1v1t1es before taxation multiplied by standard rate of UK


corporation tax of 24 50% (2011 - 26 49%) 1,419 1,553

Effects of
Non deductible expenses 197 224
Accelerated/(Decelerated) capital allowances 123 (3)
Enhanced R & D deduction (189) (190)
Adjustments to previous periods (8) (1,295)
Other timing differences 7
Defined benefit pension scheme (305) (344)
Group relief not charged (1,252) (1,240)

(1,427) (2,848)

Current tax credit for the year (8) (1,295)


-- --
The company has received the benefit of tax losses amounting to £5, 111,000 (2011 £4,680,000) from
certain fellow subs1d1ary undertakings without making any payment

- 14 -
AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

5 Taxation {Continued)

Factors that may affect future tax charges


The standard rate of Corporation Tax in the UK reduced from 2€;% to 24% with effect from 1 April 2012
Accordingly the company's profits for this accounting period are taxed at a blended rate of 24 5% The
March 2012 Budget announcement included further proposals to reduce the main rate of corporation tax
to 23% from 1 April 2013 and to 22% from 1 April 2014 The reduction to 23% was enacted during the
year and therefore deferred tax balances are stated at 23% On 5 December 2012, 1t was announced that
the main rate of corporation tax for the year commencing 1 April 2014 will be reduced by a further 1% to
21% The March 2013 Budget subsequently announced that the rate would fall again to 20% with effect
from 1 April 2015 As the further reductions had not been substantively enacted at the balance sheet date
no account has been taken of them 1n these financial statements The impact of the further changes 1s not
expected to be material

The rate of writing down allowances on the main pool of plant and machinery and on the special rate pool
fell to 18% and 8% respectively with effect from 1 April 2012

6 D1v1dends 2012 2011


£'000 £'000

Ordinary d1v1dend in the year 4,254 2,000


=
7 Intangible fixed assets
licences, Goodwill Total
patents and
knowhow
£'000 £'000 £'000
Cost
At 1 January 2012 367 16,449 16,816
Add1t1ons 58 58
-- --
At 31 December 2012 425 16,449 16,874
-- --
Amortisation
At 1 January 2012 143 1,644 1,787
Charge for the year 88 823 911
-- --
At 31 December 2012 231 2,467 2,698
-- --
Net book value
At 31 December 2012 194 13,982 14,176
-
---
= --
At 31 December 2011 224 14,805 15,029
-- -
--- --
The licence, patents and knowhow cost represents payments made under a consultancy agreement to
enable the company to develop the knowhow to improve the scope of its manufacturing capability The
cost 1s being amortised over five years, which 1s the period over which the company 1s expected to benefit
from the arrangement

- 15 -
AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

8 Tangible fixed assets


Freehold I Plant and Total
Leasehold machinery
property
£'000 £'000 £'000
Cost
At 1 January 2012 4,795 4,344 9,139
Transfers (44) 44
Add1t1ons 7 328 335
Disposals (87) (1,670) (1,757)
-- -- --
At 31 December 2012 4,671 3,046 7,717
-- --
Deprec1at1on
At 1 January 2012 1,567 1,673 3,240
On disposals (79) (1,611) (1,690)
Charge for the year 176 369 545
-- --
At 31 December 2012 1,664 431 2,095
-- -- --
Net book value
At 31 December 2012 3,007 2,615 5,622
--
- - -
--- --
At 31 December 2011 3,228 2,671 5,899
-- --
- - --
- -

Add1t1ons to plant and machinery include £189,000 (2011 £287,000) in respect of assets under
construction

Included in cost of land and buildings 1s freehold land of £1,400,000 (2011 - £1,400,000) which 1s not
depreciated

9 Stocks and work in progress 2012 2011


£'000 £'000

Raw materials and consumables 10,886 9,510


Work in progress 2,864 3,912
Finished goods and goods for resale 326 448

14,076 13,870
--
- -

- 16 -
AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

10 Debtors 2012 2011


£'000 £'000

Trade debtors 8,909 10, 139


Amounts owed by group undertakrngs 4,694 1,973
Corporation tax 905 1, 173
Other debtors 191 214
Prepayments and accrued income 933 797
Deferred tax asset {see note 13) 168 50
-- --
15,800 14,346
--

11 Creditors. amounts falling due wrthrn one year 2012 2011


£'000 £'000

Trade creditors 4,369 6,011


Amounts owed to group undertakings 102 63
Taxes and sacral security costs 621 321
Other creditors 254 541
Accruals and deferred income 2,706 2, 113
-- --
8,052 9,049
--
- - --
- -

12 Creditors. amounts falling due after more than one year 2012 2011
£'000 £'000

Amounts owed to group undertakings 23,423 23,423


--
- -

- 17 -
AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

13 Deferred tax asset

The deferred tax asset (included 1n debtors, note 10) 1s made up as follows
2012
£'000

Balance at 1 January 2012 (50)


Profit and loss account (118)

Balance at 31 December 2012 (168)

2012 2011
£'000 £'000

(Decelerated)/accelerated capital allowances (102) 16


Other t1mmg differences (66) (66)

(168) (50)
-- --
The effect of future changes m tax rates 1s not considered to have a material effect on the deferred tax
balance

14 Pension and other post-retirement benefit commitments

Employee benefit obhgat1ons

The company has established various pension arrangements, both defined benefit and defined contribution
schemes covering many of its employees

Defined contribution pension scheme


The company operates a defined contribution pension scheme for the benefit of the employees The assets
of the scheme are administered 1n a fund independent from those of the company The pension cost m the
year was £212,000 (2011 £193,000) Contributions amounting to £34,000 were owing to the the defined
contribution scheme at the year end (2011 Nil) The assets of the scheme are held separately to those of
the company

Defined benefit pension scheme


Smee 1 June 2000, the company has part1c1pated m the A1rtechnology Group Pension Plan, which ts a
funded defined benefit scheme

The company expects to contribute approximately 22 1% of pensionable salaries m add1t1on to £550,000 of


deficit funding contributions to the pension plan m 2013

- 18 -
AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

14 Pension and other post-retirement benefit commitments (Continued)

The amounts recognised in the balance sheet are as follows

Defined benefit
pension plans

2012 2011
£'000 £'000

Present value of funded obhgat1ons 21,464 18,026


Fair value of plan assets (23,956) (20,818)

(2,492) (2, 792)


Related deferred tax hab1hty 573 698

Net asset (1,919) (2,094)

The amounts recognised in the profit and loss account are as follows:

Defined benefit
pension plans

2012 2011
£'000 £'000

Included in operating profit


Current service cost 426 306
--
426 306
-- --
Included in other finance income
Interest on obhgat1on 884 960
Expected return on pension scheme assets (1,481) (1,441)
-- --
(597) (481)
-- --
Total (171) (175)
-
--- =
Actual return on plan assets 2,471 (227)
--
- - =

- 19 -
AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

14 Pension and other post-retirement benefit commitments (Continued)

Analysis of amount recognised in the statement of total recognised gains and losses
Defined benefit
pension plans

2012 2011
£'000 £'000

Actuarial losses (1,544) (1,553)


--
Cumulative amount of actuarial (losses)/ gains (910) 634
--
Changes in the present value of the defined benefit obligation are as follows

Defined benefit
pension plans

2012 2011
£'000 £'000

Opening defined benefit obl1gat1on 18,026 17,096


Current service cost 426 306
Interest cost 884 960
Contributions by scheme part1c1pants 118 131
Benefits paid (524) (352)
Actuarial losses I (gains) 2,534 (115)
-- --
Total 21,464 18,026
--
- - --
- -
Changes in fair value of plan assets are as follows.
Defined benefit pension
plans
2012 2011
£'000 £'000

Opening fair value of plan assets 20,818 20,139


Expected return 1,481 1,441
Actuarial gains I (losses) 990 (1,668)
Contnbut1ons by employer 1,073 1,127
Contributions from scheme part1c1pants 118 131
Benefits paid (524) (352)

23,956 20,818
--

- 20 -
AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31 DECEMBER 2012

14 Pension and other post-retirement benefit commitments (Continued)

The maior categories of plan assets as a percentage of total plan


assets are as follows:
2012 2011
% %

Equ1t1es 73 00 73 00
Debt securities 26 00 27 00
Other 1 00
-- --

Principal actuarial assumptions at the balance sheet date (expresssed


as weighted averages).
2012 2011
% %

Discount rate 4 40 4 90
Expected return on plan assets 6 75 7 00
Future salary increases 3 00 3 00
Pension increases - RPI capped at 2 5% 1 90 1 90
Pension increases - RPI capped at 5 0% 2 84 2 84
Pension increases - CPI capped at 3 0% 1 90 1 73
Inflation assumption (RPI) 3 00 3 00
Inflation assumption (CPI) 2 40 2 00

Life expectancy for a male currently aged 65 years (in years) 22 10 21 20


Life expectancy for a female currently aged 65 years (1n years) 24 50 24 00
Life expectancy for a male currently aged 45 years (in years) 23 40 23 10
Life expectancy for a female currently aged 45 years (1n years) 26 10 25 90

The post mortality table used in 2012 was SAPS Normal Health base table with CMI 2011 core model
with long term improvement rate of 1% and in 2011 was SAPS Normal Health base table with a medium
cohort pro1ect1on and a 1% underpin on future improvements based on year of birth

Following the Government's announcement that statutory increases for pensions in deferment and in
payment will in future be based on the Consumer Prices Index rather than the Retail Prices Index,
allowance has been made for deferred pension revaluation in excess of GMP and increases in payment
to post April 1988 GMP to be based on the Consumer Prices Index rather than the Retail Prices Index

- 21 -
AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

14 Pension and other post-retirement benefit commitments (Continued)

Amounts for the current and previous four periods are as follows.
Defined benefit pension plans
2012 2011 2010 2009 2008
£'000 £'000 £'000 £'000 £'000

Defined benefit obligation (21,464) (18,026) (17,096) (16,208) (12,546)


Fair value of scheme assets 23,956 20,818 20,139 16,994 12,942
Surplus/( deficit) 2,492 2,792 3,043 786 396
Experience adjustments on
plan hab1ht1es (412) 1,352 (12) 115 1,915
Experience adjustments on
plan assets 990 (1,668) 1, 101 2,264 (4, 751)
-- = = =

- 22 -
AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31 DECEMBER 2012

15 Share-based payment transactions

Certain directors and members of senior management are granted restricted shares and share options in
the ultimate parent company, AMETEK Inc These share-based payments are settled by the issue of equity
shares in AMETEK Inc

A three for two split of the parent company's common stock took place on 29 June 2012 in order to broaden
the stock's marketability and improve its trading hqu1d1ty The new shares were payable to shareholders on
record at 15 June 2012 Where appropriate, further 1nformat1on has been given in the comparatives to
reflect the three for two split

Restricted shares

Restricted shares generally vest (1e all restrictions lift) after 4 years This 1s accelerated 11 the share price
increases to double that of the grant at the close of business on 5 consecutive trading days, in which case
they vest 1mmed1ately The expense 1s recognised on a straight-line basis over 4 years, ignoring the
poss1b1hty that this vesting could occur but taking into account estimated forfeitures, based on historical
experience

Share options

Share option awards generally vest 25% each year for 4 years and expire 7 years after the award date

The expense 1s recognised on a straight-line basis over the requ1s1te service period for the entire award as
111t all vested at the end of this 4 year period but taking into account estimated forfeitures, based on
historical experience

The fair value of each option 1s estimated on the date of grant using a Black-Scholes option pricing model
The following weighted average assumptions were used in the Black-Scholes model to estimate the fair
value of options granted during the years 1nd1cated

Expected share volatll1ty 28 36% (2011 26 37%)


Expected life of options (years) 5 06 (2011 5 04)
Risk free interest rate 0 84% (2011 1 95%)
Expected d1v1dend yield O 47% (2011 0 54%)

Expected volatility 1s based on historical volatility of AMETEK Inc's share price Historical exercise data for
AMETEK as a whole has been used to estimate the options' expected hie, which represents the period of
time for which the options granted are expected to be outstanding Management ant1c1pates that the future
option holding periods will be s1m1lar to the historical option holding periods The risk-free rate for the period
within the contractual hie of the option 1s based on US Treasury yield curve at the time of the grant

The weighted average fair value per option granted during the year was £5 27 (2011 £4 60 for unapproved
options and £4 53 for approved options (split adjusted))

- 23 -

AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

15 Share-based payment transactions (Continued)

Restricted shares

The following table illustrates the number and weighted average fair values (WAFV) of, and movements
in restricted shares during the year

Number of WAFV Number of WAFV


shares shares
2012 2012 2011 2011
£ £

Outstanding at 1 January 6,370 20 71 10,602 16 04


Effect of three for two stock split 3,185
Granted 1,365 20 99 2,076 27 16
Forfeited (6,560) 14 79 (1,080) 18 18
Vested (1,499) 11 04 (5,228) 14 32

Outstanding at 31 December 2,861 16 41 6,370 20 71


-
--- -- --
- - --
The movements and values for 2012 are shown split adiusted

The fair values of restricted shares shown above are determined at the grant date market value

Share options

The following table illustrates the number and weighted average excerc1se price (WAEP) of, and
movements in share options during the year

Number of WAEP Number of WAEP


options options
2012 2012 2011 2011
£ £

Outstanding at 1 January 19, 147 19 86 25,891 16 83


Effect of three for two stock split 9,572
Granted 4,827 20 96 5,586 28 56
Forfeited (15,154) 14 75 (2,828) 17 62
Expired (188) 18 15
Exercised (6,669) 10 71 (9,502) 17 40

Outstanding at 31 December 11,535 14 45 19,147 19 86


= =
Exercisable at 31 December 4,686 10 71 5,820 16 12
-
---

The movements and values for 2012 are shown split adjusted

- 24 -

AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

15 Share-based payment transactions (Continued)

The weighted average share price at the date of exercise for the options exercised m the year was
£21 20 (2011 £18 35 (split adjusted))

Options outstanding at the year end have exercise prices ranging from £8 94 to £20 96 (2011 £9 35 to
£19 19 (split adjusted)) and a weighted average remaining contractual life of 4 years and 8 months (2011
5 years and 1 month)

16 Share capital 2012 2011


£'000 £'000
Allotted, called up and fully paid
480,000 Ordinary shares of £1 each 480 480
-
---
17 Statement of movements on profit and loss account
Profit and
loss
account
£'000

Balance at 1 January 2012 19.486


Profit for the year 5,945
Share based payment transactions 67
D1v1dends paid (4,254)
Actuarial gains or losses on pension scheme assets (1,544)
Movement on tax relating to pension asset 100

Balance at 31 December 2012 19,800


--
- -
Profit and loss account excluding pension asset 17,881
Pension scheme asset 1,919

19,800
-
---

- 25 -
• AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31 DECEMBER 2012

18 Reconciliation of movements in shareholders' funds 2012 2011


£'000 £'000

Profit for the financial year 5,945 7, 145


D1v1dends (4,254) (2,000)
--
1,691 5, 145
Other recognised gains and losses (1,544) (1,553)
Share based payment transactions 67 97
Movement on tax relating to pension asset 100 128
-- --
Net add1t1on to shareholders' funds 314 3,817
Opening shareholders' funds 19,966 16, 149
-- --
Closing shareholders' funds 20,280 19,966
-- --

19 Contingent liab1ht1es

Bank guarantees given in the normal course of business amounted to £232,000 (2011 £386,000)

20 Financial commitments

At 31 December 2012 the company was committed to making the following payments under non-
cancellable operating leases in the year to 31 December 2013

Land and buildings Other


2012 2011 2012 2011
£'000 £'000 £'000 £'000
Operating leases which expire
Within one year 25 32
Between two and five years 400 139 125
In over five years 22 373
-- --
422 373 164 157
-- -
--- --

21 Capital commitments 2012 2011


£'000 £'000
At 31 December 2012 the company had capital commitments as follows

Contracted for but not provided in the financial statements 280 180
--
- - =

- 26 -

AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31DECEMBER2012

22 Directors' remuneration 2012 2011


£'000 £'000

Remuneration for qualifying services 174 178


Company pension contributions to defined contribution schemes 5
--
- -
The number of directors for whom retirement benefits are accruing under defined contribution schemes
amounted to 3 (2011 - 2)
The number of directors for whom retirement benefits are accruing under defined benefit schemes
amounted to 1 (2011 - 1)
The number of directors who exercised share options during the year was 2 (2011 - 2)
The number of directors who received shares under long term incentive schemes during the year was 2
(2011 - 3)

23 Employees

Number of employees
The average monthly number of employees (including directors) during the year was
2012 2011
Number Number

Production 229 253


Engineering 55 67
Sales and marketing 17 22
Adm1nistrat1on 17 20
-- --
318 362
-- =
Employment costs 2012 2011
£'000 £'000

Wages and salaries 10,841 10,360


Social security costs 1,086 1, 144
Other pension costs 636 496
-- --
12,563 12,000
-
--- =

Included in wages and salaries 1s a total expense for share-based payments in relation to equity-settled
transactions of £67,000 (2011 £97,000), of which £32,000 (2011 £64,000) relates to restricted shares
and £35,000 (2011 £33,000) relates to share options

- 27 -
.
• AMETEK AIRTECHNOLOGY GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


FOR THE YEAR ENDED 31 DECEMBER 2012

24 Control

At 31 December 2012 the rmmedrate parent company was EMA Holdrngs UK Lrmrted, a company
regrstered rn England and Wales On 2 January 2013 the rmmedrate parent company became AMETEK
Aerospace and Defense Group UK Lrmrted, a company regrstered rn England and Wales

The ultrmate parent company rs AMETEK, Inc, a company rncorporated rn the Unrted States of Amerrca
AMETEK Inc prepares group financral statements whrch rnclude the company and are the smallest and
largest consolrdated accounts that the company rs rncluded rn, copres of whrch can be obtarned from P 0
Box 36, 2 New Star Road, Lercester LE4 9JQ

25 Post balance sheet events

The company has declared and pard drvrdends amountrng to £1,200,000 srnce the 31 December 2012

- 28 -
.\MIETEK®
TEST&: CALIBRATION INSTRUMENTS

Ametek Denmark A/S


(CVR-nr. 14747079)

Arsrapport for perioden


1. januar 2013 31. december 2013
M

Flnanoial Statements for the period


January 1, 2013 • December31, 2013

The english part of /his parQl/ol documonl in Danis/I and English is


an unofficial lrenslslion of the orfglnsl Dani.~h text In Ille ovent of
dlspules 01 misunderstandings arising from the interpretation of l/1e
lram>/sllon, Ille Danish lsnguegs vorsio11 shell prevail.

AMETEK Denmark AIS • Gydevang 32-34 • 3450 Allen<!d •Denmark• CVR nr. OK-14747079
P: +45 4816 80\)0 • F: +45 4816 8080 • jofra@ametek.oom • www.lofra.con1
.\METEK®
CALIBRATION INSTRUMENTS

INDHOLOSFORTEGNELSE
CONTENTS
Side

PATEGNINGER
ENDORSEMENTS

Ledelsespategning 1
By Management and Board of Direclors

Revisionspategning
By Ille Auditor

LEDELSESBERETNING
INFORMATION AND REPORTS

Selskabsoplysninger 4
Company lnfonnafion

Hislorlske tal, N0gletal 5


Historic figures, Key figu/'8s

Arsberetning 6-8
Directors' repoTt

ARSREGNSKAB
FINANCIAL STATEMENTS

Anvendt regnskabspraksis 9 -14


Accounting poHcies

Resultatopgeirelse for perioden 1. januar 2013 - 31 . december 2013 15


Income stafemenl forth@ period January 1, 2013 - December 31. 2013

Balance pr. 31. december 2013 16 -1 7


Betance sheet as at Dscember 31, 2013

Pengestr0msopg1Z1relse pr. 31. december 2013 18


Cash Flow Statement as at Decembsr 31, 2013

Noter tn Arsregnskabet 19 -24


Notes to the financial statements
.\METEK®
CALIBRATION INSTRUMENTS

U:PELSESPATEGNING STATEMENT BY THE SUPERVISORY AND


EXECUTIVE BOARDS ON THJ: ANNUAL REPORT

Bestyrelsen og dlreklionen har dags dato Today, the supetvisory and executive boards have
behanc:llet og godkendt ~rsrapporten for 1. discussed and approved the annual report of Ametek
januar 2013-31. december 2013 for Ametek Denmark NS for the financial year 1 January 2013 -
Denmark AJS. 31 December 2013.

Arsrapporten er aflagt i overensslemmelse The annual report is prepared in acoo<dance with the
med arsregnskabsloven. Danish Financial Statement$ Act.

Det er vores opfaltelse, al arsregnskabet giver I our opinion, the financial statements give a true and
et retvisen<le blllede af selskabets akliver, fair view of the company's financial position at 31
passiver og flnansielle slllllng pr. 31. december December 2013 and of the resull of the company '9
2013 samt af resultatet af selskabets aktivlteter operations and cash flows for the financial year 1
og pengestr0mme for regnskabs~ret 1. Januar January 2013- 31 December 2013.
2013 - 31. december 2013.

ledelsesberetnlngen indeholder efter vores In our opinion, the management's review include·s a
opfattelse en retvlsende rec;teg0retse om d& fair review of lhe matters deall wllh ln lhe
forhold, beretningen omhandler. management's review.

Arsrapporten lndslil!es Iii ganeral!orsamlingens We recommend the adoption of the annual report al
godkenclelso. the annual general meeting.

Allernd, den 30. maj 2014.


A(feroo. May 3d11 2014.

Dlrektlon I Management

~
~~: J~
Harald Preben Car~

Godkendt pa selskabels ordinaere generalforsamtlng den 30. maj 2014


Approved at lhe anmtol generel maetlng on May 3an 2014

Asbj0m R gaard Joensen


Advokat
H.C. Andersens Boulevard 12
1553 I<Bbenhavn V

1
.\METl!K®
CALIBRATION INSTRUMENTS

DEN UAFHIENGIGE REVISORS INDEPENDENT AUDITOR"S REPORT


EKRLJERINGER.
Til aktionanerne i Ametek Denmark A/S . To the shareholders of Ametek Denmark
NS
Pategning p~ arsregnskabet Report on financial statements

Vi har revideret arsregnskabet for Ametek We have audited the financial statements of
Denmark AJS for regnskabsaret 1. januar - 31. Ametek Denmark NS for the f;nanoial year 1
december 2013, der omfatter anvendt January - 31 December 2013, which comprise
regnskabspraksis, resultatopg<llrelse, balance, a summary of significant accounting policies,
egenkapltalopgr1ffelse, pengeslrnmsopg0relse og income statement, balance sheet, statement of
noter. Arsregnskabet udarbejdes efter changes in equity, cash flow statement and
arsregnskabsloven. notes. The financial statements are prepared in
accordance with the Danish Financial
Statement Act.

Ledelsens ansvar for arsregnskabet Management's responsibility for the


Ledelsen har ansvaret for udarbejdelsen af et financial statements
arsregnskab, der giver et retvisende billede i Management is responsible for t11e preparation
overensstemmelse med arsregnskabs!oven. of financial statements that give a tme and fair
Ledelsen har endvidere ansvaret for den interne view in accordance wilh the Danish Financial
kontrol, som ledelsen anser n0dvendig for at Statement Act. Further, management is
udarbejde et arsregnskab uden vmsenttig responsible for such infernal control as it
fejlinformatlon, uanset om denne skyldes determines is necessary to enable the
besvigelser eller fejl. preparation of financial statements that are
free from material misstatement, whel/1er due
to fraud or error.

Revisors ansvar Auditor's responsibility


Vo res ansvar er at udtrykke en konl<lusion om Our responsibility is to express an opinion on
arsregnskabet pa grundlag af vores revision. Vi the financial statements based on our audiL
har udf0rt revlsionen I overensstemmelse med We conducted our audit in accordance with
internationals standarder om revision og internationar standards on auditing and
yderligere krav if0Jge dansk revisorlovgivning_ additional requirements according to Danish
Dette krc:ever, at vi overholder etiske krav samt audit regulations. This requires that we comply
planlregger og udfarer revislonen for at opna h0j with ethical requirements and plan and perform
grad af sikkerhed for, om arsregnskabet er uden the audit to obtain reasonable assurance about
v~sentlig fejlinformation. whether the financial statements are free from
material misstatement.

En revision omfatter udf0relse af An audit involves performing procedures to


~evisionshandlinger for at opna revisionsbevis for obtain audit evidence about the amounts and
behllb og oplysninger i arsregnskabet. De valgte disclosures in the financial statements. The
revisionshandlinger afheenger af revisers procedures selected depend on the auditors'
vurdering, herunder en vurdering af rislci for judgement. including an assessment of the
veesentlig fejlinformation i arsregnskabet, uanset tisks of material misstatement of the financial
om denne skyldes besvigelser eller fejl. Ved stalements, whether due to fraud or error. In
risikovurderlngen overvejer revisor intern kontrol, mal(/ng those risk assessments, tl1e auditor
der er relevante for virksomhedens udarbejdelse considers internal control relevant to the
af et arsregnskab, der giver et retvisende blllede. entity's preparation of financial statements
Formalet harmed er at udforme that gjve a true and fair view. The purpose is to
revislonshandlinger, der er passande after design audit procedures that are approp1iate in
omsteendighederne, men ikke at udlrykke en the circumstances, but not to express an
konklusion om effektiviteten af virksomhedens
2
.\METEK®
CALIBRATION INSTRUMENTS

interne konlrol. En revision omfatter endvidere en opinion on the effectiveness of the entity's
vurdering af, om ledelsens valg af internal control. An audit afso includes
regnskabspraksis er passende, om ledelsens evaluating the appropr;ateness of accounting
regnskabsma:;ssige sk0n er rimelige samt den policies used, the reasonableness of
samlede prresentatlon af Arsregnskabet. accounting estimates made by management
as well as the overall presentation of financial
statements.
Det er vores opfattelse, at det opnaede We believe that the audit evidence we have
revisionsbevis er tllstraekkeligt og egnet som obtained is sufficient and appropriate to
grundlag for vores konklusion. provide a basis of our opinion.

Revisionen har ikke givet anledning til forbehold. The audit has not resulted in any qualification.

Konklusion Opinion
Deter vores opfattelse, at arsregnskabet giver et In our op;nion, the financial statements give a
retvisende billede af selsl<abets aktiver, passfver true and fair view of the company's financial
og finansielle stilling pr. 31. december 2013 samt position at 31 December 2013 and of the
af resultatet af selskabets aktiviteter og results of operations and cash flows for the
pengestnzsmme for regnskabsaret 1. januar - 31. financial year 1 January - 31 December 2013
december 2013 i overensstemmelse med in accordance with the Danish Financial
arsreg nskabsloven. Statements Act.

Udtalelse om ledelsesberetningen Statement on the management's review


Vi har i henhold ti1 arsregnskabsloven In accordance with the Danish Financial
gennemlrest ledelsesberetningen. Vi har ikke Statements Act, we have react the
forelaget yderfigere handlinger i tillreg til den management's review. We have not performed
udf0rte revision af arsregnskabet. Det er pa any further procedures in addition to the audit
denne baggrund vores opfattelse, at of tl1e financial statements. On t11fs basis, it is
op!ysningerne i ledelsesberetningen er i our opinfon that the information provided in the
overensstemmelse med arsregnskabet. management's review is consistent with the
financial statements.

K0benhavn, den 30. maj 2014


Copenhagen, May 3d11, 2014

3
.\METEK"
CALIBRATION INSTRUMENTS
SELSKABSOPLYSNlNGER
COMPANY INFORMATION

AMETEK DENMARK NS
Gydevang 32·34
3450 Alter0d

Te\efon 4816 8000


Phone
Telefax 4816 80 80
Fax
Hjemmeside www.ametek.dk
Web·pege
E-mail ametek@ametek.dk
E-msil

CVR. Nr 14 74 70 79
VAT No..
Sliftet 1. september 1990
Founded
Hjemsted Alter0d kommune
Place

BESTYRELSE
BOARD OF DIRECTORS

Harald Preben CarCIJe - Hoersholm, Denmark (Formand I Chairman)


Joel Frie - Copenhagen, Denmark
Craig Timothy Howarth -·Malvern, United Klngdom

DIREKTION
MANAGEMENT

Joel Frie, Adm. Oirektrar

MODERSELSKAB
PARENT COMPANY

AMETEK Holdings B.V., Prins Bernhardplein 200, 1097 JB Amsterdam,


Netherlands.

REVISOR
AUOITOR

Ernst& Young
Godkendt revisionpartnerselskab
Gyngemose Parkvej 50
2860 Srz>borg

DIVERSE
OTHER
Arsrapporlen for koncernes k.an hentes pc\ www.Ametek.com
Consolidated annual acoounls can be downloaded from www.Ametelwom

4
.\METl!K~
CALIBRATION INSTRUMENTS
HISTORISKE TAL
HISTORIC FIGURES

2009 2010 2011 2012 2013


Brultofortjeneste
Gross profit 54.689 63.063 66.917 79.296 76.782
Resultat af primrer drift
Opereting prolil 16.493 22.017 25.396 37.624 33.351
Resultat f0r skat
Pfoflt before tax 16.543 22.910 25.506 37.241 32.495
Finanslelle Poster - Netto
Financial expenses/Income • Net 50 893 110 -383 -856
Arets resultat
Profit for the year 12.300 17.172 19.090 . 27.897 24.377
Tllgang I Mat. Anl~gsakt.
Additions Tangjblfl Fixed Assets 503 663 848 841 536
Balances um
Bola11ce 48.182 55.969 54.552 65.234 82.626
Egenkapital
Equity 37.206 41 .787 41.207 62.133 67.538
Gns. antal ansatte
Avg. no of employees 47 46 49 48 46

Nt27GLETAL
KEY FIGURES
Alkastn!ngsgrad (%)
Rent.abi1ilel {%}
Return on nef 1111sets
Rcwrn on equity

2009 2010 2011 2012 2013

Li\\vldltcl(%)
Sollditet (%)
Cash to current lieblliCies Solvency

600,0% 84,0%

500,0% - --·- ---··- .. ~~


82,0% · - - •
80,0%
400,0% - -- --· - J.t - - · ril ·
• io~ • ,,·n~ f::: 1ti,0% • I

300,0% f,•:] - •J'r - • ,(~ •• .~( ....~ . '!


k"1 .. ., ~· • 76.0%
200,0% . t'·-~'..
{ -· ;r~·.I .~i~~ . ·.~~
t~r '. ··1
,~, 74.0%
100,0% ' il· - :~ - ilt ·~i
0,0%
ri{ iii lli. ;xt ;Si ! 72,0%
70.0% .j....L..t-.J.._.__,

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

5
.AMETEK®
CALIBRATION INSTRUMENTS
LEDELSESBERETNING DIRECTORS' REPORT

Hovedaktivltet Primary activity


Den primrere aktilritet i AMETEK Denmark A/S The primary activity of AMETEK Denmark AIS
bestar af udvilding, produktion og afsretning af comprises research & development, production
temperatur-, tryk- og signalkalibreringsinstru- & worldwide sale of temperature, pressure and
menter, der afsrettes globalt, samt temperatur- signal calibration instruments, as well as devel-
f121lere, der primcert afsrettes i Danmark. opment and production of temperature sensors
sold primarily in Denmark.

AMETEK Measurement & Calibration Techno- The division of AMETEK Measurement & Cali-
logies Division, som AMETEK Denmark A/S bration Technologies, which AMETEK Denmark
indgar i, varetager salg, service og kal!brerings- A/S is a part of. handles sale, service and cali-
ydelser i USA og Canada. AMETEK s0stersel- bration in the US and Canada. The affiliated
skaber i Tyskland og Frankrig varetager salg, companies in Germany and France l1andle sale,
service og kalibreringsydelser pa disse marke- service and calibration of these markets.
der.

PA rzJvrige markeder forestar AMETEK Denmark On all other markets, AMETEI< Denmark A/S
AJS selv markedsfGring og salg, enten gennem handles marketing and sale from Denmark, ei-
egne srelgere eller forhandlere. ther via safes representatives or local distribu-
tors.

AMETEK Denmark A/S ' eksportandel var i 2013 In 2013, rhe export share of AMETEK Denmark
pa 86% mod 85% aret fiar. AIS was 86% compared with 86% in 2012.

Udvikling i aktiviteter og 0konom. forhold Trends in activities and economic conditions

Arets resultat: Result of the year:


Arets brutlofortjeneste blev pa t.kr. 76.782 mod Gross Profit for the year ended at TDKK 76, 782
t.kr. 79.296 aret fo.sr - et fald der hovedsagellgt vs. TDKK 79,296 In 2012- a net decrease pri-
skyldes en rendring i produktsammensretningen marily due to a change in product mix and also a
og til dels et fald i den amerlkanske Dollar. Vi drop in the US Dolfar. However we still see an
ser dog f orsat et C11get salg af nye produkter samt increase in sales of new products and also ser-
service og kalibreringsydelser, en general for- vice and calibration, a ge119ra/ improvement of
bedring af markedsvilkarene samt en effektiv me market conditions as well as Ugh/ control of
styring af materialeomkostninger. material cost.

Resultatet for 2013 blev efter skat t.kr 24.377 Profit after tax for 2013 was TDKK 24, 377
(2012: t.kr. 27 .897) og arets resultat f0r skat (2012: TDKK 27. 897) and profit before tax was
blev t.kr. 32.495 (2012: t.kr. 37.241). Resultatet TDKK 32,495 (2012.· TDKK 37,241). The result
for aret vurderes som tilfredsstillende. of the year Is considered to be satisfactory.

Arets resultat med tillffig af t.kr. 6.450 fra tidlige- AMETEK Denmark suggests that profit after tax
rear foreslas udbetalt som udbytte. and additional TDKK 6,450 from previous years
are paid as dividend.
Nye produkter
I 2013 fortsatte AMETEK Denmark A/S lance- New products
ringen af nye temperatur-. tryk- og signalkalibra- In 2013, AMETEK Denmark AIS continued the
torer, som vii medvirke til at fastholde virksom- release of new temperature, pressure and signal
hedens markedsledende position lndenfor disse calibrators contributing to maintain the com-
omrader. pany's leading market position within this area.

For fortsat at udbygge markedspositlonen som W11h the purpose of strengthening lhe market

6
AMETEK®
CALIBRATION INSTRUMENTS
en betydende global producent og leverand0r position as an important global manufacturer
inden for kalibreringsinstrumenter, forventer and supplier within calibration instruments,
AMETEK Denmark AJS ogsa i 2014 at introdu- AMETEK Denmark A/S has planned lo introduce
cere flere nye produkter til komplettering af den more new products during 2014 to complement
eksisterende produktportef01je. the existing product portfolio.

f nvesterlnger Investments
Der er i l0bet af 2013 foretaget investeringer for Investments of TDKK 536 were made during
sammenlagt t.kr. 536, hvoraf ca. 40% relaterer 2013, of which about 40% is related to IT im~
slg til forbedringer inden for IT og produktions- provements and product tooling.
vcarkt0jer

Kapltalberedskab Capital res ources


AMETEK Denmark er velkonsolideret med h0j AMETEK Denmark is firmly based and has a
soliditet. Soliditetsgraden udg0r satedes 81,7 % high solvency. The solvency in 2013 is 81. 79%
i 2013 (2012: 79,9 %) svarende til en egenkapl- (2012: 79.9%) corresponding to a total equity as
tal pr. 31. december 2013 pa t.kr. 67.538 (2012: per December 31, 2013 of TDKK 67, 538 (2012:
t.kr. 52.1 33). TDKK 52, 133).

Forskning og udvikllng Research and development


Selskabets udgifter til forskning og udvikting The company's research and development costs
udg0r t.kr 5.591 (2012: t.kr 4.859) 09 er fu!dt amount to TOKI< 5,591 (2012: TDKK 4, 859). Afl
udgiftsf0rt 12013. costs are expensed in 2013.

Risikofaktorer Risks
Bortset fra de generelle markedsbetingelser er Apart from the general market conditions, the
AMETEK Denmarks primrere risiko knyttet tH major operating risk of AMETEK Denmerk is
evnen til at vrere stoorkt positioneret pa de bety- connected to the ability to hofd a strong position
dende markeder. Denne risiko vurderes at voore on the most important markets. This risk is con-
begrrenset, da AMETEK Denmark NS med sa- sidered to be limited, as AMETEK Denmark AIS,
vel den eksisterende som planlagte produktpor- based on the existing as well as the planned
tef0lje og det globale salgs- og distributionsnet product portfolio and its global sales and distri-
anser sig for al vrere pa forkant med den tekno- bution network, is at the leading edge of tech-
logiske og markedsmcessige udvikling inden for nology and marketing developments within tem~
savel temperatur-, tryk- og signalkalibrering som perature, pressure, and signal calibration as well
temperaturf(Zllere. as within temperature sensors.

AMETEK Denmark fakturerer i DKK, EURO, AMETEK Denmark invoices in DKK, EURO,
USO, JPY og GBP - de samme valutaer, som USO, JPY and GBP- the same currencies tl1at
drekker den vresentlfgste del af varek0bef. I cover a considerable parl of purchases. In com-
overensstemmelse med koncempolltil< holdes pliance with company policy, all currency funds
valutabeholdninger hos AMETEK Denmark NS at AMETEK Denmark A/S are l<ept at a mini-
pa et minimum. mum.
AMETEI< Denmark AJS' kreditrisici drekkes ind Risks related to receivables are kept on a mini-
vha. stram og leibende kredltvurdering af alle mum by tight and ongoing assessment of credit
kunder. Handel med udenlandske kunder af- terms. When possible, all foreign trade is in-
daakkes hvor muligt vha. Atradius. sured by Atradius. .

Milj11Jforhold Environmental issues


AMETEK Denmark arbejder kontinuerligl pa AMETEK Denmarl< is continuously working on
forbedringer inden for genanvendelse af mate- improvements related to reuse of materials and
rialer, samt milj0venligt valg af maferialer. environment-ftiendly choice of materials.

7
.\Ml!TEK®
CALIBRATION INSTRUMENTS

Endvidere er der installeret udsugnlngsanlceg, Fwthermora air extracting systems, collection


opsamlingsfillre og andet udstyr til kontlnuerlig fillers, and other equipment to conUnuously col-
opsamling af ethvert stof eller materiale der mat- lect any substances or materials with a negative
te have negativ pavirkning af milj0et. Impact on the environment, have been installed.

Vidensressourcer Knowledge resources


Da AMETEK Denmark er en videns - og know- As AMETEK Denmark is a knowledge and
how tung virksomhed, s121ger vi altid qua vores know-how intensive company. we always try to
intranetbaserede ISO-system og 0vrlge doku- document, via our intranet based ISO-system
mentationssystemer at dokumentere virksomhe- and other documentation systems, the knowl-
dens vlden i en form der slkrer denne. edge of the company at a level protecting this
l<nowfedge.

Ejerforhold og andet Ownership and other matters


AMETEK Holdings B.V, Prins Betnhardplein AMETEK Holdings B. V, Prins Bernhardplein
200, 1097 JB Amsterdam, Holland ejer hefe ak- 200, 1097 JB Amsterdam, Netl1erlands owns the
tiekapitalen, hvor selskabet ligeledes indgar i whole share capital, and the company is a/so
koncernregnskabet. inclt1ded in the consolidated accounts.

Fremtidsudsigter Future prospects


I 2014 forventer AMETEK Denmark en moderat In 2014, AMETEK Denmark expects a moderate
stigning i savel bruttofortjeneste som indtjening increase in tf1e gross profit and in earnings due
begrundet I en forventet generel bedring i det to the expected general pick-up of the global
globaJe marked, fortsat introduktion af nye pro- market, continuing introduction of new products
dukter samt ekspansion pa eksisterende og nye ancl expansion in existing and new market ar-
markeder. eas.
Der er efter regnskabsarets afslutning ikke ind- After the closing of the financial year, no major
truffet betydelige hcendelser som pavirker sel- events have taken plaoe having an impact on
skabets rcikonomiske stilling og resultat. the financial position and result of the company.

8
.\METEK®
CALIBRATION INSTRUMENTS

ANVENDT REGNSKABSPRAKSlS ACCOUNTING POLICIES APPLIED

GENERELT GENERAL ASPECTS


Arsrapporten er aflagt i overensstemmelse med The Annual Reporl has been presented in ac-
arsregnskabslovens bestemmelser for mellem- cordance with the provisions of the Danish Fi-
store klasse C-virksomheder. nancial Statements Act as regards medium-
c
sized report.ing class enterprises.

Den anvendte regnskabspraksis er Ua3ndret i The accounting principles applied are un-
ar.
forhold til sidste changed compared to last year.

FREMMED VALUTA FOREIGN EXCHANGE


Transaktioner i fremmed valuta omregnes til Transactions in foreign exchange have been
danske kroner efter transal<tionsdagens kurs. converted into DKK based on the exchange rate
of the transaction date.
Aktiver og gceld i fremmed valuta er omregnet til Assets and liabi/iUas in foreign exchange have
danske kroner efter balancedagens valutakur- been converted into DKK based on the ex-
ser. change rate of the bafance date.

Realiserede og urealiserede valutakursgevinster Actual and non-actual profits and loss on the
og -tab, indgar i resultatopg121relsen under fin an- rate of exchange adjustments are included in the
sielle poster. income statement under financial items.

RESULTATOPG0RELSEN INCOME STATEMENT


lndtcegten ved salg af varer indgar i nettoom- The Income on safes of goods is recognised in
s~tningen ~ tidspunktet for levering og risiko- revenue al the time of delivery and when the risk
ens overgang, safremt indtregten kan opg0res passes to the buyer, provided that the income
palideligt. Omsretningen opg0res efter fradrag af can be made up reliably. VAT, indirect taxes and
moms, afgifter og rabatter. discounts are excluded from the revenue.

Bruttofortjeneste Gross margin


Posten nettoomsretnrng, vareforbrug og andre With reference to section 32 of the Danish Fi-
eksterne omkostninger og andre driftsindtregter nancial Statement Act, the items 'Revenue',
er med henvisning til arsregnskabsloven § 32 'Cost of sale', 'Other external expenses' ancf
sammendraget til en regnsl<abspost beneevnt 'Other operation income' are consolidated into
bruttofortjeneste. one item designated 'Gross margin'.

Vareforbrug Cost of sales


Vareforbrug omfatler kostprisen pa de varer, Cost of sates includes the cost of goods used in
som er medgaet ti! at opn~ arets nettoomsret- generation the year's revenue.
ning.

Andre eksterne omkostninger Other external expenses


Andre eksterne omkostninger omfatter omkost- Other external expenses include the year's ex-
ninger vedn1Jrende virksomhedens primcere akli- penses relation to the entity's core activity, in-
viteter, der er afholdt i arets l121b, herunder om- cluding expenses relation lo distributing. sales,
kostninger til distribution, salg, reklame, admini- advertising, administration, premises. bad de!Jts,
stration, lokaler, tab pa debitorer, ydelser pa payments under operating leases, etc.
operationelle leasingkontrakter mv.

9
.\Ml!TEK®
CALIBRATION INSTRUMENTS

Personaleomkostninger Staff costs


Personaleomkostninger omfatter l12m og gager, Staff costs include wages and salaries, including
lnklusiv feriepenge og pensioner, samt andre compensated absence and pensions, as well as
omkostnlnger til social slkring mv. til selskabets other social security contributions, etc. made to
medarbejdere. I personaleomkostninger er f ra- the entity's employees. The item is net of re-
trukket modtagne godtg0relser fra offentHge funds made by public authorities.
myndigheder.
Finansielle poster Financial income and expenses
Finansielle indtmgter og omkostninger indreg- Financiaf income and expenses are recognised
nes i resultatopg0relsen med de beli?Jb, der ved- in the income statements at the amounts that
rnrer regnskabsaret. F1nansielle poster omfatler concern the financial year. Net financials include
renteindtcegter og renteomkostnlnger. interest income and interest expenses.

Forsknings- og udviklingsomkostninger Research and development costs


Forsknings- og udviktingsomkostnlnger vedr0- Research and development costs for new prod-
rende nye produkter udgiftsfl'llres. i takt med at ucts are expensed as and when incurred.
omkostningerne afholdes.

BALANCEN BALANCE SHEET

Materietle og immaterlelle anl~gsaktiver Tangible and intangible fixed assets


lmmaterielle anlregsaktiver optag es til oprindeli- fntangible fixed assets are carried et original
ge anskaffelsespriser med fradrag af akkumule- cost less accumulated depreciation.
rede afskrivninger.

Materielle anlcegsaktiver optages tn oprindelige Tangible fixed assets are carried at original cost
anskaffelsespriser med tilla3g af senere tilgange adjusted for additions and disposals less accu-
. og med fradrag af akkumulerede afskrivninger. mutated deprecialion.

Afskrivninger foretages lineaart over den foiven- Depreciation is a straight line depreciation based
tede brugstid for virksomheden, som er. on the useful lives for the company, i.e.:

Antal ar Number of years


Bygninger 30 ar Buildings 30 years
Si:srlige installat!oner 5-10 ar Special Installations 5-_10 years
Driftsmateriel og inventar 3-5 ar Working plant and furniture 3-5 years
Licenser og Software 3-5 ar Licenses and software 3-5 years

Afskrivninger indregnes i resultatopgriJrelsen pa Depreciation costs are included in the income


deres respektlve llnier. statement on the respective lines.

Fortjeneste og tab ved afh(endelse af anlaagsak- Profl1 and loss incurred when disposing or sell-
tiver opg0res som forskellen mellem salgsprisen ing fixt:Jd assets are calculated as the differenoo
med fradrag for salgsomkostninger og den regn- between the selling price less cost of sefling and
skabsmressige vrerdi pa salgstJdspunktet. tile booked value at the time of disposal.

Aktiver under finansielle leasingkontraktar males Assets held under finance leases are measured
til def laveste bel0b af anskaffelsespris if0lge at the lower of cost according to the lease and
!easingkontrakten og nutidsvrerdien af leasing- the net present value of the lease payments,
ydelserne, opgjort pa basis af leasingkontrak- calculated by reference to the interest rate im-
tens interns rente (eller en tllnrermel veerdi for plicit (or an approximation hereof) in the lease
denne) med fradrag af akkumulerede af- og Jess accumulated depreciation and write-downs.
nedskrivninger_

10
.\METEK®
CALIBRATION INSTRUMENTS

Der foretages nedskrivningstest pa materielle An impairment test is made for property, pfant
anleegsaktiver, safremt der er indikationer for and equipment if there are indications of de-
vc:erdifald. Nedskrivningstesten foretages for creases in value. The impairment test is made
hvert enkelt aktiv henholdsvis gruppe af aktiver. for each individual asset or group of assets, re-
Aktiverne nedskrives til det hsjeste af aktivets spectively. The assets are written down to the
eller aklivgruppens kapita!va3rdi og nettosalgs- higher value in use and the net selling price of
pris (genindvlndingsveerdi), safremt denne er the asset or group of assets (recoverable
lavere end den regnskabsmaassige vcardi. amount) if it is lower than the carrying amount.

Varebeholdninger Inventory
Varebeholdninger males til kostpris opgjort efter Raw materials are staled al the costs based on
FIFO princrppet. the FIFO principle.

Kostpris for handelsvarer samt ravarer og hjrel- Costs for commodities, raw materials and ancil-
pematerialer omfatter anskaffelsespris med lary materials are valued at the original cost with
eventuelt tillGeg af hjemtagelsesomkostninger. possible addition of landed costs.

Egenfremstillede faardigvarer samt varer under Self-produced finished goods as well as work in
fremslilling optages ti! vrerdien af medgaede progress are accounted for by using the basis of
materlaler, direkte J0n og indirekte produktions- material content, direct wages and indirect pro-
ornkostninger, IPO. IPO indeholder indirekte dC1otion costs, /PO. fPO includes indirect mate-
materlaler og lrlln, samt vedligeho\delse og af- rial and wages as well as maintenance and de-
skrivninger pa de af produktionsprocessen be- preciation on buildings and equipment used for
nyttede bygnlnger og udstyr, samt omkostninger the production process and finally costs to the
ti\ fabriksadministration og ledelse. Laneomkostw administration and management of the factory.
ninger indregnes ikke. Borrowing costs are not included.

Ved Valrdiansaattelsen er der foretaget nedw Provision has been made for obsolete and slow
skrivning af ukurante og langsomt omsc.ettelige moving items.
varer.

Periodeafgr~nsningsposter Prepayments
Periodeafgn:ensningsposter indregnet under Prepayments included under assets relate to
aktiver omfatter afholdte omkostninger vedf0- outlaid costs that concern next fiscal year.
rende efterfeilgende regnskabsar.

Tilgodehavender Receivables
Tilgodehavende males til amortiseret kostpris, Receivables are measured at amorlised cost,
der scedvanligvis svarer tit nominel vcerdi. Der which usually corresponds to the nominal value.
foretages nedskrivnlng til im0degaelse af tab Provisions are made for bad debt on the basis of
baseret pa en objektiv indikation pa, at et tilgo- objective evidence that the receivable or a group
dehavende eller en gruppe af tilgodehavender er of receivables are impaired. Provisions are
vrerdiforringet. Nedskrivning foretages til netto- made to the lower of the net realisable va/uo and
realisationsvferdi, safremt denne er lavere end the carrying amounf.
regnskabsmcessig va:irdi.

Udbytte Dividend
Foreslaet udbytte indregnes som en srerskilt Proposed dividend is stated separately under
post under egenkapita!en, indtil det vedlages pa equity, until it is decided upon in the General
den ordincare generalforsamling, hvorefler det Meeting. I-le reafter if is reclassified as an obliga-
indregnes som en forp!igtelse. tion.

11
.\METEK®
CALIBRATION INSTRUMENTS

lndkomstskat Income tax


Skat af arets resultat omfatter aktuel skat af Tax for the year includes current tax on the
arets forventede skattepligtige indkomst og arets years expected taxable income and the year's
regulering af udskudt skal Arets skat indregnes deferred tax adjustments. The portion ot the tax
i resultatopgerelsen med den del, der kan hen- for the year that relates to the profif/foss for the
feres til arets resultat 09 i egenkapltalen med year Js recognised in the income statement,
den de!, der kan henfll'res ti\ transaktioner ind- whereas the portion that relates to transactions
regnet i egenk:apltalen. taken to equity is recognised in equity.

Akluelle skatteforpligtelser og tilgodehavende Current tax payables and receivables are recog-
skat indregnes i balancen som beregnet skat af nised in the balance sheet as the esUmafed tax
tirets forveniede skattepligtige indkomst regule- charge in respect of the taxable incomf) for the
ars
ret for skat af tidligere skattep!igtige indkom- year. adjusted for tax on prior years' taxable
ster samt betalte aoontoskatter. income snd tax paid on account.

Hensaatlelse tH udskudt skat beregnes efter den Provisions for deferred tax are calculated, based
balanceorienterede greldsmetode af alle midler- on the liability method, of all temporary differ-
tidige forskelle mellem regnskabsmaassige og ences between carrying amounts and tax val-
skattemeessige va:irdier af aktier og forpligtelser, ues, with Ille exception of temporary differences
bortset fra mldlertldige forskelle, som opstar pa occurring at the time of acquisiUon of assets and
anskaffelsestidspunktet for aktiver og forpligtel- liabilities neither affecting the result of opera-
ser, og som hverken pavirker resultatet eller den fions nor the taxable income, as well as tempo-
skattepligtlge indkomst, samt midlertidige for- rary differences on non-amorlisable goodwi11.
skelle pa skaltemressigt ikke-
afskrivningsberettiget goodwill.

Udskudt skat males pa grundlag af skatteregler Deferred tax is measured according to the taxa-
og skattesatser, der med balancedagens lovgiv- tion mies anr/ taxation rates Jn the respective
ning vii vrere greldende, nar den udskudte skat counties applicable at the balance sheet date
forventes udl0st som aktuel skat. Udskudle skat- wf1en the deferred tax is expected to crystallise
teakliver indregnes med den VCBrdi, som de for- as current tax. Deferred tax assets are recog-
ventes at blive udnyttet med, enten ved udlig- nised at the valoe af which they are expected to
ning i skat af fremtidig lndtjening eller ved mod- be utilised, either through elimination against tax
regning i udskudte skatteforpllgtelser inden for on future earnings or through a set-off against
samme jurlsdil<lion. deferred tax liabilities within the same jurisdic-
tion.

Flnansielle gmldsforpligtelser Financial mortgage payments


Finansielte gceldsforpligtelser indregnes ved Financial liabilities are recognised on the raising
laneoptagelse til det medtagne provenu efter of the foan at the proceeds received net og
f radrag af afholdte omkostninger. Rentebceren- transaction costs incurred. Interest-bearing debt
de g~ld males efterf0lgende tll amortiseret is subsequently measured at amo1tised cost,
kostpris opgjort pa basis af den effektive rente. using the effective interest rate method. Borrow-
Laneomkostninger, herunder kurstab indregnes ing costs, including capital losses, are recog-
som finansieringsomkostninger i resultatopg0~ nised as financing costs in l/Je income statement
relsen over Janets l121betid. over the term of the loan.

12
.\METEK®
CALIBRATION INSTRUMENTS

PENGESTR0MSOPG0RELSE CASH FLOW STATEMENT

Generelt General aspects


Pengestnamsopgi:zJrelsen er opstillet efter den The cash flow statement is tabulal6d using the
lndirekte metode med udgangspunkt i arets re- Indirect method based on the profit of the year.
sultat. Pengestr0msopg0relsen viser penge- The statement shows cash flows for the year
str0mme for aret, opdelt pfl drifts-, investerings- divided into operating, investing and financing
og finansieringsaktivitet, samt hvorledes disse activities, as well as their respective impact on
pengestrnmme har pavirket arets likvider. the liquidity of the current year.

Oriftsaktlvttet Operating activities


Pengestr0mme fra driftsaktiviteten opg0res som Cash flows from operating activities include the
~rets resultat reguleret for ikke likvide driftspo- profit of the year adjusted for non-liquidity oper-
ster, finansielle poster, betall selskabsskat samt ating items, financial items, paid income tax and
eendring i driftskapitalen. Driftskapitalen omfatter changes i11 working capital. The working capital
oms83lningsaktiver samt kortfristet goold, eks- consists of current assets and short-term debt,
klusive de poster de indgar i de finansielle re- exclusive of the items Included in the financial
server. rese1Ves.

lnvesterlngsaktivitet Investing activities


Pengestr0mme fra investeringsaktivitet omfatter Cash flows from investing activities include pur-
k0b og salg af anlcegsaktiver, samt deposlta. chase and sales of fixed assets as well as de-
posits.

Fin ansi eringsaktivitet Financing activities


Pengestrn1mme fra finansieringsaktivitet omfatter Cash flows from financing activities include
afdrag pa prioritetsgreld og anden tangfristet c/Jangas in mortgage debt, long-term borrow~
greld, betaling af udbytte samt eksterne titskud. ings, paid dividend and external subsidies.

Likvider Funds
De likvide midler bestar af kontanter samt inde- Funds Include cash in liand and credit balance.
staende i pengeinstitutter.

AN ORE OPLYSNINGER OTHER INFORMATION

Segmentoplysninger Market Segmentation


Opdeling pfl segmenter oplyses lkke grundet Split by Market or Product Segments are not
konkurrencemcessige hensyn. disclosed due to competitive reasons.

NBgletal Key Figures


N0g!etal er udarbejdet i overensstemme!se med Key Figures are cafcufated in accordance with
Den Danske Finansana!ytikerforenings vejled- the guidelines from "Den Danske Finans-
ning af 1997. analytikerforening of 1997" (The Danish Finan-
cial Analyst Association of 1997).

De i hoved- og nsg!etatsoversigten anf0rte nrz.sg- Key figures as represented in tf1is Report are
letal er beregnet saledes: cafculated as follows:

13
.AMETEK®
CALIBRAT(ON INSTRUMENTS

Afkastningsgrad: Return on Net Assets:


Operating Profit .. 100
Resultat af primaar drift * 100
Total Assets
Aktiver
Rentabllitet: Return on Equity:

Resultat f0r skat * 100 Profit for the Year* 100


Egenkapital Equity
Likviditet: Cash to current liabiUties:
Omscetnjngsaktiver * 100 Total Current assets * 100
Kortfristet G~Jd Short-term Debt
Soliditet: Solvency:
Equity " 100
Egenkapjtal * 100
Total Assets
Aktiver

14
.\METEK®
CALIBRATION INSTRUMENTS

RESULTATO~G0RELSE
INCOME STATEMENT

2013 2012
Note TDKK TDKK

Bruttofortjeneste 76.782 79.296


Gross profit

Andre eksteme omkostninger -11 .981 -11.426


Other exl"mal expenses

Personaleomkostninger 1 -29.856 -28.601


staff costs

Afskrivnlnger lmmat.akttver 4 -266 -283


Depreciation Intangibles

Afskrivninger, Mat. aktiver 4 -1.326 -1.362


Depreciation, fixed assets

Resultat af prlmmr drift 33.351 37.624


Operating profit

Finansielle indt~gter/udgifter, net to 2 -856 -383


Financlaf lncomrJ/axpenses. net

Resultat f~n skat 32.495 37.241


Profit before tax

Skat 3 -a:11a -9.345


Income tax

ARETS RESULTAT 24.377 27.897


PROFJT FOR THE YEAR

Arets resultat foreslas anvendt saledes:


Profit for the year is suggested split as:
Arets resultal 24,377 27.897
Prcfil for the year
Overf0rt fra tidligere ar 42.661 23.736
Reatained earnings previous years
Til disposllion 67 .038 51.633
Atdisposaf

Foreslaet udbytte 30.827 8.972


Propo$9d dividend
Overf0rt tll neeste ar 36.211 42.661
Carried forward to next year
I all 67.038 5'\.633
Total

15
BALANCE pr. 31. december 2013
BALANCE SHEET as at December 31, 2013
.\METEK®
CALIBRATION INSTRUMENTS
2013 2012
Note TDKK TDKK
AKTIVER
ASSETS

Licenser &Software 4 558 638


Licsnse & software

lmmaterielle anlaegsaktiver 558 638


Intangible fl:ced assets

Bygning 4 7.049 7.382


Buitdi'ng

Tekniske anleeg og maskiner 4 1.245 1.687


Technical p/enr snd meohinery

Driftsmateriel og inventar 4 22 37
Equipment, fixtures and Ottlngs

Materielle antaegsaktlver 8.316 9.106


Tlmglbfe fixed assets

ANLJEGSAKTIVER I ALT 8.874 9.744


TOTAL FIXED ASSETS

Va rebeholdninger 5 10.729 8.472


l11Ventories

Tilgodehavender fra salg 10.923 13.875


Trade accounts receivable

lllgodehavender fra tllknyttede selskaber 33.602 9.826


Receivables from group companies

Andre tilgodehavender 210 24


Other receivables

Periodeafgreensningsposter 6 217 205


Prepayments

Tilgodehavende r 44.952 23.931


Rei;e/vabtes

Likvide beholdnlnger 18.070 23.087


Cash and Bank

OMSJETNINGSAKTIVER I ALT 73.752 55.490


TOTALCURRENTASSETS

AKTIVER IALT 82.626 65.234


TOTAL ASSETS

16
BALANCE pr. 31. december 2012
BALANCE SHEET as at December 31, 2012
.AMETEK®
CALIBRATION INSTRUMENTS
2013 2013
Note TDKK TDKK
PASSIVER
LIABJLrrlES

Aktiekapital 500 500


Shere cap/la/

Foreslaet udbytte 30.827 8.972


Proposed diVidend

Overff'llrsel til rueste :ir 36.211 42.661


Carried forward to next year

Egenkapltal i alt 7 67.538 52.133


Total equity

Udskudt skat 3 272 290


Deferred fax

Hensatte torpligtelser i alt 272 2~0


Total provisions

Andre l<reditinstitutler
Other credit institutions

Leverand0rer af varer 7.862 7.390


Trade accounts payable

Greld til tilknyttede virksomheder 1.12i 369


Payable to associated companies

Skyldig skat 38 347


AcCfUBd income tax

Anden ga;,ld 5.794 4.705


Other payables

Kortfristet gceld I alt 14.816 12.81 1


Total shorl term debt

Gie\d I alt 14.816 12.811


Total debt

PASSIVER lALT 82.626 65.234


TOTAL LIABJLIT/i:S

f:ventualforp\igtelser 8
Conlengencies

17
PENGESTR0MSOPG~RELSE
CASH FLOW STAYEMENT
.\METEK®
CALIBRATION INSTRUMENTS

Note 2013 2012


TOKK TDKK

Arets resultat 24.377 27.897


Pront for lhe }'Elar
Reguleringer 9 10.565 11.373
Adjuslments
lf.ndring i driftskapital 10 -20.965 81
Change in Wcriling Cspil•I
Pengestr0mme f0r finansielle poster 13.977 39.350
Cash flow before financial items
Finansielle indtoogter 30 8
Flnencial income
Finansielle udglrter -886 -391
Flnanciaf expens&
Penges1rC?Jmme fra ordincer drift 13.121 38.968
Cash flaw from continuing operations
Betalt indkomstskat -8.444 -9.574
Paid fncome tax
Pengestr0mme fra driftsaktivitet 4.677 29.394
Cash flow from operating ttclivltles

lnvesterlnger. anla:!gsaktiver -536 -841


Additions lo fixed asse/s
lnvesteringer, Ucens & Software -185 -225
Addi/ions to inlengiblo essels
Salg af anlaagsakllver
Disposal of fixed t1ssets
Pengestr0mme fra investeringsaktlvitet -721 -1.066
Cash flow from Investing actf\fities

Betalt udbytte -8.972 -16.971


Divld1md paid <lUt
Tilbagebelaling af giBld til kredllinstitutter
Repaymenl ot mortgsg&
Pengestr121mme fra finansierlngsaktivitet -8.972 -16.97'1
Casl1 flow from financing activities

JEndring af likvide midler, i alt -5.016 11.357


Cha11go In funds, nef
Llkvlde midler ved regnskabsarets begyndelse 23.087 11 .730
Funds beginning of year
Likvide midlerved regnskabsarets slutning 18.070 23.087
Fllnds end ofyear

18
.\METEK.®
CALIBRATION INSTRUMENTS
NOTER
NOTES

Note 1. Personaleudgifter
Note 1. Staff costs

De samlede personaleudglfter kan specificeres som f0f9er:


Tola/ staffcosts affJ made up aa follows:
2013 2012

27.456 26.208
Gager og l~nnlnger
Salaries and wages
2.086 2.069
Pension
Pension costs
317 324
Social sikring
Socia/ seaurity costs

29.858 28.601

Selskabet har 9ennemsnitligt beskeeftiget 46 medarbejdere i 2013 mad 48 i 2012.

Der er ikke betalt tantieme 09 honorar til bes\yrelsen.

I lighed med tidligere ar oplyses vederlag til selskabets ledelse ikke med henvisning til ARL § 98b, stk. ::

The average number of employoes was 46 lo 2013 compared to 48 in 2012.

No mmunaration wBS paid to Iha board of direc!ors.

IM/h ref6ffJflC9 to sectill 98b(3). (II), of teh D81llsh Financial Statsrmmls Ac~ Iha company like previous years dOBs not disclo86
thfJ CO<lsfderation paid to managemenl.

19
.\ME!TEK®
CALIBRATION INSTRUMENTS
NOTER
NOTES

Note 2. Flnanslelle indt~gter/udglfter


Note %. Flnancial income/expenses
2013 2012

Renleudgifter -146 -55


lnlsf9sl expensss

Rentelnd~gter 30 8
lnterast Income

Renleindtcegter rra tilknyltede virksomheder 0 0


lntet'9sl Income from group compsnlas

Realiseretlurealiseret kursgevinst -740 -335


ReaDzedlllnrea/izsd exchang9 gains

-856 -383

Note 3. Skat
Note 3. Income ta;ic
Skyldig Udskudt Oriftsf1nt
skat skat skat
Accrued Deferred Expensed
tax tu tax

Saldo pr. 1. januar 2013 347 290


Balance es Bf January 1, 2013

Skat af arets resultat 8.136 8.136


Tax on Iha profit for the year

iEndring i udskudt skat -16 -18


Movement In defeffed tax

Betalt/tilbagebetalt skat i aret -8.444


Tsx pa/dlrootafmt;d during the yoor

Saldo P'· 31. december 2013 38 272 8.118


Balance as al December 31, 2013

20
NOTER
NOTES
AMETEK®
CALIBRATION INSTRUMENTS

Note 4. lmmaterle1\e/materiel1e an1regsaktiver


Note 4. lntangib!e!Tangibl• flxed assets

Licenser Bygning Tekniske Drlftsma·


og anlceg og teriel og
software masklner inventar
Equipment
Technical and fix-
Ucense& plant and tures and
Anskaffelsessum Software Building machinery fillings
Cose

Saldo pr. 1. januar 2013 3.857 18.225 6.623 745


Balance ea at January 1, 2013

Afgang -121
DlsposrJts

Regulerlng
1-101usrmem

Ti~ang 185 326 2rn


Ad ilions

Satdo pr. 31. december2013 4.042 18.551 6.713 745


Balance as at Dtcember 31, 2013

Akkumu le re de afskriv nlnger:


Accumulated depreciation:

Saldo pr. 1. januar 2013 3.219 10.843 4.936 708


Balance as a/ Januaty 1, 2013

Afgang -121
Disposels

Regulering
Adjustment

Arets afskrivninger 266 659 652 15


DePfeclatlon for (fie year

Saldo pr. 31. december 2013 3.484 11.502 5.468 723


Balance as at December 31, 2013

Bogf0rt vcerdi pr.


31. december 2013 558 7.049 1.245 22
Booked value as at
December 31, 2013

Afskrivningsprocent
(linear afskrivning} 20-33% 3,3-20% 20-33% 20-33%
DepreGfalion rate
(straight line basis)

21
.\METIEK®
CALIBRATION INSTRUMENTS
NOTER
NOTES

Note 5. Varebeholdninger
Note 5. Inventory

2013 2012

Ravarer og hjielpematerialer 7.218 6.985


Raw materials and consumables

Varer under frems\llling 561 509


Wolk in progress

Fandigvarer 2.950 978


Finished goods

Varebeholdninger i alt 10.729 8.472


Total Inventories

Note 6. Perlodeatgraansnlngsposter
Note 6. Prepayments

Periodeafgraensningsposter indeholdar forudbetalte rorslkcinger 09 operatlonel leasing.


Prepaymimts tetate to insurances and operating /eases.

Note 7. Egenkapital
Note 7. Eq11ity
Selskabs- Overf0rt Foreslaet Egenkapltal
kapital resultat udbytle I alt
Carried for-
Shore ward to next Proposed Tolal
Capital yaar Dividend Equity

Saldo pr. 1. januar 2013 500 42.661 8.972 52.133


Balance as atJanuary 1, 2013

Udloddet udbylte -8.972 -8.972


Dividend paid Olli

Ovf., jf. resultatdisponering -6.450 30.827 24.377


Result for ltle year

Saldo pr. 31.december 2013 500 36.211 30.827 67.538


Balance as at December 31, 2013

Aktiekapltalen bestar af 3 aktier a henholdsvls TDKK 195, TDKK 105 og TDKK 200. i all TDKK 500.
Aktiekapitalen har urendret vreret TDKK 500 de seneste 5 ar.
The company's share capital consists of 3 shares of TDKK 195. TOKK 105 and TDKK 200. totalling TDKK 500.
The share capital has remained TDKK 500 in the past 5 years

22
.AMETEK®
CALIBRATION INSTRUMENTS

NOTER
NOTES

Note 8. Eventualforpligtelser
Note 8. Contengenctes

Operationelle leasingforpligtelser
Operatlonaf Lease commitments

Selskabet er indtradt i leasingkontrakter vedrerende diverse driftsmateriel. Leasing-


kontrakterne drekker perioder op Iii december 2016, og den totate forptigtelse udg0r
tdkk 875. Heraf tdkk 513 inden for et fir.

The company has teas9d sundry machinery and equipment. The /ease contracts cover periods up to
December 2016 with a total commitment of TDKK 875 ofwhich TDKK S13 is due Within one year.

23
.\METEK®
CALIBRATION INSTRUMENTS
NOTER
NOTES

Note 9. Reguleringer 2013 2012


Note 9. Adjustments

Afsk.rivning immateriel!e aktiver 266 283


Depreclarron intangibfe assets

Afskrivning andre anlregsaktiver 1.326 1.362


Depreclatfon other fixed assets

Fortjeneste/Tab ved salg af anlc:egsaktlver


Gain/Loss on disposals of fixed assets

Rentelndcegter/-udgifter mm 856 383


Interest income/expenstJs

,LEndring i udskudt skat -18 -2


Change in deferred tax

Skat af arets resultat 8.136 9.347


Income tax

Sam let regulering 10.565 11.373


Total adjustments

Note 10. Driflskapital


Note 10. Working Capital

Varelagre -2.258 -191


Inventories

Tilgodehavender -21.021 287


ReceiVables

Kortfristet greld 2.313 -15


Short term deb t

JEndring I drinskapltal -20.965 81


Total change In Worl<lng Capital

24
9/11/2014 https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfspr…

Bedrijfsprofiel - Ametek Holdings B.V. (33240060)


Kamer van Koophandel, 11 september 2014 - 23:31

Uittreksel
Dossiernummer: 33240060 Blad 00001

Uittreksel uit het handelsregister van de Kamer van Koophandel


____________________________________________________________________________
Rechtspersoon:
Rechtsvorm :Besloten vennootschap
Naam :Ametek Holdings B.V.
Statutaire zetel :Amsterdam
Eerste inschrijving in het
handelsregister :13-10-1992
Akte van oprichting :21-09-1992
Akte laatste statuten-
wijziging :26-10-2011
Geplaatst kapitaal :EUR 19.058,77
Gestort kapitaal :EUR 19.058,77
----------------------------------------------------------------------------
Onderneming:
Handelsna(a)m(en) :Ametek Holdings B.V.
Vestigingsnummer :000003205169
Adres :Prins Bernhardplein 200, 1097JB Amsterdam
Correspondentieadres :Postbus 990, 1000AZ Amsterdam
Telefoonnummer(s) :0205214777
Faxnummer :0205214888
Datum vestiging :27-07-1992
De rechtspersoon
drijft de onderneming sinds:21-09-1992
Bedrijfsomschrijving :Houdster- en financieringsmaatschappij
Werkzame personen :0
----------------------------------------------------------------------------
Bestuurder(s):

Naam :Feit, Robert Stephen


Geboortedatum en -plaats :07-03-1962, New York, Ver. Staten van Amerika
Infunctietreding :09-12-2008
Titel :Bestuurder A
Bevoegdheid :Gezamenlijk bevoegd (met andere bestuurder(s),
zie statuten)
Aanvang (huidige) vertegen-
woordigingsbevoegdheid :26-10-2011

https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfsprofiel 1/10
9/11/2014 https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfspr…

Naam :Kamphuijs, Thecla Magdalena Anna


Geboortedatum en -plaats :22-06-1966, Hengelo (O)
Infunctietreding :27-10-2011
Titel :Bestuurder B
Bevoegdheid :Gezamenlijk bevoegd (met andere bestuurder(s),

11-09-2014 Blad 00002 volgt.


Dossiernummer: 33240060 Blad 00002
____________________________________________________________________________
zie statuten)

Naam :Mandos, Robert Richard


Geboortedatum en -plaats :31-07-1958, Pennsylvania, Ver. Staten van
Amerika
Infunctietreding :01-07-2012
Titel :Bestuurder A
Bevoegdheid :Gezamenlijk bevoegd (met andere bestuurder(s),
zie statuten)
____________________________________________________________________________
Alleen geldig indien door de kamer voorzien van een ondertekening.

Uittreksel is vervaardigd
op 11-09-2014 om 23.32 uur

Voor uittreksel

Bron: Uittreksel-informatie Internet. Geldt niet als uittreksel in de zin van artikel 22 lid 1 van de
Handelsregisterwet 2007.
Historie
34 33240060 Ametek Holdings B.V. telnr: 0205214777
Prins Bernhardplein 200 1097JB Amsterdam
Oude statutaire namen zoals vastgelegd sinds 01-10-1993

*** Geen historie voor dit onderdeel***


Oude handelsnamen zoals vastgelegd sinds 01-10-1993

*** Geen historie voor dit onderdeel***


Oude vestigingsadressen zoals vastgelegd sinds 01-10-1993
Adres LEIDSEPLN 29, 1017PS AMSTERDAM
Datum ingang ***Onbekend***
Adres LEIDSEPLEIN 29, 1017PS AMSTERDAM
Datum ingang ***Onbekend***

https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfsprofiel 2/10
9/11/2014 https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfspr…

Adres LEIDSEKADE 98, 1017PP AMSTERDAM


Datum ingang ***Onbekend***
Adres Leidsekade 98, 1017PP Amsterdam
Datum ingang ***Onbekend***
Adres Teleportboulevard 140, 1043EJ Amsterdam
Datum ingang 25-02-2002
Adres Teleportboulevard 140, 1043EJ Amsterdam
Datum ingang 15-02-2007
Adres Luzerneklaver 17, 3069DS Rotterdam
Datum ingang 15-02-2007
Adres Schiekade 830, 3032AL Rotterdam
Datum ingang 01-04-2007
Adres Schiekade 830, 3032AL Rotterdam
Datum ingang 15-12-2011

Oude rechtsvormen zoals vastgelegd sinds 01-10-1993


Rechtsvorm Eenmanszaak
Datum ingang ***Onbekend***
Oude bedrijfsomschrijvingen zoals vastgelegd sinds 01-10-1993

Datum ingang 03-08-1992


Bedrijfsomschrijving HOUDSTER- EN FINANCIERINGSMAATSCHAPPIJ
Datum ingang 13-10-1992
Bedrijfsomschrijving HOUDSTER- EN FINANCIERINGSMAATSCHAPPIJ
Datum ingang 13-10-1992
Bedrijfsomschrijving Houdster- en financieringsmaatschappij
Functionarisgegevens Uitgetreden functionaris(sen) rechtspers.

Enig aandeelhouder:

Naam EMA Corporation / 5


Adres N Market Street 1105 SUITE 130, Wilmington
Delaware, Ver. Staten van Amerika
Enig aandeelhouder sedert 21-09-1992
Uit functie 27-12-2006

Functionarisgegevens Uitgetreden functionaris(sen) onderneming


De onderneming wordt gedreven voor rekening van:

Naam EMA Corporation / 1


Adres N Market Street 1105 SUITE 130, Wilmington
Delaware, Ver. Staten van Amerika
Uit functie 21-09-1992

Functionarisgegevens Uitgetreden functionaris(sen) rechtspers.


Bestuurder(s):

Naam ING Management (Nederland) B.V. / 3


Adres Teleportboulevard 140, 1043EJ Amsterdam
https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfsprofiel 3/10
9/11/2014 https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfspr…

Inschrijving handelsregister 33135957


onder dossiernummer
Infunctietreding 21-09-1992
Titel Directeur
Bevoegdheid Alleen/zelfstandig bevoegd
Uit functie 01-08-2006

Naam Kramer, Edward George / 4


Geboortedatum en -plaats 03-03-1941, Rotterdam
Infunctietreding 21-09-1992
Titel Directeur
Bevoegdheid Alleen/zelfstandig bevoegd
Uit functie 01-11-2003

Naam Molinelli, John Jospeh / 7


Geboortedatum en -plaats 30-10-1946, Moline, Ver. Staten van Amerika
Infunctietreding 13-09-1995
Titel Bestuurder A
Bevoegdheid Gezamenlijk bevoegd (met andere bestuurder(s),
zie statuten)
Aanvang (huidige) vertegen- 26-10-2011
woordigingsbevoegdheid
Uit functie 01-07-2012

Naam CAVIN, DOYLE KEITH / 8


Geboortedatum en -plaats 28-04-1936, CHURCH HILL TENNESSEE, Ver. Staten
van Amerika
Infunctietreding 13-09-1995
Titel DIRECTEUR
Bevoegdheid Alleen/zelfstandig bevoegd
Einde 31-12-1997
vertegenwoordigingsbe-
voegdheid
Uit functie 31-12-1997

Naam Massey, Mark / 10


Geboortedatum en -plaats 02-08-1965, Colwyn Bay, Verenigd Koninkrijk
Infunctietreding 01-01-2009
Titel Bestuurder
Bevoegdheid Alleen/zelfstandig bevoegd
Uit functie 26-10-2011

Overige functionarisgegevens Uitgetreden


*** Geen historie voor dit onderdeel***

Deponeringen

algemene gegevens
https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfsprofiel 4/10
9/11/2014 https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfspr…

naam Ametek Holdings B.V.


ingeschreven onder nummer 33240060

Deponeringen

Boekjaar 2012
Datum deponering 28-1-2014
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 24-1-2014

Boekjaar 2011
Datum deponering 13-2-2013
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 7-2-2013

Boekjaar 2010
Datum deponering 27-2-2012
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 2-2-2012

Boekjaar 2009
Datum deponering 3-3-2011
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 28-2-2011

Boekjaar 2008
Datum deponering 24-2-2010

Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 22-2-2010
Groepsjaarrekening deponering Ametek Holdings B.V.
onder dossiernummer 33240060

Boekjaar 2007
Datum deponering 29-6-2009
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfsprofiel 5/10
9/11/2014 https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfspr…

Datum vaststelling jaarstuk 26-6-2009


Groepsjaarrekening deponering Ametek Holdings B.V.
onder dossiernummer 33240060

Boekjaar 2006
Datum deponering 9-10-2008
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 6-10-2008
Groepsjaarrekening deponering Ametek Holdings B.V.
onder dossiernummer 33240060

Boekjaar 2005
Datum deponering 27-12-2006
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 22-12-2006

Boekjaar 2004
Datum deponering 27-12-2006
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 22-12-2006

Boekjaar 2003
Datum deponering 30-8-2005
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 26-8-2005

Boekjaar 2002
Datum deponering 3-5-2004
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 29-4-2004

Boekjaar 2001
Datum deponering 3-5-2004
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 29-4-2004

https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfsprofiel 6/10
9/11/2014 https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfspr…

Boekjaar 2000
Datum deponering 30-10-2002
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 14-10-2002

Boekjaar 1999
Datum deponering 30-10-2002
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 14-10-2002

Boekjaar 1998
Datum deponering 28-2-2001
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 31-3-2000

Boekjaar 1997
Datum deponering 17-6-1999
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 9-6-1999
Plaats deponering jaarverslag Bij de kamer

Boekjaar 1996
Datum deponering 7-5-1998
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 4-5-1998
Plaats deponering jaarverslag Bij de kamer

Boekjaar 1995
Datum deponering 7-5-1998
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 4-5-1998
Plaats deponering jaarverslag Bij de kamer

Boekjaar 1994
Datum deponering 15-1-1997
Omvang klein
https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfsprofiel 7/10
9/11/2014 https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfspr…

Maand einde boekjaar 12


Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 6-1-1997
Plaats deponering jaarverslag Bij de kamer

Boekjaar 1993
Datum deponering 15-1-1997
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 6-1-1997
Plaats deponering jaarverslag Bij de kamer

Boekjaar 1992
Datum deponering 15-1-1997
Omvang klein
Maand einde boekjaar 12
Soort jaarstukken Jaarrekening
Datum vaststelling jaarstuk 6-1-1997
Plaats deponering jaarverslag Bij de kamer

Juridische gegevens
Rechtspersoon :
Rechtsvorm Besloten vennootschap met gewone structuur
Statutaire zetel Amsterdam
Eerste inschrijving in het 13-10-1992
Handelsregister
Akte van oprichting 21-9-1992
Akte laatste statuten wijziging 26-10-2011
Geplaatst kapitaal EUR 19.058,77
Gestort kapitaal EUR 19.058,77
Overige deponeringen

Bijzondere deponeringen op Soort deponering: verkl. Stort. Niet in geld


grond van boek 2 BW (artt.94b/204b BW 2)
datum van deponering: 19961206

...
Datum deponering: 08-03-2011
Soort deponering: Geconsolideerde jaarrekening
408
...
Datum deponering: 08-03-2011
Soort deponering: Geconsolideerde jaarrekening
https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfsprofiel 8/10
9/11/2014 https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfspr…

408
...
Datum deponering: 13-02-2013
Soort deponering: Geconsolideerde jaarrekening
(art. 408 BW2)
...
Datum deponering: 28-01-2014
Soort deponering: Geconsolideerde jaarrekening
(art. 408 BW2)

Jaarrekening(en)
Algemene gegevens uit de jaarrekening

Boekjaar: 2012 2011 2010


Balansdatum: 31-12-2012 31-12-2011 31-12-2010
Vastgesteld: definitief definitief definitief
Winstbestemming: na na na
Lengte boekjaar in 12 12 12
maanden:
Werknemers: 0 0
100% dochters: 4 3
Overige deelnemingen: 3 2

Balans
Boekjaar: 2012 2011 2010
Type jaarrekening: vennootschappelijk vennootschappelijk vennootschappelijk
Winstbestemming: na na na
Bedrag: x1 x1 x1
Valuta: EUR EUR EUR

Activa
financiële vaste activa 940.199.172 879.467.050 857.454.273
VASTE ACTIVA 940.199.172 879.467.050 857.454.273

vorderingen 10.353.736 10.045.815 20.049.352


liquide middelen 931.586 19.419.829 36.063.100
VLOTTENDE ACTIVA 11.285.322 29.465.644 56.112.452

TOTAAL ACTIVA 951.484.494 908.932.694 913.566.725

Passiva
gestort en opgevraagd 19.068 19.068 19.059
kapitaal

agio 393.539.684 393.539.684 363.410.305


overige reserves 428.744.890 402.896.215 469.736.209
EIGEN VERMOGEN 822.303.642 796.454.967 833.165.573

langlopende schulden 44.017.298 34.718.515 19.351.841


https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfsprofiel 9/10
9/11/2014 https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfspr…

kortlopende schulden 85.163.554 77.759.212 61.049.311


OVERIGE PASSIVA 129.180.852 112.477.727 80.401.152

TOTAAL PASSIVA 951.484.494 908.932.694 913.566.725

Er zijn bij bovenstaande jaarrekeningen geen winst- en verliesrekeningen

Kengetallen
Boekjaar: 2012 2011 2010

Liquiditeit
current ratio 0,13 0,38 0,92
quick ratio 0,13 0,38 0,92
gouden balans 1,09 1,06 1,01

Solvabiliteit
balanstotaal/ vreemd 7,37 8,08 11,36
vermogen
eigen vermogen/ 0,86 0,88 0,91
balanstotaal
eigen vermogen/ vreemd 6,37 7,08 10,36
vermogen

Rentabiliteit

Overige kengetallen
aantal werknemers 0 0

Bedrag: x1 x1 x1
Valuta: EUR EUR EUR
werkkapitaal 73.878.232- 48.293.568- 4.936.859-
Bron: gedeponeerde jaarrekeningen Kamer van Koophandel

https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=332400600000&CHK1=J&kvknummer=332400600000&product=Bedrijfsprofiel 10/10
AMETEK INSTRUMENTS INDIA PRIVATE LIMITED .\METEK®
"'· Clear Vision 0 Sound Strategies "" Solid Performance

DIRECTORS' REPORT

To

The Shareholders:

Your Directors have pleasure in presenting their Fourth Annual Report of the Company
together with Audited Statement of Accounts for the year ended 31st March, 2012.

Financial Result:

Year ended Year ended


31st March 2012 31st March 2011
(Rs. in Millions)

Gross Income 428.90 262.62


Earnings before Interest & Depreciation 62.72 52.29
Finance Charges 13.21 8.02
Depreciation & Amortization 52.07 42.67
Profit/(Loss) before Taxation (2.56) 1.60
Less: Provision for Taxation:
Current Tax 19.32 14.00
Deferred Tax (8.56) (2.24)
Profit/(Loss) after Taxation (13.32) (10.16)

Review of Operations:

The Company had again increased its gross income considerably compared to the previous
year and Earnings before Interest & Depreciation has also increased from Rs. 52.29 million
during the previous year to Rs. 62.72 million and therefore overall performance during the
year ended 31st March 2012 can be considered quite satisfactory. The Loss before Tax for
the year under review was Rs. 2.56 million. In view of higher provision for Income Tax and
Deferred Tax, there is a loss for the year under review of Rs. 13.32 million compared to loss
of Rs. 10.16 million for the previous year

Dividend:

As there is a loss during the year under review, the Directors do not recommend any
dividend for the year
AMETEK INSTRUMENTS INDIA PRIVATE LIMITED .\METEK®
.;J Clear Vision e Sound Strategies w Solid Performance

Auditors' Report:

As regards Auditors' comments on maintenance of records for Fixed Assets, your Directors
would like to state that since the required information with respect to each individual asset
was not available in respect to group of similar fixed assets acquired from two companies,
the Company has maintained records for such groups of similar assets and not for each
individual asset.

As regards Auditors' comments on delay in deposit of withholding taxes and other taxes,
ascertainment of ageing of inventory, collection of accounts receivables and settlement of
travel claims, your Directors would like to state that certain teething problems are being
faced in the new accounting software and steps are being taken to streamline the same to
ensure that appropriate reports on timely basis could be taken out from the system for
control purposes to facilitate minimization or elimination of such occurrences.

The procedures for physical verification of inventory are being strengthened and the scope
and coverage of internal audit are being widened in consultation with Mis. Grant Thornton.
As regards use of short term funds for long term purposes, proper procedures for more
scientific projection of long term and short term requirement of funds are being put in place
so that an appropriate strategy for meeting the future requirement of funds is worked out.

-----------------------------This place is left blank intentionally-----------------------------


AMETEK INSTRUMENTS INDIA PRIVATE LIMITED AMETEK®
"i- Clear Vision Sound Strntegies "" Solid Performance

Auditors:
The auditors, M/s. S. V Ghatalia & Associates , Chartered Accountants, Bangalore who
retire at the conclusion of the Third Annual General Meeting have expressed their
willingness for reappointment.

You are requested to appoint the Auditors for the current year to hold the office from the
conclusion of the Fourth Annual General Meeting until the conclusion of the next Annual
General Meeting.

Directors' responsibility Statement:

Your Directors confirm that:

(i) in the preparation the annual accounts, the applicable accounting standards have
been followed;
(ii) the Directors have selected such accounting policies and applied them consistently
and made judgements and estimates that are reasonable and prudent so as to give
1
a true and fair view of the state of affairs of the Company as at 31' March 2012 and
of the profit of the Company for the year ended on that date;
(iii) the Directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act.. 1956 for
safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
(iv) the Directors have prepared the annual accounts on a going concern basis.

Particulars of Employees:

Particulars of the employees covered under section 217(2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) Rules, 1975 are given in Annexure A
to this Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings &


Outgo:

Information relating to Conservation of Energy is not applicable to the Company. As the


Company is not carrying on any Research & Development activity and since the Company
has not imported any technology, information required under the provisions of Section
217(1 )(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988 relating to the same is not applicable and
hence not provided. Details regarding Foreign Exchange Earnings and Outgo during the
year are provided in Annexure B to this Report.
AMETEK INSTRUMENTS !NDIA PRIVATE LIMITED
(» Clear Vision 0 Sound Strnte9ies & Solid Performance

Appreciation:

Your Directors also wish to place on record their sincere appreciation for the dedicated
services rendered by the Management Team and employees at all levels and also express
their gratitude to the shareholders for their active support and co-operation.

For and on behalf of the Board of Directors

Place: Bangalore 1)
/I/
Dated: i> r- / Managing Director Director
ANNEXURE A TO THE DIRECTORS' REPORT

Particulars of the employees covered under section 217(2A) of the Companies Act,
1956:
r· - - · - - - - - - - · - - · · - · - - - - , - - - - - ...,..... - .
.,·--~-------------------··----------··-···------,

1 l'articulars 'flj;,:~;;j);:~:ti ____ .J'l:i•ll(!()f_tl1f ~n~p~~;.~~;,~:;:,;i;;;~------------1


1--··· I .., ,.-.l--"··-.. --... -·"·-···-··-·····-····--~----·--··--------j
I Designotion I Managing Director I l3u:;iness Director I
Rem~~n~~[l~ion_ __________ i_f\s.68,_L(),()72/- _________ I Rs 61.87.643/- _ _____j
, Qualification
1---- .. . -
Experie11ce(i11 years)
'1 ..
1
BE
- · - - - - - - - -..··· ------------------
__..______1_22 i_
l3 Com __ __ _______
38 . _. . . ·-·-·-·----------------•
!

~~~~~:j~~1)1eneement of _\l~;-Apr1l,~O~~--------- ~~()":~bc~,2009 i

Last c1np!oy1nent held Ln1erson Process Manage1nent 1 l_Jnispec Marketing Private


l
I _ ~~~:~Private Li:itecl. Director- I Li111ited, Director ___ ____J
Percentage of equity shares held in NII I NIL i
I ! !
1 the Co1npany ··-·--- --·-----·---------------------··m ... ___ _L_ _____________"'1

I
ANNEXURE B TO THE DIRECTORS' REPORT

Information pursuant to section 217(1)[e] of the Companies Act, 1956, read with the
Companies (Disclosures of Particulars in the report of Directors) Rules 1988 in respect of
foreign exchange earning and outgo.

Foreign Exchange Earnings and outgo:

(a) Activities relating to Exports & initiatives taken to increase exports & export plans:

The Company is providing pre sales marketing and software development services
to its overseas associate companies and which results in earning of foreign
exchange. The Company has commenced such services to a few more overseas
group companies and further opportunities in this area are being explored in order to
further increase the foreign exchange earnings for the Company.

(b) Foreign Exchange earned and used:

Particulars


I
S. V.C-uArAUA 8 Assc1c1AlfS

Td
·rhe i'vlL'!l1hcrs or /\n1etek lnstrU!lh.'11!~; India Private!. i111i1cd

\Ve h;iv~· audit(·d rhe attached Ba!;1ncc Shc(~l oi' ,.\11H:tck lnqrun1cnt..; India Privall~ L.in1i1ed
( ·1hi: t 'nn1p:iny') as at \1:-u-ch l ! . ~O I::'. :ind a):;u lhl'. S1:Hc11lcnt or pn1fit and loss and 1hc ca:>h
tlO\\· _-,1a1cnh:nt f0r the year ended ~111 that date annexed lhL'n.·1u. These financial stalt...'ntt.:11\':> :in:
tih' rcspunsibility of th(· ('0111pi111:v'-; 1nanagc1nent. (hll" 1c:-.pnnsibili1y is to cxprc;:;s an up1nion
lll! 1h1.'.·;1..~ !lnanci~d st;Ht1nc1Jts bas1:d on -:;ur audit.

' \Ve ,:iJnducl::d our audi1 i11 accurdancl..' \\'ith auditin~~ -.,t;JJnLHds g..:.:ncrally at:ct'ptcd in India.
l'hl'is .. ~ Standards rcquir...:: 1h:i1 \\t: plan and p~~rforr11 th<:: audit \1> uhtaln rt.:asonabk· assur:incc
;1!.H)1l! \\'hcth~r the financial st:11c1ncn!s arc Cree or n1:1!<.:1·ial 1niss!:11c1nen1. !\!l audit includes
exanii11i11g. on a 1cq basi:>, evidi..~11ci: snppor1ing thl' an1(l1J11h and disclosures in the finan!.:i;il
'.'.>\ill('Ji\t'llts. /\n audit H].Sl) in1.:ludcs a~;scssing tlie <·1rcou111in~; princip!t:s used and :-ii;nificant
es1in1;1!L'S n1ade by 111:1n~1gt'rllt'llL as \~ell as cvalua1in.~,~ 11lc overall financial state:111cnt
pr1.:Sl~rllal1r1n. \Ve bc!ic\"c rh:1t our :1udit pnn·iJes a rcast:111;1hlc basis for our opininn.

). .-\s rt'1p1ircd by the C.~nn1p;l!liL·~, (.-\uditC'r"s Rl:'pun) ()rdl:r. :'_()()'; (:b anK·nch:d) i"-;ued by 1hc
c\:1!!1;d ( in\\"1"\llllt'!ll l)f J11di;1 i11 [;.'fl)h \)!" 5t1b··:'1.~l;\i1>:1 (--It\) u! Seel Hill 2~7 ,,f :lie (_'0111p;111ic-;
i\ct. Ii))(). \\'L' cnc!c1;.;e 111 !lie ;\11nc:>.:tirl' a c-lHlL'llh:ll! ,-Jti the 111;1llLTS ·.:,pcciflt:d in par:1g1aplic- -1
and ) or lht: :-;aid ()rdl'r.

,j l-11nlier !o uur c(Hllincnt:=> in tlii: i\nnl'\!lrt.: n."!ferH.:d to abnvc, \Ve 1\:port 1hat:

J. \Ve h;l\'L" obtained all lhl' i11l;lr:11;1tiull :ind c:-:pla11:lli(111", \\lii,:il l<J thi.: l\'-"'! n! 11u1
h.no\~ k:d~'.e ;ind bc!i-::1" \\t..'1"1.' n,.,:.:t'_,,~,:ll) fr;:- th'"· pcq_\!)';•:'>: 11' ,>\11 :1ud1l.

ll Jll llllr urinion, prupl'!' book'; nl <lCCl.l\l!l! ;1-; n::q111r~·d by i:I\\· hilVC bLeJl kl~p! h) till'
Cnnqi;u1y :;Q far zi·~ appt.:'<ll"·; J'ro1n nur ex:1n1in:nion nl"tho:;c ho1.)~s:

111 !'lie balan(.:c .-:;he-ct, '>latcnll:nl ui' pr(1fit and lo:;:-; and l';ic-h Jlo\\" s\;1h.:ni<.:n! lk·alt \Vi!h hy 1lii:;
rcpnrt arc in ;igrcc111e111 \Villi tliv honks of <lCC\'Ull\;

!\ In 1lll1· ,-,pin11•n. 1h.._· b;1L1n1.:\' -,he<..'\. -.,1;1l<...'!llc1\t .-1( p1·l!1! ::nd !r'"'· .~nd ...:~1sh rJ,,\\ -;L!11·n1,_·nt
th';1i1 \'--1ili li: '.)n-., 1cp,q! 1:d1nr·h \\1!!1 the ,h:-,:i":t1n;111~' -..:1·lrHLir1I-, rl·fcrr1.'.d Hl 1n ,11h·-,vcli(\lf
i _; \ , l P ( -...v1· II f;fl :-: I: I! 1 I i1 c I . "1np:l11 i ,: . .; :\ ..-1, ] l) :' (1,

( )n the h;-1:-.i::i 11r ih<: \V:-iltL:11 rcpr<...''>l'l:l<Hions i'(:c,-i,1.:d fr,>111 ll!c 1i!r1.:\~t111::;. :1.., (\fl \1:1rlli 1 I .
.";I) ! _). :tlld l:lkl'11 Ull 1l.'t:(111J b:.' 1lh: ) ~o.ird \J( ] ) !l"V1..-'!t ,, :;. \\'!,' I t.:p( irl tii<ll llt)l lt' uf ! ilt· d I I L't'l ll \ 1

l'> ,1i..,,q:1:ili1iL~d ~i"i UH l\-·Lu,li \i ..-·o:~~ i'!(Jili .1pp<.'ii';:1.d ;)'., .1 di11.·~"\tll 111 i\.'tlli'• ,,1
,; 1:1 li.<1.· <vi n t" .., u :i-..,,'( t 1\)1 i ( 1 i < Ir :.,., 1 i \ "!\ ::'. -,; . 1 u 1 l! tl· t -, , 1, 111: 11 11, · .... :\ '-- 1. l l./ :' t.i:
S. \/.(~NA IAllA s Asso< 11 u\

,·;. !n our opinion :-ind to the bi..:st of our infonn8.tion Jnd according to the cxpl<inations givL'!l
10 us, the said ac<.:ounts give the infon11ation required by the ('u1T1panies AcL ! 956, in the
n1an11er so required and give a true and L1ir vit'\V in co11forn1ity \\'ith the rH:.:,:ouniing
principle-.; i.~ener3!Jy ;iccepted in lndi:~~

a) in !he c3se of the balance sheet, of the state of affairs of the ('0111pany as at March
31.20!2:

b) in the case of the staten1ent of profit and loss, of the Joss for the year l..'ndcd on th;it
date; and

c) tn Lilt' case of <..'::ish tlo\v stat::1nent, uf tbe cash J1o,vs f<.H· the )'t'ar en Jed 011 th al date.

s.V.G!W~ .J.J'r~
For S.\i.(ffL\T/\LL\ & /\SSOCl/\TES
Finn registration nun1hcr: l 03162\V
Chartered .~\cc()lllltanls

per TS (iangadh3ran
Partner
tvle1nbership No.: :?2835
1

l)lacc: Bangalore
Dale Jc;1-y 27 )012._
I
S. \/. (,'11A TAUA s Assoc IA I I\

t\ llllt.\lHe rcrcrred 1(1 in p;HJg_r:'..ph 3 n( <lll!' rfpon of C\'t:I) J;J[I..'.


J{c· ;'\lllt:tt:k lnS!fUrlh'lll:; India PriYah' l.irnit~·d ('th~~ c,)!l)pany')

ti) (a) fhc (\qnpa11y h:·1s 1nainr:-iith:d pr(lpc~r recl1t\~S. .;;hn\\'ing full particulars. inciudinp
,1uantil:J!i\'t...' Jctail;;;, Jnd si1uati,111 ,,( f!\td as:-.c!'>, <''l"('<I'(/f)rjix1.'d os,·\'fs 1uke11 O\'i'f' o\- fh1rr
1~( rhe usser 1)11rch11se {lgre.:11n·111 11)1c1\' rh,, l"i'cord.~ urt' 111oinu1111edfor gruur of \'/1111/ur
,issets ond 11(1rJ;1,. <.'och indf\'1d11,J/ <1.1·.Ycl.

(b) 1:1;.;cd :is.:,t:t"i li:J\c been ph>·si(;illy \·t:rificd by tile 111:-inagetncnt during the year and no
1n1tc:rial dis(1cpancies \vcre id1.,,·nti(1cd on StJi..'h verilicatiun.

(-:) !'hcrt: \\';.1s nn disposal of a subst:i.nti;i! part of fi.\cd assets during the ~.:t~;H.

(ii) (:1) Tht> r11a11a~c111v111 l1a::. cu11dul:h:d physical \'e1if1c:Hi\)fl u! in\'~!'l\(iry .il re<t:--unab!t in!t'r\;1h
during the )t::n

(\)) /'fit~ 1'1/ rif1_r:;icu/ l'Crijii:u!iun t.!f ///'.'t'!if1Jr_I j(.1/fo1rcd hy the 1110110;.t,ellh'lll are
pro(;ed11t('S
n:q11ir~:d hi' \'fl'<'ngth~'11ed to n111ke it reasD11uhlc und c"Jdequorc i11 rcluriun tu the si;_·c of
!1J

the C'on1pn11y und the 11at11n.' r!fl!s h11si11ess

(;.:)Th~ c:(irnpany is gcncr<:lly n1ain1:1ining prop~r rl'i..:nrd_..; \)r illVl..'H\\'lry. lh() ( ·un1run1' i1 Ill
rhe f!FO:.:e.1s o/r,'1·1111ciii11.c. rhe 1/i.1·,.,-,'fNJncit'\- 11111t'd on ;:ln·s1c(d 1·c,,-i(1curic111 As (:\·f;fu111i·d
tu u-;. 1!1<'.\(' oro: 1101 1"X/h:"Ch"d tu h(· 111utcr:ul.

(iii) (a) .:\ccordint}, tL1 thL· infonliatitin :111d l~.\1.1lar1:1lit_i11s givt.'11 lP u:->, ihe (\Hnp;111y has not gr;i11lL·d
a11y !0311,;, st:i.:urcd or unsccurL·d to co111panics. lirins or other p;11·1ic:; \..'.Ovcrcd in 1\ic
register rn;1in!ai1H:d under st.'cti11n 30! of the (\:ln1p~111ic5 ;\ct. ! 1J5(l. ;\c:.:nrdinµly. thL·
pr(1vi<:..i(11h ,l! ;..\.111 .... (' .l(iii'1(:1l Iii (,I) \)f the ()H!i.:1 :11c n(ll .1ppli;..·;1hiv 111 the C(_)n1p:1;1\ .ind
h<..'l)(L' J\( l \.'.l\il!ll\i..'llll'd upl>!L
1

(b) "\..::..::orJing Ill ini;--,nnalion and l'.\pla11:Hio11::; :~i\"<_'!l \\l u~,. 1hc C\l111p:111y IJ;1s no! 1ah.1~n ;111)
luans, sccllfL~d (lr unsccun:d. frn1ll ,;nr11panies, li1111'; or otlH:J p;1r\1t~S o..:uvr:rt.:d i11 the
regi~~li.:r 111aintaincd under :',l.'".:tinn ;01 of the (_,)111p;111ies .'\cl. \ 1)(,(1 ;\ccordinl--'.lv, 1h'-'
p1(1vi::.in11s nl' ..;L1t1\c ·~(iii)(::) tu(:-·.-) 11f the ()rdcr :nt': !!Dl t1pplic;1hh: \1) 1hc C:ornpany ;111d
hence 111\! COll~!llCrtlL'd tqK1!l

(l\) hi \)llf r1pin11_111 :111d :1..;o..:;.lnii11.'-'- h'> lh..: 111J(:,n~·1;Jtiori ,111d <,-'.\pl<H1:11i(l11:; fl\'i..'!1 l!1 u:-.. there h :111
adcqu:t\C !ltlc1n:!I <.:ontrol S}',l<:111 c1i11111ll:1':'tH:l!t: \\'llli the si;(· ,-d· lilL' ( '1i1npa1iy .uid !]\("
11:1!11rl' <)f i!'; ht1>1111·~;-;_ !or 1h1' p11rch:1'i: ti!' in\crlll!l.Y :ind li,\L'd :J.',·>ch ;i1Hl lin the -;;ik (il
~'_!:q(j..., :uitl <1..'1\·1 ....'t."" /-/,;1\-, i·cr 1/,'" 111fcu1ui (·1·1111·.i/ >\''/c'/li _jol' .1"·,·1/,1/!lill? u.:'.i.·111,\: ,1/
ii;\(Ji/r;.''\' (!/!<.' ,·('//,-,.,!!!// ilf u1·, ()/1.1/!\ /"L'-:'c/l"tih/,·.\ II lll!h/\:tjlliliC /11 (Ii!/" U/-'llJ!Uli. {}/J,\ I\,/

(·u111111u11i,;' /(11iur.· ro ·.n-rt·( r " 111;.'f•!l' \\<.'«'l!!<'.'' 1/i .rh" 111f1'l"!!O.', .iu/n1( >'f ,fc11i

Ilic llllild<ill 11~ !\ 111<.: p tlll<:\IL11 .. ,I[ C•l11l1;1l·t .... ,·,1 :\11,11;: ,\'ll';,'!ll'-, rt•t'c~nt·d l•l i11 . ,,__·ctil>I\ )0! ,ii
1

111~_. ( ·un1p;1)l\(" ·\l l. i i;)f1 ih.11 111.·1·d [,\ h,· cn\=·i:.·il 1;J1 . · thL' tl".!l',1vl' 111:1i111:ii11c'd 1111(k1
,!_''-.·Ii<'·;) \()\ }\;t\1' :'1.'Cli ·,,, ~':il,··~·d
S. v.c;nAIAUA '" Assoc1A1rc,

(b) Jn respcl'.t of transactions rnadc in pursuance ()f ~uch contracts or arrange111c111s and
exceeding the value or RupCt.'S five lakhs c:ntc:rcd Into during the !'1nanci~.d yt.'ar. because
Of the uniqt1l'. :_u1d :ipeci:.1lized nature uf !he itelllS iH\'O!Vl~d and 3bSl.'.llCC Of illl)
co111parable prices, \\'C arc unable to coffi1nen1 \\'hether the transactions \vCr(; n1adc at
prevailing 1narKct prices at the rclcv3nt tirne.

(\·i) lhc (.'c1111pany has not accepted a11_y deposits frorn the public.

(vii) ['he (~on1pany has an internal audit systen1, rhe scope and co1'crage f~/ 1rhich. Ill our
opinion, rf!q11ircs to he e11/arg<'d to be CO!l1111ensl1tore H·irh the si::,t· and 1u.1t11re r~f its
husincss

(viii) To the best of our kno\vledge and <lS explained, the c:cntral (_lovcrn1ncnt has not
prescribed ninintenance of' co:;t records under clause (d) of :>ub--section ( J) of section 209
ofthc c:o111panics /\ct, 1956 for the products and services ()fthc C:ornpany,

(ix) (:i) Undisputed stannnry dues including provident fund, investor education and protcctiun
fund. CnlpJoyccs' state insurance, i11co1ne-!aX, sa}eS··13X, \VCalth·l:.iX, service tax, CLIStO!llS
duty,, excise duiy, ccss and other rnateria! statutory dues have gcn..::ra!ly bc-cn rcgu!~1r!y
dcposi1cd \Vi!h the appropriate authoritit:s e_xcept_(or prl~fl~s.;ion ll1x and se1Tice tax H'here
rhe1·e have been serious deloys in a fC\v cases 011d incon1c tox. provident jiaul and vu/11e
added tux \Vhere 1h,'re htt\'e heen slight delays in a_feH· 1_:oses,

(b) i\ccording to the inronnation ;-uid cxplan.1tio11'; given 10 us. no undisputed ;11nounts
payab!L~ in respect ofprovidc1li rund, i11vcs!l1r education and protection fund. cn1pl0ycc.-;'
state insuranct;;;', inconic~tax, \VCa!th·l<lX, service tax, sales-tax> custonl'> duty, C';\..cisc duty
Cl'SS and oth~~r rn;1ttrial s1i1tutory dues \vcrc outstanding, at !he yc;:ir end, for a period l'if
lllOl"t: !hiill :->iX 1nn11ths !'roin the (]ate they bcc:11ne payab!e,

(l:) ;\ccording tn the infonnation Cllld explanations g1\'(.'ll lo llS, there ~tr(.' 110 dUCS of' illCOll\C
Ll:\, sales-tax. \vcah!i t.1x. service 1:1.\, custt1111s duty, c:.:cisc duty and ccss \V!iicli have nol
been dcpositccl nn account of ;111y di:::putc.

(x) The (\)lllJl~!llY has been reg.istered for :i period or


lcs'i than f\\'C years and hence \VL' ;ire
nol n:q11irL'd In cnn1111c11t 011 \vhcther or not the accuii11il:1tcd kisses at the end of tltc
fill<i!lt'.i:1] ycnr \S l'\Jty per CC!lt 01' lllOre of its lll'l \VOr!h ;ind \VhCthCr it !J<iS incurred C;i-;11
lusc-;cs in the c111Tc11! fi11a11ci;1l year and in the i1n1110.:di:1l<:ly pn.:ccdi11g l"111;111ci;·d ;,T;11

(_\I) n:1.c;l:d <'Ill 1111r dtidii pro\:Cdtl!c.'; a11d :Lo.; pl'.l' tlh: l!!Ji.:r111~1lit111 ;n:d (>,pl;1n<1li1ll\S ;_'.l\'l'll h) liic
111;1nagc·111c11t, \VC arc l)f'thc opiniDn that the ('\)rnpany h;1.., 110! dcE1ultcd in rcp<1:1ncn1 •ll
d11cs ln ;t (inane in! i11stitutin11, bank or dchcntiirc holdt:rs.

(;..;ii) ,i\ccordin!.'. lu thl' inf\ll-111;ilit)n 1111d cxp!:1n;ninns givc11 tD uc-; and hc1:;l•d on the d11.__:11;n(·11h
::11d rccdrd;; pr()duc:_:d bcron.· us_ the (\i11ipr111y 1i:·1.., 1H1l ;:_r;111!vd io•·1ns :u1d ;1d\·;11:c:.., ,,,1 lhv
li;t:',;S nr _;;;cl;lJrJ:\ by \\',1Y ,,f plcd~"l: tlf \h;i1·c-,;. dt.:lil:ntllH::, ;111d \llhl'r -;,__·.._:uritic_o.;_

(.\:n) ln p11r t)piniu1·L thi: Cut11p;111y i,, 11,11 ;: chi! 1·u11,J nr :1 11idhi i r1111!u;i] hc11c(i1 hind -,u,;1,·t\·.
l'lic1ct'nrc, lhc provi.-;inn~; of ...:1;111;-;e -'l(x1ii} oi' the (';,llnp:111ics (,1\udi1or·s ){,:pol"!) lhdL'r,
·~)003 (;1-.; ;inH:1Hicd) :ire 11(1! :ipplic:-il1k· rn the ('01np;1ny

\
'/:
S. v. (;fl A/,\ UA s A SSC>C!A I/.\

(xiv) !n our opinion. the (~01npa1ry is not dealing in or trading in shares, ~ecuritics, dcbcntun:s
nnd other invest1nents. A.ccordingly, the provisions of clause 4(xiv) of the C:on1panies
(i\uditor's J<cpo1i) Clrder, ~'.003 (as J1ncnded) arc neol 3pplicable h-1 the (~on1pany.

(\\) /\ccnrdi11g to the infonnntion cu1d (·;.,:p!analions g,i\'cn :o u:;, the Cornpany· has not given
any guaran\(':l' !'or loa11s taken by others fron1 bank or finan..::ial l!lStitu1lons.

(:.:vi) Fhtse<l l)!l the infonnatiun a11J L::\planations gi~·en lo us b:.v the nianagcn1en1, tcn11 Joans
\1.·crl' applied !'or the purpo::,e for v•hich the ]o;"ins \VCrc obtained.

(xvii) .-\ccording to the infonn;:ition and c:-.:planations gi\i.-:n to us and on an overall cxa1nina1ion
of the h::i.lance sheet or the c:on1pany, HC reporr that _funds a1110101ring to R5.3 I, ?OY,601
1f1iscd n!I shorr rern1 has is i11 rhe j()r111 (~( cosh credir _faciliry j;·o1n hanks have been used
/in· lung-Jer111 inFust1ne11t re pres en ring acquisition <-'.ffixt:!d assets, repayn1e11r of long·ter1n
loan and j/-1nding <~flosses.

(xviii) ·rhc c:o1npany has not 1nade any preferential a!lot1ncnt of shares to parties or con1panies
covi:rl'U in the register 1nai11taincd under section)()] of the (~0111panics /\ct, 1956.

(xix) Tht: (\.l!llpany did not have any outstandin!_; dehentllres during the year.

(xx) The C\Hnpany has nut raised nny rnoncy through a public issue during the year.

(xxi) Based upon the audit procedure~ perfc1rnied for the pllrjJO\t: or reporting the true and fair
vic\v of tht.' tinanci<ll staten1ents and as per !ht.: inf"onnation <tnd explanations given by the
1nanage1ncnL \VC re-port that no fraud on or by· the Con1pnny has been noticed or reported
during the year.

5.y,~~c:..~..J:;-
1:.,, S.\I. Clli\Ti\111\ & ,\SSCJC:li\TFS
l:inn n::gis1r;lli11n nuniber: I OJ I (l~\V
Ch<trlcrcd ,i\i.:cl.'n1nt;·1n1.;;

~
·r
rh:r S (Jangadh;\r:in
f 1il rl I lCI
:\,lcn1hcr~J1ip '.°\<.) .. ·.:::s \~.'
i'Licc: Ucnµ_alur11
ll:llc': J\!1, '( 2 '1 1 )J'll

11
AMETEK Instruments India Private Limited
Balance Sheet as at 31 March 2012
All amounts in f-{upees. unless othf>rwise statPa
Notes. 31 March 2012 31 March 2011

E9u_ifj_~~~.!~&p11~!i.~/':- ::
Shareho!der:s' tunds

Shall' cJpital 3 10.-l,720 103, 720


_, :i;:_GHJ.158 45.401.05'.)
-------
32,1B4.B7B 4!i,504,775

Non-current llabl!lties
Lonq-lc>rn\ borrowinqs 5 24,000.000 4'/,000,000
Lonq-tcrm prov:$;ons 6 6.410,210 2,500,JO"l
30,410,270 49,500,307
Currant l1o11bililies

Snon·ti:rm bo1rvwmq~ 7 72,200,000 55,000,000


Tra<le P;;y,1bies B JC.789.350 3B.9 l 9.42(,
Other cunent !i<'!bilities B 49.842.290 40,262,566
Snort·term p1ovi:.io11$ 6 16,751.768 5,$83.446
169,583,408 139, 765,438
TOTAL 232,176,556 234,770,520

Non-current a!.:seh

Fixed as:.el~

Tangible assets 9 47,771.244 50,696,225


!ntanqiblc .:i~scls 10 20,032. 564 45.491.393
Capit<JI work·in~progress 1,424,855
Deterred tax assets (net) 11 12,889,052 4, 331,685
L~1rl(i-term loans end advances 12 18, 340,67 l 16, 119.442
Other non·current assets 13.2 1.750.000
100, 783,531 118,063,600
Current assets
Inventories 26,762,728 9.273,770
Trade recl?1vab!es
"
13.1 55,696, 750 35, 784,333
Cash and bank balances 15 7,963, 704 J,834,584
$hort·lcrrn loan5 ano: advance;. 12 17,694,442 13.920,1"18
Othc-r cu1 rent us~eb 13.2 23,2Tf.321 55,894.055
131,395,02.5 116, 706,920
TOTAL 232,178,556 234, 770,520

Summary of s1Q11ificant .:1u;ountinq politi(!S 2.l

As per our rt>port of evt>n date

o;;.v··~~~~ rcll-
For S.V. Gtlata!ia & Associates ana on trnt1alf of the boord of dir<>ctors ol

firm Reqistra!iun No: l03162W AMETEK Instruments India Private Limited

Chartered Accollntants

.( ,/
/1
•?/
per TS GanQadharan Hirt'n De~<1i Bruce Coley
Partner Manaqinq OirPdor Director
Memtwrship No. ?.283~>

f'loce: BonqolO! e Place: Banqalore Place: Lekester, UK


Date: .T.Vk'i /,? 1 2..012 Date: July 16, 2012 Dati:: July 16, 2012
AMETEK Instruments India Private Limited
Cash flow staten1ent for lhe year ended 31 March 2012

)l Morch 2012

<;_a~-h)_IOw fn::im-_operetlrn;i activities


LO>> Delore \d1 (2.'.i'i9.230)

~-~.074.727

8.:!96
~.CJ5/,0J:i

2.12-',19}
l•<lbH>\t{'S flO lonq~r f{'Cl\llleO ... r•ttt>:i \lOC' (34"1.347.)
lflterest C%1J~"'r l2.980,4CJO
Interest tnco~1e C29.0C9l
65.938.720

(7.782.734)
.l,909.963
lnCf\.'il}C •n orwrt·t~!P1 DfQVl\>WlC 3.987.810
lnoedSI.' •n o\ll<;•< (.;,u('n\ 1i<1bd1t•f's

lncreas;> in trilO;> •Ht>1vablt>S (23.12),245)


(l 7,488.9':i8)
(2,221,229)
0."17·1 264)
(.Jt>creo~e 111 oth~r curr<'.'nt os~e\s 32.616.734
Cash qenH.:iteo from op;>1~t1ons 6l.042.S2l
Dirl'li: t~•t>> tM•~ (net of 1erv110~l _ _ _ _02.).37.522)
N(•t Cd~h !low !mm o~wratin~ oct1v>t•n (A) 48,904,999

f'(;r(!lJSI.' ot lixl.'d .:tSSl.'t~. including intangible .i~set~ <>nd cdp;tdl work in progress (22,S82,66l)
P!O{('('!lS from Sdl(' of lix;>O ~SS('!S 308.303
lnvrs\m('nts :n l>.1nk O£"pos1ts (havinq oriq1nal mJtur1ty of mor(' thar1 12 rr.onl!•>l (l,7S0.0001
lf\(('1('$\ f(.'C('IV~!l 29,009
Net rnM1 flow uHd ln investmQ actlvitie~ (B) (73,995,3.:19)

~~rr~:if~:.~,!Y~'.tl!ifililf:fillfu'WN«lfl~'W&~~J1&~~}[~~%1"4£$~;--~!!i!~·~""ill1111111!!11!1iillllll!llli1!llll~
R~;.o~ym(•nl 011ong·terrn 001row1nqs (23.000,000)
P1ccecds 1rom short·tcrm boriowmgs 17.200,000
lnter .. st P~>d (12.980.450)
Net cull flow und in tin11nclnQ 11ct1V1Ues (C) (1$JB0,450)

NN mcrC>,\SP in cash and (.ash ('<J<Ji~alC>n!s(A ~ B • C; 6,129.200


(,15h Jf\\l c~>h cqu•val('nt> attn(' IH'G•nni119 c! the \'CM !.634.S84
Cash and cash .. qulva!ena at the eno ol the year 7,963,784

~~~!~Y~f"~~~~t'l~~~~-Jt~&4l~illi'11~···~'~'1!'~·lili!lll!llil~!lil!lill!ff!!fl!!j]!!lli!l
Ca~h on l\;md 6,476
With !:an~s- Of\ Cl1rrer1t ~ccoun! ?.'.l'i;',308
Tot11I ca!.h 1md cash eQulvolenh (note l 'i) 7,963,784
=c-..==·===-----··--

2.1

s.·.v·~..._~c)>
for S.V. Ghalalla & A~soci~te~ fo• Jna on ocn~1r o! tile bo.ird of rJ1rector~ 01
f,rm fl~9ist1.ition No· J03lfo?W AMETEK lostn.ttnCl\h !l'ldla Prl'<'~te Llm!te<:I
ChJ1\ered Acccvotant~

)/
'
pc1 T$ (,~ny~dl1~r.rn li:lfl.'11 DC~<l: an.Kc Coley
Partner Ma'"to~in(J Director
MernbH~h1p No. 2283~'

f'iacc B<i1>QJ:ore f'1acr: 8anq,;!ore PlM~: l_~1ce~lN. UK


Dak :J\)l 'i 2·r 1
/, C11). '.>ate .lu:y 16, 20:2 D~t~: .JUI"/ 16, 20l2
AMETEK Instruments India Private Lirnited
Notes to financial staternents for the year ended 31 Marc!-1 2012

Corporatoo informativn
AM[l[K ln~trumen1~ 111t11,1 ij1iv;1IP t.1m11<'d ('A!S\Pl!'k·' rn "\h• CofllP¥ly''lwii•, nHc·r:i01dlt·d o" Alu)ll:>t ,"O. ?COfl. "' ,i p11v,lt(• 1irnde\l comp,;iny un\lf.'f tt\e
Comparne~ Ac:, l'J',)6 Anwte~ 1> d wholly ownl'<l ~uli>1d·ar·y of Anietf.k Sifl<JdPO'c> f·T[ l"l'Hl'n. Tll\' Cornp~11y ;~ ('l\(J<'IQ('cl intH·iliM 1H me tws1ne~s 01
Dfo?Sales and marKe\llllJ ~f-fV•Ct-.<. il<;d !\.,~i!N1nq te(l111,c,11 a~~'SLinC•'. onstMli•\•O<i Mill u>mmr~~!t>n•n~ ~erv,<.:c>~ a11(J <ir1nuul momt~nant!' ~erv1ce~ in ir~prc!

r1f (•q1,iprnen\s. i1pp1Fance~ <1:1t1 other "'du~lr:<11 ill0(l;<t·t~

D11rinq (hl.' Yt.'<H, \11(' Compdny ild~ 1nc1..1rred lo~s of R~ 13.-.119.897 (2011: fis 10,160.403) .:ma has acn1mulat<?d los~('S ot R~ 61.143.4?.0 (2011: lh
47.8/'.l.'.l?J;, nie 51\ill{' (d~llill ant! Ol'<U!l\I('', prt:•r•:Ulll ,;('(OUl\1 ,l', ,:t M,HCI\ };_, 201/ I', lh 03.3?8.~"JB vo11·. !Is 93.328,298). The lll.)n.J9f'fllr,f't\ is
cof\fident that thl• CnmrMny wili I;(' able to 1Jl•n('ril!C' su!!:cn;nt profits ant\ (d~li flew~ in tlw fu\ur\" ye.:irs irnm its continued operiltions to ln('C·t its
obliQil!ions in ttw fore~eeatlle future. f,c~orGingiy, tr\\' fmJnc1a1 stato:nwnt> n<:VC' oeen pres;«ro:ll b'{ tt:e management un0i:r ttw ;,10111<1 ccn(<'lll
il5~1,mption.

B<1si~ of prepariltion
The f<nanc1al ~t<i\enwnb of the Company have been pr~t>.Jred in accordance w1U1 generally accepted ilcCotJnting principles in India (lfl(!i;rn GAAP). Th'.'
Company f\as p1ep<ired \hesc> !m<inn,11 ;t;lterrwn!s le comply in all rnatt'lidl re>pect; w1tl1 !he accourit11HJ ~tariddrds notified under Compam'es
IACC:HJll!rllg Sland ..u/J_\j Huie>. 2006, (<is <11nc•ll(l1;><1) arid Hll' relcv.:i11t prov1~;ons ot the Compa111es Act. 1956. Thl' financlill statements hilve been
pr(>pMe(i on an accn1al b<1S•S and under the h1>toric1:<! ro>t co:iventwn. The M(Ol;ntmq pol;cies adopted;,~ Uie pn~parat1on ot lmanc:,11 stat(•nwnh Ml'
l Ull>i 'ol !!nl wit Ii thu;<e uf p1 L'V•UU'. YPdl. l'XU•pl ! lH tlil' l'hdl!(W 11> dU;uunlim.1 pul•1:y c•xpld:l\l'tl t;el()W.

2..1 Surmnary of siqniflcant accountinq policies

a. Change in accountinq policy

Presentiltlon and dlsc!osurn of financial statements

Dvrmq the year ended 31 March 2012, ttw rc;v1seu Schellule Vt 110t1fieU unoe1 tne Companie~ Ad 1956, has become <1.ppl1Cilble to U1e Company, for
prPpMa\1011 an1i f>C{'Sc>ntatmn ol its 1111anc1a! ;talrrnents_ H>e adoption o! l('VISrd Schedule VI doo;>s not tmp.;ict recoq1\1\1of\ and meilsurc;ment p1ir.C1ple~
followl;'a !or prep3r,;i~ion of financial statements. Howev(•r, 1\ nils s1onil1cant 1mpuct on pre~entation and disclosures made in the financial stat('ments.
ThE Companv rias also rec!assi!H:d the- prev:ou~ yem !1qt.1re~ ir1 acccrrlt1nte with tlw 1equirl'menb auplicallll.' in tt1e current yo:;;r.

b. Use o! estlm<iti:~

The prep<11at1on o! financial ~tatem!':'l'tts in con!0rmity w•lh Indian GAAP reqL.mes lhP m<ir.aqt•mrnt to milk€ ju<lgments, P.~t1mates 91\d ilSSvmption~ \hill
affect !he n•port0d amounts of 1rvenut'-'>, l'Xpl•nse~, a..-,sl'ts ,m(j
<1nO the t11sc1osure ot cont1nQent 11ao111t1i:os. at the end ol the reportmq period.
1ial.l1ht1e~

Allhouqh ttiesl' estimates are basl'd on the 1n,1naQi:ment's best Knowledqe of c11rrent !':'vents and actions. uncertainty about these assumptions and
i'stimates could result in t~.e outcomes reQuir1nQ a material ad1u5tm~nt to the ca1ryinq amounts of as5Ns or liabilHies in future periods.

c. Tan9lble ll11ed assets.


Fixed asseH ar(' stated at cost. net ol accumul<11l'd depreciation ant:! acu1m<.1li1INJ ,mpnirrnl•nt l\l~sl's, 1! dny. The co5t compr1~es purchas!' pr1c!':',
borrowmq costs il cap1taliia\ion cnteri.1 are ml'! <ino 01rectly attrrbotable cost or t>rmg!IHl the asset to .is work1n9 condition tor th!':' 1nten<lecl usr. Ar1y
trade <liscounts 3nd reb.ites are deducted in arriving at the purchase price.

Subsequent e~pcn<l1\rn e related to an item of ti;i;ed <isi.et 1s adi:Jetl lo 1h bo01<. value only <f 1t mer eases the future benef1ti. from the ex1stin9 ilSSi't b('oyond
its pr('ovious!y assessed standard ot per!orm11nce. A!I othN expenses on rxistinQ 1ixed as~els, including day-to·day repair and maintenance \"xpend1ture
and tost of rc>placing Pllfl~. are char<;e<l to th(> statement of prof;t 11110 loss foi tt1e per100 <lurmq which such exp!O'nses are mcurrNl.

Gains or lossl's <11 is111Q florn derecoqnition o! t1xed ilsset~ are mp,1~llff'!J <1~ !flt> 1Hferencl' tietween tlle net tlispo5al p1 oceeds and th!':' <a1rymq <1rr\ounl o!
till' dSSPt illll13re !t'l.()(;l\ill'l! II\ the ~tillPl!Wlll 01 profit <)ll!J IOS~ wilt-fl II•(> d~S~l IS dl.'1('(0(jl\ll€'d

d. Depfl':Clatlon on tanq!ble llKt<l (l$Stts


Dep1eciat1on on fixed a~sets is cal\ul<i(Fd on a stra1qM·lme has•~ us1nq ttw r<Jtes arnved at based on the useh;! lives c•~t1m,1ted by tlw maHaqenH~nt, or
those pre~<ril:>ed under tile Schedule XIV ~o l!w Comvan;<'5 Ac!. 1956, wlHtheve1 1s tll{)llef. The CompiHly has u~ell the fo!low1n9 rates to orovi0e
cepreciation or its li~Pd assl'ts.

! ...........·-··---~'!.i::tlculars._
:·-v;·hi~1~:-~-
1 - - ·- · - - - - - - - · · - - - - - - · · - · - · · ·---··----i-·
I Tool~ & Equipment~
Lf:.~r._f'lll~E_t?__ ~ f'l.~Ji!_l 1ng_s_
! Oflicl' Equipments
ro'ff<; _~_I: _lJ.l!!J~ni0:i!J_~(~:;;_t!!:i~;-:~~;9_~·;_~:~:2·-
Compute 1->

Lea~etiold improvement~ a!e Qep1ec1i'ited 0ver the primary µo:r100 c! the lease or the uselL.Jl lrfe of the assC'ts wf11ch1>ver IS lowc>r, on ii ~lrili\)111 lme tia;is.

A~s\"ts individually costinQ Rs. 5,000 or less are depfec1ateo full)''" th1;- year of purcriase.
AMETEK Instruments India Private Limited
Notes to financial statements for the year ended 31 March 2012

e. l11ta11Q!ble as~et

lnLmq1hle ilSS('tS .:icqun't'\I S1'p01i1\(•ly arr 1l\('<lSLJll:'\J on m>t><ll fl'C.Clijml10n a1 cw,t :·11e CD~\ o! 1n\Ml(Jlbil:' a~set~ ,)cquired m Ml ,1m.:il(j<1rna\con •n tt1e nahHt'
<i! Pllf'r!hl~~ is \ho?1r f,1" value ,ls <i! tlH? <J,1tt> o1 ;imalqMnat:nri f()ll<Jw"I\) md"11 l't'{NJntt'""· 111t.wq1b:,, .i>~eh ar~ c~11ie(I ilt cost I\·~~ .;sc<.\imulJtNI
amort1zat1on .:ir.d accumul3\ed unp;mment 1o~~es. 1f ,-;ny. lrit~1r.aily qen~1atHI :n~;,r•9dilf< as~.t>'.\. eH:h1d1n(J cap•tillii.NI r!{•v!'IDflml'nt coo;t,. ,111' not
c<1p1t3:1.1ed ;ind <'Xpend1ture is rell('ftMI '1\ t!W st<'!t('1l'('•H oi profH <lnil los:; "' llw 'o'h1' m whi(h ttie l'XP!'rld1\,.;1<.· is mcurretl.

intiirn11ble <1'5Ph «IP dn10111;f,(l on ii >hd1qt1t IH•<" IJd>I> ovvr Hw (>;t,ma!<!G c10Flc1I econorn;c Id!'. T!w Company U'"''· a rt>IJ111t.Uih.• pr('sump\!011 that \lw
u~eiul hit><>! ,111 1ntanq•ti1e ,-;s~et w111 l\Ot l'>C('<'ti t(•11 1'c"1rs !1om the (i<Jle wtwn \h<; itS~l.'t ·~ <iv<i•l<Jb1e f(lr tise. If the persuasive ev1Qence exists to tt1e
.:if!ect th,1t usef!JI life of ilr\ intanqit:de <lsset ex~(!<,(!~ ten yl'<l!S. llie Com;iany ;irnorti2e~
:rn: •ll\i!fl()1t!le <Jsse1 over trie l)e"t estlm.>te of its useful i:ie. S\•Ch
11\tanqinle ass<,t~ and rnt<1n9it1I(' a~sets not yet availalJle 101 ,1se air: te\ted for •mpa.imt<n\ ilnnually. l"llhN inWv•dually or at t!w cd~ti·(Jt•nerating unit
le;«i>I. All o\!l.:r 1ntornQibl(' <1~wts Me as5essed tor 1mpa1rrn('rl! whenever thrre is an il"ldicat1(>n that t11r 1Mano1t•le 11sset may be 1mpa1red.

The <Jmort11ation 1w,.oi:l and U11: amort1;at1on method Ml' 1cv1ewcd al l\'d~t ,11 eac!1 !rnilncia! vcM eMi. If th<' ('xpt•cted uselul lifE> of thr .1sset is
s1gni!ir.011tly dilfrr<'nt trom prrviou~ rst1matf'S, thC' arrwrtiu1tion 1wriod is ch;mged accordinqly. If there has been a s1r,nificant chanqt> in the e~pected

patlern of ecnnomic nerwfits from tlw ass('t, HH! arnrnt1z;itmn methorJ is O\,:i11qc>d lo l<'!l(•c\ tne chanq<•D pattern, S11ch ch.:i11qes are iH;countt:d !or in
accoi\lance w1tll AS 5 Nt:t f"rof1/ or L0£5 for l/ie Penod, Pnor Penod Uem~ ,md Cli.rnr;es 111 Ac:counrmq Po/IUl'S.

Gains or losses ar1s1119 1ram oer!!cogrnt101\ of ;in 1ntarig1lll<' .-isse1 are me.-is11rC>d as the (li!1erence heh11een t11e net disposal procreds <'l•ld thl' CM1y1nq
amount ot th>? a~set ;md are r>?co9nt2e(! 1n ttw stati:rnent 01 pro!•t antJ lo~~ when the <1s~N LS dC'<'ecoqtHle(!

Goodwill 1.~ <1mort1zed us1nq tne stra1qht-irne me1t1od ovH ii pei;oo of ~'x yeois 01 ba!once estm\a\et:J l:!e as evaluateo by the 1n.Of1il(Jement. Computer
software ht:ld !or use on bu5111e5~ pu1 post's m amort•Zl.'0 over an est11n.>ted ust:lul 111e of t!Hl'l' ye.>rs or trw period of l<eense. whith('Vl'r is lower.

t. L('ases

Lii>dS('S, where the il'S5or ef1.:>ct1ve1y rt:ta1ns sullstant1ohy al! the risks ;mo bent:fits er ow11l'rsh10 ol lht> lea~f:'d 1!em. are c!assil1ed as m1<!rat1n9 lease~.
Operntir19 l('<JSe payrnen!s <ire recui1111ied ilS an expr>nS(' in the ~tll\Priwnt o! proht ant110~~ on il straigM·liiw basis over Hie lii>ilSe term.

q. Impairment of t<mglbl;i and intanglble .-issets

TIH'Con1pany '15S('S::.l"S M e,1ch r<.'porlmq da\(' wht:rner ther<; is an maiu1!rnn that 11n ,ns\'t may bP 11np111red. ti any rnd1catmn (',;,sts, or when annual
impairment \i'slillg for ilfl asset is required, the Comp<my est1m.:iles Uw .-isst·t's recover.ibl!' <irnounl. An as-.et"s recoverable a1nount is the hiqher of an
asset·s or cash·generatmq ur11t's iCCUJ riet se111nq price and ns ;<<1lue •11 use. Hie recoverable amount 1s determined !or on intliv1dua1 asset. unless Oie
.:issel (joes not qener,1te c,;-,h tnflows thill Me !arr,eiy <ndeper-u:lent o! those !rorn other assets or <;roups of assets. Where the carryrng amom1t o! an .:isset
or CGU exceeds Its rncoverable amount, the a~set is consid('r('d imp;i1r('C ;rncl is written down to its recoverable amount. In asseSSlflQ value in use. the
E<stim,1tecl future cash !lows are discounted to their presl'nt v.:i!ue uSll'IQ a pr!'·tax discount rate that rC>flects current market as5essments of the time
value of money ilnd the risks speci!it to \he asset. In delerm11Hn(J net sellimJ oriLe, recent ma1 f..et tnrnsact1ons a11.• taken iutu accour1\, 1! avail<Jbi(', !1110
such tr.:in~actions can be alH1tified, an i!ppropriate vi!luatmn model 1s used.

Altei 1mpilinnt:nt. deµr~·Liatio111s provided on tlw rt•vi~l'll carry;nlJ amo1mt of Hw ass('t OV('f its remammq ust•1u! li1e.

An asst•ssnwnt 1s ma<lt' at eacn 1eµo1tinq date ilS to whet!lt•1 tll!'re is ;my 111d1cJt1on \11<1t µ1evious1y 1ecoq111ied imp.:iirmenl iosses mily no lonQer exist or
m<>y h.:ive <lecre.:ised. II such ind1cat1on eK1sls, the Company estimates th<: .:isset's or cilsh·Q('neratmq urnt's recover.:iblii> amount. A p1t:v1ous!y
recognized impairment loss •s revNst:ct only 11 there has beeri a chanq£' m the asslnn0tmns used to determine the asset's reco¥e1able ilrTHlu1ll '>nice \hp
last iinpo1rm('nt loss wa~ reco()niz(>O. The revers<>I is li1rnteO so that the carryinQ amount o! the asset does not e~ceed its recoverabll' amount. nor
e~cN.•d Ille carrymQ ,1mounl that would have been dt:tern11ned. net of depreciation, h.:rd no impairment 10~~ been reco<,iniied for uw as~et m pnor years.
Such rev('rsal 1s reCOQ111Z('d in tht: stiltemeri\ o! p1o!lt and io~~ unless the i15set is u1n1ed at a revillued <>mount. m which case th(' rl'vers.:it 1s treotetl as a
it:valu<>tion incrlfase.

h. lnvi:-ntortes

Stock of trad!'d qoods is valued at 1ower ol cost and net reillizaDle va:ue. Co~t of invt:nloril's compr1st:s of co~t o! purch<ise <1rid other costs mcurr('d in
b<u1qmq th<.> <11vento11es lo their present concl<l•Of"I an(l 10~.:i\ion, Cost is dt:terrnint:C on ii wrHJhled overaoe basis. Net !ea!ililDI<' Villue 1~ uw t'slimated
sell•nCJ price 1n tht: ordinary course 01 businC>~s. less est1milt<"-d co,>ts o1 completion M•rJ e~tim<11f't1co~ts1\f'(('\sary to make !hr sillf'.

I. Revc-nue recoqnltlon
RrvPnut: 1s recoqnilPtl to thr rx!rnt Ui.11 11 h pfOtJ.-ible Iha! l!w ('Conomic be11ehts will flow to th<> Company and th<: revenue can be rellobly measurNI.
The loliowinq specilit 1ecognilion criteria must also be met before revenue 1s recognized:

... :.;:
/'
AMETEK Instruments India Private Limited
Notes to financial statements for the year ended 31 March 2012

Sale of Goods
RPV(•f1U(' ,,om ;,;!t• of <j(!<.ld~ ·~ (('((>\)ll'l(\(I wtwn dll tlw ~irplf1ca11t l1~K; ,]O\(j <L'WJI{)~ of OW'l"(~lup of tlw 1.JOO(h !hlV<' Pil5~('(l to !IH: llUYl'f, <,;SU<lil'f on t11e
•.!L'hvcry o( the yoo<ls. lhe Corn(J<lll'f co!leds o..:i!e> tuxe; ond vo!ue .idO<.'d \axe~ (VAT) 011 llt!l10if o! U•\• 90,·ewrnent <1110, lhert>fore, these .:ire not
P(Or>ornrc tiene!11s flowinq to tt1e C:omp,-,ny_ Hli'r.ce. !lwy a11: l'\:Cll!Oi:t1 ficrn ((»'fnue. Sa:('s TU> and VAT deductNI from revenue (qross/ 1> the .imount
U1,;;t 1s H1ciudeo 111 tr1e revenue (qro~sl '.:inr: not the ent1rt: ~mount at '1<1tJ11fly <lf•~mq t1,cron(J \111,> yN<r.

Income trom 5Hvices


fl('vt'NH! from iJnlludl rna11ilena:i(<' anct !<'fJdir ~"''ii<'.<'~ <S rl•ccH;nilf'\I as ppr Bw tc>rm~ of the anr1uJI ma1ntenanu• conlro~ts to \hp edent whf:'f<; therf:' i~
<lfl i1herlau\iltJll• ce;\.>111ty dtJout ti\!! rea11zat10'1 of tlw a1111uili m<l>fltenantf:' r;f\af[/es 11w Comp,Jny coill'C1S ~(·rv.ce t,n on t.Whdl! of the qovi;rnment and,
t11ecefore. it 1s not"" o:conomic beuo:t1t now.ii() \o th•: C\ln\~imy. Herc<'. 1\ .~ e~c•uded from rp·l(•rh;f•,

Re~enL!e horn pre·~al<;> and rnark<;l•rHJ o,ev1t<;~ i'> reco9111zet1, •l'> service> are rende11,>d, on the IJi!'>IS o! i!fl ~(jleNJ m.irK IJP on casts mn1rr!:'tl, m
Mi.OT rldnt:o• with lhi> twm~ ol thr JQrf'li'fll<?nt <>nt.:red cnto IJy th(· Company w'n1 1\:. 01stom+~' ~.

Jntere~t

lnlere~t income 1s recoqnued on a tnnt• proumt:on bils•s t.ikmq 'nto account BK' amount ou:standllHJ and \lie applicable interest iate. Interest mcome is
mclu<h?t11111der th!.' head "othec income' j(\ th!.' statemNit of profit and loss.

J. Foreiqn currency transactions


ln!tlal R._.co1m!tlon
Foic•1qn currency transactions ar(• rt«orde(i 1n trie repor11nq c11Hency, by applymq to !he rore1qn currem;y <imount th,, !.'xcti;:rnge 1,lte oetwe('n the
reporting currency and the fon'1<Jn currency at ltlf' dil!o;. ol tlw tTilf\SilCt1or..

Conversion
Fore•qn c1Jrrency monet<Jry items <lfl' retransla.ted vsinq the ('xchor1oe rate preva1l1n() at th<.? r!.'pOrt1nq Oate. Non·rnonelary items, wriu::ll are measured in
terms of t"~tor.c,,I cost drnominatl'cl in a f<irpign cu1n•1Ky. a1e ieporh·tl u5HHJ t!H• exchdncil' ra\t~ JI \lw <J.3!e of tn!.' transact•on. Non·rr;onrtilfy •te1n:..
which a1e me<1sured ii\ lair value or other s1rrular vaiucl\ion oenomn1dted in a foie•l)l1 Clll ency. are \rclfl~lclte<I wsinq thr exch<:lnQe rate at the dah~ when
svch value w,H d<?terrnm('ll

Ex.chanqe D!lt!:'rences
Excn,1nqe d1tterences ans1n(J on tl1R sett1Rrner1t or monetMy item~ or on restatRmrnt of the Company's monrtary 1trms at ratrs dif1erent lrom those at
whcch they WNP cnitially f!.'UJrded dvrm9 t!1e year, or ff'f'lOftf'd If! p1evious financta! st,1temer1ts, are recoqniled as in(OfTl€ or as expo<n~es in the year 111
w11it ri they a1 ise.

k, Retirement and other employ-..e benefits

Ret1rrrnen1 l>enPIH m thP form o! provi[Jen! furn; 1~ il rJpf1upd contiin11ti1>11 \Oleme. lhe con1r1hul1011~ to llH! prov1d€'n\ hinO are charQl'd to Hie statement
ol prnht .ind loss Im tile ye.ir wrwn the cm1t11but1ons ill'!.' !JU<'. ltie Compony ha~ no obl1Qat•on, other than the contrtt:Jut1on payat:Jle to the provident fund.

Gratuity hatJll1ty is a defined t:Jen('fit obl1oation and is providrd for on the tl<>s1s of an <>ctu<>nal valuation on proiectt>d unit credit method mode at the end
o! ('ilCh financial yo<ar. Actuarial qains and losses are ri:coqn1z€d m lull m th(' period in which they occur in the ~tatement o! pro!il dnd loss.

Accumulated leave, which ls expectrtl to be utilized within the next 12 months, tS treatC!O as short·term employee benelit. Thr Company mea~ures the
expected cost ot such absenco<s as the adOitiona! amo1Jnt that it exp(>t!~ to pay as a r('Su!I of the unvsed ent1tlemrnt that ha~ accumulated at thi:
reportrnQ date

The Company ti eat~ accumu1atl':d leave i:-xpecte\l to bl' carrwo 1orwartl lleyono twelve months, as 101\q·term employe\: benefit !or m('asureme11t
purposes, Such long·INm compen~a\ed ;1bsences are prov•cted for bilSt'd on the actuilf1a1 ~aluation us1nq tht' pro1ectt-d unit credit method at lhl' yeaJ·
ent1. Aclua11al qa1n~/ lo~ses are imml'dii!ll'ly laKl'n to !ht• st<1ternent of pio!•t .;ind loss ,,nd ,ire not deferred, The Company prt>sents \ht> enti1e leavt' as a
current habllity in the balilnc,• sheet. since it Oof's not have tt1f' t1ncond1t10na1 r•qM to ae!H its settlement tor 12 moriths Mier the r('port1nQ ildl\'

I. lncom!.' T.1;u•s

lax eKpense comprises of current ili1(! d!.'lerred t.H. Current income t,H 1s tn!.'i1Su(€'d ill 111€' 11mount e~p\'('trd 1o tie \Ml<l to the l<1x .:rnttrnnl,es m
accordance with the lncom!.'-tax Act. 1961 en,1ctrd •n India ano tox lilws prevoil,nq 1n the 1t>wective la~ J1JflS(1!ttt(JllS wner"' nw C.ornpany operates. fhe
t.Jx r,l\€~ 3n(l ton laws \!$l'<l to comput!? the ,1n1ount ilf!? those th;,t ;,re enadet1 01 subslanllveiy ena~h•d, at the n•po!l1ny \late.

Dr!errell iu~orne !axi:s reflett tll!.' imµact of tim111<; diffe(encrs b!:'lwi;en taxoble ;ncom<• i!ll(J account:ng intortw oliijindtinq dur1rn; till' current y!.'<H and
rl.'ver~.;I of t•min9 d•f!i:rt•ntl'S for t!w i.>Jrlll.'I yr..irs. Def!'!!(•(! ta, 1s measured usinQ the tax iates ilml tl11.' t;ix laws enacted or sub~tantiv!.'ly enac1e-d at
tne reportirH) date.

De!erred tax l1ab•l1t1es are recogn1H<I !or all taxable timing dillerences. Deferre.d tax assets are recognized for deductitife limH1Q diHero<nces only to the
rxtrnf that there is reasonable- certainty Uiat sullicient futur!.' taxable income \</;ii lie av,11loble against whiCt\ such deferred tax assl:'t:. con bl• ri>ali7ed. In
s1tual1on~ where thi> Compdny has unabsorbe() dcprcti<1t1on or c<:lrry forward tax los5es. ail ()elerred \,n assets are recognized only if ther!.' is virtual
t!.'rtilinty supported by corw;ricinq evidence tl\at they 'arl be re11i1zed o'l(j<iin>t !uturt' t.oxdllll• profits.

c-;,;:::::::l<;-;;--> ,;
(l
AMETEK Instruments India Private Limited
Notes to financial statements for the year ended 31 M,1rch 2012

f\ t PMh rl•portinq !l<!\\'. It;<:> Comr,,1ny f e·~'>SE'>~es unr l'COQni ll'!l def Pl 1l'll t.ix d>'>l't, n i l!CtHJ'"' ,., 1;1H <•ro9n,; ed def l!l l l'<.l t .ix i!S~.et s to tl1~· l'Xtl:'nt I hd! it
iws t!ecome rea~on,1bly c('ft,w1 or v•rtually ~erldlll, a> t11e CdH' mny ta.'. tri<ll ~uff1t1('nt futu<l' l.Jxahle 1ncorne will !le av,'ltl.itil<' oQ,~m>t whitl1 >uC11
df.'!erred l·1X asseh u1n ht' f<'ili<Li~r5

Tlie ,;<1JJV,1HJ amount u1 defl'•ll·ll t~A rl~'>l!l> die> ll'Vll!Wl'i) ,Jl ~«Kh \Jdldn(.P ',li(:t'l dale. Tiu; (\lflli!<lllY wr<le>·(Jmvn \lie c,irry;nq amount ol ,1 t1r!prr(•(! tax
,:,5set to \h(> (>All'i1\ !11il11t ,., rm 10~1qp1 rp,1sonan~y {_erL11n ui <111\;aliy ((>rt,w1, .:is !lw U!'..(' m;,y t>(·, th<1t s1iff,nent hitvr,, t<i~<tblc- 1Moriw w11! be ov<1d<1ble
.:.9,1inst wh<Cll l!<?ft><1nl \<1x .is\P\ i;.w 1Jt• 1e,li11ed Any suct1 w•ite·down b ievr•1~\'ll to H1P !'X\(·nl t!lilt 1! becofn\>s 1ed~cm,1l>ly (<.'rtain or virtu.;illy cert<iiri,
<iS tlw CdS<' rnay tll'. rn<it ~ulf•c1ent fdc11r t.i~~bie rncom\"' will he ill'dlldblO:.

Oef(>r1ed tax assets anr; tJe!erred ta> 11ab1i1t1('S <11(· otf>et. 1f a leqi!lly enforce,1bf<- 11qr't t>xi~t~ to >!'!·off curr1>nt tax i!S~l'b dQiltn~! o;nt-nt tax 11ab1li\1('s
,1110 11W O!'l(>rl{'(j t,lX (l;,~et~ dlltl dek•rrr!d '.iJH'~ fl'lilll' lo !lw sanw lax.:rnlc~ .;r1t1ly ,md \!I!' ~.}fl\\' t;ix;itll111 <11J!!\(Jf11y

m. Seqment report!m,i
/ileriUlr<<Jt1011 or 'NJm(•nrs
Hw CornpM1v's opriat•r\(J o.. 1~11wsH'S ar<' orqan11el1 <>r•d rnar1aqel1 separilteiy ilCcordinQ :o the nature of services rendered. The analysis ol Qeo9raphical
~"QmPnls is basPd on th(> geoqraphrril! iocafion of ttw CorntJany'·; C\J~to1ne<

Allocdliori of common co~!s


Commun i111uc.allil' costs <)rt; a!loca\e(1 to l'il<ll ~eqrn(>nf an:urrl•flQ to t11c• rPi.1t1V!' t:ontr11Jul1on of (>iJCh ~e,iment tu the total cornmon costs

Unalloo!lt>d items
lnchH1es qener.ii corpor<1te incmnt! an\l expense rtems w11,c1-, a1e not allo~ated to cmy ou~.iws~ ~eqnient.

Segment .1ccoun1111Q po/1C1es


The Company prepares els seQrnent mtorrnatoon in contorm1ty with the accountmq pohc1es adopted for preparmq <111d oresentmQ the fin<mcial ~tatements

o! the Compony 35 3 whol(>.

n. Earnh'\QS Per Share


Basic t>arninqs pQr share are <alcu!att•d by clivid,nq the rwt profit 01 loss !01 the period attributable to equity share-holders by the wei()hted avera.:ie
numb\'r ot eQ1.J1ty :.hare~ o..ibt<indiny dur111g !!H.• Dl'HOd. Ttie Wl'HJhled averaqe nmntJer cl ec;uily shares out~tandinq d.JfllllJ the period is ddJUStl'd for
events or bonu~ issue; bones element <ll a liQh!s issue, share split, ,1nd reverse sriare split (consolldat<Ofl or Sh<HeS} that have chilnQed the rwmber of
equity sha1es 0\1tstandinq, without a correspond111q ch3nqe 1n resources.
For t11e purpose o! calculat1nQ diluted earni11qs per share. !he net prnfit 01 loss fo1 th" period attributable to equity shareholders and the weiqhted
avera9e number of shares outstar1dlnQ durlnQ the period are adjusted for the ellect of all dilutive potentiill equity shares.

o. Prov!sions
A provision 1~ recogmied when iln enterpr1.~e has ii pres!.'nt obliQilt1on ilS a result of past event. it 1s probable that ari outflow of resources ('ffibody1r1Q
ecor1omic tien<.>lits will be re<1u1re11 to sell le the obhqatlon and a relii!Ole est1m<1te can be rn<1de ol the amount of the obllQ<ltion. Provisions Me not
discounted to the•r present value am1 are detNmm<'d bilsed on the best estimate required to settli' tne obliq<>tion at the reportinq dale, These estimates
are reviewea at each reportinQ date and adjusted to reflect \hl' current best estimates.

p. Contini;ient llablUtles
A contmqe11t l•alJ1lity 1s a possible obl1gatwn tt1at arises lrom past events whose e~1ste-nce will be confirmed by the occurrence or non·on:urrenc(> ot one
or more uncertain future events bi.'yond the control ot the Company or ii prn~ent obli(jat1on t!111t is not rf'co(Jrnzed heu1use it is not prob;.ible tl1at an
outflow of resourtes will lH' r<•quirNI to ~ettle the ObhQat1ori. A contrnq!.'nt l111bility al5o arises m extremely rare Ci.ISl'S wheie there is a l1ab1!ity that
can11ot be rl'.'coqnized bl'.'cause •I canriot be rne,isuied rehilbly. Tht1 Compuny does not reco:)nize a contmqent liability but discloses its existenc<' m tht>
fm11ncu1I statements.

q. Ca:<.h and cash equivalents


C~st1 and cash equivalents !or the pu<;>OS!.'S or ca~h 11Dw statemo:>nt co1npris(' cash <it banf. and in hand and short-te1rn iiwestrTwnts with ao or1gon.i1
maturity of three months or less.

r. Measurement of EBITDA
/lo; per milted Oy the G1.11c:rance Nott• on I/le flev1sed ScheOule VI io the Comp,1n1P.s Act. 1956, \he Company has elected to p1 ese11t e,1rnmq~ t!elor"
rnH:re.st. til~. depu:thl\1on ana ,lmcrt1~at1cn (U317DA) as a sepMate hne item on !he race 01 the statement of µrefit <1nd loss. The Company measures
EBITDA on the basis of profit/ {loss) from contmuing opt>rn!ions. In its nH?<lsua•ment, lfw Company 1:0e$ no1 '1\(llHle 1:eprec1a\1on a11d omort1zat1on
l'~p(!l1~(>. !:nan<:e co~ts and l<J~ <;Xp(>ll>(!.
AMETEK Instruments India Private Limited
Notes to financial statements for the year ended 31March2012

3 Share capita!

Authorized shares
<i0,000 (?011: '10,000) r>quity sh,Jres of l~s. 10 each ':°>00,000 500,00Q

Issued, subscribed and fully paid-up shares


10.372 (2011: 10,372-) r:qinty shares o1 Rs. 10 e,:ch 103, 7 20 103.720

Total issued, subscribed and ful!y paid·up share capital 103J20 103,720

(a) Reconciliation of the shares outstanding at the beginning and at the end of the reportinq period
Elluity Shares

Al the lle9mrnnq of \lw µ\.'! ioi.J

Outstanding at the end of the period 10,372 1Q3,720 10,372

(b) Terms/ rights attached to equity shares


The Company has only one class of equity sha1es hilvinq a par value o! R~ 10 per ~hare. Each !lolder o! equity shares is entitled to one vote per
shar1:. The Company declares and pay dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to !hp approval of the
shart>holders in ensuing Annual Genera! Meelmq.
In event of liquidation of the Company. the holders of equity shares would be entitled to recC'ive remaining assets of the Company. The distribution
will be in proportion to the number of l:'Quity shares held by the shareholders.

(c) Shares held by holding/ ultimate holdinq company and/ or their subsidiaries/ associates
Out of equity shares issued by the Company, shares held by its holdtnQ company, ultimate holding company and their subsidiaries/
<15sociatcs are os below:
31 March 2012 31 March 2011
Rs. Re•_·_ __
Amet!!k Sinqapore PTE Limited, the hold!nq company
10.371 (2011: 10.3/l) equity shares of Hs 10 each 103.llO 103, 710

(cl) Detnlls of shareholders holdlnq more than 5% shares in the Company

31 March 2012 31 March 2011


% holding in the
--~?::_______ ----~--~9Jdin9 in the das~ No. class
Equity shares of Rs 10 each fully paid

Ametek Sirn)<1pore P1E L•mited, the hold1nq company ---~'~0~,3~7~1_ _ _ _ _ _ _9_9_.9_9_%_ _ _ _~1~0~·~3_7.=1_ _ _ _ 99.99%

As per n;>cords of the Company, including its re9ister of shareholders/ members and other declarat1ons received from shareholders reQarding
bel\eficial interest, the above shareholclinQ represents both leqal umJ beneficial ownership of shares.

4 Reserves and surplus


31 March 2012 31 March 2011
R•. R•.
Securities premium account
flalance as per the last linancial statements 93,224.578 93,224,578

ClosinQ Balance -~9~3"'"'22=-4'-''-=5.=7.=8_ _93,224, 57 8

Surplus/ (deficit) in th~ statement of profit and loss


Balance as per last financial st.Jtements {47,823,523) (37,663,120)
Profit/ (loss) for the year {13,319,897} (10,160,403)

Net surplus/ (deficit) in the statement of profit and loss (61,143,420) (4?,82_3,523)

Total reserves and surplus


AMETEK Instruments India Private Limited
Notes to financial staterr1ents for the year ended 31 March 2012

5 LonQ·term borrowinqs
Non· current portion-c==-~=~~Ccuc'c"c"c'cm=•ct"c'c;tc;~"'-~--
31 March 2012 31 March 2011 31 March 2012 31 March 2011
Rs. Rs.
Term loans
!nd1an rupee term loan from banks (u11secured) 24.000.000 47,000.000 23,000.000 23,000,000

24,000,000 47,000,000 23,000,Q,90 23,ooo,ggo


The above amount includes
SetlHed bo1row•ngs
Unsecured borrowin9s 24.000,000 47,000,000 23,000,000 23,000,000
Amount disclosed under the head "ottwr currt.'nt liabil1t1es"
<note 8) (23,000.000) (23.000,000)
Net amount 24,000,000 47,000,000
~ '°""'"-"'-~--=-·-""o·

.. Indian rupee loan from bm1k of Rs 23.000.000 carries interest~ 9% p.a. and is repayable in St'PIC<ml)(~r 2012. lndian rupee loi.ln from bank of Rs
24,000,000 cairit'S 1nk1e::.l@ 9.~)~{ p.<l. irnd 1s ieoayable Hl Seµternber 2013. The loans oie unsecured.

6 Provisions
Lon9-term Short·terrn
31 March 2012 31 March 2011 31 March 2012 31 March 2011
R>. Rs.
- -Rs.
------------- Rs.
Provision for employee benefits
Provis.ion for qr.;ituity (note 24) 6,410,270 2,500,307
Provision for leave llt>nef1ts 7,348,750 3,360,940
6,410,270 2,500,307 7,348,750 _3,360,940
Other provision
Provision for taxation (net) 9,403,018 2,222,506

9,403,018 2,222,506
6,410,270 2,500,307 16,751,768 5,583,446

7 Short-term borrowinQS
31 March 2012 31 March 2011
Rs. Rs.

RevolvinQ credit facility (unsecured) 72.200,000 55,000,000


72,200,000 55,000,000
The above amount Includes
Secured borrowings
Unsecured borrowincg, 72,200,000 55,000,000

The revolvim;i credit facility is unsecur<,>d and carries interest (ill 9% to 12% p.a.

8 Other current liabilities


31 March 2012 31 March 2011
R>. R>.
Trade payables (refer note 30 lor details o! dues to micro and small entt•rprises) 30,789.350 38,919,426

Oth~r liabilitles
Current maturities of lonq-term borrowings (note 5) 23,000,000 23,000,000
Unearned revenut> on AMC services 12,618,873 11,363,159
Advance from customers 3,604.690
Deferred rent 2,043,384 364,546
VAT poyab!e 336,188 313,896
Service tax payab!<> 835,504
TDS Payable 3,970,653 2,558,81:-
Professional tax payable 96,933 59,501
Provident rund dues p.:iyable 1,689,080 951,923
Others 2,482.489 815,162
80,631,640 79,181,992
AMETEK Instruments India Private Lirnited
Notes to financial st.::itenH~nts foi \tie year ended 3J Mi::lrch 2012

··-··-·-· -~··---------------------------"-·- ·-----·


Furnilurn & Tools &
Total
Cost or va!v<1ti1.>n
At 1 April i'OlO 4.767,ifM [1,,)')0,016 ?.,65'.>,1·18 'J,';J9,70'i •l.044,'120 2,359,84} 33,696,616
Allth!IOllS 3,808.014 ),),447,)41 ?.421.680 6,45"1,043 8,880.691 35,006, 769
D1~po>,1I~ (20,COO) (; 5.000) (35.000)

At 31March2011 8,567,198 27.797,35'! 5.056,828 5,519.105 10,<186,763 11,240,534 68,668,385


ACl01t1ons 1,.'.11,0'.>C! 2,8il2.66:' 9,088,148 2,559,612 1'.;,747,472
DlSDO.'u'll~ 1,<155,138 1.455,138

At 31 March 2012 9.184.248 l0,680,019 13,800, 146 82,960,719

Depreciation
Al 1 Aprd ;;010 817.92-2 t:.407.39-( 581.015 l,62'1.344 939,859 558,959 6,932,496
Ch<'lf\J<' for thl' 'fl'M 1.438.875 2.851.051 l,839.718 2,111,0T/ 2.514,591 U.039.664
D1~µv~.i;~

At 31 March 2011 2,256,797 5,258,448 064,567 3,467 ,062 3,051,736 3,073,550 17,9'{2,161
Criar9\> tor !lw yt>ar 2.129.l·H 5,00'.i,4'.)1 410,378 1.611,1-10 S,OJJ.511 <1,106.191 J8.3'_)';.,8S4
D1spo~dl~ (l,138,539) (1,l'.>8,539)

At 31 Marc.h 2012 .4.385,938 10,263,905 1,334,945 3,939,6.?3 B,085,253 7' 11?..•.!.~ l 35,169,475

NE>t Block
-······---·-===-~=~-=~~-~=-=----c~c
At 31 March 2011 =6".'o'ooc.•coc1C---C'c'c·'7.'cac.090009--~·c·'c9c2c.2c'c'~-"'"''c'sc2c.c'o•o'--ccc''c•o'csc.oc2c7c--~•c·o''=6,984 __~soo·c•c'c'c·'c'c'c.
At 31 March 2012 .~'-~-~_0_,_3_1~. ·-~·<?.'.~16,114 3,721,603 124,874 ll'...~-~_2,658 {>~_620.405 47,Tfl,244

10 lntanqib!I! assets

--'-'-"·"·'·'-'----"-'-'-'-"-"-'----------------------------cT.ota!
Gross block
At 1 /,pril 2011 1,487,177 123,869,749 125,356,926
Atlclitlon~ 1,455,101 1,455.101

At 31March2011 2,942,278 123,869,749 126.812,027


Additions 8,260.044 8,260,044

At 31 Morch 2012 l LZ02,322 123.869,749 135,072,071...

Amortization
At l AprU 2010 124,206 49.568,339 49.692.545
Ct\arqe !or the year 6&0,6S2 30,96'/,437 31.628,089

At 31 March 2011 784,656 80,535,776 Sl,320.634


Criarqe for the yc-ur 2,751,43& 30,967,4YI 33. 7 l8.873

At 31 March 2012 111,503,213 11$,039,507


· -·· ~-· ·--·--c·o~--c-.o-o-cococccc-.~=---=---·- ---o'-"'-=··-""-·~~='

Net Block
····-····-···----------,,45,-,4c:9c-l,3cc9~3
At 31 March 2011 --~..2.?.?.!.~f_?___ ..'.12.'~.~-~. . ~.?.~ ----··--··-· -· -· ·----··
At 31 March 2012 ·r.666,02s 12,366,536 20,032,564

I
·"'
AMETEK Instruments India Private Limited
Notes to financial statements for the year ended 31 March 2012

11 Deterred tax assets (net)


31 March 2012 31 March 2011
Rs. Rs.

Deferred tax liabWty

Deferred tax asset


Fixed assets: Impact of dlffe1 PIK!' b('!ween tax d('p1ec1at10n d!l(l depreciation/
amortization charq!'d tor ttle financinl rL'portmq 2,412,280 1,175,999
Impact or expi:nditurc• chan}ed to the statement of pro!it and loss in the current year but
ill!owed fort.ax purposes on paynwnt basis 9,334,660 3,155,686
Provisions for doubtful debts and advilnces 1,142,112
---- - ------···----·~·-·-·-·-

Gross deferred tax asset 12, 8 8? ·?~~ -·- - -------~~-~-!~68 5-·

Net deferred ta" asset 4,331,685

12 Loans and advances


~~~~~~~
Non-current~~~~~~~~~~-
Current -
31March2012 31 March 2011 31 March 2012 31 March 2011
Rs. Rs.
Capltal advances
Uns~'curecJ, considered good 43"1,500 378,034
tA) --·-···----·------·-----------~--4~3"1---,s~o'--o~----'3---1"a",o",'--,'-

Security deposit
Unsecured, considered good 17,865,671 14,416,060 150,000 l,212,000
(B) 17,865,671 14,416,060 150,000 1,212,000

Loan and advances to related parties


Unsecured, considered good 2,340,485
<Cl 2,340.485

Advances recoverable in cash or kind


Unsecured considered 9ood 1.167,958 7,343,998 9,178,762

(D) 1,167,958 7,343,998 9,178,762

Other loans and advances


Prepaid expenses 3, 139,705 2,193,210
Advance to suppliers 3,463,221 893.596
loans to employees 450,000 485,424 35,424 64,516
Balances with statutory I government ilU\ horil1es ----"2~5~·'-"0-"0-"0-----~"-""-''-'---~c'-'-"="---~----
50,000 "184,109
(E) 475,000 535,424 7,422,459 3,151,382

16,119,442
-- 17,694,442 13,_9?0,178

Loans. and advances due by directors or other olficers, etc.

Non-current Current
ll-M;-cc-h~20_1_2 --3i~M-a_ro_h_2_0_1_1_~-3-l-March 2012=~3~1~M~,-,-,h~2~0~1~1-

Loans to employees include


Dues trom director -150,000 450,000

Loans and advances to related parties include


Dues from a company under sarne manaqernent 2,340,48$
AMETEK Instruments India Private Limited
Notes to financ!a! statements for the year ended 31 March 2012

13 Trade receivables and other assets


13.l Trade receivables
Non-current Current
31 March 2012 31 March 2011 31 March 2012 31March2011
Rs. Rs. Rs. Rs .
.. ··--·····-· ·----···-·---~ --··-··--· .. ·-····--·-·---~··--~-----···--·---

Unsecured, considered qood \rnless st,1ted otherwise


Outstandinq for a period ex<eedinq s•x months from the elate thev are
due lor payment
Unsecure(l, considered qootl l,913.283 225,984
Doubtful 3.520,147 796.354
5,433,430 1,022,338
P1ov1sion for doubtlul f<'"Ceiv.;ib!es (3. 520.14 7) (796,354)
(A) 1,913,283 225,984
Other receivables
Unsccur('d, considc>red good 53,783.467 35,558,349
Doubtful
35,5!".8,349
Provision for douotlu! receivables
(8) 53, 783,46 7 35,558,349
- · · · · . ···-------------~-~-
Total (A+B) 55,696,"150 35,784,333

13.2 Other assets


Non-currE-nt Current
31March2012 31 March 2011 31 March 2012 31 March 2011

"'· "'·
Unbilled revenue 23,27"1,321 55,894,055
Non· current bank balances (note 15) 1,750,000

14 Inventories (valued at lower of cost and net reallzable value)


31 March 2012 31 March 2011
Rs.
---- -Rs.
----
Traded goods (including stock in transit Rs 232,470 (2011: Rs Nil)} 26,762,"l28 9,273, 770

15 Cash and bank balances


Non-current Current
31 March 2012 31 March 2011 31 March 2012 31 March 2011

Cash and cash equivall.'nts "'· Rs.

Balances with banks:


On current account::. 7,957,308 1,828,225
Ca$h on hand 6.476 6,359

7,963, 784 1,834,584


Other bank balances
Margin money deposit 1,150,000

1,750,000

Amount disclo~ed under non-curr£>nt assets (note 13.2) (1,750,000)

7,963,?84 1,834,584
AMETEK !nstrun1ents India Private Limited
Notes to financial staten1enls for tt1e year en,jeci 31Marct12012

16 Revenue from operations


3l MMch 2012 31 M<irch 2011
Rs. R>
Hevei\ue from operations
M.;irketinq & Er:qm{'r;rmq SC'rvi<.:l'.'S 36U,032,935 207,466,787
Ar.nu<1I M<>inten;;ince Scivi(l'!: 5.->.332,271 42,292.62b
S,ll(' of tr,)QC'O qoo::~. l'i.1~6,4'i'.'i H,S,~0.094

258,299,507

17 Other income
31 March 2012 31 March 2011
Rs.
"'·
lntere~t inC()frH.' 011 6d11k deposit$ 29,009
Liab1l1bes no longer required wr•tten back 347,342 4,320.020

376,351

18 (Increase)/ decrease in inventories


31 March 2012 31March2011

Inventories at the end of the year


Rs.
"'·
Traded qoods 26.762J2!3 9,273, 170

Inventories at the beqinnmq of the year


Traded qoods

(17,488,958) (4,114,285)

19 Employee benefit expense


31 March 2012 31 March 2011

"'· "'
Salaries. waqes and bonus 182,077,244 98,274,661
Contribution lo providr:nt and other fund 8,610.424 4,438,891
Gratuity expense (note 24) 3.909,963 l,937,980
Staff welfare expens<:s 5,618,394 2,680,995

200,216,025 107 ,332,527

20 Other expenses
31 March 2012 31 March 2011

"'· "'·
Consumption of sic.res and spares 2,853,759 2.025.665
Power and fuel 4,690, 795 2,934,601
Freiqht and forwardinq charqes l.,686.846 2,157,837
Rent 22,039, 709 12, 906, 701
Rates and taxes -1.495, 759 1.350.860
Insurance 164,873 64,319
Repairs and maintenance:
Othe1s 5,045,827 2,743,675
Advert1s1nq i'lnd sales promotion 7.564,288 4,704,069
Travellinq and corweyancr 64.821,262 40,696,194
Cornmunic<.Jtion costs 8.361,197 S.Bl.4.603
Printing crnd ~t,~l,orwry 1.264,033 846,160
Leqal and professional fees 20,256,740 10.412,442
Sta!f Recruitment Charqes 5J37,899 3.425,764
Payment to auditor (Rl'.'ler clet<i.1~ below) 1,286,028 964,800
Provision tor bad dnd doubtful debts 2,723,793 807,960
Provision for slow rnovinq invt•nto1y 1.473,296
Exchange difference (net) 540,021 2,884,150
Loss on sale of fixei:1 <1ssets (net) 8,296
Securtly Charqe~ 973.060 253,525
Misce1ldneous expenses
"--~-'..QQ:~....!_~·~·- 801,2~;2

158, 5l9,367 97,267,B'T3


AMETEK Instruments India Private Li1nited
Notes to financial statcrnents for the year ended 31 March 2012

Payment to auditor
31 March 2012 31 March 2011

As audito1: "'· "'·


Audit fee 1.011.~·~0 772,100
!'<ix iJudit fef! 112.360 I 10,300

Hellr1bursem('~\ of expenses
1,286,028 964,800

21 Depreciation <H'ld amortiiation e:.:pense


31 March 2012 31 Mnrch 2011

"'· "'·
Dt<prec1atiori of tamiible ilsseb Hl,355,854 11, 700,314
Amortization of intangible assets }_3_,_L~.?~?J}___ ---..~~~-?..?.~~.?!._.
52,074,727 42,667,751

22 Finance costs
31 March 2012 31 March 2011
Rs. Rs.

Interest 12,980,450 7,882,901


Bank charqes 226,632 142,"166
13,207 ,082 8,025,667

~·,

;1
/
AMETEK Instruments India Private Limited
Notes to financial slalen1ents for tl)e year ended 31 March 2012
All <lmourt\) 111 l?1Jpi:.oes, ;;nle~s o\!ie: w:><' sidled

23 Earnlnqs per s.hore


31March2012 31 March 2011

Net Prof,t/Uoss) for calculMion ot [p~, (l:l, ll9,897) (10, 160,403)


Weightell aveiaqe nurntH•r of emiity s!1Jrl'S 1n caicui.i~1ng EPS 10,]7;> 10,372

24 Grutuity

Ttw Company na~ a defined benrfit qra!ut\y plan UndN this plan, evr?ry 02rnp;oyee w!10 h,1s (<)rnpiE\Ed aliEast five year> of
servK<> gets <1 c;1atu1ty <Jn departure,.,,, 15 a<iys last cir.awn sa!a1y !01·eac11 tompli?le(I vioM ot ;<J1v1ce. rr1e scnemo: :s
unfunded.

The following tables 5urr:m<ir17e me components of net benefit expense recoqn170:;d in the statement or profit and ioss and
,Jmo1111t~ 'l!CO\)llil.(•(! in !lw lh;lil!l(.10 ~IWPl

Statement of profit and loss

Net emptoyee benelit expenses recoqnized in employee cost


31 March 2012 31 Marth 2011,__

Cwn.>nt service co~\ 3,05'/,440 1,709,680


lnt"'rest cost on bt>ne!it otiliqa!ion 200,033 44,980
Expected return Di\ plan <1SSet
Net .:ictu<iri<il ([JJlfl)/ios~ reco<inil('d in nw yc•a1 183,]20

Net benefit expenses 3,909,963

Balance sheet

Benefit <l\s.set/ llabi!ltv


31 M.arch 2012 31 M11rch 2011

Present value of defined benefit obliQ.ltion 6.410,270 2,500,307

Chanqes In the present value ot the dellned benefit oblli;iotloJ\ ore iiS follows.:

0Pt'ning defi11ed benefit obliQa\1011 2,500,307 562,327


Current service cos! 3,057,440 1.709,680
Interest cost 200.033 44,980
Net or.tu.:1rial (qai11)/lo~s 652,490 183,320

C!os.lnq defined benefit obll9;:1tlon 6,410,270 2.500,307.

The principl\? ass11mptions used in d\?\errnining qratc.ity ot·ligations 0!'€ shc .... n bo:!ow.
-- __ }_!__~-"'-~~-~--~Q-~? --- } __1_.. ~ ..;!rEb.~~91 !__. __

Discount r<iti..' 8.6% 8.01'.


ExpecteU rate 01 return on assets NIA NIA
Salary Escalation rate 15,0'>i 15.0%
Employee turnover 10,0'>i 10.0%

The estimate of future salary Increases, considered in actuarial vdlu<ition, tak€ account of inflation. seniority, pron-wtio11 and
other r.:l;•v,11111<>c\m~. such as supply and d(•m<:!fld in the t•mployrnl'rl\ m.:irkl'1

Amounts for Ille current and previou~ four pe1 iotls ilre il!, follows.

Gratu!lv
Defined benefil obli!ption (6,<110,270) (2,500,307) (562,327)
Plan as~eh
Surplus/ (delicit) (6,410,270) (2,500,307)
ExperiP.nc e iH.!justrnvnt~ on pl.:rn li<t\lilit :cs (1,13J.980) (183.32())
f. Xll<.!I iencP. dtliu>lmer1\ s on pl..i11 ..i~;~l'( '>

25 Leases
Hie Compony has entered iflto operatinQ leases for offkt> µremises am1 vehicles. Thrse leases havr an averaqe liff! of
between three and !ive \fi:'illS.
tuture mlnlmum rentals payable under non-cancelliib!e operntinq leases are as follows:

___ )_1 _~_~rch 2012

Within Onr! \fl'dl l(),011,555 9,127,011


After onl' Vl'M out no: mer(.' thdn 11ve years 3 s. 0311~.'~'~6~--~'~s~.0~'~6~.4~9,,.,1_
_4_!_>,()~t;,,~-~-~- !.i..4,AIJ.,.59.?.
AMETEK Instruments India Private Limited
Notes to financial staternent':. for the y1.>or ended 31 Md1ch 2012.
All amocrnt> m Rupl'P<;, "";<:s> oUwrwt>e sta~f'(l

26 Seciment Report!nQ

Ttlf' Company'5 OIH.>r cJl •on' pr l'dom1a.i11l I y rel.ih.• to n1 ov tdiaQ rn,u ~l't ;f,<J ,)1H! mJint er.Jnce S~'r view, 1.ll'!1v('f ('cj to tu>t onwr 5 Qlob,Jlly .icros> the
qeogr<1pl'iP.s. The Company consioers all o! these services to be related to on€' se9ment and concl!Jde\ that it oper;ites In O">P. sinqle segment w1tri
1l's1n:ct to ih serv•t:l'~. Till' Co111pany is mcnaQNI c~ u1w entity anu is QOvernet11Jy s1miiar sels of iisr..s and rctwns. Accortiinqly, revenue~

rt>presentea alonq var101is 9eo9r.1phies lJa-;ed on U1l' !0cat1on of th~ custo1f'1?1 compri~e lhf' primary basis o! segmental inlorm<it•on ~('\ oot ;n
these Jii\dnu<!I st,:itr.'ments.

Geoqr.:iphicat seqments

Second.lry s~>qm(•ntill n•r;orunq 1~ pertorm~'G on \hi' lh1\IS ot tlw qeoqrapll•lJI i0cat1011 ot Cu$\mners. rne manaqement views tr-ic Indian mark1;t
M1d r:;.;por\ mark el~ as dist in ct geoqr ap111cal seqment ;:. Fo:lowmg i~ t lie distribution ol \tit< Company's ><lie tJy 9eo9r apl1ical rn<'lrkeb:

Revenues

80,76·1.lf>3
347,757,498

SeQment assets

sunarv debtors UnblHed revenue

:nd1a 16.2"(8.936 2,603,059


E;.;poit s .19Al 7.81,\ 20,674.262

55 696 750 23_..}..!. ?.l~.~-·~


All fix(o'd .:i~sels are situa\l'd in lnd;a.

27 Related party disc;losure!>

.~am~s of r<;lated parties and rcla1ed party re!at!onsh!p

Related padles where control ex!sts


Holdinq Company Ametek S1n9aporE> l'TE Limited
Ultimate Holdino Company Anwt~·k Ille, USA

Related parties with whom transactions have taken place durlnlJ the year
Kev ManaQemel'1t Personnel Hiren Desai. Manaq!no Director
M 5 Mascarenha~. Dir 1:ctor

Enterprises owned or significantly inf!uencea by f\ey manacJi"ment personnel UnlspE>c Marketing Private Umlted
Thelsa Ti;chnical Services Private limited

Fellow Subsidiaries Cr,ana!er lf\slrumt!'nls Co .. USA LLC


Ametek Canodo LP
Taylor Hobson Limited, UK
Ametek Aerospac<' & Defence Inc .. USA
Lana lnstrurnenb lnternation;il Limited, UK
Spectro Anaiytical Instruments GmbH, Germany
EMA Holdi">Q~ UK Lirrnted, UK
Sol<Jtron Metroloyy Lirnite(!, UK
ED/IX Irie. USA
Cam£>c~, Franc<'
An1elek Ted1niLal & Industrial Products lnc, USA
t,rnetek Prnces~ & Ana!ytical Instruments lnc.
Anwtt>k Solidstale Controls Inc., USA
Arnetek Airtechnolo(Jy Group Limited, UK
AmetPk Denmark A/S
Ametek Powei ln~trurnent5
Ameli>k Pro(jl"ilmm,1bcc Pow<>r Inc
td :a~ Mate! ial Te~I inq Te(lmoloqy (lnd,a) Pr111ate Lirn•ted
Aua~ M<1tH1a1 Te~tin() Technoloqy GmbH
Vision RL'>l'JJ ch Inc, USA
fleic!1e1t Inc. USA
Ametek Rotron Inc, USA
Anwtek HSA. USA
l'recitecti Inc, USA
A1r•etek Floo1 Sµ;;ciality Chemicals
Ametek Amer on Inc, USA
AmHeK AMT. USA

I
0
~1
'J
AMETEK Instruments India Private Limited
Notes to financial statements for the year ended 31 March 2012
.~n <HTIOurth m Rupees. unlt>~s o\h!'rwise s\Jted

!<elated party tran~ac.tions


rhe Tol1owin[j t,1bie r;rov1,1h thr• 101a ,irnm1n: o! llill~~iictmns \hilt t;ilvf' iH~( r. c-nt("Pr1 ,r.t0 w1t'1 ttw relntet1 partie<, tor me relevant fint•flCiil! year:

1------ Name ct the P11rty

r;..:~_;~; ~-i::-·;_1~~~-~;-_u~s·A_·;:u i'i i;;~~:; ~ f i_q o.ing SY.r!:P_e_'.IY}_


1

L3_1'.ld inst.~~~ternational Ud:i..UK .8.£ll.'.!ir Expenses 794,254


?2~.£.~alytKal Instruments Gmt>H. Germany Spares Purchase 6,228,602 3.766,848 j
Taylor Hobson Ltd .. cJ:J~~-~.-----·-·-·---~----~--- ~~r_~!-~I!~~.?.~- .........."~'.!_._5_9c4c·•'.3,c7c8-t-_ _ _9,, !8 l ,~.28 ·I
Alles Material Test~ectmology (India) Private L.imited S~_?.~="c"cho4o'o'-+--~1=3c,lc7_4",'''1'6+------··
Alta~ Material Testinn Techno!o9y_Gmb~:L ________________ ™-""--"---··--·---~=S,Pc'c"c'cpc"c'c'chc"c'~~----=6c4~6·.!~2.. -------~

~~~~-~'!'~-~!.!'.!.~:'!_'?..!:.~.1__ _
Hir~-"---·™ ...... --·---~~----------------·f"'=ernu1wr,1tion_naid,_\---~•c·8clc6",'67C.C2+--~6c·'c3c2c..=Scol~3-I
M S Mascarenha~-----·---- Remuneration a!d 6,187.643 6.528,632

Not(): Tile remuneia\ion to the key manaQerla! persoflncl does flOt include tile provisions m<1de for gratuity and leave bene!•t5. as they are
deti?rmined on ill\ actu,H,al Oasis tor the CCJmpany as a whole

(Tf11$ spi!Ce has Deen intent1or.a/ly f('f( Dlank)

;
AMETEK Instruments India Private Limited
Notes to financial staternenls for tt1e yea1 ended 31 Maf"c:h 2012
All ilrnounts in Rupees, unlESS othef\ViSe ~\Jtc>d
Ye<lr end boll<:rnces

"··-:~})~~::fg~l

---5,951.685-
--
3,096.254
493,576

----~

Enterprises ownt:d or siqnlficont!y influenced by key manaqement personnel


r - · · · - - - · - - - - - - - - - - · · · · · · · ·..
·~-·-- "·----------
·1vnispec Marketing Private Umitec1 lntere~! payabte 1,704,3981
Thelsa Technical SNvices Private Limited Interest Dilyob:e 598.714

Key Manaqement Personnel


••• ·~--··----------------' •m•--]~i~~~~~~~~~~~:=J:~·-~ 4so,ooo I 450.oo~J

(I h15 space> hiJ5 brc>n in/ention<illy left blank)

,,,.
AMETEK Instruments !ndia Private Liniited
Notes to financial statements for the year enCt>d 31 March 2012

28 C<.H1tinQ.,nt lidbil<ti1;s
}) ' _tA_~_r_c_ h__ _l_(}_ ~_ l __

29 Unhed<Jed lr1relqn currency eKpr1swe

Import trad1, payilb;<' {Euro)


f~~~~-;~~~-~~~-.~---~t:m::~-~~~-~:- . .ll.-~~~:~. ?.Q_~_?__ }_1_~-~~~?Q!_l~
, 16,6.?7 1·n.210 1.136.30-i a.29"1.698
Import trade p,w<1bte (G81'i II 39.2'10 :I 143,809 3.209.780 10,344,023
E>nrnt triltk reu·•v.-iblc (GBP) 5l.~i59 105.326 4,217.489 "f.5'/5,983
6
~~~~: l_ ---~-~~~;:~---~:~~~~-:-~-~~---~:-~~~:~~~I
b\)Ol"t :r,we rece1vao:r tlJ50l
Expon tradf' r<'n•1vao;f' (£u101 1..
30 Bas<'d on tho: 1niorrnat1on avilllaOlo: with the C0mpany, there arc no suppi1~,r~ ..,ho ::ire rcq:~tered ,1~ micro. small or rnedwm enterpri~es under "The Micro
Small and Mt>di\1m Entt>rprtses 0f.'veloprnent Act. 2006"' ~$ ~t MM ch )l, 2012 .:irul .:i~ .:it M;;1ch 31, 2011.

31 Value ot Imports c;ilculated on C!F b;isis


:.n March 2011

Compon(•n\:;. and spare ~Mrts ll.469.723 8.936.673


Ot'mo Equ<pments (Customs Dut;1 l",;ym.;nt} 907.155

32 f::xpenditure In forl!iQo currency (Accrual ba~i::.)

Tra.-ellinQ and corweyanu• 14.397.143 12,057.856

33 lmport'l(I <ind lndlqenous spare parts i:;onsu11>11d MMCh 31, <'012 March 31, 2011
\!, ot tot<il .,, ol total
Value
consumption consumptloo
511111~ l)dl l~
Imported 83',-> 6,166,375 83% 4.749,393
mdiQC'flOU~ m ---~'~·'"73,666_ 17'!; - -------··~ 980,2-._81!_
----~M~lc 5 730 300

Jtl f.arninQs in f111~IQn curr~ncy (Accru<1I basis)

14"/,7'i7,498 ?07.460,787

35 Tl,., ( '""IJ<'"Y 1,.,~ << '·'""~" .,r.,..,s,v.;- ~y ~t• ,-,-, (,f .,·,;,ju[(•,.;,.·,.·.;- ,.,f "·,1,-,,·,1·,;,t..:.10 ,;,-,;1 11,-,, ,,rr,,..,·,t ~ .H r,-.f1llirt>i1 hy !hr· tr irnsfH pricinq !t>qi~l11hon "''dt-r H·di.;,r1 92
99f 01 rhf' Income Tax Act. 1961. The Company n.i~ rellNl on lndcpc-ndently rese.irch\'(1 Trau~i(~r Prlcln(J Stu!Jy lo IJl!ll'l!!llnc \tldt the tn\l!f!hlllonal
transactrnns am at arm's lt>n(jth .'lnd henH• beiipves that tr,f' afor1>sa•O i<'Qi~:at1on wdl not have ll!W 1mp11ct on the fi111mcial statements. part1cul.uly on tnP
amount of ta• expense and that o1 provos1on for ta•ation.

36 The Company no lonQer qual!lie~ a~ d Small and Medium Company a~ detined m \he General Instructions in respect of fl.ccountinq St<rndard~ notified undN
the Cmnpames Act, 1956 s.nce the Company h,1d borrow1nqs 1n exce~s DI Rupee~ ter\ crnres ourm(J the •mmediately prec('dlnQ account •nQ year.
fl.ccordmqly, previous year fiqures have not be('n disclosed in ca~e of tilsh flow statenwnt and seqrnent repottinq

37 Pre-vlous vear llQVn~s


Till the ye>d! Pndf'd 31 Ma•cfl 2011. tt"' Com1i.1ny wil~ <1\m(J llff>·IPv:SPfl Sclw!lulP VI to trw CompamP~ Act. l9'i6, for preparation and prf'sf'ntation ol its
l1nanci.:i1 <;\a\l!ment~. D111inq th\' ye<;r <:-ndt>d 31 M111(tl 2012. ttw rev•sed Sctwdule VI notif•ed undN the Cornpar,ies Act 1956, has bec-omt• i!ppl1(at>le to
the Company. Th.: Company h.:is reclass1f1ed pre~lo1.;~ ye.:ir l!Qures to con!orrn to this year's classi!icaiion. The ii<loptwn o! rev1~ed Schedule VI ctoc.-s not
impact reco9nit1on and measurPml'nl prmuplPs followed lor prl'p11r<1t1on ol fmanc111I statements. However. ii s1qnificant1y impacts presentation and
d>sclosures made •n lhl' t.n,rnc1,1I sta!cmtnts. p;irt•culMly pres<-nt«t1nn cf balan(P. sheet.

S·V-~~
r~· 'i-.V Gh•tttl• •· AIH•c!•lu '~· ·'"~ '"' ''~"·''' ,,, .... h~~·~ "' ~"'"'"'' "'
F«m fkq,,lr~11on l~o: JO'Jlti.'W
ChMtNcd A~cou<">tdnts

I/
~ P" ;:, G~f\~MlhMHl
,:;
l!l:tnDH<ll
~''\
0fUCt'CCI~~
Partner M.in~Q""I Dir~c~or Oir<.'clor
M~mb¥,.t>ip No 221.ur.

P•~ct· 06nQ~lore f-'iH~: 6~1\Q~IOft" Ploc~. Lt'>Ct">lt"r, iJI-\

"''
0
• Ju~ y 271 1012 D.lt<'' Juiy J(,, 20l.? Dat .. ·.July J(,. 2012
FORM 23AC
[See section 220 of the Companies Act,
Form for filing balance sheet and other documents
with the Registrar

1956 and Rule 7B]

Note -
- All fields marked in * are to be mandatorily filled.
- Figures appearing in the eForm should be entered in Absolute Rupees only. Figures should not be
rounded off in any other unit like hundreds, thousands, lakhs, millions or crores.

Authorised capital of the company as on the date of filing (in Rs. `) 500,000.00

Number of members of the company as on the date of filing


0
Part A
I. General information of the company

1.(a) *Corporate identity number (CIN) of company U29200KA2008PTC047509 Pre-fill

(b) Global location number (GLN) of company

2.(a) Name of the company AMETEK INSTRUMENTS INDIA PRIVATE LIMITED

(b) Address of the Ist Floor, Left Wing, Prestige Featherlite Tech
registered office Park, Plot # 148 EPIP II Phase, Whitefield
of the company Bangalore
Karnataka
INDIA
560066

(c) *e-mail ID of the company manoj.ladi@ametek.com

3.(a) * Financial year to which balance sheet relates

From 01/04/2012 (DD/MM/YYYY) To 31/03/2013 (DD/MM/YYYY)

(b) *Date of Board of directors' meeting in which balance sheet was approved 06/06/2013 (DD/MM/YYYY)

(c) Details of director(s), Managing Director, manager, secretary of the company who have signed the balance sheet
Following details are to be entered only in case date of balance sheet is on or after 1st July'2007
Provide Director identification number (DIN) in case of director, Managing Director and Income-tax permanent account
number (Income-tax PAN) in case of manager, secretary

(I) DIN or Income-tax PAN 02602238 Pre-fill Designation Managing director


Name Hirenkumar Vinodchandra Desai

(DD/MM/YYYY)
Date of signing of balance sheet 06/06/2013

(II) DIN or Income-tax PAN 02505008 Pre-fill Designation Director


Name David Bruce Coley

Date of signing of balance sheet 06/06/2013 (DD/MM/YYYY)

(III) DIN or Income-tax PAN Pre-fill Designation


Name

Date of signing of balance sheet (DD/MM/YYYY)

(IV) DIN or Income-tax PAN Pre-fill Designation


Name

Date of signing of balance sheet (DD/MM/YYYY)

Page 1 of 11
(V) DIN or Income-tax PAN Pre-fill Designation
Name

Date of signing of balance sheet (DD/MM/YYYY)

4.(a) *Date of Board of directors' meeting in which Board's report referred (DD/MM/YYYY)
06/06/2013
to under section 217 was approved

(b) Details of director(s), Managing Director who have signed the Board's report

Following details are to be entered only in case date of Board of directors' meeting is on or after 1st July'2007

(I) DIN 02602238 Pre-fill Designation Managing director


Name Hirenkumar Vinodchandra Desai

Date of signing of Board's report 06/06/2013 (DD/MM/YYYY)

(II) DIN 02505008 Pre-fill Designation Director


Name David Bruce Coley

Date of signing of Board's report 06/06/2013 (DD/MM/YYYY)

(III) DIN Pre-fill Designation


Name

Date of signing of Board's report (DD/MM/YYYY)

5. *Date of signing of reports on the balance sheet by the auditors 06/06/2013 (DD/MM/YYYY)

6.(a) *Whether annual general meeting (AGM) held Yes No

(b) If yes, date of AGM 16/07/2013 (DD/MM/YYYY)

(c) *Due date of AGM 30/09/2013 (DD/MM/YYYY)

(d) Date of AGM in which accounts are adopted by shareholders 16/07/2013 (DD/MM/YYYY)

(e) *Whether any extension for financial year or AGM granted Yes No

(f) If yes, due date of AGM after grant of extension (DD/MM/YYYY)

7. Service request number (SRN) of Form 66


8.(a) *Whether the company is a subsidiary company as defined under section 4 Yes No

(b) CIN of the holding company, if applicable Pre-Fill

(c) Name of the holding company Ametek Singapore Private Limited

(d) Section under which the company has become a subsidiary Section 4(1)(b)

9.(a) *Whether the company has a subsidiary company as defined under section 4 Yes No

Page 2 of 11
(b) If Yes, then indicate number of subsidiary company(s)

CIN of subsidiary company


Name of the subsidiary
company

Section under which the company has become a subsidiary

Whether particulars of subsidiary company has been attached in pursuance of Section 212(1) of the
Companies Act, 1956 Yes No Not Applicable

If yes, period of annual accounts From (DD/MM/YYYY) To (DD/MM/YYYY)

Pre-fill all

Page 3 of 11
10. *Number of auditors 1
(I) (a) *Category of auditor Individual Auditor's firm

(b) *Income-tax PAN of auditor or auditor's firm AACFS6921Q

(c) *Name of the auditor or auditor's firm S.V.Ghatalia & Associates LLP

(d) *Membership number of auditor or auditor's firm's registration number 103162W


(e) *Address of the auditor
or auditor's firm Line I 2th, 13th Floor, UB City, Canberra Block

Line II 24, Vittal Mallya Road

*City Bangalore *State Karnataka-KA

Country INDIA *Pin code 560001


(f) Details of the member representing the above firm
Name T.S.Gangadharan

Membership number 22835 (g) *SRN of Form 23B S21027594

(II) (a) *Category of auditor Individual Auditor's firm


(b) *Income-tax PAN of auditor or auditor's firm

(c) *Name of the auditor or auditor's firm

(d) * Membership number of auditor or auditor's firm's registration number


(e) *Address of the auditor
or auditor's firm Line I

Line II

*City *State

Country *Pin code

(f) Details of the member representing the above firm


Name

Membership number (g) *SRN of Form 23B


11.(a) In case of a government company, whether Comptroller and Auditor-General of India (CAG of India) has commented
upon or supplemented the audit report under section 619(4) of the Companies Act, 1956 Yes No
(b) Provide details of comment(s) or supplement(s) received from CAG of India

(c) Director's reply(s) on comments received from CAG of India

(d) Whether CAG of India has conducted supplementary or test audit under section 619(3)(b) Yes No

12. (a)*Whether schedule VI of the Companies Act, 1956 is applicable Yes No


(b)*Type of Industry Commercial and Industrial (C&I) Comp
Note: In case the type of industry is other than Banking or Power or Insurance or NBFC,then select Commercial
and Industrial (C&I).

Page 4 of 11
I. BALANCE SHEET ((As per Schedule VI to the Companies Act, 1956 applicable for the financial
Part -B year commencing on or after 1.4.2011)
Figures as at the end of Figures as at the end of
(Current reporting period) (Previous reporting period)
(in Rs. `) (in Rs. `)
Particulars 31/03/2013 (DD/MM/YYYY) 31/03/2012 (DD/MM/YYYY)
I. EQUITY AND LIABILITIES
(1) Shareholders' funds

(a) Share capital 103,720.00 103,720.00


(b) Reserves and surplus 72,349,420.00 32,081,158.00
(c) Money received against share warrants 0.00 0.00
(2) Share application money 0.00 0.00
pending allotment
(3) Non-current liabilities
(a) Long-term borrowings 17,000,000.00 24,000,000.00

(b) Deferred tax liabilities (net) 0.00 0.00


(c) Other long term liabilities 0.00 0.00
(d) Long term provisions 22,315,960.00 13,628,568.00

(4) Current liabilities


(a) Short-term borrowings 62,200,000.00 72,200,000.00

(b) Trade payables 30,571,280.00 30,968,726.00

(c) Other current liabilities 58,103,282.00 49,662,914.00


(d) Short -term provisions 6,464,053.00 9,533,470.00

TOTAL 269,107,715.00 232,178,556.00

II. ASSETS
(1) Non-current assets

(a) Fixed assets


(i) Tangible assets 56,099,237.00 47,771,244.00
(ii) Intangible assets 7,629,390.00 20,032,564.00

(iii) Capital work-in-progress 0.00 0.00


(iv) Intangible assets under development 0.00 0.00

(b) Non-current Investments 0.00 0.00


(c) Deferred tax assets (net) 16,871,864.00 12,889,052.00
(d) Long-term loans and advances 20,712,407.00 18,746,446.00
(e) Other non-current assets 1,211,135.00 1,750,000.00

(2) Current assets


(a) Current investments 0.00 0.00
(b) Inventories 43,478,387.00 26,762,728.00

(c) Trade receivables 60,226,254.00 55,696,750.00

(d) Cash and cash equivalents 27,658,215.00 7,963,784.00

(e) Short-term loans and advances 10,480,451.00 17,262,559.00

(f) Other current assets 24,740,375.00 23,303,429.00

TOTAL 269,107,715.00 232,178,556.00

Page 5 of 11
Part B I. BALANCE SHEET (Applicable for financial year commencing before 01.04.2011)
Figures as at the end of Figures for the period
(Current financial year) (Previous financial year)
Particulars (in Rs. `) (in Rs. `)

(DD/MM/YYYY) (DD/MM/YYYY)

Sources of funds

Paid-up capital

Share application money


(pending allotment)
Reserves and surplus

Secured loans

Unsecured loans

Deferred tax liabilities (Net)


Others (Please specify)

TOTAL 0.00 0.00

Application of funds

Gross fixed assets (including


intangible assets)

Less: depreciation and


amortization
Net fixed assets 0.00

Capital work-in-progress

Investments

Deferred tax assets (Net)

Current assets, loans and


advances
(a) Inventories

(b) Sundry debtors

(c) Cash and bank balances

(d) Other current assets

(e) Loans and advances


Less: Current liabilities and
provisions
(a) Liabilities

(b) Provisions

Net current assets 0.00 0.00


Miscellaneous expenditure to the
extent not written off or adjusted
Profit and loss account

Others (Please specify)

TOTAL 0.00 0.00

Page 6 of 11
II. Detailed Balance sheet items (Amount in Rs. `) as on balance sheet date (Applicable in case of Revised
Schedule VI- that is for financial year commencing on or after 01.04.2011)

A. Details of long term borrowings (unsecured)

Particulars Current reporting period Previous reporting period

Bonds/ debentures 0.00 0.00

Term Loans
- From banks 0.00 24,000,000.00
- From other parties 0.00 0.00
Deferred payment liabilities 0.00 0.00

Deposits 0.00 0.00


Loans and advances from related parties 17,000,000.00 0.00
Long term maturities of finance lease
0.00 0.00
obligations
Other loans & advances 0.00 0.00
Total long term borrowings (unsecured) 17,000,000.00 24,000,000.00
Out of above total, aggregate amount
guaranteed by directors 0.00 0.00

B. Details of short term borrowings (unsecured)

Particulars Current reporting period Previous reporting period

Loans repayable on demand

- From banks 62,200,000.00 72,200,000.00

- From other parties 0.00 0.00

Loans and advances from related parties 0.00 0.00

Deposits 0.00 0.00

Other loans and advances 0.00 0.00


Total short term borrowings (unsecured) 62,200,000.00 72,200,000.00
Out of above total, aggregate amount
0.00 0.00
guaranteed by directors

C. Details of long term loans and advances (unsecured, considered good)

Particulars Current reporting period Previous reporting period

Capital advances 0.00 437,500.00

Security deposits 15,936,006.00 15,180,300.00

Loans and advances to other related parties 0.00 2,340,485.00

Other loans and advances 0.00 0.00


Total long term loan and advances 15,936,006.00 17,958,285.00

Less: Provision/ allowance for bad and


doubtful loans and advances
- From related parties 0.00 0.00
- From others 0.00 0.00
Net long term loan and advances
(unsecured, considered good) 15,936,006.00 17,958,285.00

Loans and advances due by directors/ other


officers of the company (refer note 6.L.(iv) 450,000.00 450,000.00
of Schedule VI)

Page 7 of 11
D. Details of long term loans and advances (doubtful)

Particulars Current reporting period Previous reporting period


Capital advances 0.00 0.00
Security deposits 0.00 0.00
Loans and advances to related parties 0.00 0.00
Other loans and advances 0.00 0.00
Total long term loan and advances 0.00 0.00
Less: Provision/ allowance for bad and
doubtful loans and advances
- From related parties 0.00 0.00
- From others 0.00 0.00

Net long term loan and advances (doubtful) 0.00 0.00

Loans and advances due by directors/ other


officers of the company (refer note 6.L.(iv) 0.00 0.00
of Schedule VI)
E. Details of trade receivables
Current reporting period Previous reporting period
Particulars
Exceeding six months Within six months Exceeding six months Within six months
Secured, considered good 0.00 0.00 0.00 0.00
Unsecured, considered good 1,559,857.00 58,666,397.00 1,913,283.00 53,783,467.00
Doubtful 4,328,578.00 0.00 3,512,047.00 0.00

Total trade receivables 5,888,435.00 58,666,397.00 5,425,330.00 53,783,467.00


Less: Provision/ allowance for bad and 4,328,578.00 0.00 3,512,047.00 0.00
doubtful debts
Net trade receivables 58,666,397.00 1,913,283.00
1,559,857.00 53,783,467.00

Debt due by directors/ others officers of


the company (refer note 6.m.iii.iii of 0.00 0.00 0.00 0.00
Schedule VI)

III. Financial parameters - Balance sheet items (Amount in Rs. `) as on balance sheet date (unless specified otherwise)
1. *Amount of issue allotted for contracts without payment received in cash during reporting period 0.00

2. *Share application money given 0.00

3. *Share application money given during the reporting period 0.00


4. *Share application money received during the reporting period 0.00

5. *Paid-up capital held by foreign company 103,710.00 99.99 percent

6. *Paid-up capital held by foreign holding company and/ or through its subsidiaries 0.00 0.00 percent

7. *Number of shares bought back during the reporting period 0.00

8. *Deposits accepted or renewed during the reporting period 0.00


9. *Deposits matured and claimed but not paid during reporting period 0.00

10. *Deposits matured and claimed, but not paid 0.00

11. *Deposits matured, but not claimed 0.00

12. *Unclaimed matured debentures 0.00

13. *Debentures claimed but not paid 0.00

14. *Interest on deposits accrued and due but not paid 0.00

15. *Unpaid dividend 0.00

16. *Investment in subsidiary companies 0.00


17. *Investment in government companies 0.00
18. *Capital reserve 0.00

19. *Amount due for transfer to Investor Education and Protection Fund (IEPF) 0.00
20. *Inter- corporate deposits 0.00
Page 8 of 11
21. *Gross value of transaction as per AS-18 (if applicable) 565,637,405.00

22. *Capital subsidies or grants received from government authority(s) 0.00

23. *Calls unpaid by directors 0.00

24. *Calls unpaid by others 0.00


25. *Forfeited shares (amount originally paid-up) 0.00
26. *Forfeited shares reissued 0.00
27. *Borrowing from foreign institutional agencies 0.00
28. *Borrowing from foreign companies 0.00
29. *Inter-corporate borrowings - secured 0.00
30. *Inter-corporate borrowings - unsecured 17,000,000.00
31. *Commercial Paper 0.00
32. *Conversion of warrants into equity shares during the reporting period 0.00
33. *Conversion of warrants into preference shares during the reporting period 0.00
34. *Conversion of warrants into debentures during the reporting period 0.00
35. *Warrants issued during the reporting period (In foreign currency) 0.00

36. *Warrants issued during the reporting period (In Rs. `) 0.00

37. *Default in payment of short term borrowings and interest thereon 0.00
38. *Default in payment of long term borrowings and interest thereon 0.00
39. *Whether any operating lease has been converted to financial lease or vice-a-versa Yes No
Provide details of such conversions

40. Net Worth of the company 72,453,140.00


41. Number of shareholders to whom shares allotted under private placement
during the reporting period
42. *Secured Loan 0.00

43. *Gross fixed assets (including intangible assets) 247,217,746.00

44. *Depreciation and amortization 183,489,119.00

45. *Miscellaneous expenditure to the extent not written off or adjusted 0.00
IV. Share capital raised during the reporting period (Amount in Rs. `)
Equity shares Preference shares Total

(a) Public issue 0.00 0.00 0.00


(b) Bonus issue 0.00 0.00 0.00
(c) Rights issue 0.00 0.00 0.00

(d) Private placement arising out of conversion of


0.00 0.00 0.00
debentures/ preference shares
(e) Other private placement 0.00 0.00 0.00
(f) Preferential allotment arising out of conversion of
0.00 0.00 0.00
debentures/ preference shares
(g) Other preferential allotment 0.00 0.00 0.00
(h) Employee Stock Option Plan (ESOP) 0.00 0.00 0.00
(i) Other 0.00 0.00 0.00
(j) Total amount of share capital raised during the 0.00 0.00 0.00
reporting period
Page 9 of 11
V. Details of qualification(s), reservation(s) or adverse remark(s) made by auditors

1. *Whether auditors' report has been qualified or has any reservations or contains adverse remarks Yes No

2(a) Auditor's qualification(s), reservation(s) or adverse remark(s) in the auditors' report


Change in method of inventory valuation and inability to ascertain impact of such change on financial statements
Non-availability of details of individual fixed assets acquired from companies, delay in deposit of taxes, internal
control in respect of sale of goods & services, purchase & sale of fixed assets and physical verification of inventory,

(b) Director's comments on qualification(s), reservation(s) or adverse remark(s) of the auditors as per Board's report
Change in method of inventory valuation was done to provide more accurate value and in accordance with holding
company policy. Details of individual assets not provided by selling companies. Appropriate steps are being taken to
ensure timely deposit of taxes. Policies & System control procedures are being implemented to strengthen internal
control with respect to sale of goods & services, purchase & sale of fixed assets.

VI. Details w.r.t Companies (Auditor's Report) Order, 2003 (CARO)


Yes No
1. Whether Companies (Auditor's Report) Order, 2003 (CARO) applicable

2. Auditor's comment on the items specified under Companies (Auditor's Report) Order, 2003 (CARO)

Particulars Auditor's comments on the report

Fixed assets Unfavourable Remark

Inventories Unfavourable Remark

Loans given or taken by the company Favourable Remark

Section 301 Disclaimer Remark

Acceptance of Public Deposits Clause not applicable


Maintenance of Cost records Clause not applicable

Statutory dues
Unfavourable Remark

End use of borrowed funds Favourable Remark

Special statute - chit fund companies Clause not applicable


Nidhi/ mutual benefit fund - special aspects Clause not applicable
Financing companies - special aspects
Clause not applicable
Term loans Favourable Remark

Preferential allotments Clause not applicable

Disclosure of end use of funds Clause not applicable

Others Clause not applicable

Page 10 of 11
VII. Details related to cost audit of principal products or activity groups under cost audit
1. *Whether maintenance of cost records by the company has been mandated under any Cost
Yes No
Accounting Records Rules notified under section 209(1)(d) of the Companies Act,1956
2. *Whether audit of cost records of the company has been mandated by Central Government
Yes No
under section the 233B of the Companies Act, 1956
3. If yes, names of the product or activity groups under cost audit

Attachments

1. *Copy of balance sheet duly authenticated as per section 215 Attach List of attachments
(including Board's report, auditors' report and other documents) DR-AR-BS- 2013.pdf
(in pdf converted format)

2. Statement of subsidiaries as per section 212 Attach

3. Statement of the fact and reasons for not adopting balance sheet in Attach
the annual general meeting (AGM)

4. Statement of the fact and reasons for not holding the AGM Attach

5. Approval letter for extension of financial year or AGM Attach

6. Supplementary or test audit report under section 619(3)(b) Attach

7. Optional attachment(s) - if any Attach

Verification Remove attachment

I confirm that all the particulars mentioned above are as per the attached balance sheet and other related documents,
all of which are duly signed and authenticated as required under the Companies Act, 1956.
To the best of my knowledge and belief, the information given in the form and its attachments is correct and complete.

I have been authorised by the Board of directors’ resolution number * 1 dated * 06/06/2013 (DD/MM/YYYY)
to sign and submit this form.

To be digitally signed by Digitally signed by MURALIDHARAN


S MASCARENHAS

Managing Director or director or manager or secretary of the company


DN: c=IN, o=Personal,
postalCode=400069,
MURALIDHARAN S st=MAHARASHTRA,
serialNumber=0e28b665e0bac0b80
MASCARENHAS ed74b7d7371de937d2b5e19f8021b
3f8ffe8c8f1eb4c41e,
cn=MURALIDHARAN S
MASCARENHAS
Date: 2013.08.12 13:58:55 +05'30'

*Designation Director
*DIN of the director or Managing Director; or
Income-tax PAN of the manager; or 00219430
Membership number, if applicable or income-tax PAN of the secretary
(secretary of a company who is not a member of ICSI, may quote his/ her income-tax PAN)
Certificate
It is hereby certified that I have verified the above particulars (including attachment(s)) from the records of

AMETEK INSTRUMENTS INDIA PRIVATE LIMITED

and found them to be true and correct. I further certify that all required attachment(s) have been completely
attached to this form.

Chartered accountant (in whole-time practice) or Cost accountant (in whole-time practice) or
Company secretary (in whole-time practice)
Digitally signed by KRISHNAN
GOVINDAN
DN: c=IN, o=Personal,
KRISHNAN postalCode=400080,
st=Maharashtra,
serialNumber=f41a7050d6ce0a296b
GOVINDAN 10fd14f768d087be56e266e0636bc8
1b2e98ff351b7324, cn=KRISHNAN
GOVINDAN
Date: 2013.08.12 17:33:05 +05'30'

*Whether associate or fellow Associate Fellow

*Membership number or certificate of practice number 21193

Modify Check Form Prescrutiny Submit

This eForm has been taken on file maintained by the registrar of companies through electronic mode and on
the basis of statement of correctness given by the filing company

Page 11 of 11
9/11/2014 https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=244089210000&CHK1=J&kvknummer=244089210000&product=Bedrijfspr…

Company profile - Ametek International CV (24408921)


Chamber of Commerce, September 11, 2014 - 23:41

Excerpt
Chamber of Commerce
number 24408921

Grouping
RSIN 817568256
Legal Limited Partnership
Name Ametek International CV
Established 22-12-2006
Duration Indefinite
Number of limited partners 1
Partnership capital

Company
Trade Ametek International CV
Start Date Company 22-12-2006
Activities SIC code: 70102 - Holdings (not financial)
Employment 0

Establishment
Establishment Number 000016021371
Trade Ametek International CV
Visiting address Galen 40, 3941VD Doorn
Phone 0343476812
Fax number 0343476609
Email andante@andantetrust.nl
Date of establishment 22-12-2006
Activities SIC code: 70102 - Holdings (not financial)
Holding, financing and management of other enterprises and companies
Employment 0

Partner
Name Chandler Instruments Company LLC
Visiting address 2001 North Indianwood Ave Tulsa, Oklahoma 74012, United States of America
Registered in Secretary of State
Texas, United States of America
under number 702198922
Date of appointment 22-12-2006
Jurisdiction Unlimited jurisdiction

Data are made on 11-09-2014 at 23:41 PM.

https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=244089210000&CHK1=J&kvknummer=244089210000&product=Bedrijfsprofiel 1/2
9/11/2014 https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=244089210000&CHK1=J&kvknummer=244089210000&product=Bedrijfspr…

History
30 24408921 Ametek International CV tel: 0343 476812
Galen Laan 40 3941VD Doorn

Old statutory names as set since 01-10-1993

*** No history for this section ***

Old trade as laid since 01-10-1993

*** No history for this section ***

Old branch addresses as recorded since 01-10-1993


Address Lucerne Clover 17 3069DS Rotterdam
Date of entry *** Unknown ***
Address Schiekade 830, 3032AL Rotterdam
Date of entry 01-04-2007
Address Schiekade 830, 3032AL Rotterdam
Date of entry 01-10-2007
Address Van Galen 40, 3941VD Doorn
Date of entry 01-10-2007

Old forms as laid since 01-10-1993


*** No history for this section ***
Old business descriptions as laid since 01-10-1993

Date of entry 22-12-2006


Company Holding, financing and management of
Description other enterprises and companies
Officer Data Leavers

*** No history for this section ***


Other official information Leavers

*** No history for this section ***

Filings
There are not (yet) available filings with the selected entry.

https://www.kvk.nl/handelsregister/TST-BIN/FP/TSWS010@?BUTT=244089210000&CHK1=J&kvknummer=244089210000&product=Bedrijfsprofiel 2/2
l!I Bolagsverket Bevis
Arsredovisning
865 A

851 81 Sundsvall
0771-670 670
vrww. bolagsverket. se

--
WW
w
-
u.
u.
0

Harmed intygas att bifogad arsredovisning ar registrerad hos Bolagsverket.

Sundsvall

2014-09-26

Pernilla Wennman
AMETEK NORDIC AB
Org.nr. 556733-9691
BOLAGSVERKET

0\
201~ -05- 111
M
0\
C'I")
0
['.
N
lf)
0

-
tj-

0
C"l------------------------------------------------------------------------
ARS REDO VIS NING
2013

Styrelsen och verkstallande direktoren fdr Ametek Nordic AB far harmed avlamna arsredovisning fdr
rakenskapsaret 2013-01-01 -- 2013-12-31.

Arsredovisningen omfattar

2 FORVALTNINGSBERATTELSE
3 RESUL TATRAKNINGAR
4 BALANSRAKNINGAR
5 STALLDA SAKERHETER OCH ANSVARSFORBINDELSER
6 TILLAGGSUPPLYSNINGAR
9 UNDERSKRIFTER

Undertecknad styrelseledamot i Ametek Nordic AB


intygar harmed, dels art denna kopia av arsredovisningen overensstammer
med originalet, dels art resultat- och balansrakning faststallts pa arsstamma
den 2 april 2014.
Stamman beslot tillika godkanna styrelsens forslag till vinstdisposition.

~'~V.1;0.1~··················
Bengt Svensson
AMETEK NORDIC AB
Org.nr. 556733-9691

ARSREDOVISNING
2013

Styrelsen och verkstallande direktOren for Ametek Nordic AB far harmed avlamna arsredovisning for
rakenskapsaret 2013-01-01 -- 2013-12-31.

Arsredovisningen omfattar

2 FORVALTNINGSBERATTELSE
3 RESULTATRAKNINGAR
4 BALANSRAKNINGAR
5 STALLDA SAKERHETER OCH ANSVARSFORBINDELSER
6 TILLAGGSUPPL YSNINGAR
9 UNDERSKRIFTEIJ7

' l(G
AMETEK NORDIC AB
Org.nr. 556733-9691

FORVALTNINGSBERATTELSE
Arsredovisningen ar upprattad i svenska kronor, SEK.

Verksamheten
Foretaget bedriver verksamhet avseende marknadsforing, distribution och forsaljning av elektroniska instrument
sasom spektrometrar och liknande utrustning. Bolaget tillhandahaller aven service och underhall for tillhandahallna
produkter.

Flerarsjlimforelse*
2013 2012 2011 2010 2009
Nettoomsattning, tkr 10 252 9 240 14 141 10 737 8 335
Res. efter finansiella poster, tkr 2 377 1 741 1 885 2 137 I 425
Balansomslutning, tkr 8 646 6457 8 333 6 999 5 138
Soliditet 54% 44% 19% 49% 36%

*Definitioner av nyckeltal, se tillaggsupplysningar

AgarfOrballanden
Bolaget ar helagt dotterbolag till Ametek GmbH, Org. nr HRB 1911.

Resultatdisposition

forslag till disposition av bolagets vinst

Till arsstammans forfogande star


balanserad vinst 2 405 702
arets vinst 1419125
3 824 827

Styrelsen foresliir att


i ny rakning overfores 3 824 827
3 824 827

Betraffande bolagets resultat och stallning i ovrigt hanvisas till efterfoljande


resultat- och balansrakningar med tillhorande tillaggsupplysningl/}

Sida 2 av 9
AMETEK NORDIC AB
Org.nr. 556733-9691

RESULTATRAKNINGAR
Not 2013-01-01 2012-01-01
2013-12-31 2012-12-31

Rorelsens intakter
Nettoomsattning 10 252 018 9 240 138
Ovriga rorelseintakter 5 739 241 5 566 872
15 991 259 14 807 010

Rorelsens kostnader
Ravaror och fornodenheter -2 883 258 -2 265 151
Ovriga externa kostnader -3 566 339 -3 542 247
Personalkostnader -7 110 537 -7 008 308
Avskrivningar av materiella och immateriella
an!aggningstillgangar -56 452 -262 651
-13616586 -13 078 357

Rorelseresultat 2 374 673 I 728 653

Resultat fran finansiella poster


Ranteintakter 2 589 12 567
2 589 12 567

Resultat efter finansiella poster 2 377 262 I 741 220

Bokslutsdispositioner
A vsattning till periodiseringsfond -550 000 -450 000
Forandring av avskrivningar utover plan 0 55 670
-550 000 -394 330

Resultat fOre skatt I 827 262 I 346 890

Skatt pa arets resultat 2 -408 137 -387611

Arets resultat 1419125 959 279

1!

Sida 3 av 9
AMETEK NORDIC AB
Org.nr. 556733-9691

BALANSRAKNINGAR

Not 2013-12-31 2012-12-31

TILLGANGAR

AnHiggningstillgangar

Immateriella anlaggningstillgangar
Handelsrattigheter 3 0 0
Goodwill 4 0 0
0 0

Materiella anHiggningstillgangar
Inventarier, maskiner och datorer 5 148 670 341 427
148 670 341 427

Summa anHiggningstillgangar 148 670 341 427

Omsattningstillgangar

Varulager
Ravaror och fornodenheter 545 524 393 400
545 524 393 400

Kortfristiga fordringar
Kundfordringar 1 072 580 1 522 209
Fordringar hos koncernforetag 356 558 315 524
Aktuell skattefordran 238 542 284 565
Ovriga fordringar 200 493 21 767
Forutbetalda kostnader och upplupna intakter 36 264 0
1904437 2 144 065

Kassa och bank 6 047 386 3 578 431

Summa omsattningstillgangar 8 497 347 6 115 896

SUMMA TILLGANGAR 8 646 017 645732tn

Sida 4 av 9
AMETEK NORDIC AB
Org.nr. 556733-9691

BALANSRAKNINGAR

Not 2013-12-31 2012-12-31

EGET KAPITAL OCH SKULDER

Eget kapital 6

Bundet eget kapital


Aktiekapital 7 100 0