UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 20-F


|_|   REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE
      SECURITIES EXCHANGE ACT OF 1934

                                       OR

|X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                                       OR

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                        Commission file number: 000-30980

                               INFICON Holding AG
             (Exact name of Registrant as specified in its charter)

                              INFICON Holding Inc.
                 (Translation of Registrant's name into English)

                                   Switzerland
                 (Jurisdiction of incorporation or organization)

                                  INFICON Inc.
                              Two Technology Place
                          East Syracuse, New York 13057
                    (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

                                      None

                                   ----------
<PAGE>

Securities registered or to be registered pursuant to Section 12(g) of the
Act.

TITLE OF EACH CLASS:                      NAME OF EACH EXCHANGE ON WHICH
                                          REGISTERED:

American Depositary Shares, each          The Nasdaq National Market
representing one-tenth of one INFICON
Holding AG share with a par value of
CHF 10

INFICON Holding AG shares with a par      The SWX Swiss Exchange
value of CHF 10 each

                                   ----------

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act.

                                      None

                                   ----------

                                (Title of class)

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.

                                2,315,900 shares

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                         Yes |X| No |_| Not applicable.

Indicate by check mark which financial statement item the registrant has elected
to follow:

                             Item 17 |_| Item 18 |X|
<PAGE>

                                TABLE OF CONTENTS

PART I.........................................................................3
         Item 1. Identity of Directors, Senior Management and Advisors.........3
         Item 2. Offer Statistics and Expected Timetable.......................3
         Item 3. Key Information...............................................3
         Item 4. Information on the Company....................................9
         Item 5. Operating and Financial Review and Prospects.................22
         Item 6. Directors, Senior Management, and Employees..................33
         Item 7. Major Shareholders and Related Party Transactions............37
         Item 8. Financial Information........................................41
         Item 9. The Offer and Listing........................................42
         Item 10. Additional Information......................................43
         Item 11. Quantitative and Qualitative Disclosures about Market Risk..51
         Item 12. Description of Securities Other Than Equity Securities......51
PART II.......................................................................52
         Item 13. Defaults, Dividend Arrearages, and Delinquencies............52
         Item 14. Material Modifications to the Rights of Security Holders
                   and Use of Proceeds........................................52
         Item 15. Controls and Procedures.....................................52
         Item 16. [Reserved]..................................................52
PART III......................................................................53
         Item 17. Financial Statements........................................53
         Item 18. Financial Statements........................................53
         Item 19. Exhibits....................................................54
Consolidated Financial Statements ...........................................F-1


                                        1
<PAGE>

INFICON Holding AG is a corporation (Aktiengesellschaft) organized under the
laws of Switzerland. In this annual report, "INFICON Holding AG" refers solely
to the ultimate parent company of the INFICON Group. "INFICON," the "INFICON
Group," "we," "us" and "our" refer to INFICON Holding AG and its consolidated
subsidiaries. All references to "Unaxis" refer to our significant shareholder,
Unaxis Holding AG, a corporation (Aktiengesellschaft) organized under the laws
of Switzerland.

PRESENTATION OF FINANCIAL INFORMATION

      We have prepared our consolidated financial statements in accordance with
U.S. generally accepted accounting principles, or U.S. GAAP. In accordance with
the requirements of the Swiss law, we have included our INFICON Holding AG
Financial Statements under Swiss generally accepted accounting principles. Our
shares are quoted on the SWX Swiss Exchange in Swiss Francs and Nasdaq National
Market until March 18, 2005. Although we do not anticipate paying dividends, any
cash dividends declared with respect to our shares will be declared in Swiss
Francs.

MARKET SHARE AND INDUSTRY DATA

      Market information contained in this annual report, including information
on our market share and the position of our business relative to our
competition, largely reflects management's best estimates. These estimates are
based upon information obtained from sources such as: customers, trade or
business organizations and associations, contacts within the industries in which
we compete and, in certain cases, upon published statistical data from
independent third parties. We also rely on forecasts of future market conditions
and trends from third-party sources. These third-party sources of statistical
data and forecasts typically address a broad market for finished products made
by our customers and do not address the vacuum instrumentation market directly.
We have not independently verified the data and assumptions upon which these
forecasts were prepared by the third-party sources, in addition to the rates of
general economic growth that were assumed in preparing the forecasts; however,
we believe them to be reasonable. Except as otherwise noted, market share
information and assessments of our competitive position were derived by
comparing our sales to the sales estimates of our competitors', as well as
general market conditions. Amounts and percentages included in this annual
report have been rounded and, accordingly, may not total.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

      This annual report on Form 20-F and other materials we have filed or may
file with the Securities and Exchange Commission, as well as information
included in oral statements or other written statements made, or to be made, by
us, contain disclosures which are "forward-looking statements." Forward-looking
statements include all statements that do not relate solely to historical or
current facts, and can be identified by the use of words such as "may,"
"believe," "will," "expect," "project," "assume," "estimate," "anticipate,"
"plan," "continue," "resumes," "opportunity," "potential," "outlook," "forecast"
or "guidance." These forward-looking statements address, among other things, our
strategic objectives, trends in vacuum technology and in the industries that
employ vacuum instrumentation, such as the semiconductor and related industries
and the anticipated effects of these trends on our business. These
forward-looking statements are based on the current plans and expectations of
our management and are subject to a number of uncertainties and risks that could
significantly affect our current plans and expectations, as well as future
results of operations and financial condition. Some of these risks and
uncertainties are discussed under "Key Information---Risk Factors."

      As a consequence, our current and anticipated plans and our future
prospects, results of operations and financial condition may differ from those
expressed in any forward-looking statements made by or on behalf of our company.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.


                                        2
<PAGE>

                                     PART I

Item 1.     Identity of Directors, Senior Management and Advisors

            Not applicable.

Item 2.     Offer Statistics and Expected Timetable

            Not applicable.

Item 3.     Key Information

A.    Selected Financial Data

      The following tables present our selected historical consolidated
financial data. This data has been derived from our consolidated financial
statements prepared in accordance with U.S. GAAP. The information set forth
below should be read in conjunction with the "Operating and Financial Review and
Prospects" section in addition to our historical financial statements and notes
to those statements included within this annual report. Our income statement
data, set forth below, for the years ended December 31, 2004, 2003 and 2002 and
the balance sheet data as of December 31, 2004 and 2003 are derived from our
audited consolidated financial statements and the notes to those statements
included in this annual report. Our selected historical combined financial and
other data for the years ended December 31, 2001 and 2000 and the balance sheet
data as of December 31, 2002, 2001 and 2000 have been derived from our audited
combined financial statements, which are not included in this annual report.

      As of the present date, no dividends have been declared by the Company.


                                        3
<PAGE>

<TABLE>
<CAPTION>
                                                                                       Years ended December 31,
                                                             -----------------------------------------------------------------------
                                                                  2004           2003           2002           2001          2000
                                                             -----------------------------------------------------------------------
                                                                     U.S. $ in thousands except for shares and per share amount
<S>                                                          <C>            <C>            <C>            <C>            <C>
Income Statement Data:
Net sales
  Semiconductor vacuum instrumentation                       $    49,127    $    36,674    $    30,716    $    43,614    $   54,187
  General vacuum instrumentation                                 139,020        120,900         99,563         98,619       104,024
                                                             -----------    -----------    -----------    -----------    ----------
Total net sales                                                  188,147        157,574        130,279        142,233       158,211
Cost of sales                                                    100,603         86,974         72,364         77,146        78,908
                                                             -----------    -----------    -----------    -----------    ----------
Gross profit                                                      87,544         70,600         57,915         65,087        79,303
Research and development                                          20,181         17,939         16,052         12,039        10,566
Selling, general and administrative                               52,740         46,583         39,264         38,097        38,809
                                                             -----------    -----------    -----------    -----------    ----------
Operating income from continuing operations                       14,623          6,078          2,599         14,951        29,928
Interest (income), net                                               (83)          (170)          (597)          (478)          292
Other expense (income), net                                       (1,415)          (552)           383          1,337         1,332
                                                             -----------    -----------    -----------    -----------    ----------
Income from continuing operations before income taxes             16,121          6,800          2,813         14,092        28,304
Provision (benefit) for income taxes                               4,661          3,686           (120)         2,504         8,450
                                                             -----------    -----------    -----------    -----------    ----------
Income from continuing operations                                 11,460          3,114          2,933         11,588        19,854

Discontinued Operations (Note 5):
  Income(Loss) from operations of discontinued operations,
      net of income taxes                                         (1,328)        (9,880)        (2,828)        (1,636)        3,077
  (Loss) on disposal of discontinued operations, net of
      income taxes                                                  (711)        (2,623)            --             --            --
                                                             -----------    -----------    -----------    -----------    ----------
(Loss) from discontinued operations                               (2,039)       (12,503)        (2,828)        (1,636)        3,077
                                                             -----------    -----------    -----------    -----------    ----------
Net income (loss)                                            $     9,421    $    (9,389)   $       105    $     9,952    $   22,931
                                                             -----------    -----------    -----------    -----------    ----------

Earnings (loss) per share:
Diluted:
  Continuing operations                                      $      4.91    $      1.35    $      1.27    $      5.01    $     9.70
  Discontinued operations                                          (0.87)         (5.40)         (1.22)         (0.71)         1.50
                                                             -----------    -----------    -----------    -----------    ----------
  Total                                                      $      4.04    $     (4.06)   $      0.05    $      4.30    $    11.21

Earnings (loss) per share:
Basic:
  Continuing operations                                      $      4.95    $      1.35    $      1.27    $      5.01    $     9.70
  Discontinued operations                                          (0.88)         (5.40)         (1.22)         (0.71)         1.50
                                                             -----------    -----------    -----------    -----------    ----------
  Total                                                      $      4.07    $     (4.06)   $      0.05    $      4.30    $    11.21

Weighted average number of shares:
Diluted                                                        2,332,703      2,315,000      2,315,000      2,315,000     2,046,000
Basic                                                          2,315,900      2,315,000      2,315,000      2,315,000     2,046,000

Balance Sheet Data:
Working capital                                              $    84,690    $    64,342    $    63,796    $    61,741    $   55,087
Total assets                                                     172,165        150,674        147,928        138,194       152,934
Total debt                                                            --             --             --             --           869
Stockholders' equity                                             142,304        125,759        127,410        119,524       108,531
</TABLE>


                                        4
<PAGE>

Exchange Rate Information

      Since the primary listing for our shares is on the SWX Swiss Exchange in
Swiss Francs, we have set forth below, for the periods and dates indicated,
information regarding the noon buying rate in the City of New York for cable
transfers in Swiss Francs as certified for customs purposes by the Federal
Reserve Bank of New York, or the "noon buying rate," expressed in Swiss Francs
per Dollar.

      We have provided these rates solely for your convenience. They should not
be construed as a representation that Swiss Franc amounts actually represent the
Dollar amounts or that the Swiss Franc amounts could have been, or could be,
converted into Dollars at these rates or at any other rate. We do not use these
rates for preparing our consolidated financial statements included in this
annual report. On February 28, 2005, the average buying rate was U.S.$1.00=CHF
1.1623.

                                       CHF           CHF
           Month                       High           Low
           -----                       ----           ---

          September 2004               1.28          1.25
            October 2004               1.27          1.19
           November 2004               1.21          1.13
           December 2004               1.17          1.13
            January 2005               1.20          1.13
           February 2005               1.22          1.16

                            CHF           CHF          CHF             CHF
      Calendar Year      Average(1)       High         Low        At Period End
      -------------      ----------       ----         ---        -------------

          2000             1.6885        1.8300       1.5420          1.6116
          2001             1.6872        1.8226       1.5665          1.6732
          2002             1.5565        1.7300       1.3850          1.3875
          2003             1.3452        1.4299       1.2405          1.2423
          2004             1.2429        1.3225       1.1258          1.1318

(1)   The average of the buying rates throughout the year.

B.    Capitalization and Indebtedness.

      Not applicable.

C.    Reasons for the Offer and Use of Proceeds.

      Not applicable.

D.    Risk Factors.

Investing in our shares involves a high degree of risk and uncertainty. You
should carefully consider the risks and uncertainties described below prior to
investing in our shares. If any of the following risks actually occur, our
business, prospects, financial condition, and results of operations could be
harmed. In that case, the value of our shares could decline, and you could lose
all or part of your investment.

On February 17, 2005, we announced our intention to voluntarily delist our
American Depositary Shares from the Nasdaq National Market and terminate our
American Depositary Receipts program. For more detailed discussion please refer
to section "Rights of ADR Holders" contained within Item 10. B. of Part I.


                                        5
<PAGE>

Risks Relating to Our Business

Downturns in the semiconductor chip manufacturing industry have had in the past,
and may have in the future, a material adverse effect on our sales and
profitability.

      Our business depends upon the strength of demand from semiconductor chip
manufacturers and semiconductor equipment manufacturers, Original Equipment
Manufacturers (OEMs), or microelectronic products, which in turn depend upon the
current and anticipated demand for semiconductors and products using
semiconductors. Periodic reductions in demand from semiconductor chip
manufacturers and OEMs may reduce revenues, and we may be unable to increase
sales to new or existing customers.

The following table represents the percentage of our total sales to
Semiconductor and related industries:

                                              2004                    2003
                                           -----------             -----------
Total                                         31%                     28%

The loss of sales to our major customers would likely have a material adverse
effect on us.

      Our largest customers in 2004, Pfeiffer Vacuum and various entities
related to Unaxis, including Leybold Vacuum, accounted for an aggregate of
approximately 32% of our net sales. The loss of a major customer or any
reduction in orders by these customers, including reductions due to market or
competitive conditions, would likely result in a significant decrease in revenue
for an extended period of time, until new or existing customer orders can make
up for the reduction.

      Attempts to mitigate the adverse impact of any loss or reduction of orders
through the rapid addition of new customers could be difficult. This difficulty
occurs because prospective customers typically require lengthy qualification
periods to test and evaluate new products, prior to placing significant orders
with a new supplier.

Our future growth and competitiveness depend upon our ability to develop new and
enhanced products for industries we target and to adapt rapidly to changing
technologies. We cannot assure you that we will be successful in our product
development efforts or that our new products will gain general market
acceptance.

      The markets in which we sell our products, including the semiconductor
manufacturing and equipment markets, are characterized by rapidly changing
technology, evolving industry standards and practices, frequent new product and
service introductions and enhancements, pricing pressure and changing customer
demands. Our future growth will depend, in part, on our ability to adapt to
rapidly changing technology and our ability to design, develop, manufacture,
assemble, test, market and support new products and enhancements in a timely and
cost-efficient manner. We cannot assure you the introduction of new products and
product enhancements will gain market acceptance. For example, product
development efforts focused on the semiconductor market include the addition and
enhancement of products for process control, in situ analysis and vacuum
measurement. We cannot assure you that semiconductor device and semiconductor
manufacturing equipment manufacturers will accept these products. We may also
experience difficulties or delays in our development efforts with respect to
these and other products.

      Additionally, products or technologies developed by our competitors may
render our products or technologies obsolete or noncompetitive. A fundamental
shift away from vacuum technology in the semiconductor chip manufacturing market
could render our product offerings obsolete and significantly reduce our
revenues and the value of our shares or ADSs.

The markets for our products are highly competitive.

      We are exposed to the competitive characteristics of several diverse
geographic and product markets. Competition is dependent on a variety of factors
that include price, quality, functionality, brand recognition, and the
effectiveness of our marketing, sales and customer service efforts. We believe
the rapid identification of new product applications and the ability to supply
commercial quantities of products that enable these applications are critical
competitive factors. As the markets for our products expand we expect the
emergence of new competitors along with our existing competitors committing
additional resources to the markets in which we participate. In particularly
competitive markets, we have reduced the prices on our products in order to
maintain market share. For example, our fittings and valves are especially


                                        6
<PAGE>

sensitive to pricing pressure, since there is minimal technical differentiation
among competitive products. Increased competition in these markets may result in
further price reductions.

      Our sales and operating profit depend upon our ability to deliver products
with functional specifications at prices that compete successfully with our
competition, as well as our ability to manage operating costs. Some of our
competitors may have larger financial, technical and marketing resources than we
currently have. We cannot assure you that we will be able to compete effectively
in the future.

Our failure to protect our proprietary technology may significantly impair our
competitive position, which could result in a loss of revenues and profits.

      We rely, in part, on patent, trade secret, copyright and trademark law to
protect our intellectual property. Our future success and competitive position
depend upon our ability to obtain and maintain proprietary technology used in
our principal product families. We have obtained a number of patents relating to
our key product families and have filed applications for additional patents.
There can be no assurance that any pending patent applications will be approved,
that we will develop additional proprietary technology that is patentable, that
any patents obtained by or issued to us will provide us with competitive
advantages, or that these patents will not be challenged by any third parties.
Furthermore, there can be no assurance that third parties will not design around
our patents. Any of the foregoing results could harm our competitive position
and result in lost revenue and market share.

      In addition to patent protection, we rely upon trade secret protection for
our confidential and proprietary information and technology. We routinely enter
into confidentiality agreements with our employees. However, there can be no
assurance these agreements will not be breached, that we will have adequate
remedies for any breach, or that our confidential and proprietary information
and technology will not be independently developed by, or become otherwise
known, to third parties.

      We license technology used in our products from and to third parties. Our
inability to acquire third-party licenses, or to integrate the related
third-party technologies into our products, may result in delays in product
developments and enhancements until equivalent technologies can be identified,
licensed and integrated. We may also require new licenses, in the future, as our
business expands and technology evolves. We cannot assure you these licenses
will be available to us on commercially reasonable terms, if at all.

      Our commercial success depends upon our ability to avoid infringing or
misappropriating any patents or other proprietary rights owned by third parties.
If we are found to have infringed or misappropriated a third party's patent or
other proprietary rights, we could be required to pay damages to such third
party, alter our products or processes, obtain a license from the third party or
cease activities using such proprietary rights. If we are required to do any of
the foregoing, we cannot assure you we will be able to do so on commercially or
financially favorable terms, if at all. Our inability to do any of the foregoing
on commercially or financially favorable terms could have a material adverse
effect on our business, prospects, financial condition and results of
operations.

      Litigation may be necessary in order to enforce our patents or other
intellectual property rights, to protect our trade secrets, to determine the
validity and scope of the proprietary rights of others, or to defend against
claims of infringement from third parties. Any such litigation could result in
substantial costs coupled with the diversion of resources.

Our inability to convince OEMs to use our products in their manufacturing
systems could weaken our competitive position.

      Manufacturing systems built by OEMs to whom we sell typically have a
lifespan of five to ten years. These OEMs subject components to rigorous and
lengthy testing processes before incorporating them into their systems. Once an
OEM has selected a vendor's equipment for a manufacturing system, the OEM
generally relies, to the extent possible, upon that vendor's equipment. As a
result, when another vendor's equipment is incorporated into an OEM's system, we
may have difficulty convincing an OEM to incorporate our products into their
manufacturing systems unless there are compelling reasons for a change, such as
significant performance or cost advantages. Additionally, a semiconductor chip
manufacturer who purchases a system from an OEM would typically seek replacement
parts only from that OEM's supplier. Convincing this manufacturer to change
suppliers would require a significant sales and marketing effort. Consequently,
our success depends in large part on our ability to convince OEMs to choose our


                                        7
<PAGE>

products for use in each new generation of their equipment. If we are
unsuccessful in convincing OEMs to choose our products, our competitive position
may be harmed.

We must compete intensively to attract and retain key technical personnel to
help maintain our current level of success and to support our future growth.

      Our success depends principally upon the efforts and abilities of our key
managers and other employees, particularly those with knowledge and experience
in semiconductor manufacturing and related industries. The loss of key employees
or officers could temporarily impair our ability to effectively manage our
business until new personnel are found. Our future growth and success will
depend upon our ability to attract and retain highly skilled technical,
financial, managerial and marketing personnel. Competition for such personnel in
our industry is intense, and we cannot be certain we will be successful in
attracting and retaining the appropriate personnel.

Unfavorable exchange rate fluctuations may distort our results of operations.

      Our operations are conducted through subsidiaries in twelve countries. The
results of operations and the financial position of these subsidiaries are
reported in their local currency and translated into U.S. Dollars, at the
applicable foreign currency exchange rate, when consolidating our financial
statements. Exchange rate fluctuations between these foreign currencies and the
U.S. Dollar may have a material adverse effect on our consolidated financial
statements as reported in U.S. Dollars.

      We are also challenged with the transaction risk that results from
fluctuations in exchange rates between the various currencies in which we do
business. We believe a portion of the transaction risk of our operations in
multiple currencies is mitigated by our hedging activities, as well as the
structural matching that occurs because many of our operating and financial
expenses are incurred in the same currency in which the sales relating to such
expenses are invoiced. We cannot assure you that our operating profit will not
be materially or adversely affected by large exchange rate fluctuations.

      Additionally, our shares are quoted on the SWX Swiss Exchange in Swiss
Francs. Although we do not anticipate paying dividends in the foreseeable
future, any cash dividends declared in respect to our shares will be declared in
Swiss Francs. Fluctuations in the exchange rate between the Swiss Franc and
other currencies, may affect, among other things, the foreign currency
equivalent of the Swiss Franc value of an investment in our shares and of
dividends and other distribution payments on these shares.

Future acquisitions could adversely affect our business

      We continue to explore opportunities to expand or enhance our product
offerings to existing customers, to new customers, and into new markets through
acquisitions. The identification of an appropriate acquisition candidate
involves risks inherent in assessing the values, strengths, weaknesses, risks
and profitability of acquisition candidates. If we identify an appropriate
acquisition candidate, we may not be able to afford the acquisition or may be
unsuccessful in doing so due to market conditions, competition, or failure to
agree on terms and conditions. Other risks include the effects of the possible
acquisition on the Company's business, diversion of management resources and
risks associated with unanticipated problems or latent liabilities. Should the
Company acquire another business, the process of integrating the acquired
operations into the Company's existing operations may result in unforeseen
operating difficulties and may require significant financial resources that
would otherwise be available to support existing operations. If the Company
pursues future acquisitions, it may be required to expend significant funds,
incur additional debt or issue additional securities, which may negatively
affect the Company's results of operations and be dilutive to its shareholders.
If the Company spends significant funds or incurs additional debt, its ability
to obtain financing for working capital or other uses could be jeopardized.
Additionally, the Company could become more vulnerable to economic downturns and
competitive pressures depending on the acquisition.

Benefits from deferred tax asset may not be realized.

The Company has a significant net deferred tax asset at December 31, 2004.
Although the Company believes it is more likely than not that the deferred tax
assets will be realized, a full realization of the deferred tax asset amount may
not be assured. The amount of the deferred tax asset considered realizable could
be reduced and negatively impact our financial results if the Company is not
able to generate sufficient taxable income in future years to support the
deferred tax asset.


                                        8
<PAGE>

Unaxis has a significant influence on our company and may make decisions that
are not in the best interests of all shareholders.

      Insider control of a significant proportion of our shares could have an
adverse effect on the market price of our shares and ADSs. Unaxis currently owns
19.50% of our shares. Sales of our shares in the public market could adversely
affect the market price of the shares and ADSs. Additionally, one of our
directors was an officer of Unaxis until 12/31/2002. This could present the
potential for a conflict of interest with respect to areas in which we compete
with Unaxis and with respect to matters related to the agreements between us and
Unaxis described under "Major Shareholders and Related Party
Transactions---Related Party Transactions---Agreements in Connection with our
Separation from Unaxis---Agreements with Unaxis." In light of its stock
ownership position and representation on our board of directors, Unaxis has
significant influence on the outcome of corporate actions requiring shareholder
approval, including the election of directors, the amendment of our articles of
incorporation, mergers and consolidations, and sales of assets that could
provide our shareholders with the opportunity to realize a premium over the
prevailing market price of their shares. This influence may have the effect of
delaying or preventing a change of control of INFICON, even if this change of
control benefits our shareholders generally.

Item 4. Information on the Company

A.    History and Development of the Company.

      INFICON Holding AG (commercial name: "INFICON") was incorporated on August
2, 2000. INFICON Holding AG is a corporation (Aktiengesellschaft) organized
under the laws of Switzerland. Its registered office (Sitz) is located at
Hintergasse 15 B, 7310 Bad Ragaz, Switzerland. The telephone number of the
registered office is 41-81-300-4980. The fax number is 41-81-300-4988. INFICON
maintains their global corporate headquarters through its U.S. subsidiary
located at Two Technology Place, East Syracuse, New York 13057, United States.
The telephone number in the United States is 1-315-434-1100. The Company also
maintains regional headquarters through local subsidiaries in China, Finland,
France, Germany, Japan, Korea, Liechtenstein, Singapore, Taiwan and United
Kingdom. The address on the Internet is www.inficon.com. The information on the
website is not incorporated by reference into this annual report.

      In our initial public offering on November 9, 2000, 1,736,000 INFICON
shares, with a par value of CHF 10 each, directly or in the form of ADSs, were
sold publicly in Switzerland and the United States and to institutional
investors outside Switzerland and the United States. Of the 1,736,000 shares,
315,000 shares were sold by us and 1,421,000 shares were sold by Unaxis as
selling shareholder.

      Prior to our initial public offering, our business was wholly owned by
Unaxis. In order to implement our initial public offering, Unaxis restructured
the corporate ownership of the businesses in its instrumentation group and
created INFICON Holding AG under the laws of Switzerland to hold the companies
through which we now conduct our operations. These companies acquired from
Unaxis all of the assets relating to our business. Unaxis currently owns 19.50%
of our shares and is no longer subject to its lock-up agreement.

Principal Capital Expenditures

                                                  (millions U.S.$)
                                          2004          2003          2002
                                          -----         -----         -----
Capital expenditures                      $ 3.8         $ 4.1         $ 7.3

      During 2004 and 2003, these amounts were used primarily for the purchase
of manufacturing equipment, tooling, office computer equipment, facility
upgrades and leasehold improvements. The principal investing activities for 2002
included building infrastructure changes for our facility in Cologne, Germany
and leasehold improvements for our new building in Balzers, Liechtenstein that
began in the second half of 2001. We invested approximately U.S.$5.6 million,
during 2002, for leasehold improvements in the new building in Balzers,
Liechtenstein. These capital expenditures were funded through operating cash
flows.


                                        9
<PAGE>

Important Events

      Effective November 1, 2001, INFICON acquired substantially all the net
assets of the man-portable gas chromatograph-mass spectrometer systems business
of Leybold Inficon, Inc, a subsidiary of Unaxis (HAPSITE ). The acquisition
allowed the Company to take advantage of this unique technology for direct,
on-site identification of chemical warfare agents and toxic industrial chemicals
and the growth of the security and emergency response markets.

      In January 2003, INFICON acquired the privately-held company, New Vision
Systems ("patterning solutions software business"), that specializes in advanced
process control (APC) and lithography analysis for semiconductor manufacturing
since 1989. In March 2004, the Company retained the services of an investment
bank in connection with the disposal of its patterning solutions software
business. The Company's decision to exit this business is based upon its
decision to further focus its resources. After careful consideration, a decision
was made to phase out operations and fulfill existing customer contracts through
2005.

      In May 2003, we acquired privately-held Sentex Systems, Inc. of Fairfield,
New Jersey. This extended the Company's leadership in critical, on-site
monitoring and identification of toxic chemicals and materials. Founded in 1980,
Sentex Systems supplies sophisticated monitoring and analysis instruments using
gas chromatography (GC) technology to detect toxic chemical contaminants for
drinking water security and safety. These market-leading products complement the
INFICON portfolio of fully portable chemical identification systems (gas
chromatograph/mass spectrometer or GC/MS technology) used for fast on-scene
detection and analysis of chemical warfare agents and toxic industrial chemicals
in air, soil and water. The acquisition is part of our growth strategy to
position INFICON in the security and emergency response markets with products
and technical expertise that help our customers make crucial decisions affecting
life, health and safety. The results of operations for Sentex Systems, Inc. are
reported as a separate reporting unit under the general vacuum instrumentation
segment for the year ended December 31, 2004 and since the date of acquisition.

      In October 2003, we completed the divestment of our Ultra Clean Processing
(UCP) business unit as planned. Our UCP business was sold to management, staff,
and a group of local investors in Liechtenstein. While UCP is a viable business
specializing in preparing computer chips for final assembly prior to use in
computers and other applications, it was not considered a long-term strategic
fit for INFICON. By divesting this business, we are better able to focus on the
Company's core competencies in instrumentation and advanced process control
software designed exclusively for the first steps in the complex semiconductor
manufacturing process.

      On February 17, 2005, the Company announced its intention to voluntarily
delist its American Depositary Shares from the Nasdaq National Market and
terminate its American Depositary Receipts program. For more detailed
discussion, please refer to section "Rights of ADR Holders" contained within
Item 10. B. of Part I. The Company believes that the ADS listing on Nasdaq is
not providing enough liquidity to justify the cost and administrative burden.
Additionally, the continued listing of Company shares on the SWX Swiss Exchange
should provide sufficient ongoing liquidity to shareholders and annual cost
savings should be realized from the Nasdaq delisting.

B.    Business Overview

General

      We are a leading developer, manufacturer and supplier of innovative
instrumentation, critical sensor technologies, and process control software for
the semiconductor and vacuum coating industries. These analyses, measurement and
control products are vital to original OEMs and end-users in the complex
manufacturing of semiconductors, flat panel displays, magnetic and optical
storage media and precision optics. The Company also provides essential
instrumentation for gas leak detection to the air conditioning/refrigeration
markets and toxic chemical analysis for emergency response, industrial hygiene
markets, military and government markets.

      We have four major product lines which form two business segments:


                                       10
<PAGE>

      The semiconductor vacuum instrumentation segment focuses on the
semiconductor and vacuum coating markets with products such as:

      o     gas analysis instrumentation and software for real-time, integrated
            data analysis which enable semiconductor chip manufacturers to
            monitor and control their manufacturing processes through powerful
            analysis applications for rapid trouble-shooting, fault analysis,
            and process optimization.

      The general vacuum instrumentation segment serves selected industries,
including refrigeration and air conditioning, automotive, emergency response
markets, and government and university laboratories with products such as:

      o     leak detectors, which provide verification of "leak tightness" for a
            diverse set of customers who are faced with increasingly stringent
            quality standards;
      o     Vacuum Control products, which precisely measure and control gas
            pressures during a manufacturing process;
      o     chemical identification instrumentation which provides detection of
            chemical agents and toxic materials in air, soil, and water
            significantly reducing the cost, time, and difficulties of
            laboratory testing.

      Product lines are described under the heading "Our Principal Products."

      Based upon our knowledge of our competitors and the markets we serve, we
believe many of our key high-performance, high-quality products maintain leading
market share positions. The Company has been an innovator in leading-edge
industries which require constantly advancing technology, with a list of more
than 20 "firsts" to its name and a patent portfolio of more than 300 patents.
Throughout the world, INFICON solutions are designed to increase productivity,
raise the bar on quality, and protect people and the environment.

      The principal customers within our target markets include large
manufacturers who incorporate our products into their manufacturing processes
and original equipment manufacturers, or OEMs, who integrate our products into
systems they build for their customers. Additionally, we sell to several large
distributors who serve diverse markets. Our customers are located primarily in
the United States, Europe and Asia.

Our Competitive Advantages

      We believe that we have leading market shares in the process knowledge and
control, leak detection and environmental health and safety markets, along with
a strong position in the vacuum control market. We believe we can enhance our
market position, growth and profitability through the following competitive
advantages:

      o     Market-Driven Technology and Product Innovation. Our customers
            operate in an environment of constant technological change. The
            cornerstone of our strong market position is our investment in
            technology and product innovation to keep pace with these
            technological changes. Our investment is made through internal
            product development coupled with the acquisition of advanced
            technology that complements our vacuum instrumentation portfolio.
            Our engineers and technical experts work directly with our customers
            to develop optimal solutions for their manufacturing problems. We
            seek to translate our knowledge of customer process requirements and
            our advanced technology into innovative products that improve our
            customers' process yield, quality, costs and profitability.

      o     Global Presence and Comprehensive Customer Support. We have direct
            sales, application support and service centers in 12 countries
            around the world. This global reach is an increasingly critical
            success factor for a customer base that itself is increasingly
            multinational in scope. Large end users have factories worldwide and
            products sold to OEMs are often exported throughout the world. Our
            customers expect us to provide comprehensive service and application
            support to any location in which our products are used. We believe
            we have an excellent reputation for sales, logistic, application and
            service support in all important market areas of the world.

      o     State-of-the-Art Enabling Technologies. We maintain major
            manufacturing operations in Syracuse, New York, USA; Balzers,
            Liechtenstein; and Cologne, Germany. Each of these manufacturing


                                       11
<PAGE>

            locations is highly focused on specific product lines. We focus on
            core competencies of sensor assembly, calibration and technology.

      o     Demand-based Manufacturing. We employ a demand-based manufacturing
            system, where products are manufactured upon receipt of an order,
            enabling us to manufacture products rapidly and efficiently to meet
            specific customer demands. Combined with an aggressive supply chain
            management, our demand-based manufacturing system minimizes
            inventory, dramatically reduces manufacturing cycle times, improves
            on-time delivery, lowers manufacturing costs, and improves quality.

      o     Total Quality Management and ISO Registration. All of our factories
            were early adopters of sophisticated total quality management
            techniques, including extensive employee participation at all levels
            in team-oriented programs aimed at improving product quality and
            manufacturing process efficiency. All our factories were among the
            earliest to apply for and achieve ISO 9001 and/or 14001
            Registration. This world-recognized quality methodology mandates
            that companies adhere to, and document their compliance with,
            stringent product/process specifications.

      o     Integrated Management Information Systems. We have a company-wide
            integrated management information system which provides us with
            information on our manufacturing, sales, service and accounting
            functions on a real-time basis.

      o     Brand Recognition. As a result of our strong market position, there
            is considerable name recognition for the INFICON brand. Our brand
            equity, coupled with our reputation for high quality and
            comprehensive customer service, provides significant support for our
            introduction of new and innovative products.

      o     Strong and Committed Management Team. We believe our company
            benefits from a cohesive and highly experienced management team. As
            of the date of this report, our 6 executive officers have an average
            of 14 years of experience with INFICON and our predecessors
            originate from a variety of national backgrounds. We believe that we
            have the leadership we need to continue to leverage our competitive
            advantages in the future.

      While we believe these competitive advantages will enable us to compete
favorably in our target markets, there can be no assurance we will continue to
do so. We encounter substantial competition in each of our product lines from
numerous competitors. Certain competitors have larger financial, technical and
marketing resources than we do. Other smaller competitors are well-established
in specific product niches making it difficult to break into those smaller
markets. Furthermore, in some cases, semiconductor chip manufacturers may direct
semiconductor capital equipment manufacturers to use a specified supplier's
product in their equipment. Accordingly, our success depends in part on our
ability to have semiconductor chip manufacturers specify our products for use at
their manufacturing facilities. We may encounter difficulties in changing
established relationships of competitors with a large installed base of products
at those customers' manufacturing facilities.

Our Strategy

      We seek to maintain and enhance our position as a leading developer,
manufacturer and supplier of innovative instrumentation, critical sensor
technologies and advanced process control software. INFICON has achieved a
favorable balance between selling products for the growing, but more volatile,
technology markets and serving the more stable industrial and government
markets. We focus on providing in situ tool-based sensors and process diagnostic
software that enable yield and productivity improvements for the most advanced
semiconductor processes. Our leading-edge instrumentation and advanced process
control software are equally valuable in enhancing productivity in a wide
variety of other markets, including refrigeration/air conditioning, automotive,
aerospace, heat-treating, analytical instrumentation, and research and
development. And our revolutionary technology is in use throughout the world to
improve security with on-site chemical identification and monitoring systems for
environmental health and safety. Our strategies are designed to increase sales,
cash flow and long-term profitable growth for INFICON.

      o     Develop new markets while continuing to protect and build on our
            current strengths.


                                       12
<PAGE>

               Drive momentum in growing semiconductor and vacuum coating
               markets. The semiconductor and vacuum coating industries, such as
               flat panel displays, magnetic and optical storage media and
               precision optics, have been a strategic market focus of INFICON
               since 1997. Our technology solutions and process expertise
               directly address the cost and productivity improvements urgently
               demanded by both OEMs and end-users, which have been heightened
               in recent years by the ongoing migration to 300mm manufacturing
               equipment. We believe our technological capability in gas
               analysis, measurement and control and our market knowledge will
               continue to enable us to introduce new products and increase our
               market share in these industries.

               Exploit opportunities in emergency response, security and
               environmental monitoring markets. Leveraging the expertise that
               made INFICON the market leader in semiconductor gas analysis, our
               portfolio of state-of-the-art environmental products provide
               on-site detection, identification and monitoring of volatile
               organic compounds in air, water and soil. INFICON technology is
               now being used throughout the world for emergency response,
               chemical warfare agent detection, and early detection of chemical
               contamination in water source and distribution systems. We
               believe INFICON has the ability to introduce an even greater
               number of essential early-alert products and is well-positioned
               to take advantage of the many opportunities in these market
               sectors.

               Maintain market-leading position in refrigeration/air
               conditioning. We have successfully leveraged our R&D investments
               in the semiconductor industry to hold a long-standing, dominant
               position in the refrigeration/air conditioning market with a
               strong presence in the automotive sector. We reap additional
               competitive advantages from the stringent cost and quality
               requirements of the high-tech industries in applying our leak
               detectors to these other markets. We expect to continue
               introducing high performance leak-testing products to sustain our
               number one position worldwide in leak detection.

               Continue development of significant market share in general
               vacuum processes. Because of the broad array of industrial
               applications where our products are valuable, we partner with
               manufacturers of vacuum pumps who buy our products and resell
               them to an extensive range of end-users with their own name on
               them. This helps us address a large number of medium to smaller
               customers in R&D, aerospace, automotive, and analytical
               instrumentation. Our private label partners are the largest
               vacuum pump manufacturers in the world, and we will continue to
               develop this relationship with more companies.

      o     Invest in Technological Innovation. We continue to invest in product
            and process innovation in order to provide technologically advanced
            products to our customers. Industries whose manufacturing processes
            use vacuum systems, in particular the semiconductor, air
            conditioning and refrigeration, automotive, and thin-film coating
            industries, require increasingly sophisticated instrumentation. Our
            aggressive R&D investing during the past 4 years has resulted in the
            development of new products that address the specific challenges in
            semiconductor manufacturing. The trend towards more expensive,
            larger 300mm diameter silicon wafers for manufacturing chips has
            necessitated more rapid fault detection with reduced reliance on
            test wafers. Our line of mass spectrometers and other products for
            in situ metrology permit customers to monitor and control the
            semiconductor manufacturing process within the process chamber,
            reducing the need for test wafers. We have also developed and will
            continue to develop more sophisticated leak detectors for efficiency
            and mobility within the semiconductor fab environment and to meet
            the increasing demand in the automotive industry for stringent
            quality in the testing of air conditioning, air bags for safety, and
            other sub systems. We generally seek to introduce innovative,
            high-margin products that will enable us to maintain profitability
            in a competitive market.

      o     Strengthen Our Position in Core Geographic Markets. The United
            States and Asia are the strongest markets for the semiconductor
            business. These are already the largest markets for our
            semiconductor vacuum instrumentation products, and we have expanded
            our sales, distribution, and customer service and support
            infrastructure in these areas to meet the rising demand, including
            strengthening our presence in China for the expected demand from new
            semiconductor fabs.

      o     Maintain the Strength of the INFICON Brand. We intend to continue to
            promote an image of quality, reliability, high performance, and
            innovation associated with the INFICON brand. We have developed our
            reputation by offering customers technologically advanced products


                                       13
<PAGE>

            and providing responsive customer support services. We believe our
            strong brand awareness, brand loyalty and reputation for superior
            products enhances our competitiveness and provides us with a solid
            foundation for future growth. We intend to maintain the efforts that
            have already cemented customer loyalty to the INFICON brand.

      o     Enhance Our Distribution Channels to Reach Distinct Customer Bases.
            We have developed specialized sales forces to target our distinct
            customer segments. In our semiconductor vacuum coating related
            markets and for environmental and security markets, we employ a
            specially trained force of direct sales, service, and application
            support professionals. Similarly, we have a specialized group of
            sales distributors and representatives who concentrate exclusively
            on the refrigeration and air conditioning industry. In the more
            diffuse markets for general vacuum instrumentation, we distribute
            our products through vacuum pump manufacturers who have developed
            strong relationships with small to mid-size vacuum instrumentation
            users. We intend to continue to use our specialized sales forces to
            build strong customer relationships in our major industrial and
            geographic markets.

      o     Continue to Improve Manufacturing Efficiency. In order to maintain
            the highest quality standards, we focus our internal manufacturing
            efforts on our core proprietary vacuum sensor and accessory
            technology, on the final assembly of our products, and on quality
            assurance. We outsource the construction of most other parts and
            components, including circuit boards, mechanical assemblies, and
            housings. This strategy enables us to focus on our key technologies
            that have been central to our success and on assuring the high
            quality of our products, while reducing the capital investments and
            fixed costs associated with non-core activities. In addition, we
            believe this manufacturing approach significantly reduces our
            susceptibility to periodic downturns in the volatile semiconductor
            market. We also use a demand-based manufacturing system to reduce
            inventory cycle times and production defects, in addition to our
            Total Quality Management Programs and ISO registration which
            supports our objectives of improving business practices and product
            quality to increase profitability.

Process Knowledge and Control Product Line

                                                     (millions U.S.$)
                                          2004             2003             2002
                                        ------           ------           ------
      Net Sales                         $ 49.1           $ 36.7           $ 30.7

      Our Process Knowledge and Control (PKC) hardware and software are used in
front-end chip manufacturing to provide process verification and control,
including run-to-run control of key process parameters for process optimization
and immediate and automatic feedback to the process equipment or a process
engineer on any faults detected and their probable cause.

      As the cost of wafers increases and the complexity of the manufacturing
processes reduces the acceptable windows of process operation, the requirement
for faster parameter modifications in response to inevitable process changes and
for immediate fault detection becomes more critical. We believe the industry
will conduct more and more of these analyses in the process chamber itself using
in situ metrology and adopt automatic process control, leading to growth in the
market for our PKC products. The Semiconductor Industry Association's National
Technology Roadmap for Semiconductor Manufacturing supports this expectation.

      Our PKC product offerings include the following:

      In Situ Metrology Sensors and Sensor Integration and Analysis Software

      o     Gas Analyzers. Our gas analyzers are well-established in the
            semiconductor market as diagnostic tools to aid process engineers in
            determining the source of contaminant gases. They also find use in
            continuously monitoring the manufacturing process for the presence
            of contaminant gases and for verifying the presence of desired
            process gases. Our gas analyzers use mass spectrometer technology.
            Our products include a photoresist detector designed to stop a
            physical vapor deposition process if a wafer is contaminated with
            photoresist.


                                       14
<PAGE>

      o     Particle Detectors. Our Stiletto particle detector is a breakthrough
            in situ sensor that finds yield-limiting contamination in real time
            on every wafer with scanning-laser sensitivity and accuracy. Its
            submicron sensitivity detects particles which can destroy the
            performance of the chip.

      o     FabGuard. The FabGuard software takes data from the in situ sensors,
            integrates that data with data from the process equipment itself,
            and condenses and analyzes it to provide the process engineer with
            actionable information. Alternatively, the engineer can choose to
            have FabGuard automatically send control commands directly to the
            process equipment. The software is typically sold in conjunction
            with our PKC sensor products or separately as an upgrade for us with
            the products.

      o     Composer. The Composer, based on acoustic resonance technology,
            monitors and controls the reactant feedgas to ensure that the gas
            concentration is constant. The Composer is applied most frequently
            in metal organic chemical vapor deposition applications.

      o     Thin Film Deposition Controllers. Our thin film deposition
            controllers determine the thickness of a material deposited in a
            batch evaporation process. Although these processes are less common
            in semiconductor processing today, they are still used for very
            specific applications. They are used more frequently in the optical
            industry, including both high-precision, scientific optics and
            consumer optics. Recently, they have found use in the manufacture of
            organic electroluminescent displays.

      To address the broader, non-semiconductor market for gas analysis, we
adapt and package our mass spectrometers for distribution through Pfeiffer
Vacuum, a vacuum pump manufacturer. Thus, we leverage our product development
efforts and technology without diminishing our direct sales force's focus on the
semiconductor and related markets.

      Because the semiconductor market is in a constant state of technological
change, we concentrate key resources on understanding our customers' processes
so that we can better support our customers, embody that knowledge in our
software offerings, and define the right hardware and software products for
future process needs. We must continually innovate and produce both
next-generation products and new products for evolving applications. Our
internal development is twofold: (1) adapting our hardware technologies for
changing applications and (2) increasing our emphasis on software development.
In addition, we remain alert to new technology acquisitions that would enhance
our offering of PKC sensors and software capability.

      Our customers for PKC products include semiconductor chip manufacturers
and original equipment manufacturers, such as Samsung, Anelva, TSMC, Sunic,
Leybold Optics, Unaxis, UMC, Zeiss, and a private label partner, Pfeiffer
Vacuum. Semiconductor chip manufacturers constitute the larger part of the
market. Geographically, the semiconductor market is concentrated in Asia and the
United States.

      General Vacuum Instrumentation

      We have three product lines which serve general vacuum applications: leak
detection, vacuum control, and environmental health & safety.

      Leak Detection Product Line

                                                  (millions U.S.$)
                                        2004             2003             2002
                                       ------           ------           ------
      Net Sales                        $ 57.9           $ 50.4           $ 47.4

      Our Leak Detection (LD) products are used for a wide variety of purposes
in numerous industries. They are used in vacuum applications, for example, to
confirm the integrity of a vacuum chamber, and in the maintenance of gas lines,
which must be airtight. We offer two families of leak detectors: helium leak
detectors and refrigerant leak detectors.

      Helium leak detectors are used by manufacturers for quality control in a
broad range of applications. They are used primarily to test the integrity of a
container, whether it is a vacuum chamber or a pressurized container. The


                                       15
<PAGE>

central element of any leak detector is a sensor which is designed to detect the
presence of a certain gas. Helium is an ideal gas for use in leak detection
because (1) helium atoms are very small and can seep through the tiniest cracks
in a chamber and (2) helium is not commonly found in the atmosphere, so the
likelihood of false readings is reduced. A typical helium leak detection process
involves pressurizing a container with helium, sealing the container and using
sensors to detect if any helium leaks out. Another technique is to evacuate the
container, expose it to a helium environment and use the sensors to detect the
presence of helium inside the container. Our helium leak detection products
perform both of these functions.

      Refrigerant leak detectors have sensors that can detect a range of
refrigerant gases. Refrigerant leak detectors are often used in conjunction with
helium leak detectors. For example, manufacturers of refrigeration systems will
initially test a refrigeration coil with a helium leak detector to ensure that
the chamber is leak-free. Later in the manufacturing process, the coil is filled
with refrigerant, resealed and then tested with a refrigerant leak detector to
assure integrity of the final seal. Our refrigerant leak detection products
range in size from large units which are used in assembly lines to small,
hand-held units that are used by air conditioning repairmen.

      Products. Our most important leak detector products include the following:

      Helium Leak Detectors

      o     UL1000 Fab. Designed as a mobile leak detection tool, the UL1000 Fab
            is highly maneuverable for leak detection efficiency and mobility
            within the fab environment. It provides an extremely fast leak rate
            response across all measurement ranges.

      o     UL5000. The UL5000 is an enhanced version of the UL1000 Fab built on
            the same platform. It is dedicated to perform very sensitive leak
            tests on large chambers in a short time, a strong requirement of the
            semiconductor tool manufacturer industry.

      o     UL1000. Designed for demanding applications, the UL1000 is a perfect
            leak detector for industrial customers looking for high pumping
            speed and reliable tests under extreme testing conditions.

      o     Protec. The Protec leak detector is often used in the automotive and
            refrigeration and air conditioning industries to test the integrity
            of a system before it is charged with refrigerant. This quality
            control measure helps manufacturers ensure that resources are not
            wasted by charging faulty systems with refrigerant.

      o     LDS1000/2000. The LDS1000 and updated LDS 2000 are designed for OEMs
            to flexibly incorporate into the larger leak test systems they
            build.

      Refrigerant Leak Detectors

      o     Ecotec II. The Ecotec II is used in assembly lines in the automotive
            and refrigeration and air conditioning industries. The Ecotec II can
            differentiate among refrigerants and is used to perform a final
            quality control test on systems after they are charged.

      o     HLD5000. Introduced in 2001, the HLD5000 is used for quality testing
            in the manufacture of air conditioned systems. Its unique
            functionality will improve productivity on the assembly line and
            reduce the cost of ownership.

      o     D-Tek family. The D-Tek family of leak detectors consists of
            hand-held units which are used by field service technicians in the
            refrigeration and air conditioning and automotive industries.

      We plan to continue to develop new leak detection products to expand the
range of leak detection applications and to serve our existing customers'
changing needs.

      Markets. Our largest markets for leak detectors are the refrigeration and
air conditioning, automotive and semiconductor markets. In the refrigeration and
air conditioning market, our key customers include A'Gramkow, GD Midea, Carrier,
Whirlpool and York International. In the automotive market, our customers
include PSA, Kia, DaimlerChrysler, General Motors, Volkswagen, Audi, Delphi
Automotive Systems and Eaton Aeroquip. Our leak detector customers in the
semiconductor industry include Applied Materials, IBM, Samsung and LAM Research.


                                       16
<PAGE>

The users of our D-Tek leak detectors are service technicians whom we reach
through third-party distributors. In addition, we serve other markets that
require sensitive leak detection, such as power plants, airplane manufacturers,
printer manufacturers, petroleum companies, and research and development
institutes.

      The market for leak detectors is global. We believe that we are a strong
leader in the European market and that we are well established in the United
States and South America. We also plan to continue expanding our presence in the
Asian market for leak detectors. We are a recognized provider of leak detectors
to the Chinese refrigeration and air conditioning market, and we use our
Singapore office to pursue opportunities in countries such as Thailand,
Malaysia, the Philippines, and Indonesia.

      Vacuum Control Product Line

                                                     (millions U.S.$)
                                         2004             2003             2002
                                       -------          -------          -------
      Net Sales                        $  60.3          $  46.7          $  38.4

      Our Vacuum Control (VC) products include gauges, valves, and fittings.
Gauges enable our customers to monitor gas pressures during various stages of
the manufacturing process. Gauges vary widely in design depending on the
pressure range and the application. Valves, which control gas flow, and
fittings, which are used to connect components to a vacuum chamber, are used in
all vacuum systems.

      Products. Our principal Vacuum Control products include the following:

      o     Capacitance Diaphragm Gauges. Capacitance diaphragm gauges are used
            in a wide variety of applications to provide precise pressure
            measurement within a narrow pressure range. Our SKY capacitance
            diaphragm gauge features a ceramic diaphragm which provides higher
            accuracy, stability, longer life and greater resistance to corrosive
            gases than conventional metal diaphragms. These benefits are
            possible because ceramic has significant advantages over metal, such
            as better thermal and chemical characteristics and less propensity
            to fatigue.

      o     Bayard Alpert and Penning Gauges. These high-vacuum gauges provide
            reliable pressure measurement in a wide range of industries
            including optical coating, space simulation, and heat-treating, as
            well as semiconductor manufacturing processes. Our transmitter
            gauges are particularly well suited for incorporation in OEM vacuum
            systems because they function as "smart sensors" requiring no
            additional controllers.

      o     Pirani Gauges. Our Pirani gauges are the most cost-effective
            products we offer to measure moderate vacuum ranges directly or as
            part of a pumping system in applications such as thin film coating,
            analytical instrumentation, or research and development.

      o     Combination Gauges. Our combination gauges integrate a low-vacuum
            gauge, a high-vacuum gauge and an electronic controller into one
            compact measuring device. These innovative gauges enable customers
            to replace two conventional gauges and a controller with one
            combination gauge to provide a cost-effective way to measure a wide
            range of pressures. We expanded our range of combination gauges in
            2002 with a new Pirani/Capacitance Combination Gauge and in 2003 we
            launched the first TripleGauge, which combines three different
            measurement technologies in one housing. Both new products are
            targeted for semiconductor and thin film coating applications.

      o     Valves and Fittings. We offer a wide range of valves and fittings
            for a variety of vacuum applications. We also started to market and
            manufacture custom heated valves and fittings, especially made for
            the etch exhaust lines of semiconductor manufacturing equipment.

      Markets. Gauges, valves and fittings are used in all vacuum applications
in a range of industries. We focus on serving OEMs and manufacturers of vacuum
pumps. The market for valves and fittings is characterized by high price
competition, low barriers to entry, and less technical differentiation among
competing products. The target customers of our gauges, valves, and fittings
products fall into two general categories:


                                       17
<PAGE>

      o     Manufacturers of vacuum pumps, who distribute our products under
            their own private-label brands to users with industrial, analytical
            instrumentation and research and development applications. Our
            private-label customers typically require a wide array of our
            products to fit into their lines of vacuum pumps. Our largest
            customers in this category are Leybold Vacuum and Pfeiffer Vacuum.

      o     Large OEMs, including semiconductor and non-semiconductor coating
            equipment manufacturers. Our large OEM customers generally use large
            quantities of products specifically geared toward their
            applications. Our largest customers in this market segment are
            Applied Materials, Singulus, Unaxis, Shincron, Applied Films,
            Leybold Optics and TEL, and we intend to continue our efforts to
            increase sales to large OEM customers.

      The biggest growth potential for Vacuum Control is the semiconductor OEM
market focus on new 300mm equipment. Growth in other market segments may be
limited because of price competition and trends toward the use of combination
gauges to replace multiple stand-alone gauges. We intend to pursue growth in
this product line by focusing our sales efforts on the semiconductor and vacuum
coating OEM industry and intensifying our sales efforts in the United States and
Asia.

Environmental Health & Safety Product Line

                                                    (millions U.S.$)
                                         2004             2003             2002
                                        ------           ------           ------
      Net Sales                         $ 20.8           $ 23.8           $ 13.7

      Our Environmental Health & Safety (EH&S) product line features a
field-portable chemical identification system called HAPSITE(R) that is used in
emergency response and military applications for immediate, on-site detection of
chemical agents and toxic materials. This product utilizes gas chromatography in
conjunction with mass spectrometry (GC/MS) to provide laboratory quality results
in the field. The MS technology for HAPSITE draws heavily on the same vacuum
sensor expertise that has made INFICON the market leader in semiconductor gas
analysis, thus leveraging our knowledge of vacuum technology in less volatile
markets. Additionally, the acquisition of Sentex Systems Inc., in May 2003,
expands the EH&S capabilities to include environmental monitoring of air and
water using gas chromatography technology. In these applications, the technology
is directed at quickly obtaining critical data for decision-making in emergency
situations or for environmental applications, such as hazardous waste site
analysis and remediation or regulatory compliance for drinking or waste water.

      Products. The GC/MS family of products consists of:

      o     HAPSITE Chemical Identification System. HAPSITE is a laboratory
            grade, field-portable gas chromatograph/mass spectrometer (GC/MS)
            for easy and dependable on-site analysis of volatile organic
            compounds (VOCs). Battery-powered, lightweight, and weatherproof,
            HAPSITE can speciate and quantify VOCs in minutes, significantly
            reducing the cost, time, and difficulties of testing for toxic
            chemicals in air, soil, and water. It allows the user to obtain
            field information within minutes, instead of days or weeks with
            competing methods and instruments.

      o     Water and Soil Sampling System. (Headspace) This accessory
            instrument allows the HAPSITE to detect and identify VOCs which may
            be present in water or soil samples. It can be operated in the same
            field environments as the HAPSITE or set up in a fixed site.

      The GC products consist of:

      o     Scentograph gas chromatographs for chemical monitoring of air and
            water. Models CMS100 and CMS200 are battery powered, lightweight
            units which can be easily transported and set up to sample or
            monitor as needed, providing results in just a few minutes. The
            model CMS500 is specifically intended for fixed site monitoring for
            water security, drinking water compliance or wastewater compliance.


                                       18
<PAGE>

      Markets. GC/MS is a relatively mature analytical approach to the detection
and identification of organic compounds. However, up until the development of
HAPSITE, the analytical procedure required that samples be obtained in the field
and transported to the laboratory for characterization. As noted, this procedure
takes anywhere from hours to weeks for the results to be delivered to the
customer. HAPSITE allows this analysis to be totally completed, on site, within
15 minutes. The results which have been judged by the Environmental Protection
Agency (EPA) to be equivalent to the laboratory results. The same is true for GC
work; the acquisition of the Sentex product line provides a complementary
product offering for applications where the customer is monitoring or checking
for specific compounds, as in the case of regulatory compliance.

      These products have been sold into the following market areas:

      o     Military, Security, and Emergency Response. This is by far the
            largest market segment for the HAPSITE product at the present time.
            The largest customers are the U.S. National Guard Bureau which has
            units deployed throughout the U.S. as part of the homeland defense
            initiative and the U.S. Air Force, which has units deployed
            worldwide. Other U.S. and Allied military and governmental agencies
            are also key customers. Fire Departments, usually "first responders"
            in the case of chemical spills and other environmental accidents,
            are also important customers in this application.

      o     Environmental Protection. We expect that enforcement of the clean
            air act in the U.S. and similar laws in other countries will be
            natural drivers for utilization of the HAPSITE and Scentograph. Some
            sales have already been made into this market.

      o     Water Security. This is a relatively new market that is receiving
            significant attention and funding in order to protect water
            resources in the U.S. and elsewhere from contamination, either
            accidental or terrorist related. Both the HAPSITE and the
            Scentograph play a significant role in this area.

Marketing Sales and Service

      We sell our semiconductor vacuum instrumentation products primarily
through our direct sales force, which is critical to our strategy of maintaining
close relationships with semiconductor chip manufacturers and OEMs. We have
direct sales organizations in China, France, Germany, Hong Kong, Japan, Korea,
Liechtenstein, Singapore, Taiwan, the United Kingdom and the United States. We
sell some of our general vacuum instrumentation products through the vacuum pump
sales forces of our private label partners . We also have sales representatives
and agents who sell our leak detectors in other countries, such as Argentina,
Brazil, Canada, Denmark, Israel and Mexico. Approximately half of our sales were
through our direct sales force and half to private label partners, distributors
and agents.

The following table represents specific customer sales as a percentage of total
Company sales:

                                                  2004        2003        2002
                                                  ----        ----        ----
Pfeiffer Vacuum                                    17%         16%         18%

Unaxis  and its divisions                          15%         14%         14%

We believe that a strong customer service and support infrastructure is
important to maintaining the long-term customer relationships that are critical
to our success. Customer service and support covers such varied functions as
installation, training, on-site or telephone applications advice including data
interpretation, field repair and maintenance, and factory repairs. The
functional lines between service/repair, technical support, sales, and marketing
are blurred because all customer contact people strive to meet the demands of
our customers. Some forms of support are included in the price of the product;
others are paid based on a service contract or a one-time arrangement. The
nature of the product, the application, and the marketing concept determine the
particular approach used.

      Because we address global markets, our customer service and support is
also global. We have personnel located in China, France, Finland, Germany, Hong
Kong, Japan, Korea, Liechtenstein, Singapore, Taiwan, the United Kingdom and the
United States. In addition, many of our distributors also provide customer
service and support.


                                       19
<PAGE>

Research and Development

      We firmly believe that market-driven innovation is the key to success in
our fast-moving industry. We invest heavily in product research and development.
We also pursue technology acquisitions in the semiconductor and related markets
when appropriate. Our research and development staff works closely with our
marketing personnel and our customers to establish product innovation projects
and goals. We strive to minimize the time-to-market of our innovations, and are
committed to developing and maintaining strong proprietary positions through
patents and other intellectual property rights.

                                           (millions U.S.$)
                            2004   % Sales    2003    % Sales    2002    % Sales
                          -----------------  ----------------  -----------------
Research and Development  $  20.1    10.7%   $ 17.9    11.3%   $ 16.1      12.3%

Patents and Other Intellectual Property Rights

      We rely on a combination of patent, trademark, copyright, and trade secret
protection, as well as license arrangements, in the United States and in other
countries, to establish and protect our proprietary rights in our products and
our business. Although our intellectual property is important to our business,
we are not substantially dependent on any single patent, trademark, copyright,
or trade secret.

      We have over 300 patents and patent applications. We intend to file
additional applications as we deem appropriate. We also own over 50 trademarks
and trademark applications. In addition, we have copyrights related to our
business, including copyrights in computer software.

      We have entered into intellectual property license agreements with Unaxis
entities as part of the reorganization. Under these license agreements, the
Unaxis entities license certain intellectual property rights to us, and we
license certain intellectual property rights to the Unaxis entities. See "Major
Shareholders and Related Party Transactions---Related Party
Transactions---Agreements in Connection with our Separation from
Unaxis---Intellectual Property Assignment and License Agreements" for a
description of these license agreements.

      In addition to patent, trademark, and copyright protections, we rely on
trade secret protection for our confidential and proprietary information and
technology. We routinely enter into confidentiality agreements with our
employees and contractors, pursuant to which they agree to maintain the
confidentiality of all our proprietary information and to assign to us all
inventions made while in our employ.

      We cannot assure you that any of our pending patent or trademark
applications will be granted, that we will develop additional proprietary
technology, or that any of our proprietary technology will provide us with
competitive advantages. Moreover, despite our efforts to protect our proprietary
rights, unauthorized parties may attempt to copy or otherwise obtain and use our
products or technologies. Monitoring unauthorized use of our technology is
difficult, and we cannot be certain that the steps we have taken will prevent
unauthorized use of our technology, particularly in countries where the laws may
not protect our proprietary rights as fully as in the United States.

      Finally, there has been substantial litigation regarding patent and other
intellectual property rights in our industries. In the future, we may be a party
to litigation to protect our intellectual property or to respond to allegations
that we infringe third-party intellectual property rights. An assertion that our
products infringe third-party proprietary rights would force us to defend
ourselves against the alleged infringement. If we are unsuccessful in any
intellectual property litigation, then we may be subject to significant
liability for damages and loss of our proprietary rights. Intellectual property
litigation, regardless of its success, would likely be time-consuming, expensive
and would divert management time and attention. Any of the foregoing results
could have a material adverse effect on our business, prospects, financial
condition or results of operations.

Manufacturing, Source of Supply and Quality Control

We concentrate our in-house operations on the manufacture of our core
proprietary vacuum sensor technology and the final assembly of our products in
order to assure the highest quality standards. We outsource all "non-core"
manufacturing, such as printed circuit boards, mechanical assemblies and
housings. This practice allows us to concentrate on those areas that are key
success factors, while reducing our investment and fixed costs associated with


                                       20
<PAGE>

non-core activities. In this manner, we strive to reduce our cost vulnerability
in periodic downturns associated with the high-growth, but volatile,
semiconductor market.

Manufacturing is conducted primarily in four locations: Syracuse, New York
United States; Cologne, Germany; Balzers, Liechtenstein and Mariehamn, Finland.
We employ a demand-based manufacturing system to reduce our inventory, cycle
times and defects. Additionally our quality management and ISO registration
programs stress team-driven, continuous improvement and comprehensive
documentation of process and product specifications.

Suppliers are certified to meet our standards for quality, delivery, and
financial stability. In many instances, we have sole-source relationships with
suppliers.

It has been our experience that the raw materials used for our products are
generally readily available at relatively stable prices. Any scarcity in raw
materials used for our products has always been limited to a very small portion
thereof and has never had a material adverse effect on our business or financial
condition.

Competition

The markets for our products are highly competitive. In all our markets, we
compete primarily on the basis of the following factors:

      o     performance and features;
      o     quality and reliability;
      o     on-time delivery;
      o     price;
      o     range of products;
      o     historical customer relationships;
      o     applications expertise;
      o     manufacturing capacity; and
      o     customer service and support.

      With respect to our semiconductor vacuum instrumentation, the most
important competitive factors are performance and features, applications
expertise and historical customer relationships. With respect to our general
vacuum instrumentation, the most important competitive factors are performance
and features, price, customer service and support, and manufacturing capacity.

Seasonality

      Our net sales and results of operations are seasonally affected by the
summer vacations of our suppliers' and customers' employees. Additionally, our
refrigerant leak detection products, which comprise approximately 6% of annual
sales, are seasonally affected by a larger percentage of sales occurring during
the initial six months of the year. As a result, our net sales and results of
operations are usually lower in the third and fourth quarter of each calendar
year. This seasonality causes our operating results to vary from quarter to
quarter.

C.    Organizational Structure.

      INFICON Holding AG is the parent company of the INFICON group which
operates from 12 countries and consists of a parent company, four manufacturing
companies, seven sales subsidiaries, and a management company located in Bad
Ragaz, Switzerland which performs administrative, inter-company financing, and
intellectual property management functions. For details please see Exhibit 99,
"Corporate Governance," as required by the SWX Swiss Exchange.


                                       21
<PAGE>

D.    Property, Plants and Equipment.

      Our global headquarters is located in Syracuse, New York, USA, and our
manufacturing facilities include the following:

                            Owned or  Expiration     Size
Location of Facility         Leased    of Lease   (sq.ft.)(1)   Primary Products
--------------------         ------    --------   -----------   ----------------

                                                                PKC
Syracuse, New York, USA      Owned        N/A         150,000   EH&S

Balzers, Liechtenstein       Leased      2014         125,000   VC

Cologne, Germany             Leased      2010          50,000   LD

Mariehamn, Finland           Leased      2005           5,400   VC

(1)   This figure includes gross space, i.e., including traffic and utility
      areas.

Item 5. Operating and Financial Review and Prospects

      You should read the following discussion together with the rest of the
annual report, including our consolidated financial statements and related
notes. The results described below are not necessarily indicative of the results
to be expected in any future periods. This discussion contains forward-looking
statements based on current expectations, which involve risks and uncertainties.
Actual results and the timing of certain events may differ significantly from
those projected in these forward-looking statements, due to a number of factors,
including those set forth in the section entitled "Key Information - Risk
Factors" and elsewhere in this annual report.

Overview

      We are a leading developer, manufacturer and supplier of instrumentation
and critical sensor technologies to the semiconductor and vacuum coating
markets, as well as other industries worldwide. We operate in two business
segments: the semiconductor vacuum instrumentation segment and the general
vacuum instrumentation segment.

      We have one major product line that we include in the semiconductor vacuum
instrumentation segment: our Process, Knowledge and Control product line. The
products we sell in our semiconductor vacuum instrumentation segment are
technologically advanced products, which were developed for use in various
semiconductor-manufacturing applications. Although we sell some of these
products outside of the semiconductor market, our general level of sales of
these products is sensitive to the cyclical fluctuations of the semiconductor
equipment market, which is generally more volatile than the semiconductor chip
manufacturing market. For the years ended December 31, 2004, 2003 and 2002, we
estimate that on average 64% of our sales in this segment were to semiconductor
and vacuum coating markets such as manufacturers of semiconductor chips, flat
screen televisions and monitors, computer disc drive components and various
electronic storage media, such as compact discs, digital video discs and floppy
discs. While the semiconductor chip manufacturing market has been highly
cyclical, it has showed improvement during 2003 and 2004, which resulted in an
increased demand and sales for our products.

      Our general vacuum instrumentation segment consists of versatile products
which are suitable for multiple applications in manufacturing and industrial
markets. Our products in this segment fall into three product lines: Leak
Detection, Vacuum Control, and Environmental, Health and Safety product lines.
These products are used in many markets, including air conditioning,
refrigeration, automotive, emergency response and security and semiconductor
manufacturing.


                                       22
<PAGE>

      We are subject to risks common to companies in the semiconductor industry,
including the highly cyclical nature of the semiconductor industry leading to
recurring periods of oversupply, development by our competitors of new
technological innovations, dependence on key personnel, and the protection of
proprietary technology. Our general vacuum instrumentation segment sells to
diverse markets and, accordingly, we believe that it is less susceptible to the
risks associated with the semiconductor or any other single market, but is
susceptible to the performance of the economy as a whole. For more information
on the risks of our business, see "Key Information - Risk Factors."

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the dates of the financial statements and
the reported amounts of revenues and expenses during the reporting periods. On
an on-going basis, management evaluates its estimates and judgments, including,
but not limited to, those related to revenue recognition, pension actuarial
assumptions and methods, reserves for obsolescence and excess inventory, bad
debt, warranty, goodwill and intangibles, and valuation allowances for deferred
tax assets. Management bases its estimates and judgments on historical
experience and on various other factors believed to be reasonable under the
circumstances that form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions. The following summarizes specific accounting policies:

      Revenue Recognition - Revenue is recognized upon the transfer of title and
      risk of loss which is generally upon shipment. When a customer's
      acceptance is required, generally revenue is not recognized until the
      customer's acceptance is received. The Company accrues for anticipated
      returns and warranty costs upon shipment.

      Goodwill and Intangible Assets - The Company reviews goodwill and
      intangible assets for impairment whenever events or changes in
      circumstances indicate that the carrying amount of these assets may not be
      recoverable, and also reviews goodwill annually. Goodwill and intangible
      assets deemed to have indefinite lives are not subject to amortization,
      while all other identifiable intangibles are amortized over their
      estimated useful life. Intangible assets, such as purchased technology,
      are generally recorded in connection with the acquisition of a business.
      The value assigned to intangible assets is determined by or with
      assistance of an independent valuation firm based on estimates and
      judgment regarding expectations for the success and life cycle of products
      and technology acquired. If actual results differ significantly from the
      estimates, or other indications are present, the Company may be required
      to record an impairment charge to write down the asset to its realizable
      value. In addition, goodwill is tested annually using a two-step process.
      The first step is to identify any potential impairment by comparing the
      carrying value of the reporting unit to its fair value. If a potential
      impairment is identified, the second step is to compare the implied fair
      value of goodwill with its carrying amount to measure the impairment loss.
      A severe decline in fair value could result in an impairment charge to
      goodwill, which could have a material adverse effect on the Company's
      business, financial condition, and results of operations. The Company
      performs its annual impairment analysis during the third quarter.

      Bad Debts - The allowance for doubtful accounts is for estimated losses
      resulting from a customer's inability to make required payments. If the
      financial condition of our customers were to deteriorate, resulting in an
      impairment of their ability to make payments, additional allowances may be
      required.

      Warranties - The accrual for the estimated cost of product warranties is
      provided for at the time revenue is recognized. While we engage in
      extensive product quality programs and processes, including actively
      monitoring and evaluating the quality of our component suppliers, our
      warranty obligation is affected by product failure rates, material usage,
      and service delivery costs incurred in correcting a product failure.
      Should actual product failure rates, material usage or service delivery
      costs differ from our estimates, revisions to the estimated warranty
      liability may be required.

      Inventory - The reserve for estimated obsolescence or unmarketable
      inventory is equal to the difference between the cost of inventory and the
      estimated fair value based upon assumptions about future demand and market


                                       23
<PAGE>

      conditions. If actual future demand or market conditions are less
      favorable than those projected by management, additional inventory
      write-downs may be required.

      Pension Benefits - The pension benefit costs and credits are developed
      from actuarial valuations. Inherent in these valuations are key
      assumptions including discount rates and expected return on plan assets.
      The Company considers current market conditions, including changes in
      interest rates, in selecting these assumptions. Changes in the related
      pension benefit costs or credits may occur in the future in addition to
      changes resulting from fluctuations in our related headcount due to
      changes in the assumptions.

      Deferred Tax Assets - As of December 31, 2004, the Company had net
      deferred tax assets of approximately U.S.$38 million reflecting tax credit
      and loss carry forwards, basis differences primarily from intangible
      assets, and other deductions available to reduce taxable income in future
      years. A majority of the net deferred tax assets balance resides in the
      United States. In assessing the realization of the Company's deferred tax
      assets, we consider whether it is more likely than not the deferred tax
      assets will be realized. The ultimate realization of our deferred income
      tax assets depends upon our ability to generate future taxable income,
      including the implementation of tax planning strategies, during the
      periods in which our basis differences and other deductions become
      deductible and prior to the expiration of our net operating loss carry
      forwards. On a quarterly basis, the Company evaluates the recoverability
      of its deferred tax assets based upon historical results and forecasted
      results over future years, considering tax planning strategies, and
      matches this forecast against the basis differences, deductions available
      in future years and the limitations allowed for net operating loss carry
      forwards to ensure there is adequate support for the realization of the
      deferred tax assets. While we have considered future operating results, in
      conjunction with ongoing prudent and feasible tax planning strategies in
      assessing the need for the valuation allowance, in the event we were to
      determine that we would not be able to realize all or part of our net
      deferred tax assets in the future, an adjustment to the deferred tax
      assets would be charged as a reduction to income in the period such
      determination was made. Likewise, should we determine that we would be
      able to realize future deferred tax assets in excess of its net recorded
      amount, an adjustment to the deferred tax assets would increase income in
      the period such determination was made. For the year ended December 31,
      2004, the Company's evaluation of the recoverability of our deferred tax
      assets, in accordance with SFAS 109, showed that an increase to our
      valuation allowance for its deferred income tax assets was required. An
      additional valuation allowance of U.S.$.8 million was recorded for the
      year ended December 31, 2004. If the Company generates future taxable
      income against which these tax attributes may be applied, some portion or
      all of the valuation allowance would be reversed and reported as income
      tax benefit in future periods.

      Although realization is not assured, the Company believes it is more
      likely than not the net deferred tax asset balance as of December 31, 2004
      will be realized. Differences between forecasted and actual future
      operating results could adversely impact our ability to realize our
      deferred income tax assets; however, differences between forecasted and
      actual future operating results are continually monitored to ensure the
      Company has adequate support for the realization of the deferred tax
      assets. The Company's analysis supporting the realization of the deferred
      tax assets places careful consideration on the net operating loss carry
      forward periods.

      Impairment of Long-Lived Assets - SFAS No. 144, "Accounting for the
      Impairment or Disposal of Long-Lived Assets," was early adopted by the
      Company on January 1, 2002. In accordance with SFAS No. 144, long-lived
      assets to be held and used by an entity are to be reviewed for impairment
      whenever events or changes in circumstances indicate the carrying amount
      of an asset may not be recoverable. If the sum of the expected future
      undiscounted cash flows is less than the carrying amount of the asset, an
      impairment loss is recognized by reducing the recorded value to fair
      value. During 2004 and 2003, an impairment charge was recognized and is
      included in loss from discontinued operations (see Note 3).

      Disposal of Long-Lived Assets/Discontinued Operations - SFAS No. 144,
      "Accounting for the Impairment or Disposal of Long-Lived Assets," was
      early adopted by the Company on January 1, 2002. Under SFAS No. 144, the
      definition of what constitutes a discontinued operation is broader,
      discontinued operations are no longer measured on a net realizable value
      basis, and future operating losses are no longer recognized before they
      occur (see Note 5).


                                       24
<PAGE>

A.    Results of Operations.

The following table sets forth, for the periods indicated, the amount and
percentage of total net sales of certain line items included in our consolidated
statements of income:

<TABLE>
<CAPTION>
                                                                          Years ended December 31,
                                                        ------------------------------------------------------------

                                                            2004                 2003                2002
                                                        ------------------------------------------------------------

<S>                                                     <C>         <C>     <C>         <C>      <C>         <C>
Net sales
Semiconductor vacuum instrumentation                    $ 49,127     26.1%  $ 36,674     23.3%   $ 30,716     23.6%
General vacuum instrumentation                           139,020     73.9%   120,900     76.7%     99,563     76.4%
                                                         -------     ----    -------     ----      ------     ----
Total net sales                                          188,147    100.0%   157,574    100.0%    130,279    100.0%
Cost of sales                                            100,603     53.5%    86,974     55.2%     72,364     55.5%
                                                         -------     ----    -------     ----      ------     ----
Gross profit                                              87,544     46.5%    70,600     44.8%     57,915     44.5%

Research and development                                  20,181     10.7%    17,939     11.4%     16,052     12.3%

Selling, general and administrative                       52,740     28.0%    46,583     29.6%     39,264     30.1%
                                                         -------     ----    -------     ----      ------     ----
Operating income from continuing operations               14,623      7.8%     6,078      3.9%      2,599      2.0%
Interest (income), net                                       (83)     0.0%      (170)    -0.1%       (597)    -0.5%
Other expense (income), net                               (1,415)    -0.8%      (552)    -0.4%        383      0.3%
                                                         -------     ----    -------     ----      ------     ----

Income from continuing operations before income taxes     16,121      8.6%     6,800      4.3%      2,813      2.2%
Provision (benefit) for income taxes                       4,661      2.5%     3,686      2.3%       (120)    -0.1%
                                                         -------             -------               ------
Income from continuing operations                         11,460      6.1%     3,114      2.0%      2,933      2.3%
(Loss) from discontinued operations                       (2,039)    -1.1%   (12,503)    -7.9%     (2,828)    -2.2%
                                                         -------             -------               ------
Net income (loss)                                       $  9,421      5.0%  $ (9,389)    -6.0%   $    105      0.1%
                                                        ==========================================================
</TABLE>


                                       25
<PAGE>

The following table sets forth, for the periods indicated, certain segment and
product sales information, expressed absolutely and as a percentage of total net
sales:

<TABLE>
<CAPTION>
                                                                             Years ended December 31,
                                                                ===================================================
                                                                  2004              2003              2002
                                                                ---------------------------------------------------

<S>                                                             <C>        <C>   <C>          <C>   <C>         <C>
Semiconductor Vacuum Instrumentation

Process Knowledge and Control                                   $ 49,127   26%   $  36,674    23%   $ 30,716    24%
                                                                --------   --     --------    --    --------    --
Total net sales                                                   49,127   26%      36,674    23%     30,716    24%
Gross profit                                                      26,180   14%      18,359    12%     14,627    11%
Earnings before interest and taxes - continuing operations(1)      4,308    2%      (3,121)   -2%     (5,725)   -4%

General Vacuum Instrumentation

Environmental, Health & Safety                                  $ 20,830   11%   $  23,803    15%   $ 13,744    11%
Leak Detection                                                    57,921   31%      50,421    32%     47,426    36%
Vacuum Control                                                    60,269   32%      46,676    30%     38,393    30%
                                                                --------   --     --------    --    --------    --
Total net sales                                                  139,020   74%     120,900    77%     99,563    76%
Gross profit                                                      61,364   33%      52,241    33%     43,288    33%
Earnings before interest and taxes - continuing operations(1)     10,693    6%       9,751     6%      7,941     6%
</TABLE>

(1)   The gain on receipt and sale of Prudential stock of $1,038 (see footnote
      6) has not been allocated to the segments, otherwise all income and
      expenses have been included in the appropriate segments.

The following table sets forth, for the periods indicated, sales to customers,
based on customer location, in each geographical market expressed absolutely and
as a percentage of total net sales. (2)

                                          Years ended December 31,
                          ======================================================
                             2004              2003              2002
                          ------------------------------------------------------

Europe                    $ 83,147    44%   $ 71,699   46%     $ 58,471      45%
North America               51,434    27%     48,241   31%       42,325      32%
Asia-Pacific                51,783    28%     35,899   23%       28,744      22%
Other                        1,783     1%      1,735    1%          739       1%
                          --------          --------           --------
Total                     $188,147   100%   $157,574  100%     $130,279     100%
                          ========          ========           ========

(2)   The table above summarizes sales on the basis of a product's country of
      destination, as opposed to its country of origin.

Year Ended December 31, 2004 Compared with Year Ended December 31, 2003

Net Sales

Net sales increased by 19.4% to U.S.$188.1 million for the year ended December
31, 2004 from U.S.$157.6 million for the year ended December 31, 2003. Excluding
the impact of changes in currency exchange rates, sales grew 13.8%. In general,
the increase in sales resulted from volume and not price increases.

      Semiconductor Vacuum Instrumentation Segment. Net sales increased by 34%
to U.S.$49.1 million for the year ended December 31, 2004 from U.S.$36.7 million
for the year ended December 31, 2003. On a constant dollar basis sales grew 28%


                                       26
<PAGE>

or U.S.$10.1 million, resulting from improved demand from semiconductor
end-users and equipment manufacturers and flat panel display equipment
manufacturers, primarily in Asia. The increase in semiconductor manufacturers is
being driven by significantly higher sales to Samsung Electronics Co. Ltd.

      General Vacuum Instrumentation Segment. Net sales increased by 15.0% to
U.S.$139.0 million for the year ended December 31, 2004 from U.S.$120.9 million
for the year ended December 31, 2003. On a constant dollar basis sales grew 9.8%
or U.S.$11.9 million, primarily due to stronger demand by large private-label
customers of major vacuum pump manufacturers in Europe, who resell our products.
In addition, there has been an increase in sales of our leak detection products
in the air conditioning, refrigeration and automotive industries. These
increases were partially offset by a decrease of U.S.$3.0 million in EH&S
product sales to the U.S. military and homeland defense agencies.

Gross Profit

Gross profit increased by 24.0% to U.S.$87.5 million, or 46.5% of net sales, for
the year ended December 31, 2004 from U.S.$70.6 million, or 44.8% of net sales,
for the year ended December 31, 2003. The percentage improvement is primarily
due to the impact of favorable foreign currency exchange rates. Additionally,
there was a favorable sales mix of higher margin products sold through our
semiconductor vacuum instrumentation segment coupled with increased absorption
of fixed overhead costs across the majority of our product lines. These
increases were partially offset by a higher mix of lower margin private label
sales, which also requires less overhead cost to support.

Research and Development

Research and development costs increased by 12.5% to U.S.$20.2 million, or 10.7%
of net sales, for the year ended December 31, 2004 from U.S.$17.9 million, or
11.4% of net sales, for the year ended December 31, 2003. Approximately 50% of
the U.S.$2.3 million increase results from changes in foreign currency exchange
rates. The remaining increase results from a full year of expenses from our May
2003 acquisition of Sentex Systems, as well as increased product development
activities primarily in our Vacuum Control products.

Selling, General and Administrative

Selling, general and administrative expenses increased by 13.2% to U.S.$52.7
million, or 28.0% of net sales, for the year ended December 31, 2004 from
U.S.$46.6 million, or 29.6% of net sales, for the year ended December 31, 2003.
Changes in foreign exchange rates relative to the U.S. dollar contributed to
U.S.$2.1 million, while higher commissions, profit sharing and incentive expense
on higher sales and profit, contributed most of the remaining increase.
Additionally, headcount increases in sales and marketing of our EH&S product
line were offset by savings realized from headcount reductions in the fourth
quarter of 2003, following the divestiture of our ultra clean processing
business.

Other Expense (Income)

Other (income) was U.S.$(1.4) million for the year ended December 31, 2004 as
compared to other (income) of U.S.$(0.6) million for the year ended December 31,
2003. The increase is a result of a U.S.$1.0 million gain from receipt and sale
of shares of Prudential Financial, Inc. (see footnote 6).

Provision (Benefit) for Income Taxes

Provision for income taxes increased to U.S.$4.7 million, or 29% of income from
continuing operations before income taxes for the year ended December 31, 2004
from a provision of U.S.$3.7 million, or 54% of income from continuing
operations before income taxes, for the year ended December 31, 2003. During
2004, a U.S.$.5 million tax credit was received from New York State, which
resulted in a reduction of the effective tax rate by 3.2%. During 2003, a
U.S.$1.1 million valuation allowance was recorded against the Company's deferred
tax assets, which resulted in the effective tax rate being increased by 16%, as
well as the implementation of certain tax planning strategies. The remaining
difference was due to changes in the earnings mix amongst tax jurisdictions.


                                       27
<PAGE>

Discontinued Operations, net of tax

The Company recorded a loss from discontinued operations of U.S.$2.0 million for
the year ended December 31, 2004 compared to a loss of U.S.$12.5 million for the
year ended December 31, 2003. During 2004, the Company wrote down a portion of
its deferred tax asset relative to specific loss carryforwards that were
recorded as part of the acquisition of the patterning solutions software
business of U.S.$1.4 million. Additionally, the patterning solutions business
incurred losses from operations of U.S.$1.3 million. These losses were offset by
the ultra clean business income from operations of U.S.$.6 million, which
resulted from gains on sale of inventory and collection of fully reserved
accounts receivable and loan balances. During 2003, the Company recorded a
goodwill and intangible asset impairment charge of U.S.$7.4 million related to
the patterning solutions business as well as U.S.$2.3 million charge and loss
from operations associated with the divestment of the ultra clean processing
business.

Net Income(Loss)

Net income increased to U.S.$9.4 million, or 5.0% of net sales, for the year
ended December 31, 2004 from U.S.$(9.4) million, or (6.0)% of net sales, for the
year ended December 31, 2003.

Year Ended December 31, 2003 Compared with Year Ended December 31, 2002

Net Sales

Net sales increased by 21.0% to U.S.$157.6 million for the year ended December
31, 2003 from U.S.$130.3 million for the year ended December 31, 2002. This
increase is due primarily to favorable changes in exchange rates relative to the
U.S. Dollar and higher sales within our semiconductor vacuum and general vacuum
instrumentation segments. Price changes did not have a significant impact on our
net sales, however, our European sales are subject to a currency translation
effect due to the weak US Dollar. Sales for the year ended December 31, 2003
were positively impacted by changes in currency exchange rates of U.S.$11.3
million, primarily with respect to the Swiss Franc, Yen and the Euro, as
compared to 2002.

      Semiconductor Vacuum Instrumentation Segment. Net sales increased by 19.4%
to U.S.$36.7 million for the year ended December 31, 2003 from U.S.$30.7 million
for the year ended December 31, 2002. This increase resulted from improved
demand for PKC instruments and software from semiconductor manufacturers in the
United States and Asia, primarily the result of a large sale to Samsung
Electronics Co. Ltd, as well as sales of thin film equipment resulting from an
increased demand by flat panel display and optical storage equipment OEM
customers. Additionally, favorable changes in exchange rates relative to the US
Dollar had a favorable impact of U.S.$2.0 million.

      General Vacuum Instrumentation Segment. Net sales increased by 21.4% to
U.S.$120.9 million for the year ended December 31, 2003 from U.S.$99.6 million
for the year ended December 31, 2002. This increase resulted from higher EH&S
product sales from the U.S. military and homeland defense agencies coupled with
favorable changes in exchange rates relative to the US Dollar of U.S.$9.3
million. This increase was primarily offset by a lower demand for our Leak
Detection products by our U.S. industrial customers.

Gross Profit

Gross profit increased by 21.9% to U.S.$70.6 million, or 44.7% of net sales, for
the year ended December 31, 2003 from U.S.$57.9 million, or 44.5% of net sales,
for the year ended December 31, 2002. Although the overall percentage remained
relatively flat, there was a decline due to changes in foreign exchange rates
relative to the U.S. dollar , which were offset by the favorable absorption of
fixed costs in the Vacuum Control and EH&S product lines.

Research and Development

Research and development costs increased by 11.2% to U.S.$17.9 million, or 11.3%
of net sales, for the year ended December 31, 2003 from U.S.$16.1 million, or
12.3% of net sales, for the year ended December 31, 2002. This increase was
driven primarily by the acquisition of Sentex Systems during 2003, increased new
product development activity for PKC products for the semiconductor industry,


                                       28
<PAGE>

and changes in foreign exchange rates relative to the U.S. dollar of U.S.$1.5
million.

Selling, General and Administrative

Selling, general and administrative expenses increased by 18.6% to U.S.$46.6
million, or 29.6% of net sales, for the year ended December 31, 2003 from
U.S.$39.3 million, or 30.1% of net sales, for the year ended December 31, 2002.
This increase is primarily the result of additional costs following the
acquisition of Sentex Systems during 2003, changes in foreign exchange rates
relative to the U.S. dollar of U.S.$3.5 million, higher compensation and
commission cost associated with the growth of the EH&S product line and
additional pension and compensation costs.

Other Expense (Income)

Other (income) was U.S.$(0.6) million, or 0.4% of net sales, for the year ended
December 31, 2003 as compared to other expense of U.S.$0.4 million, or 0.3% of
net sales, for the year ended December 31, 2003. The increase in other income is
primarily the result of foreign currency gains recognized during the year ended
December 31, 2003.

Provision (Benefit) for Income Taxes

Provision for income taxes increased to U.S.$3.7 million, or 54.4% of income
before income taxes for the year ended December 31, 2003 from a (benefit) of
U.S.$(0.1) million, or 4.3% of income before taxes, for the year ended December
31, 2002. The increase in the provision for income taxes resulted from a
U.S.$1.1 million valuation allowance relating to the Company's analysis of its
deferred tax assets, as well as the implementation of certain tax planning
strategies. The remaining change in the effective tax rate was due to changes in
the earnings mix amongst tax jurisdictions.

Discontinued Operations, net of tax

The Company recorded a loss from discontinued operations of U.S.$12.5 million
for the year ended December 31, 2003 compared to a loss of U.S.$2.8 million for
the year ended December 31, 2002. A goodwill and intangible asset impairment
charge of U.S.$7.4 million related to the patterning solutions business was
recorded during the third quarter of 2003. Additionally, a loss from operations
of patterning solutions of U.S.$1.3 million was incurred during 2003. During
2003, U.S.$2.3 million in costs associated with the divestment of the ultra
clean processing business were incurred. These ultra clean divestment costs were
partially offset by a U.S.$1.6 million lower loss from operations for the year
ended December 31, 2003.

Net Income (Loss)

Net income(loss) was U.S.$(9.4) million, or (6.0)% of net sales, for the year
ended December 31, 2003 from U.S.$.1 million, or 0.0% of net sales, for the year
ended December 31, 2002.


                                       29
<PAGE>

B.    Liquidity and Capital Resources.

The following table sets forth, for the periods indicated, selected cash flow
information.

<TABLE>
<CAPTION>
                                                                        2004                  2003
                                                                    ------------------------------

<S>                                                                 <C>                   <C>
Net income (loss)                                                   $  9,421              $ (9,389)
  Depreciation and amortization                                        4,863                 5,222
  Other non-cash adjustments                                           3,038                 7,430
    Change in trade accounts receivable                                2,451                (4,481)
    Change in inventories                                               (341)                2,317
    Change in other assets and liabilities                             3,690                  (209)
                                                                    ------------------------------
Net cash provided by operating activities                             23,122                   890

  Purchases of property, plant and equipment                          (3,745)               (4,109)
  Purchase of short-term investments                                  (5,048)                   --
  Other                                                                1,038                (1,500)
                                                                    ------------------------------
Net cash used in investing activities                                 (7,755)               (5,609)

Net cash provided by financing activities                                 34                   208

Effect of exchange rate changes on cash and cash equivalents           3,641                 3,739
                                                                    ------------------------------

Cash and cash equivalents at end of period                          $ 56,116              $ 37,074
                                                                    ==============================
</TABLE>

Historically, we have been able to finance our operations and capital
requirements through cash provided by operations. The increase in operating cash
flow of U.S. $22.2 million was primarily the result of improved operating
results and working capital. Improved inventory turnover and days sales
outstanding generated U.S.$2.1 million of increased cash flow as well as higher
commissions, profit sharing and incentive accruals. Cash contributions to
Company's defined benefit pension plans were U.S.$ 2.9 million and U.S.$2.3
million for 2004 and 2003, respectively.

Investing activities consisted of purchases of capital equipment, two
acquisitions in 2003 and sale of investments in 2004. During 2004 and 2003,
capital expenditures were relatively unchanged and approximately U.S.$1.0
million less than depreciation levels. During 2004, the Company invested
U.S.$5.0 million in short-term investments, primarily certificates of deposit
and other time deposits with maturities between three months and twelve months.
Finally, during 2004, the Company sold U.S.$ 1.0 million of stock it owned in
Prudential Financial, Inc. (see footnote 6). During 2003, the Company acquired
the New Vision Systems and Sentex Systems, Inc., which results in net cash
outflow U.S.$1.5 million (see footnote 3).

Borrowing Arrangements

The Company has a U.S.$30.0 million working capital financing arrangement with
Credit Suisse. The financing arrangement can be either in the form of a current
account overdraft facility, fixed advances with a maximum maturity of twelve
months, bid/advance payment/performance bonds, issuance of letters of credit, or
as margin coverage for foreign exchange forward transactions. The working
capital financing automatically extended for one year on November 23, 2004. The
Company had U.S.$0 outstanding under the arrangement as of December 31, 2004 and
2003.

The Company has revolving credit facilities with HypoVereinsbank in Hong Kong
Dollars, which approximates U.S.$1.8 million. These facilities can be in the
form of working capital financing and/or margin coverage arrangement for foreign
exchange forward transactions. The working capital financing arrangement can be
either in the form of a current account overdraft facility, fixed advances with
a maximum maturity of nine months, short term trust receipt financing, issuance
of letters of credit, or issuance of bank guarantees. The working capital
financing arrangement expires on June 30, 2006 and the Company had U.S.$470 and
U.S.$0, respectively, outstanding under the arrangement as of December 31, 2004
and 2003.


                                       30
<PAGE>

Notes Receivable from Officers

We made full recourse loans available to our executive officers eligible to
participate in the leveraged share plan for the purpose of purchasing up to 80%
of the shares allocated to them under the plan. Loans made to executive officers
have a term of 7 years and are on a recourse basis. The loans are collateralized
by all of the shares purchased under the leveraged share plan, and we have
either a first, or, if a portion of the shares are financed or refinanced by
another lender, a second lien on the shares. The loans have an interest rate
equal to 120% of the mid-term applicable federal rate (as defined in the
Internal Revenue Code) determined on the date the loans are made. The balances
of the loans payable to us are offset against the value of the shares on our
balance sheet. As of December 31, 2004 and 2003, there is an outstanding balance
on the loans of U.S.$0.4 million.

We currently believe the cash generated from operations, together with our cash
balance and borrowings available under our lines of credit, will be sufficient
to satisfy our working capital and capital expenditure requirements for the
foreseeable future.

C.    Research and development, patents and licenses, etc.

For a description of our research and development policies for the last three
years, please refer to "Information on the Company-Business Overview-Research
and Development."

D.    Trend Information.

Since our products are used by many different industries, there are multiple
trends that influence our business. We have grouped the industries we serve into
four end markets that we distinguish. These are the general vacuum processes
market, the semiconductor and vacuum coating markets, the refrigeration and
air/conditioning market and the emergency response and security market.

Below is an overview of the historic development of sales (in MUSD) to each of
our four end markets:

                                                             Emergency
             General Vacuum     Semicond. &    Refrig. &    Response &
                  Processes    Vac. Coating     Aircond.      Security    Total

      2002             61.9            31.9         24.3          12.2   $130.3
      2003             67.6            43.6         24.0          22.4   $157.6
      2004             82.7            58.8         28.1          18.5   $188.1

The general vacuum processes market is the largest market and includes a broad
variety of industries. This includes industries like life sciences, research,
aviation, chemical and many others. We serve the majority of these customers
indirectly through our private label customers so we do not have detailed
information about the end customers. This market is also a very stable with
typically small changes in demand over time. During 2004 we have experienced
growth in this market as a result of improving economic conditions in Europe, in
particular, but also globally.

The semiconductor and vacuum coating markets include semiconductor chipmakers
and semiconductor, flat panel display, data storage and ophthalmic equipment
manufacturers as well as other specialized vacuum coating industries. This
market segment is the most volatile area of our business and is subject to
sudden and significant changes in demand both up and down. While we expect that
this sector will remain volatile, we believe we are well positioned to
outperform the sector as a whole because of our focus and leadership in emerging
technologies and employing some of the most advanced enabling technologies in
our manufacturing environment. In 2004, we experienced a recovery in these
markets from a previous prolonged downturn in 2001 through 2003, and recently we
are seeing some signs of weakness again, making the trend for 2005 uncertain.

The refrigeration and air conditioning market includes manufacturers of cooling
appliances such as refrigerators for commercial and residential use and air
conditioners for commercial, residential and automotive use. Also included in
this market are wholesalers and distributors who serve the service industry for
cooling and air conditioning market. This market is more stable and is driven by
a global trend towards regulating indoor air temperatures particularly in areas
of warmer climate. Approximately 20% of our sales to this market have a seasonal


                                       31
<PAGE>

pattern with increasing sales in the first and second quarter and decreasing
sales in the third and fourth quarter of each calendar year.

The emergency response and security market includes military agencies, civil
emergency response agencies on federal, state and municipal level, industrial
hygiene, water safety and environmental protection customers. Following the
terror attacks in 2001 in the U.S. the demand for chemical security products
like our HAPSITE has grown significantly. While this demand was driven at first
primarily by U.S. military agencies, we are now seeing increased international
demand by both military and non-military customers. However, sales to U.S.
military agencies still account for a majority of our sales on an annual basis.

E. & F. Off Balance Sheet Arrangements and Contractual Obligations

      A summary of contractual obligations and commitments as of December 31,
2004 is as follows:

                               Less than   1 - 3      3 - 5   More than
                                 1 Year    Years      Years    5 Years    Total
                                ------     ------     ------   -------   -------

Operating Leases                $4,978     $9,384     $9,535   $14,240   $38,137

Purchase Obligations               768        438                        $ 1,206

Total Contractual Obligations   $5,746     $9,822     $9,535   $14,240   $39,343

The Company leases some of its facilities and machinery and equipment under
operating leases, from Unaxis and third parties, expiring in years 2005 through
2014. Generally, the facility leases require the Company to pay maintenance,
insurance and real estate taxes. Purchase obligations include amounts committed
under legally enforceable contracts or purchase orders for goods or services
with defined terms as to price, quantity, delivery and termination liability.

Derivative Financial Instruments

The Company maintains a foreign currency exchange risk management strategy that
uses derivative instruments, in the form of forward exchange contracts, to hedge
against future movements in foreign exchange rates that affect certain foreign
currency denominated sales and related purchase transactions, caused by currency
exchange rate volatility. These contracts are designated as cash flow hedges and
generally have durations of less than one year. The Company attempts to match
the forward contracts with the underlying items being hedged in terms of
currency, amount and maturity. The primary currencies in which the Company has
exposure are the Japanese Yen, the Swiss Franc, Euro and U.S. Dollar. This
exposure arises in certain locations from intercompany purchases and sales of
inventory in foreign currency for resale in local currency, in addition to
intercompany billings relating to research and development and management
services.

The Company's accounting policy, for derivative financial instruments, is based
on its designation of such instruments as hedging transactions. An instrument is
designated as a hedge based in part on its effectiveness in risk reduction and
one-to-one matching of derivative instruments to underlying transactions. The
Company records all derivatives on the balance sheet at fair value. For
derivative instruments that are designated and qualify as cash flow hedges, the
effective portion of the gain or loss on the derivative instrument is reported
as a component of accumulated other comprehensive income and reclassified into
earnings in the same period or periods during which the hedged transaction
affects earnings. The gain or loss (ineffectiveness) on the derivative
instrument in excess of the hedged item, if any, is recognized in current
earnings during the period in which it occurs. The Company's unrealized net
losses under foreign currency contracts at December 31, 2004 and 2003, are
included in accumulated other comprehensive income, net of taxes. These
unrealized net losses are expected to be recognized into earnings over the next
twelve months. The Company recognized gains net of taxes from ineffective hedges
of U.S.$264 in 2002.


                                       32
<PAGE>

                                                                    2004   2003
                                                                    -----  -----

Aggregate value of contracts for sale of U.S. Dollars               2,300  2,200

Aggregate value of contracts for exchange of all other currencies   3,000  4,269

Unrealized net losses under foreign currency contracts                 78     13

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123(R), "Share-Based Payment", which is a revision of SFAS No. 123 and
supersedes APB Opinion No. 25. SFAS No. 123(R) requires all share-based payments
to employees, including grants of employee stock options, to be valued at fair
value on the date of grant, and to be expensed over the applicable vesting
period. Pro forma disclosure of the income statement effects of share-based
payments is no longer an alternative. SFAS No. 123(R) is effective for all
periods after July 1, 2005. In addition, companies must also recognize
compensation expense related to any awards that are not fully vested as of the
effective date. Compensation expense for the unvested awards will be measured
based on the fair value of the awards in accordance with the provisions of SFAS
No. 123. The Company is currently assessing the impact of adopting SFAS 123(R)
to its consolidated financial statements.

Item 6. Directors, Senior Management, and Employees

A. - C. Directors and Senior Management, Compensation, and Board Practices

For details please see Exhibit 99, "Corporate Governance," as required by the
SWX Swiss Exchange.

D.    Employees.

      The following table shows a breakdown of employees by main category of
activity and geographic location as of December 31, 2004:

                                                North
      Employees by Activity           Europe    America   Asia     Total
                                  ------------------------------------------

      Manufacturing & Service         173       114       28       315

      Research and Development         62        66       --       128

      Sales & Marketing                69        84       59       212

      General Administration           35        32        7        74

      Total                           339       296       94       729

      Additionally, we had 724 and 694 full time employees as of December 31,
2003 and 2002, respectively.

      Some of our non-management workers at our German facility belong to German
workers unions. However, we do not negotiate collective bargaining agreements
with these unions to cover our workers nor do we have any other direct relations
with them. Instead, in accordance with German practice, unions negotiate
agreements with industry-wide employers' associations. In recent years, unions
have cooperated with industry, agreeing to concessions to improve operating
efficiency. A German collective bargaining agreement governs the employment of
all workers of the categories organized in the relevant union, whether or not
the individual worker is a union member.


                                       33
<PAGE>

      In Germany, employers and unions generally negotiate collective bargaining
agreements annually. The general umbrella agreement that covers our workers was
entered into for an indefinite term. A separate agreement, which covers
compensation and benefit matters and is usually entered into for a period of one
year, has a two-year term this time which expires in February 2006.

      Our employees at our Cologne, Germany and Balzers, Liechtenstein
facilities are represented by workers councils, elected by all non-management
employees. In Germany, the members serve a four-year term and elections were
held in February 2002. In Liechtenstein, elections of the new members were held
in January 2004 and the members serve a three-year term.

      The works councils facilitate communications between us and our staff at
the facility level. The members of our works councils share responsibilities
with us for managing staff-related matters and working condition issues such as
compensation issues (within the framework provided by the collective bargaining
agreement), the hiring of new employees, working hours, working shifts or
matters relating to employee facilities. In Germany, the rights and
responsibilities of works council are set forth in the German Works Council
Constitution Act (Betriebsverfassungsgesetz). The German Works Council
Constitution Act provides, among other things, that any termination of an
employee must be approved by members of the works council. Similarly, scheduled
overtime work must generally be approved by the works council.

      We have never experienced a work stoppage, slowdown or strike, and we
consider our relations with our employees to be excellent.

E.    Share Ownership.

      Under our leveraged share plan described below, 23,683 options to purchase
118,415 INFICON shares were granted to our executive officers and certain key
employees. Each option entitles its holder to purchase five INFICON shares at
the initial public offering price of CHF 225. The options are non-transferable
and will expire on the seventh anniversary of the date of grant which was
November 8, 2000.

      In connection with our initial public offering, we offered employees the
right to participate in one of two equity purchase programs. These are the
leveraged share plan and the discounted share purchase plan.

      Leveraged Share Plan. The leveraged share plan was available only in
connection with our initial public offering to three tiers of employees: the
Chief Executive Officer, other executive officers and key employees. No shares
were made available to our directors under the leveraged share plan. Depending
on an eligible employee's tier, an eligible employee could purchase shares in
the offering at the initial public offering price for a total purchase price
between CHF 40,000 and CHF 1,000,000 (U.S.$22,504 and U.S.$562,588,
respectively). For each share purchased in the initial public offering by an
eligible employee pursuant to the leveraged share plan, such eligible employee
received an option to purchase five shares at the offer price. The amount of
shares authorized for issuance under the leveraged share plan had a maximum
aggregate value of CHF 7.0 million (U.S.$3.9 million), representing 31,111
shares at the initial offering price of CHF 225. Employees are at all times
fully vested in shares purchased under the plan.

      Except as otherwise determined by the board of directors, none of the
shares purchased under this plan may be transferred or sold until the fourth
anniversary of the closing of the offering. In the case of an employee's
termination of employment as a result of resignation, dismissal for cause,
retirement or disability (unless otherwise determined by the board of directors
or any compensation committee of the board of directors), the shares were
subject to the lock up agreement through November 8, 2004.

      The options are non-transferable and expire on the seventh anniversary of
the date of grant. Fifty percent of the options vested and became exercisable on
the second anniversary of the date of the grant and the remaining 50% of the
options vested and became exercisable on the third anniversary of the date of
grant. In the case of an employee's termination of employment as a result of
resignation other than as a result of a material adverse change in (i) his or
her compensation or (ii) the material terms of his or her employment, or
dismissal (other than for cause) unvested options lapse without compensation,


                                       34
<PAGE>

and vested options may be exercised within 90 days. Upon an employee's
termination of employment as a result of a termination of employment without
cause or a resignation due to a material adverse change in (i) his or her
compensation or (ii) the material terms of his or her employment, all vested
options remain exercisable for the term of the options. In the case of
termination of employment for cause, all vested options lapse with immediate
effect. In the case of termination of employment upon death or as a result of
retirement or disability, unless otherwise determined by the board of directors
or any compensation committee of the board of directors, vested options may be
exercised within 360 days. The underlying shares related to the options will be
made available by us through authorized but non-issued shares (conditional share
capital) of us or through shares purchased in the market.

      We made loans available to executive officers for purposes of purchasing
up to 80% of the shares allocated to them under the plan. The loans are for a
term of 7 years. The loans were made on a full recourse basis and are
collateralized by all shares purchased under the plan by such executive officer
or key employee and we have either a first or if a portion of the shares are
financed or refinanced by another lender, a second lien on the shares. The loans
have an interest rate equal to 120% of the mid-term applicable federal rate (as
defined in the Internal Revenue Code) determined on the date the loans are made.
The restrictions on transfer under the leveraged share plan will be released to
the extent that it is necessary for us or any other lender to realize on
security in the shares. As of December 31, 2004 and 2003, we had outstanding
loans to executive officers in an aggregate amount of approximately U.S.$0.4
million.

      During the period during which the option may be exercised, an employee
may elect to pay for the shares, issuable upon exercise of such option and, if
required by us, to satisfy tax withholding obligations related to the option, in
full at the time of exercise as follows:

      o     in cash;
      o     at the discretion of the board of directors with shares that are
            already owned by the participant;
      o     in a combination of cash or already owned shares; or
      o     through an exercise procedure approved by the board of directors by
            which an employee sells some or all of the shares underlying the
            exercised portion of the option.

56 employees participated in the leveraged share plan purchasing an aggregate of
23,683 shares representing 1.02% of the voting rights. In addition, 23,683
options to purchase 118,415 INFICON shares at the initial public offering price
of CHF 225 each were granted to our executive officers and certain key
employees.

      Discounted Share Purchase Plan. The discounted share purchase plan were
offered to employees who were not eligible to participate in the leveraged share
plan. Under this plan, eligible persons were offered the opportunity to purchase
shares on the closing of the offering at a 30% discount to the offer price. Each
employee was entitled to purchase up to CHF 15,000 (U.S.$8,439) worth of shares
(based on the offering price and rounded down to the nearest whole share) in the
offering at a 30% discount. A total of approximately 600 employees were eligible
to participate and a total of 589 employees eventually participated in
discounted share purchase plan. Based on the amount of shares actually purchased
by our employees under the program, we incurred compensation expense of CHF
659,272 (U.S.$371,170) in the fourth quarter of 2000. The amount of shares
issued under the discounted share purchase plan had a maximum aggregate value of
CHF 1,538,303 (U.S.$865,431), representing 9,767 shares, at the initial offering
price of CHF 225, discounted by 30%. Employees are at all times fully vested in
their shares.

      Directors Stock Option Plan - In fiscal year 2001 the Board of Directors
approved the Directors Stock Option Plan. The Directors Stock Option Plan is
solely for members of the Board, who are not employees of INFICON. The Company
grants options to the eligible Directors, on May 15 and November 15 of each
year, commencing May 15, 2001. The number of options granted to the eligible
Directors represents 30% of their annual compensation. Options are
non-transferable and will vest immediately upon date of grant and become
exercisable one year after the grant date and are exercisable within a period of
seven years after the allocation date. All options are granted at prices equal
to 100% of the market value of the common stock at the date of grant. The plan
includes specific requirements for the Directors who are removed or resign from
the Board.


                                       35
<PAGE>

      Key Employee & Management Stock Option Plan - In fiscal year 2001 the
Board of Directors approved the Key Employee Stock Option Plan. The purpose of
the plan is to provide management and key employees of the Company with an
opportunity to become shareholders, and in addition, to obtain options on shares
and allow them to participate in the future success of the Company. It is
intended that the plan will provide an additional incentive for key employees to
maintain continued employment, contribute to the future success and prosperity,
and enhance the value of the Company. Accordingly, the Company will, from time
to time during the term of this plan, grant to such key employees options to
purchase shares in such amounts as the Company shall determine, subject to the
conditions provided in the plan. The plan is effective from May 15, 2001, and
shall remain in effect through May 15, 2011.

For additional information please refer to Exhibit 99 "Corporate Governance," as
required by the SWX Swiss Exchange.


                                       36
<PAGE>

Item 7. Major Shareholders and Related Party Transactions

A.    Major Shareholders.

For details please see Exhibit 99, "Corporate Governance," as required by the
SWX Swiss Exchange.

B.    Related Party Transactions.

Agreements in Connection with our Separation from Unaxis

In connection with our separation from Unaxis and our initial public offering on
November 9, 2000, we entered into a number of agreements with related parties.
The summary description of these agreements below does not purport to be
complete. You should read the full text of these agreements which were included
as exhibits to the registration statement on Form F-1 filed with the Securities
Exchange Commission in connection with our initial public offering and which are
incorporated herein by reference. The registration statement (including the
exhibits and schedules thereto) may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and are also available for
inspection and copying at the regional offices of the Securities and Exchange
Commission. The addresses of these offices can be found on the SEC website at:
http://www.sec.gov.

Agreements with Unaxis

We and Unaxis have entered into the master separation agreement which contains
the key provisions relating to our separation from Unaxis, our capitalization by
Unaxis and our initial public offering. In addition, the master separation
agreement provides for ancillary agreements which have been entered into by us
and companies which have or will become our subsidiaries on the one hand and
Unaxis and its subsidiaries on the other. The ancillary agreements include:

      o     agreements with respect to the transfer of assets related to our
            business by Unaxis entities to companies which have or will become
            our subsidiaries (asset transfer agreements);
      o     intercompany service agreements;
      o     intellectual property assignments and license agreements; and
      o     a tax deed.

Master Separation Agreement

Separation from Unaxis. The master separation agreement governs key matters
relating to the separation of the INFICON divisions from the various Unaxis
subsidiaries of which they were a part, and the transfer of these divisions into
separate Unaxis subsidiaries. Unaxis' contribution of the subsidiaries engaged
in the INFICON business to INFICON Holding AG was substantially complete on
October 4, 2000. The master separation agreement sets forth the obligations of
the parties after the separation, including each party's obligation to use its
best efforts to cause its subsidiaries to comply with the terms of its
respective intercompany service agreement and the following additional matters:

Non-Compete. We use subsidiaries of Unaxis as a distribution channel for some of
our Vacuum Control products. Generally speaking, we distribute these products
directly to OEMs and end users and the Unaxis subsidiaries distribute these
products to OEMs and end users under their private label. Except for these areas
which relate to leak detection and those described in "Intellectual Property
Assignment and License Agreements" below, we and Unaxis have agreed not to
compete with each other in our core lines of business for a period of five years
after the separation date. The bi-lateral non-compete provisions of the
agreement will expire during 2005.

      Generally speaking, our core lines of business for these purposes
encompass the businesses we are in today, as described in this annual report.

In more specific terms, Unaxis has agreed not to compete with us in the
following businesses:


                                       37
<PAGE>

      (1)   Process Knowledge and Control:

            Wafer state sensors, including sensors to determine etch rate,
uniformity of etch rate and completion of etch process; optical emission
spectrometers; and thin film deposition controllers. Process state sensors,
including gas analyzers based on mass spectrometer technology; and gas
concentration controllers based on acoustic resonance technology. Sensor
integration and analysis software, including FabGuard software.

      (2)   Leak Detection:

            Helium leak detectors. Refrigerant leak detectors. Other leak
detectors.

      (3)   Vacuum Control:

            Capacitance diaphragm gauges (including such gauges with a ceramic
diaphragm), Bayard Alpert gauges, Penning gauges, Pirani gauges and combination
gauges. Various valves and fittings, including integrated gas-dose controllers.

            We have agreed not to compete with Unaxis in the following
businesses:

      (1)   Information Technology:

            Semiconductor technology, including systems and processes used in
the manufacture of application-specific integrated circuits and coatings for
ultra thin semiconductor substrates. Data storage, including optical and
magnetic storage. Displays, including TFT displays and large area coating.
Optical coating systems and components. Coating materials.

      (2)   Surface Technology:

            Tool coatings. Component coatings. Decorative coatings.

            In the fields of information and surface technology we may, however,
compete with Unaxis in connection with copper wire bonding processes in back end
semiconductor manufacturing processes; the continued sale of the small ultra
high-vacuum coater for research and development applications; and in any
instrumentation that is used to monitor or control processes, such as our PKC
products.

      (3)   Components:

            Systems/Products for Vacuum Generation including:

            o     Dry pumps
            o     Turbomolecular pumps (including drag pumps)
            o     Cryogenic pumps
            o     Turbostream blowers
            o     Forevacuum pumps
            o     Cryo cooler technology

            Gas Chromatograph/Mass Spectrometers for volatile organic compounds,
            payload fairings for space industry, and satellite and solar
            generator components.

            We believe that the non-compete arrangement allows us to continue to
conduct our business as currently operated. However, technology in the
semiconductor industry is constantly evolving and could move rapidly in a
direction we have not anticipated. Accordingly, there can be no assurance that
these limitations will not have a material adverse effect on us.

Indemnities. Unaxis has agreed to indemnify us for any loss incurred by us as a
result of any claim or action resulting out of or from the operation of any
business other than our business prior to, on or after the date of separation.
In turn, we have agreed to indemnify Unaxis or any of its subsidiaries for any
loss incurred by any of them as a result of any claim or action resulting out of
or from the operation of our business prior to, on or after the date of
separation.


                                       38
<PAGE>

Expenses. We shared the costs and expenses related to our initial public
offering with Unaxis in relation to the amount of shares sold by each of Unaxis
and us in the initial public offering. Unaxis paid most of the costs and
expenses related to our separation from Unaxis.

Termination. The master separation agreement terminated on the earlier of mutual
consent of Unaxis and us and three years from the date of the separation.

Although the Master Separation Agreement was not negotiated at arm's length, we
believe that these terms and conditions, taken as a whole, are no less favorable
to us than we could have obtained from unaffiliated third parties.

Asset Transfer Agreements

The asset transfer agreements identified the assets that Unaxis and other wholly
owned subsidiaries of Unaxis have transferred to us, the liabilities we have
assumed from them in 10 different jurisdictions and the terms of the asset
transfers in connection with our reorganization. In each jurisdiction, the
agreement was entered into by a subsidiary of INFICON as purchaser, and a Unaxis
subsidiary located in the same jurisdiction as seller.

Except with respect to China, Unaxis has transferred to INFICON all of its
assets related to the businesses described in this annual report which are
necessary to conduct the INFICON businesses as they were conducted by Unaxis
prior to the asset transfers. The aggregate transfer price with respect to the
various asset transfers of approximately CHF 250 million (U.S.$140.6 million)
was not negotiated at arm's length. The transfer prices were determined by
Unaxis in accordance with tax rulings, tax law requirements, and other statutory
requirements of the local jurisdictions in which the assets are located.

The asset transfer agreements were entered into on various dates during the
period from June 30, 2000 to December 15, 2000. Regulatory requirements in China
delayed the transfer of Chinese assets. The Chinese transfer became effective in
the second quarter of 2001. During the current transition period, Unaxis held
any benefits and liabilities derived from these assets for the benefit of our
new Hong Kong subsidiary.

Intercompany Service Agreements

Services. Each of our subsidiaries has signed one or several intercompany
service agreements with its respective Unaxis counterpart or counterparts in its
jurisdiction. These agreements cover various services that differ from
jurisdiction to jurisdiction, including finance, legal, tax, information
technology, human resources, and other services. Each agreement includes a
detailed description of the services to be provided and service terms. The
service fee for all the agreements was determined by Unaxis. Although these
agreements were not negotiated at arm's length, we believe that they are on
terms no less favorable to INFICON than could have been obtained from
unaffiliated third parties.

Standard of Care, Duty to Cooperate, and Delegation of Performance. Each
providing company has agreed to maintain a high professional standard of care in
rendering the services and to use reasonable efforts to follow the pre-existing
policies, procedures, and practices. The parties have agreed to use good faith
efforts to cooperate with each other in all matters relating to the provision
and receipt of the services. The providing company may engage a subcontractor to
perform a service, provided that the subcontractor agrees to abide by the terms
of the agreement and no extra compensation is owed to the providing company.

Term and Termination. Except for the agreement of our Taiwan subsidiary which
terminated March 30, 2001, the agreements remain in effect for an unlimited
period of time unless terminated in accordance with the terms of the agreement.
The agreement provides for a termination by any party upon six months' prior
written notice. In addition, any party may terminate the agreement in case of a
material breach of the agreement if the breaching party has not remedied such
breach within sixty business days after being given notice of the breach. A
termination may relate to all or any one or more services, except in the event
of a material breach of a service where it relates to this particular service
only.

Fees. Fees are determined annually and are calculated based on the projected
direct or indirect cost of providing the services for that year plus 7%. There
are no adjustments made if the actual direct and indirect costs differ from
those projected. Fees for any additional services are determined on a case by
case basis.


                                       39
<PAGE>

Payment Terms. Under each agreement, the providing company bills the receiving
company on a monthly basis for all fees and expenses. The service fee is due on
the first day of each month and payable by the receiving company within 15 days
after receipt of an invoice. Late payments beyond 60 days are subject to an 8%
per annum interest charge on the invoiced amount.

Dispute Resolution. The parties agreed to make a good faith attempt to resolve
any dispute first by negotiation and arbitration before resorting to litigation.

Intellectual Property Assignment and License Agreements

We have entered into intellectual property assignment and royalty-free license
agreements with various Unaxis entities as part of the reorganization. Generally
speaking, with the exception of the patents related to the ultra clean
processing business, all of the Unaxis patents and other intellectual property
which are currently used by Unaxis that relate to INFICON's business have been
assigned to INFICON, with royalty-free licenses granted back to Unaxis on the
basis described below. Unaxis has retained the patents related to the ultra
clean processing business and has granted INFICON a royalty-free license to use
such property on the basis described below. The licensing arrangements have been
drafted to be consistent with the non-compete arrangement described under
"Master Separation Agreement."

      o     A license agreement between Unaxis, as licensor, and INFICON, as
            licensee, governs our use of a number of Unaxis patents related to
            the ultra clean processing business and the leak detection business.
            This license allows us to use Unaxis patents exclusively for five
            years, and non-exclusively thereafter, in the fields of plasma
            cleaning/activation of quad flat package, plastic ball grid array,
            personal computer board, chip scale package and multi chip module,
            with the exception of chip scale package and multi chip module
            processed for or within the multi-chamber systems and modules, such
            as cluster tools. This license also allows us to use such Unaxis
            patents non-exclusively in the fields of leak detector and plasma
            cleaning/activation processes for assembly and packaging concepts,
            including wafer level and board level techniques, including chip
            scale package and multi chip module processed for or within the
            multi-chamber systems and modules, such as cluster tools. This
            license is royalty-free, perpetual and worldwide. In addition,
            Unaxis has agreed that it will not grant any further licenses under
            the leak detector patents.

      o     A license agreement between INFICON, as licensor, and Unaxis, as
            licensee, provides for the Unaxis entities' use of the intellectual
            property we acquired under the intellectual property assignment
            agreements described above. This license allows the Unaxis entities
            to use such intellectual property exclusively for five years, and
            non-exclusively thereafter, in the field of designing, producing,
            selling and servicing information technology, surface technology and
            components relating thereto. This license also allows the Unaxis
            entities to use such intellectual property non-exclusively in all
            other fields outside of the field of designing, producing, selling
            and servicing of PKC systems, semiconductor cleaning systems, leak
            detection products and various gauges, valves and fittings
            associated with vacuum processes. This license is royalty-free,
            perpetual, and worldwide.

The licenses granted to the licensee in each agreement, other than the leak
detector licenses, terminate upon a change of control which has not been
consented to by the relevant licensor. For purposes of the foregoing, "control"
means (i) the ownership of at least 50% of the equity of beneficial interest of
a person, (ii) the right to vote for or appoint a majority of the board of
directors or other governing body of such person, or (iii) the power to directly
or indirectly direct or cause the direction of the management and policies of
such person by any means whatsoever.

Although the license agreements were not negotiated at arm's length, we believe
that their terms and conditions, taken as a whole, are no less favorable to us
than we could have obtained from unaffiliated third parties. We also believe
that the licensing arrangements described above will allow us to continue to
conduct our business as currently operated. However, technology in the
semiconductor industry is constantly evolving and could move rapidly in a
direction we have not anticipated.

As part of the reorganization, we have also entered into a number of
intercompany license agreements to allow INFICON affiliates to use the
intellectual property acquired under the intellectual property assignment
agreements described above.


                                       40
<PAGE>

Tax Deed

We and Unaxis have entered into a tax deed in order to regulate our and their
subsidiaries' tax affairs in connection with our separation from Unaxis and our
initial public offering. In general, under the tax deed, Unaxis is responsible
for all taxes resulting from our separation, our initial public offering, and
all taxes relating to our business for any period ending on or before the date
of separation. We are responsible for all taxes relating to our business for any
period beginning after the date of separation. The tax deed also provides that
each of Unaxis and us will indemnify the other for all taxes for which it is
responsible.

Although the tax deed was not negotiated at arm's length, we believe that its
terms and conditions, taken as a whole, are reasonable.

C.    Interests of Experts and Counsel.

      Not applicable.


Item 8. Financial Information

A.    Consolidated Statements and Other Financial Information.

      Index to Financial Statements

                                                                     Page Number
                                                                     -----------

Consolidated Balance Sheets as of December 31, 2004 and 2003                 F-3

Consolidated Statements of Income for the three years in the
      period ended December 31, 2004                                         F-4

Consolidated Statements of Stockholders' Equity for the
      three years in the period ended December 31, 2004                      F-5

Consolidated Statements of Cash Flows for the three years in
      the period ended December 31, 2004                                     F-6

Notes to Consolidated Financial Statements                                   F-7

Legal Proceedings

We are not currently involved in any material court, arbitral, or administrative
proceedings, nor are we aware of any such proceeding pending or threatened.

Dividend Policy

We currently intend to retain all future earnings to finance future growth and
therefore do not anticipate proposing to our shareholders the payment of any
dividends.

B.    Significant Changes.

Since the date of the annual financial statements included in this annual
report, the only significant change is that on February 17, 2005 the Company
announced its intention to voluntarily delist its American Depositary Shares
from the Nasdaq National Market and terminate its American Depositary Receipts
program. For more detailed discussion please refer to section "Rights of ADR
Holders" contained within Item 10. B. of Part I.


                                       41
<PAGE>

Item 9. The Offer and Listing

A.    Offer and Listing Details.

The Company's registered shares are listed and principally traded on the Swiss
Exchange, where prices are expressed in Swiss Francs. The Company's registered
shares are also traded on the Nasdaq National Market as American Depositary
Shares. On February 17, 2005 the Company announced its intention to voluntarily
delist its American Depositary Shares from the Nasdaq National Market and
terminate its American Depositary Receipts program. For more detailed discussion
please refer to section "Rights of ADR Holders" contained within Item 10. B. of
Part I. The table below presents, for the registered shares on the Swiss
Exchange and Nasdaq National Market the:

      o     annual high and low market prices for the last three years and,

      o     high and low market prices for each financial quarter for 2004 and,

For each of the periods indicated, the information presented is based on the:

      o     high and low closing sales prices quoted in Swiss Francs for the
            registered shares on the Swiss Exchange.

      o     The U.S. Dollar equivalent based on the Noon Buying Rate on the last
            trading day of the periods presented. The "Noon Buying Rate" is the
            rate in New York City for cable transfers in selected currencies as
            certified for customs purposes by the Federal Reserve Bank of New
            York.

For the last three years and each financial quarter for 2004, our high and low
marked prices have been:

<TABLE>
<CAPTION>
      Period                            High                                    Low
-------------------      ----------------------------------     -----------------------------------
                         Shares (in CHF)     ADSs (in U.S.$)    Shares (in CHF)     ADSs (in U.S.$)
                         ---------------     ---------------    ---------------     ---------------
<S>                          <C>                   <C>                 <C>                 <C>
Year Ended
December 31, 2002            179.00                10.74                51.00              3.40
December 31, 2003            116.25                 8.85                44.00              3.31
December 31, 2004            138.50                10.86                69.80              5.60

Quarter Ended
March 31, 2004               138.50                10.86               105.00              8.06
June 30, 2004                123.25                 9.64               101.00              7.79
September 30, 2004           112.25                 8.97                84.00              6.62
December 31, 2004             87.00                 7.50                69.80              5.60
</TABLE>

B.    Plan of Distribution.

      Not applicable.

C.    Markets.

      Our shares are listed on the SWX Swiss Exchange and our ADSs are listed on
The Nasdaq National Market, in each case under the symbol "IFCN." On February
17, 2005, the Company announced its intention to voluntarily delist its American
Depositary Shares from the Nasdaq National Market and terminate its American
Depositary Receipts program. For more detailed discussion please refer to
"Rights of ADR Holders" contained within Item 10.B. of Part I.


                                       42
<PAGE>

D.    Selling Shareholders.

      Not applicable.

E.    Dilution.

      Not applicable.

F.    Expenses of the Issue.

      Not applicable.

Item 10. Additional Information

A.    Share Capital.

      Not applicable.

B.    Memorandum and Articles of Association.

      Set forth below is a summary description of the material provisions of our
articles of incorporation and Swiss law relating to our company purpose and
shareholder rights. On February 17, 2005, the Company announced its intention to
voluntarily delist its American Depositary Shares from the Nasdaq National
Market and terminate its American Depositary Receipts program.

Register Entry Number and Purpose of INFICON Holding AG

      INFICON Holding AG is registered in the commercial register of the Canton
of St. Gallen, Switzerland. There is no register entry number. On their first
page, our articles of incorporation describe the objects and purpose of our
corporation as follows:

      " The purpose of the Corporation is to participate in manufacturing,
      trading, and service businesses in Switzerland and abroad and to hold,
      acquire, and sell such participations.

      The Corporation may, in Switzerland as well as abroad, establish branches
      and subsidiaries. The Corporation may perform all transactions which are
      directly or indirectly related to its purpose.

      Furthermore, the Corporation may acquire or sell real estate."

Transfer of Shares

      There are no restrictions on the free transferability of our shares. A
transfer of shares is effectuated by corresponding entry in the books of a bank
or depositary institution following assignment in writing by the selling
shareholder and notification of such assignment to us which can be made by the
bank or the depositary institution. In order to be registered in our share
register as a shareholder with voting rights, a purchaser must file with us a
share registration form disclosing its name, citizenship, or registered office
and address.

      A purchaser that does not make such disclosure will be registered as a
shareholder without voting rights. This means that the purchase r may not
participate in or vote at a shareholders' meeting, but will still be entitled to
dividends and other rights with financial value. Notwithstanding the foregoing,
any shares held by or on behalf of The Bank of New York, as depositary, or any
successor depositary for the ADSs, will be registered with voting rights. We may
enter into agreements with banks or finance companies which hold shares for the
account of other persons (nominees) regarding the entry of the beneficial owners
of our shares into the share register.

      The shares and the pecuniary rights arising therefrom may only be pledged
in favor of the bank which has the book-entry regarding these shares by written
pledge agreement. A notification to us is not required.


                                       43
<PAGE>

Voting Rights and Share Certificates

      Each of our shares carries one vote at our shareholders' meetings. Voting
rights may be exercised only after a shareholder has been recorded in our share
register (Aktienbuch) as a shareholder with voting rights. We may enter into
agreements with banks or financial companies which hold shares for the account
of other persons (nominees) regarding the exercise of the voting rights related
to the shares. Registration with voting rights is subject to restrictions. See
"The Offer and Listing--Transfer of Shares."

      Our shares are cleared and settled through SIS SegaInterSettle AG. The
shares will not be physically represented by certificates but will be managed
collectively in book-entry form by SIS SegaInterSettle AG. Shareholders are
therefore not entitled to have their shares physically represented and delivered
in certificate form (aufgehobener Titeldruck). They can, however, request a
statement confirming their ownership of the shares.

Net Profits, Dividends and Liquidation Rights

      Swiss law requires that at least 5% of our annual net profits must be
retained by us as general reserves for so long as these reserves amount to less
than 20% of our par share capital. Because INFICON Holding AG is a holding
company, any net profits remaining thereafter are distributable at the
shareholders' meeting.

      Under Swiss law, dividends may be paid out only if a company has
sufficient distributable profits from previous business years, or if the
reserves of the company are sufficient to allow the distribution of a dividend.
In either event, dividends may be paid out only upon approval by the
shareholders' meeting. The board of directors may propose that a dividend be
paid out, but cannot itself declare the dividend. In practice, the shareholders'
meeting usually approves the dividend proposal of the board.

      Dividends are usually due and payable immediately after the shareholders'
resolution relating to the allocation of profits has been passed. The statute of
limitations in respect to dividend payments is five years. For information about
deduction of withholding taxes, see "Taxation."

      In the event of liquidation, any surplus arising out of a liquidation
(after the settlement of all claims of all creditors) is distributed to
shareholders in proportion to the paid par value of shares held, but this
surplus is subject to Swiss withholding tax of 35%. see "Taxation."

No Liability of Our Shareholders for Capital Calls; No Redemption, Sinking Fund
or Similar Provisions

      Our shares are fully paid-up and non-assessable. No shareholder has any
liability to further capital calls by us. Our articles of incorporation do not
contain any redemption provisions, sinking fund provisions, or any provisions
discriminating against any existing or prospective holder of our shares as a
result of such shareholder owning a substantial number of shares.

Repurchase of Shares

      Swiss law limits the number of our shares which we may hold or repurchase.
We and our subsidiaries may only repurchase our own shares if we have sufficient
available reserves to pay the purchase price, and if the aggregate par value of
such shares does not exceed 10% of our par share capital. Shares repurchased by
us and our subsidiaries do not carry any rights to vote at shareholders'
meetings but are generally entitled to the economic benefits applicable to our
shares generally. Furthermore, we must create a reserve on our balance sheet in
the amount of the purchase price of the acquired shares. Currently, we own none
of our own shares.

Change of Shareholder Rights

      Under Swiss law, the rights of shareholders may only be changed by way of
amending the articles of incorporation which requires a shareholders' resolution
passed by the majority of the shares represented at the shareholders' meeting.
In addition, certain changes to shareholder rights require a supermajority of
votes. For instance, a reverse stock split may only be effectuated by a
unanimous vote of the shareholders of a corporation. The creation of shares with
privileged voting rights, restrictions on the transferability of shares, or a
restriction or elimination of preemptive rights of shareholders require a
resolution passed at a shareholders' meeting with a supermajority


                                       44
<PAGE>

(qualifiziertes Mehr) of two-thirds of the shares represented at such meeting
and a simple majority of the aggregate par value of the shares represented at
such meeting.

Shareholders' Meetings

      Under Swiss law, an annual shareholders' meeting must be held within six
months after the end of a company's financial year. Shareholders' meetings may
be convened by the board of directors or, if necessary, by the statutory
auditors. The board of directors is further required to convene an extraordinary
shareholders' meeting if so resolved by a shareholders' meeting or if so
requested by holders of shares representing in aggregate at least 10% of the
share capital of the company. Shareholders holding shares with a par value of at
least CHF 1 million have the right to request in writing, at least 50 days prior
to the day of the respective shareholders' meeting, that a specific proposal be
discussed and voted upon at such shareholders' meeting. If the board of
directors does not call a shareholders' meeting within a reasonable period after
the request was made, it may be ordered by a judge at the request of the
shareholders seeking such a meeting. A shareholders' meeting is convened by the
board of directors publishing a notice in the Swiss official gazette of commerce
(Schweizerisches Handelsamtsblatt) at least 20 days prior to such meeting. In
addition, shareholders may be informed by a letter sent to the address indicated
in the share register.

      There is no provision in our articles of incorporation requiring a
presence quorum at shareholders' meetings. On November 9, 2000, INFICON obtained
an exemption from Nasdaq under Marketplace Rule 4350(a) to comply with the
minimum quorum requirement of rule 4350(f). As a result, any meeting of holders
of common voting stock of INFICON do not need to meet the minimum quorum
requirement of 33 1/3 percent of the outstanding shares of the Company's common
voting stock as set by Nasdaq.

Restrictions on Right to Own our Securities and on Ability to Effect a Change of
Control

      Apart from the limitations described above on the right of a company to
own its own securities and the restriction on the voting rights of a purchaser
of our shares that does not file with us a share registration form disclosing
its name, citizenship, and registered office or address, there are no
limitations on the rights to own securities of INFICON, regardless of who owns
them.

      None of our organizational documents contain any provision that would have
an effect of delaying, deferring or preventing a change of control of INFICON.

Disclosure of Principal Shareholders

      None of our organizational documents contain any provision governing the
ownership threshold above which ownership must be disclosed. However, under the
Swiss Stock Exchange Act, shareholders and groups of shareholders acting in
concert who acquire or dispose of shares and thereby reach, exceed, or fall
below the respective threshold of 5%, 10%, 20%, 33.33%, 50%, or 66.66% of the
voting rights of a Swiss listed company with a registered office in Switzerland
must notify the company and the SWX Swiss Exchange of such transactions in
writing within four trading days, whether or not the voting rights can be
exercised. Following receipt of such notification, the corporation must inform
the public within two trading days.

      An additional disclosure obligation exists under the Swiss Code of
Obligations pursuant to which a company must disclose the identity and size of
shareholdings of all its shareholders and shareholder groups acting in concert
who hold more than 5% of its voting rights. This disclosure must be made once a
year in the notes to the financial statements as published in the company's
annual report.

Changes in Capital

      Our articles of incorporation do not impose conditions governing changes
in the capital that are more stringent than is required by law. Under Swiss law,
additional capital may be raised by shareholders' resolution of a majority of
shares except for an increase in our share capital (i) by way of capitalization
of reserves (Kapitalerhohung aus Eigenkapital), (ii) against contribution in
kind (Sacheinlage), (iii) for the acquisition of assets (Sachubernahme), (iv)
involving the grant of special privileges or benefits, or (v) for the purpose of
creating authorized or conditional share capital which require a resolution
passed at a shareholders' meeting with the supermajority (qualifiziertes Mehr)
of at least two-thirds of the shares represented at such meeting and a simple
majority of the aggregate par value of the shares represented at such meeting.


                                       45
<PAGE>

Authorized and Conditional Share Capital

      Under the Swiss Code of Obligations, the shareholders may decide on an
increase of the share capital in a specified aggregate par value up to 50% of
the existing share capital in the form of:

      (1)   authorized capital (genehmigtes Kapital) to be utilized at the
            discretion of the board of directors within a period not exceeding
            two years; or

      (2)   conditional capital (bedingtes Kapital) for the purpose of issuing
            shares, inter alia, (i) to grant rights to employees of a company or
            its subsidiaries to subscribe to new shares or (ii) to grant
            conversion rights or warrants to holders of convertible bonds. Such
            capital is called "conditional" because the issuance of any new
            shares is conditioned upon third parties, such as employees of the
            company or convertible bondholders, exercising their rights to
            require the issuance of such shares.

Director's Power to Vote on a Proposal in Which the Director is Materially
Interested

      None of our organizational documents contain any provision with respect to
(a) a director's power to vote on a proposal, arrangement or contract in which
the director is materially interested; (b) the director's power, in the absence
of an independent quorum, to vote compensation to themselves or any members of
their body; (c) borrowing powers exercisable by the directors and how such
borrowing powers can be varied; (d) retirement or non-retirement of directors
under an age limit requirement; and (e) number of shares, if any, required for
director's qualification.

      Under applicable Swiss law, however, a director or officer of a company is
prohibited from representing the company in a transaction to which such director
or officer is a party unless the director or officer is explicitly authorized to
do so by the company, the transaction is later approved by the company or there
is no potential risk of overreaching by the director or officer. The same holds
true if a person who is a director or officer of two companies acts on both
sides of a transaction between the two companies. However, Swiss case law seems
to permit such "double representation" between affiliated companies, at least in
transactions between a parent company and its wholly-owned subsidiary. In
addition, the duty of loyalty imposed on a director or officer by Swiss
corporation law requires such director or officer to abstain from voting on a
matter in which the director or officer is not only materially interested but in
which the director or officer's interest is directly opposite to the one of the
company.

The Rights of ADR Holders

      Cancellation of ADR Program

      On February 17, 2005, the Company announced its intention to voluntarily
delist its American Depositary Shares (each, an "ADS") underlying American
Depositary Receipts (each, an "ADR") from the Nasdaq National Market ("Nasdaq")
and terminate its ADR program.

      The Company gave notice to Nasdaq to delist the Company's ADSs, effective
as of the open of business, New York City time, on March 21, 2005, and to The
Bank of New York, the depositary for the Company's ADR program (the
"Depositary"), to terminate its ADR program, effective on or about March 19,
2005. In addition, the Company has instructed the Depositary to cease accepting
new deposits under the ADR program effective as of February 17, 2005. The
Company's outstanding ADRs will remain trading on Nasdaq through the close of
business Friday, March 18, 2005, and will be delisted from Nasdaq effective as
of the open of business on Monday, March 21, 2005.

      The Company and the Depositary intend to promptly amend the deposit
agreement (the "Deposit Agreement") among INFICON, the Depositary and holders of
the ADRs to shorten the period from one year to sixty days after the termination
date of the Deposit Agreement for ADR holders to exchange their ADRs for
underlying common shares of the Company (which are only eligible for trading on
the SWX Swiss Exchange) or, failing which, to receive net cash proceeds upon the
disposal of the underlying common shares of the Company, represented by ADRs not
tendered for exchange within sixty days after the termination date of the
Deposit Agreement, on their disposal by the Depositary.


                                       46
<PAGE>

      Following termination of the amended Deposit Agreement, to be effective on
or about March 19, 2005, INFICON ADRs will no longer be transferable. Holders
will, however, be entitled to return their INFICON ADRs, along with appropriate
crediting/transferring instructions, to the Depositary before 5:00 p.m., New
York City time, on or about May 18, 2005, and direct the deposit/transfer by
book-entry of the appropriate number of underlying INFICON ordinary shares to a
SWX Swiss Exchange-eligible custodian, subject to cancellation fees charged by
the Depositary pursuant to the Deposit Agreement. No physical securities will be
delivered/transferred.

      For INFICON ADRs not submitted to the Depositary for exchange by 5:00 p.m.
New York City time on or about May 18, 2005, the Depositary will, as soon as is
practicable after that date, sell the common shares underlying each ADR at
market prices the Depositary can obtain on the SWX Swiss Exchange. Any remaining
INFICON ADR holders after on or about May 18, 2005, may obtain the cash proceeds
from the sale, net of any applicable charges, expenses, taxes or governmental
charges, by submitting their ADRs to the Depositary.

      The termination of the ADR program does not affect the Company's listing
on the SWX Swiss Exchange, where the Company's ordinary shares have been listed
since November 9, 2000, and where they will continue to trade after the
delisting of the ADRs becomes effective.

      Rights of ADR Holder (prior to February 17, 2005)

      Please refer to our Annual Report on Form 20-F filed April 1, 2004 with
the Securities and Exchange Commission under Commission file number 000-30980.

C.    Material Contracts.

For a summary description of the Agreements in Connection with our Separation
from Unaxis, to the extent they are material, please see Item 7.B of Part I,
"Major Shareholders and Related Party Transactions--Related Party
Transactions.".

For a summary description of the deposit agreement as amended in 2005, between
us, The Bank of New York as depositary and the owners and beneficial owners from
time to time of ADRs, please see "Additional Information---The Rights of ADR
Holders."

For a summary of the Borrowing Agreements with Credit Suisse and
HypoVereinsbank, please see Part III Item 18 "Notes to the Consolidated
Financial Statements."

In consideration of the retirement of James L. Brissenden (Chief Executive
Officer) as of December 31, 2003, the Company entered into a separation
agreement. The separation agreement effectuates a final resolution of all
matters relating to Mr. Brissenden's employment and the termination thereof by
his retirement. The separation agreement includes special incentives which
aggregated U.S.$280 and were paid to Mr. Brissenden in March 2004. See exhibit
10.23 "Separation Agreement and General Release" for a copy of the agreement.

The lease agreement between Unaxis Balzers AG as landlord and INFICON AG,
Balzers as tenant for the manufacturing facility in Balzers, Liechtenstein was
entered into on September 1, 2000, and remained in effect until January 31,
2002, at which time it was terminated to relocate the operations to an
alternative facility in February 2002. The monthly rent for the new leased
facility is CHF 254 (U.S.$189). This new facility is owned by a local private
entrepreneur. The lease has a fixed duration of 12 years with options to renew
for two additional terms of 7 years. Additionally, the rent may be increased by
the landlord according to the Swiss consumer goods index

The lease agreement between BuL Vermietungsgesellschaft mbH & Co. KG as landlord
and INFICON GmbH as tenant for the manufacturing facility in Cologne, Germany
was entered on July 1, 2000 for a term of ten years. The monthly rent is EURO
111 (U.S.$139) and will be adjusted according to the prevailing German cost of
living-index. The lease agreement is governed by German law and contains
customary representations and warranties. In addition, landlord and tenant
agreed that in the beginning of 2001 the tenant could vacate some of the used
area and take over some additional floor-space in other buildings and that the
landlord will make a correlating adjustment to the rent.


                                       47
<PAGE>

D.    Exchange Controls.

      Other than in connection with government sanctions imposed on Iraq,
Serbia, Libya (currently suspended), and portions of Angola (UNITA), there are
currently no government laws, decrees, or regulations in Switzerland that
restrict the export or import of capital, including, but not limited to, Swiss
foreign exchange controls on the payment of dividends, interest or liquidation
proceeds, if any, to non-resident holders of capital stock of Swiss
corporations.

E.    Taxation.

Swiss Taxation of Residents of the United States

      Under Swiss tax laws, dividends paid and similar cash or in-kind
distribution made by us to a holder of shares (including dividends on
liquidation proceeds and stock dividends) are subject to a Swiss federal
withholding tax at a rate of presently 35%. The withholding tax must be withheld
by us from the gross distribution and be paid to the Swiss Federal Tax
Administration.

      Pursuant to the current Convention Between the United States of America
and the Swiss Confederation for the Avoidance of Double Taxation with Respect to
Taxes on Income entered into force on December 19, 1997 (the "Treaty"), a U.S.
holder of shares is eligible for a reduced rate of the withholding tax equal to
15% of the dividend, provided that such holder (1) is a resident of the United
States for purposes of the Treaty, (2) qualifies for benefits under the Treaty,
and (3) holds less than 10% of the voting stock of the company.

      Such an eligible holder must apply for a refund of the amount of the Swiss
withholding tax in excess of the 15% Treaty rate. The claim for refund must be
filed on Swiss Tax Form 82, which may be obtained from any Swiss Consulate
General in the United States or from the Federal Tax Administration of
Switzerland at the address below. Three copies of the form must be duly
completed, signed before a notary public of the United States, and sent to the
Federal Tax Administration of Switzerland, Eigerstrasse 65, CH-3003 Berne,
Switzerland. The form must be accompanied by suitable evidence of deduction of
the Swiss withholding tax withheld at source, such as certificates of deduction,
signed bank vouchers, or credit slips. The form may be filed on or after July 1
or January 1 following the date the dividend was payable, but no later than
December 31 of the third year following the calendar year in which the dividend
became payable.

United States Taxation

      The following discussion, based on current law, is a summary of the
material United States federal income tax considerations to you of the
acquisition, ownership, and disposition of the ADSs or shares as of the date
hereof. The discussion of the United States federal income tax consequences set
forth below is based upon the Internal Revenue Code of 1986, as amended, its
legislative history, existing and proposed regulations, and judicial decisions
and administrative interpretations thereunder, all as currently in effect, and
such authorities may be subject to subsequent changes in United States law or in
any double taxation convention or treaty between the United States and
Switzerland, which changes may have retroactive effect, so as to result in
federal income tax consequences different from those discussed below. In
addition, this summary is based, in part, upon representations made by the
Depositary to us and assumes that the Deposit Agreement, and all other related
agreements, will be performed in accordance with their terms. This discussion
does not purport to deal with all aspects of United States federal income
taxation that may be relevant to a particular holder in light of the holder's
circumstances, for example, persons subject to the alternative minimum tax
provisions of the Internal Revenue Code. Also, this discussion does not deal
with special rules that may apply to you if you are a member of a special class
of holders subject to special rules, including:

      o     a dealer in securities or currencies,
      o     a trader in securities that elects to use a mark-to-market method of
            accounting for your securities holdings,
      o     a financial institution,
      o     a life insurance company,
      o     a tax-exempt organization,
      o     a person that actually or constructively owns 10% or more of our
            voting stock,


                                       48
<PAGE>

      o     a person holding ADS or shares as part of a hedging, conversion or
            constructive sale transaction or straddle, or
      o     a person whose "functional currency" is not the United States
            Dollar.

      The discussion also does not discuss any aspect of state, local or foreign
law, nor federal estate and gift tax law.

      The discussion below pertains to you only if you are a "U.S. Holder" who
qualifies for benefits under the Treaty, holds less than 10% of our total shares
outstanding, holds the ADSs or shares as a capital asset, and whose functional
currency is the U.S. Dollar. You are a U.S. Holder if you are a beneficial owner
of ADSs or shares and you are:

      o     a citizen or individual resident of the United States,
      o     a corporation, partnership or other entity created in or under the
            laws of the United States or any political subdivision thereof,
      o     an estate, the income of which is subject to United States federal
            income taxation regardless of its source, or
      o     a trust if (A) a court within the United States is able to exercise
            primary supervision over the administration of the trust and (B) one
            or more United States persons have the authority to control all
            substantial decisions of the trust.

      You will qualify for benefits under the Treaty under most circumstances if
you are a resident of the United States for purposes of the Treaty and you are a
U.S. Holder.

      You are urged to consult with your own tax advisor regarding the tax
consequences of investing in the ADSs or shares, including the tax effects of
any state, local, foreign, or other tax laws and possible changes in the tax
laws.

      Distributions

      For United States federal income tax purposes, you will be required to
include as ordinary dividend income the full amount (not reduced by any Swiss
withholding tax) of any distribution to the extent paid to you out of the our
current or accumulated earnings and profits as defined for United States federal
income tax purposes. Such dividend will constitute income from sources outside
the United States. Dividends paid by us are not eligible for the dividends
received deduction generally allowed to corporate shareholders. If any
distribution exceeds our current and accumulated earnings and profits, such
excess will be treated as a nontaxable return of capital to the extent of your
tax basis in the shares and thereafter as capital gain. Consequently, such
distributions in excess of our current and accumulated earnings and profits
would not give rise to foreign source income and as a U.S. Holder, you would not
be able to use the foreign tax credit arising from any Swiss withholding tax
imposed on such distribution unless such credit can be applied (subject to
applicable limitations) against United States tax due on other foreign source
income in the appropriate category for foreign tax credit purposes.

      Because payments of dividends with respect to ADSs and shares are to be
made in Swiss Francs, a U.S. Holder will be required to determine the amount of
dividend income by translating the Swiss Francs into U.S. Dollars at the "spot
rate" on the date of receipt regardless of whether such Swiss Francs are
converted into U.S. Dollars. The tax basis of Swiss Francs received by you will
equal the U.S. Dollar equivalent of such Swiss Francs at the spot rate on the
date such Swiss Francs are received by you. Upon subsequent exchange of such
Swiss Francs for U.S. Dollars, or upon the use of such Swiss Francs to purchase
property, you will recognize exchange gain or loss equal to the difference
between your tax basis for the Swiss Francs and the U. S. Dollars received or,
if property is received, the fair value of the property on the date of the
exchange. Such gain or loss will be treated as United States source ordinary
income or loss. A U.S. Holder may be required to recognize exchange gain or loss
if the amount of any refund of the Swiss withholding tax differs from the United
States Dollar value of such refund on the date the dividends were received.

      You may be entitled to claim as a credit against your United States
federal income tax liability, or alternatively you may deduct from your United
States federal taxable income, the amount of the withholding tax to the extent
of the 15% Treaty rate. However, your ability to claim a foreign tax credit is
subject to a general limitation that is determined by the amount of your United
States source income relative to your total income. In addition, your ability to
claim the credit is subject to a specific basket limitation that is determined
in a similar way with respect to a specific type of income. Any refundable
portion of the paid Swiss withholding tax, such as the amount of the withholding


                                       49
<PAGE>

tax in excess of the 15% Treaty rate, would not be eligible for credit against
United States federal income tax liability. For foreign tax credit purposes,
dividends paid by us will constitute "passive income" or, in the case of some
U.S. holders, "financial services income." The rules governing the foreign tax
credit are complex. You are urged to consult your own tax advisor regarding the
availability of the foreign tax credit under your particular circumstances.

      Sale, Exchange, or Other Disposition of Shares

      Any gain or loss on a sale, exchange, or other disposition of ADSs or
shares by a U.S. Holder will be capital gain or loss for United States federal
income tax purposes in an amount equal to the difference between the amount
realized on the disposition and the U.S. Holder's tax basis in the ADSs or
shares. Any such gain or loss will be United States source gain or loss and will
be long-term capital gain or loss if you held the ADSs or shares for more than
one year. In the case of an individual U.S. Holder, capital gains will be
subject to U.S. federal income tax at preferential rates if specified minimum
holding periods are met. The deductibility of capital losses is subject to
limitations.

      Passive Foreign Investment Company Considerations

      We believe that we will not be treated as a passive foreign investment
company (a "PFIC") for United States federal income tax purposes for the current
taxable year and expect to continue our operations in such a manner that we will
not be a PFIC. However, this is a factual determination that must be made after
the close of each taxable year and therefore is subject to change. We would be a
PFIC with respect to you if for any taxable year in which you held our ADSs or
shares either (1) 75% or more of our gross income consists of some specified
types of "passive" income, such as dividends, interest, rents and royalties, or
(2) the average percentage of its assets (by value) that produce or are held for
the production of passive income is at least 50%. If we were to become a PFIC
for any taxable year during which you owned our ADSs or shares you (1) would be
subject to additional taxes on certain distributions received from us and on any
gain realized upon the sale or other dispositions of the ADSs or shares unless
you made a mitigating tax election if available and (2) would be required to
file an annual information return describing the distributions received from us
and any gain realized upon the disposition of a beneficial interest in us. You
should consult your own tax advisor regarding the potential application of the
PFIC rules to your ownership of ADSs or shares.

      United States Information Reporting and Backup Withholding

      Dividend payments with respect to the ADSs and shares and proceeds from
the sale, exchange or redemption of the ADSs and shares paid to U.S. Holders
other than some exempt recipients (such as corporations) may be subject to
information reporting to the Internal Revenue Service and possible United States
backup withholding at 31% rate. Backup withholding will not apply, however, to a
holder who furnishes a correct taxpayer identification number or certificate of
foreign status and makes any other required certification or who is otherwise
exempt from backup withholding. A U.S. Holder will provide such certification on
Internal Revenue Service Form W-9. Shareholders should consult their tax
advisors regarding the application of the information reporting and backup
withholding rules.

Amounts withheld as backup withholding may be credited against your federal
income tax liability, and you may obtain a refund of any excess amounts withheld
under the backup withholding rules by filing the appropriate claim for refund
with the Internal Revenue Service and furnishing any required information.

F.    Dividends and Paying Agents.

      Not applicable.

G.    Statements by Experts.

      Not applicable.


                                       50
<PAGE>

H.    Documents on Display.

      Except for the documents listed below, all documents referred to in this
annual report were either filed with the Securities and Exchange Commission as
exhibits to the registration statement on Form F-1 that became effective on
November 8, 2000 or are being filed as exhibits to this annual report on Form
20-F and may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and will also be available for inspection and
copying at the regional offices of the Securities and Exchange Commission. The
addresses of these offices can be found on the SEC website at:
http://www.sec.gov.

      Copies of the our articles of incorporation are available at the office of
INFICON Holding AG, Hintergasse 15 B, 7310 Bad Ragaz, Switzerland, and an
English translation thereof has been filed with the Securities and Exchange
Commission as an exhibit to the registration statement on Form F-1.

I.    Subsidiary Information.

      Not applicable.

Item 11. Quantitative and Qualitative Disclosures about Market Risk

Foreign Exchange Rate Risk

      Approximately 69%, 64%, and 64% of our net sales in the years ended
December 31, 2004, 2003, and 2002, respectively, were recognized through our
subsidiaries outside the United States. Our foreign subsidiaries maintain their
accounting records in their local currencies. Consequently, period-to-period
comparability of our results of operations is affected by fluctuations in
exchange rates. We derive a significant portion of our cash flows from
foreign-denominated revenue. To the extent the Dollar value of
foreign-denominated revenue is diminished as a result of a strengthening U.S.
Dollar, our results of operations and cash flows could be adversely affected.

      The primary currencies to which we have exposure are the Japanese Yen,
Swiss Franc, Euro, and U.S. dollar. This exposure arises from our sales of
inventory among our subsidiaries for resale in local currencies. Consequently,
the cash flows from our subsidiaries are affected by exchange rate fluctuations.
To reduce the risks associated with foreign currency rate fluctuations, our
manufacturing facilities in the United States and Germany enter into forward
exchange contracts on a continuing basis for the purpose of controlling economic
risks related to accounts receivable not denominated in its local currency, as
well as risk related to our probable anticipated, but not firmly committed,
transactions. The anticipated transactions whose risks are being hedged are the
intercompany purchases of inventory among our various entities for resale in
local currency. The time periods of the anticipated transactions that are hedged
are generally one year or less.

      We had (gains) and losses from foreign currency transactions and foreign
exchange contracts of U.S.$(0.1) million U.S.$(0.4) million and U.S.$0.6 million
for the years ended December 31, 2004, 2003 and 2002, respectively, which are
recorded as other expense(income), net. The potential fair value loss for a
hypothetical 10% change in forward currency exchange rates on our forward
exchange contracts is not material. While we do not enter forward exchange
contracts for trading purposes, there can be no assurance that any losses
realized on such instruments will be fully offset by gains on the underlying
exposure. We plan to continue to use forward exchange contracts in order to
mitigate the impact of exchange rate fluctuations.

      We have financial instruments, including cash, receivables, and payables,
that are denominated in foreign currencies other than in U.S. Dollars. The net
asset value of these financial instruments at December 31, 2004 and 2003 was
U.S.$52.9 million and U.S.$41.7 million, respectively. The result of a uniform
10% strengthening in the value of the Dollar relative to the currencies in which
our net assets are denominated would result in a decrease in the net equity
balance of U.S.$8.6 million and U.S.$6.8 million as of December 31, 2004 and
2003, respectively.

Item 12. Description of Securities Other Than Equity Securities

      Not applicable.


                                       51
<PAGE>

                                    PART II

Item 13. Defaults, Dividend Arrearages, and Delinquencies

      None.

Item 14. Material Modifications to the Rights of Security Holders and Use of
Proceeds

      On February 17, 2005 the Company announced its intention to voluntarily
delist its American Depositary Shares from the Nasdaq National Market and
terminate its American Depositary Receipts program. For more detailed discussion
please refer to "Rights of ADR Holders" contained within Item 10. B. of Part I.

Item 15. Controls and Procedures

Item 16. [Reserved]

      A.    Audit committee financial expert

            The Company's Board of Directors has determined that Dr. Thomas
      Staehelin (Chairman Audit Committee) is the audit committee financial
      expert serving on its audit committee. Dr. Staehelin satisfies the
      requirement for independence of an audit committee member as set forth in
      Nasdaq interim Rule 4200A(a)(14), and the Company expects that he will
      satisfy the independence requirements of new Nasdaq Rules 4200(a)(15) and
      4350(d)(2)(A) by July 15, 2005. Dr. Staehelin's relevant experience
      includes his membership in the standard setting group for Swiss Generally
      Accepted Accounting Principles, as well as experience under his name in
      Exhibit 99 "Corporate Governance - 3.1 Members of the Board of Directors,
      other Activities and Vested Interests, and Internal Organizational
      Structure."

      B.    Code of Ethics

            We have adopted a Code of Business Conduct and Ethics, which
      consists of written standards, applicable to all of our officers and
      employees, reasonably designed to deter wrongdoing and to promote honest
      and ethical conduct, including the ethical handling of actual or apparent
      conflicts of interest, personal and professional relationship; full, fair,
      accurate, timely and understandable disclosure in reports and documents
      that we file with or submit to the Securities and Exchange Commission and
      in our other public communications; compliance with applicable
      governmental laws, rules and regulations; prompt internal reporting of
      violations to the Code to an appropriate person or persons identified in
      the Code; and accountability for adherence to the Code.

      C.    Principal Accountant Fees and Services

            Fees paid to PricewaterhouseCoopers for the years ended December 31:

                                                   2004        2003
                                                  ------      ------
      Audit                                         $505        $389

      Non-Audit Services*                           $166        $167
                                                  ------      ------

      Total                                         $671        $556
                                                  ======      ======

      * Non-audit services for 2004 and 2003, primarily consist of tax and other
audit related services.

      Fees for non-audit services are pre-approved by the audit committee.

      D.    Exemptions from the Listing Standards for Audit Committees

      Not applicable.


                                       52
<PAGE>

      E.    Purchases of Equity Securities by the Issuer and Affiliated
            Purchasers

      Not applicable.

                                    PART III

Item 17. Financial Statements

      We have responded to Item 18 in lieu of responding to this item.

Item 18. Financial Statements

Index to Financial Statements

1.    Audited Financial Statements

                                                                     Page Number
                                                                     -----------

Report of Registered Public Accounting Firm                                  F-2

Consolidated Balance Sheets as of December 31, 2004 and 2003                 F-3

Consolidated Statements of Income for the three years in the
      period ended December 31, 2004                                         F-4

Consolidated Statements of Stockholders' Equity for the three
      years in the period ended December 31, 2004                            F-5

Consolidated Statements of Cash Flows for the three years of
      the period ended December 31, 2004                                     F-6

Notes to Consolidated Financial Statements                                   F-7


                                       53
<PAGE>

      Item 19. Exhibits

      Index to Exhibits

Exhibit
No.            Description
---            -----------

 1.1*          Underwriting Agreement
 1.2*          Share Lending Agreement
 2.1*          Master Separation Agreement between Unaxis Holding AG and
               INFICON Holding AG dated August 31, 2000
 3.1*          Articles of Incorporation of the Registrant (English translation)
 3.2           INFICON Holding AG, a Swiss Company, is not required to have
               By-laws under Swiss law
 4.1*          Deposit Agreement, dated as of  November 8 , 2000, among the
               Registrant, The Bank of New York, as depositary, and the owners
               and beneficial owners from time to time of American Depositary
               Receipts, including the form of American Depositary Receipt
 4.2           Deposit Agreement, dated as of  November 8 , 2000, among the
               Registrant, The Bank of New York, as depositary, and the owners
               and beneficial owners from time to time of American Depositary
               Receipts, including the form of American Depositary Receipt; as
               amended February 2005
10.1*          INFICON Leveraged Share Plan
10.2*          INFICON Discounted Share Purchase Plan
10.3.1*        Intercompany Service Agreement between Leybold Vakuum GmbH and
               INFICON GmbH
10.3.2*        Intercompany Service Agreement between Unaxis Balzers Limited
               and INFICON Limited
10.3.3*        Intercompany Service Agreement between Leybold Vacuum UK Limited
               and INFICON Limited
10.3.4*        Intercompany Service Agreement between Leybold Vacuum Japan Co.,
               Ltd and INFICON Co., Ltd.
10.3.5*        Intercompany Service Agreement between Leybold Vacuum Korea Ltd.
               And INFICON Ltd.
10.3.6*        Intercompany Service Agreement between Unaxis Singapore Pte.
               Ltd. and INFICON Pte Ltd.
10.3.7*        Intercompany Service Agreement between Leybold Vacuum Products,
               Inc. and INFICON, Inc.
10.3.8*        Intercompany Service Agreement between INFICON, Inc. and Leybold
               Vacuum Products, Inc.
10.3.9*        Intercompany Service Agreement between Leybold Vacuum France SAS
               and INFICON SARL
10.3.10*       Intercompany Service Agreement dated as of November 1, 2000,
               between Balzers and Leybold Taiwan Ltd., as Providing Company
               and INFICON Ltd. As Receiving Company.
10.4.1*        Asset Purchase Agreement between Leybold Inficon, Inc. and
               INFICON, Inc.
10.4.2*        Asset Purchase Agreement between Leybold Vakuum GmbH and INFICON
               GmbH, Cologne (formerly known as Leybold Vakuum Deutschland
               GmbH), including Supplementary Agreement thereto
10.4.3*        Asset Purchase Agreement between Unaxis Balzers Limited and
               INFICON Limited
10.4.4*        Asset Purchase Agreement between Leybold Vacuum UK Limited and
               INFICON Limited
10.4.5*        Asset Purchase Agreement between Leybold Vacuum Japan Co., Ltd.
               And INFICON Co., Ltd.
10.4.6*        Asset Purchase Agreement between Leybold Vacuum Korea Ltd. And
               INFICON Ltd.
10.4.7*        Asset Purchase Agreement between Unaxis Singapore Pte Ltd and
               INFICON Pte. Ltd.
10.4.8*        Asset Purchase Agreement between Balzers and Leybold China
               Limited and INFICON Limited
10.4.9*        Asset Purchase Agreement between Leybold SAS and INFICON GmbH,
               Cologne regarding sales of assets of French subsidiary,
               including English translation thereof
10.4.10*       Asset Purchase Agreement between Leybold SAS and INFICON
               Limited, Liechtenstein regarding sale of assets of French
               subsidiary, including English translation thereof
10.4.11*       Asset Purchase Agreement between Balzers and Leybold Taiwan,
               Ltd. And INFICON Ltd. Regarding sale of assets of Taiwanese
               subsidiary
10.5*          Tax Deed between Unaxis Holding AG and INFICON Holding AG
10.6*          Intellectual Property Assignment from Leybold Vakuum GmbH to
               INFICON GmbH
10.7*          Intellectual Property Assignment from Leybold Inficon, Inc. to
               INFICON GmbH
10.8*          Intellectual Property Assignment from Unaxis Balzers Limited to
               INFICON GmbH


                                       54
<PAGE>

10.9*          Ultra Clean License Agreement between Unaxis Balzers Limited and
               INFICON GmbH, including Side Agreement thereto
10.10*         Intellectual Property License Agreement between INFICON GmbH
               (Cologne) and INFICON GmbH
10.11*         Intellectual Property License Agreement between INFICON GmbH and
               INFICON Limited
10.12*         Intellectual Property License Agreement between INFICON GmbH and
               Unaxis Balzers Limited
10.13*         Intellectual Property License Agreement between INFICON GmbH and
               INFICON, Inc.
10.14*         Lease Agreement for manufacturing facilities in Cologne, Germany
               between INFICON GmbH and Balzers and Leybold Holding AG dated
               August 31, 2000 with English translation
10.15*         Lease Agreement for manufacturing facilities in
               Balzers, Liechtenstein between INFICON AG and Balzers
               AG dated August 31, 2000 with English translation
10.16*         Employment Agreement between James L. Brissenden and
               Leybold Inficon Inc.
10.17*         Loan Agreement between INFICON Holding AG and Credit
               Suisse
10.18t         Directors stock option plan
10.19t         Management stock option plan
10.20t         Key employee stock option plan
10.21**        Employment Agreement dated January 1, 2004 between
               Lukas Winkler and INFICON Holding AG.
10.22**        Employment Agreement dated October 3, 2003 between
               Peter G. Maier and INFICON Holding AG.
10.23**        Separation Agreement and General Release dated August
               12, 2003 between INFICON, Inc. and James L. Brissenden
14             Code of Business Conduct and Ethics
23.1           Consent of PricewaterhouseCoopers LLP
31.1           Certification required by Rule 13a-14(a) and
               Sarbanes-Oxley Act Section 302(a) by Lukas Winkler.
31.2           Certification required by Rule 13a-14(a) and
               Sarbanes-Oxley Act Section 302(a) by Peter G. Maier.
32(a).1        Statement furnished pursuant to Sarbanes-Oxley Act
               Section 906 by Lukas Winkler.
32(a).2        Statement furnished pursuant to Sarbanes-Oxley Act
               Section 906 by Peter G. Maier.
99.1           Corporate Governance Report required by the Swiss
               Stock Exchange
99.2           INFICON Holding AG (stand-alone financial statements
               complying with Swiss Law)

----------

      *     Incorporated by reference to our registration statement on Form F-1
            and to our Annual Report on Form 20-F filed April 2, 2001, filed
            with the Securities and Exchange Commission.

      t     Incorporated by reference to our registration statement on Form S-8
            filed with the Securities and Exchange Commission on May 28, 2002 as
            Registration No. 333-89214.

      **    Incorporated by reference to our Annual Report on Form 20-F filed
            April 1, 2004 with the Securities and Exchange Commission under
            Commission file number 000-30980.


                                       55
<PAGE>

                               INFICON Holding AG

                        Consolidated Financial Statements

                  Years ended December 31, 2004, 2003, and 2002

Report of Registered Public Accounting Firm..................................F-2
Consolidated Balance Sheets..................................................F-3
Consolidated Statements of Income............................................F-4
Consolidated Statements of Stockholders' Equity..............................F-5
Consolidated Statements of Cash Flows........................................F-6
Notes to Consolidated Financial Statements...................................F-7


                                       F-1
<PAGE>

PRICEWATERHOUSECOOPERS[LOGO]

                                                      PricewaterhouseCoopers LLP
                                                        1100 Bausch & Lomb Place
                                                         Rochester NY 14604-2705
                                                        Telephone (585) 232 4000
                                                        Facsimile (585) 454 6594

             Report of Independent Registered Public Accounting Firm

To the Board of Directors and

Shareholders of INFICON Holding AG

In our opinion, the consolidated financial statements listed in the index
appearing under Item 18, on page 53, present fairly, in all material respects,
the financial position of INFICON Holding AG and its subsidiaries at December
31, 2004 and 2003, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2004 in conformity with
accounting principles generally accepted in the United States of America. In
addition, in our opinion, the financial statement schedule listed in the index
appearing under Item 18, on page 53, presents fairly, in all material respects,
the information set forth therein when read in conjunction with the related
consolidated financial statements. These financial statements and the financial
statement schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and the
financial statement schedule based on our audits. We conducted our audits of
these statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.


/s/ PricewaterhouseCoopers LLP

March 7, 2005

                                       F-2
<PAGE>

                               INFICON Holding AG

                           Consolidated Balance Sheets
                (U.S. Dollars in Thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                                December 31
                                                                            2004            2003
                                                                            ----            ----
<S>                                                                      <C>             <C>
Assets
Current assets:
  Cash and cash equivalents                                              $  56,116       $  37,074
  Short-term investments                                                     5,048              --
  Trade accounts receivable, net                                            19,998          22,197
  Accounts receivable - affiliates                                             735              94
  Inventories, net                                                          21,029          19,395
  Deferred tax assets                                                        2,650           3,161
  Other current assets                                                       3,177           2,950
                                                                         ---------       ---------
Total current assets                                                       108,753          84,871

Property, plant and equipment, net                                          22,779          22,398
Intangibles, net                                                             1,334           1,526
Deferred tax assets                                                         37,134          39,293
Other assets                                                                 2,165           2,586
                                                                         ---------       ---------
Total non-current assets                                                    63,412          65,803

Total assets                                                             $ 172,165       $ 150,674
                                                                         =========       =========

Liabilities and stockholders' equity
Current liabilities:
  Trade accounts payable                                                 $   6,092       $   5,918
  Accounts payable - affiliates                                                268             193
  Accrued liabilities                                                       15,081          12,911
  Income taxes payable                                                       1,617             962
  Deferred tax liabilities                                                   1,005             545
                                                                         ---------       ---------
Total current liabilities                                                   24,063          20,529

Deferred tax liabilities                                                       550             479
Other liabilities                                                            5,248           3,907
                                                                         ---------       ---------
Total non-current liabilities                                                5,798           4,386

Total liabilities                                                           29,861          24,915

Stockholders' equity:
  Common stock (2,315,900 in 2004 and 2,315,000 in 2003
    shares issued; par value CHF 10 (U.S. $5.63)                            13,040          13,033
  Additional paid-in capital                                                94,051          94,024
  Notes receivable from officers                                              (421)           (383)
  Retained earnings                                                         15,362           5,941
  Accumulated other comprehensive income                                    20,272          13,144
                                                                         ---------       ---------
Total stockholders' equity                                                 142,304         125,759
                                                                         ---------       ---------
  Total liabilities and stockholders' equity                             $ 172,165       $ 150,674
                                                                         =========       =========
</TABLE>

See notes to consolidated financial statements.


                                      F-3
<PAGE>

                               INFICON Holding AG

                        Consolidated Statements of Income
              (U.S. Dollars in Thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                                     Year ended December 31
                                                                                              2004            2003            2002
                                                                                          -----------------------------------------

<S>                                                                                       <C>             <C>             <C>
Net sales                                                                                 $ 188,147       $ 157,574       $ 130,279

Cost of sales                                                                               100,603          86,974          72,364
                                                                                          ---------       ---------       ---------
Gross profit                                                                                 87,544          70,600          57,915

Research and development                                                                     20,181          17,939          16,052
Selling, general and administrative                                                          52,740          46,583          39,264
                                                                                          ---------       ---------       ---------
Operating income (loss) from continuing operations                                           14,623           6,078           2,599

Interest (income), net                                                                          (83)           (170)           (597)
Other expense (income), net                                                                  (1,415)           (552)            383
                                                                                          ---------       ---------       ---------
Income from continuing operations before income taxes                                        16,121           6,800           2,813

Provision (benefit) for income taxes                                                          4,661           3,686            (120)
                                                                                          ---------       ---------       ---------
Income from continuing operations                                                            11,460           3,114           2,933
Discontinued Operations (Note 5):
  (Loss) from operations of discontinued operations (net of income tax
    (benefit) of $(1,231) in 2004 and $(3,537) in 2003 and $(422) in 2002)                   (1,328)         (9,880)         (2,828)
  (Loss) on disposal of discontinued operations (net of income tax
    provision (benefit) of $1,398 in 2004 and $(392) in 2003)                                  (711)         (2,623)             --
                                                                                          ---------       ---------       ---------
(Loss) from discontinued operations                                                          (2,039)        (12,503)         (2,828)

Net income (loss)                                                                         $   9,421       $  (9,389)      $     105
                                                                                          =========       =========       =========

Earnings (loss) per share:
Diluted:
  Continuing operations                                                                   $    4.91       $    1.35       $    1.27
  Discontinued operations                                                                     (0.87)          (5.40)          (1.22)
                                                                                          ---------       ---------       ---------
  Total                                                                                   $    4.04       $   (4.06)      $    0.05

Earnings (loss) per share:
Basic:
  Continuing operations                                                                   $    4.95       $    1.35       $    1.27
  Discontinued operations                                                                     (0.88)          (5.40)          (1.22)
                                                                                          ---------       ---------       ---------
  Total                                                                                   $    4.07       $   (4.06)      $    0.05
</TABLE>

See notes to consolidated financial statements.


                                      F-4
<PAGE>

                               INFICON Holding AG

                 Consolidated Statements of Stockholders' Equity

                (U.S. Dollars in Thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                      Additional  Receivable              Other           Total
                                                           Common      Paid-in       From     Retained  Comprehensive  Stockholders'
                                                            Stock      Capital     Officers   Earnings  Income (Loss)    Equity
                                                           -------------------------------------------------------------------------
<S>                                                         <C>       <C>          <C>        <C>        <C>              <C>
Balance at December 31, 2001                                $ 13,033  $ 97,349     $(523)     $15,225    $ (5,560)        $119,524
  Net income                                                                                      105                          105
  Other comprehensive income, net of tax:
  Unrealized loss on foreign currency hedges,
    net of related income tax of $65                                                                         (116)            (116)
  Foreign currency translation adjustments                                                                 11,222           11,222
                                                                                                                          ---------
  Total comprehensive income                                                                                                11,211
  Adjustments to deferred taxes related to pre-IPO
    reorganization                                                      (3,325)                                             (3,325)
                                                           ------------------------------------------------------------------------

Balance at December 31, 2002                                $ 13,033  $ 94,024     $(523)     $15,330    $  5,546         $127,410
  Net loss                                                                                     (9,389)                      (9,389)
  Other comprehensive income, net of tax:
  Unrealized loss on foreign currency hedges, net of
    related income tax of $65                                                                                 (13)             (13)
  Foreign currency translation adjustments                                                                  7,611            7,611
                                                                                                                          ---------
  Total comprehensive income                                                                                                (1,791)
  Foreign currency revaluation of notes                                              (68)                                      (68)
  Payments on promissory notes                                                       208                                       208
                                                           ------------------------------------------------------------------------

Balance at December 31, 2003                                $ 13,033  $ 94,024     $(383)     $ 5,941    $ 13,144         $125,759
  Net income                                                                                    9,421                        9,421
  Other comprehensive income (loss), net of tax:
    Unrealized gain on stock available for sale                                                               158              158
    Realized gain on stock available for sale                                                                (158)            (158)
    Unrealized loss on foreign currency hedges, net of
      related income tax of $47                                                                               (78)             (78)
    Foreign currency translation adjustments                                                                 7,206           7,206
                                                                                                                          ----------
  Total comprehensive income                                                                                                16,549
  Issuance of common stock from exercise of stock options          7        27                                                  34
  Foreign currency revaluation of notes                                              (38)                                      (38)
                                                           ------------------------------------------------------------------------

Balance at December 31, 2004                                $ 13,040  $ 94,051     $(421)     $15,362    $ 20,272         $142,304
                                                           ========================================================================
</TABLE>

See notes to consolidated financial statements.


                                      F-5
<PAGE>

                               INFICON Holding AG

                      Consolidated Statements of Cash Flows
                           (U.S. Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                     Year ended December 31
                                                                  2004        2003        2002
                                                               --------------------------------
<S>                                                            <C>         <C>         <C>
Cash flows from operating activities:
  Net income (loss)                                            $  9,421    $ (9,389)   $    105
  Adjustments to reconcile net income (loss) to net cash
  provided by operating activities:
    Depreciation and amortization                                 4,863       5,222       3,879
    Gain on receipt of marketable securities                     (1,038)         --          --
    Impairment of long lived assets                                 363       7,370          --
    Deferred taxes                                                3,713          60      (1,691)
    Changes in operating assets and liabilities:
      Trade accounts receivable                                   2,451      (4,481)      3,566
      Inventories                                                  (341)      2,317       4,319
      Other assets                                                  895       1,833         471
      Trade Accounts payable                                        (43)       (813)        160
      Accrued liabilities                                         1,590      (1,918)     (1,269)
      Income taxes payable                                          591      (2,022)        636
      Other liabilities                                             657       2,711          60
                                                               --------------------------------
Net cash provided by operating activities                        23,122         890      10,236

Cash flows from investing activities:
  Purchases of property, plant and equipment                     (3,745)     (4,109)     (7,341)
  Proceeds from sale of marketable securities                     1,038          --          --
  Purchase of short-term investments                             (5,048)         --
  Purchase of Sentex Systems, Inc. (see note 3)                      --      (1,500)         --
  Loans to New Vision Systems (see note 3)                           --          --      (5,947)
                                                               --------------------------------
Net cash used in investing activities                            (7,755)     (5,609)    (13,288)

Cash flows from financing activities:
  Payments on notes receivable from officers                         --         208          --
  Proceeds from exercise of stock options                            34          --          --
                                                               --------------------------------
Net cash provided by financing activities                            34         208          --
                                                               --------------------------------
Effect of exchange rate changes on cash and cash equivalents      3,641       3,739       7,110
                                                               --------------------------------
Increase (decrease) in cash and cash equivalents                 19,042        (772)      4,058
Cash and cash equivalents at beginning of period                 37,074      37,846      33,788
                                                               --------------------------------
Cash and cash equivalents at end of period                     $ 56,116    $ 37,074    $ 37,846
                                                               ================================
</TABLE>

See notes to consolidated financial statements.


                                      F-6
<PAGE>

                   Notes to Consolidated Financial Statements

                 (U.S.$ in thousands, except per share amounts)

1. Description of Business

During 2000, INFICON Holding AG (INFICON or the "Company") completed its initial
public offering, whereby the parent, Unaxis, sold 80.5% of its ownership in
INFICON. INFICON is a leading developer, manufacturer and supplier of innovative
instrumentation, critical sensor technologies, and process control software for
the semiconductor and vacuum coating industries. These analysis, measurement and
control products are vital to OEMs and end-users in the complex manufacturing of
semiconductors, flat panel displays, magnetic and optical storage media, and
precision optics. The Company also provides essential instrumentation for gas
leak detection and toxic chemical analysis to the air
conditioning/refrigeration, emergency response, and industrial hygiene markets.
The Company's products include PKC instruments and software, leak detectors,
vacuum measurement and component products and field-portable gas
chromatograph/mass spectrometer instruments (instrumentation for environmental
health and safety). Headquartered in Syracuse, New York, INFICON has
manufacturing facilities in the United States and Europe and operations in the
United States, Liechtenstein, Switzerland, Germany, Finland, Japan, United
Kingdom, France, Korea, Singapore, Taiwan, China, and Hong Kong. INFICON is
subject to risks common to companies in our industries including, but not
limited to, the highly cyclical nature of the semiconductor industry leading to
recurring periods of oversupply, development by INFICON or its competitors of
technological innovations, dependence on key personnel and the protection of
proprietary technology.

2. Summary of Significant Accounting Policies

Consolidation

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.

Cash and Cash Equivalents and Short-Term Investments

The Company considers all highly-liquid investments with an original maturity of
three months or less on their acquisition date to be cash equivalents. The
Company classifies investments with an original maturity of more than three
months on their acquisition date as short-term investments. At December 31,
2004, short-term investments consisted of certificates of deposit or time
deposits with maturities between three months and twelve months.

Trade Accounts Receivable

Trade accounts receivable are shown net of allowances for doubtful accounts of
U.S.$675 and U.S.$1,155 at December 31, 2004 and 2003, respectively. The Company
markets its products to a diverse customer base globally. Trade credit is
extended based upon evaluation of each customer's ability to perform its
obligations, these evaluations are updated periodically and the Company may
require deposits on large orders but does not require collateral to support
customer receivables.

Concentration Risk

The following table represents specific customer sales as a percentage of total
Company sales:

                                                   2004        2003        2002
                                                   ----        ----        ----
Pfeiffer Vacuum                                     17%         16%         18%

Unaxis  and its divisions                           15%         14%         14%


                                      F-7
<PAGE>

Inventories

Inventories are stated at the lower of cost or market. Cost is determined on the
first-in, first-out method. The reserve for excess and obsolete inventories was
U.S.$5,260 and U.S.$5,530 as of December 31, 2004 and 2003, respectively.

Income Taxes

Income taxes are accounted for under the asset and liability method. Under this
method, deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases, and operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using enacted tax rates in effect for
the year in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in the Consolidated Statements of Income in the period that
includes the enactment date. A valuation allowance is recorded to reduce the
carrying amounts of deferred tax assets if it is more likely than not such
assets will not be realized.

Property, Plant, and Equipment

Property, plant, and equipment are stated at cost. Expenditures for major
renewals and betterments that extend the useful lives of property, plant and
equipment are capitalized. Expenditures for maintenance and repairs are charged
to expense as incurred. When assets are sold or otherwise disposed of, the cost
and related accumulated depreciation are eliminated from the accounts and any
resulting gain or loss is recognized in earnings. Depreciation is provided on
the straight-line method over the estimated useful lives of 20 years for
buildings and 3 to 10 years for machinery and equipment.

Intangible Assets

The costs of identified intangible (primarily completed software technology)
assets are amortized on a straight-line basis over five to ten years. The
Company periodically reviews intangibles to evaluate whether changes have
occurred that would suggest their value may be impaired based on the estimated
undiscounted cash flows of the asset to which the intangible relates. If this
review indicates the remaining useful life of an intangible requires revision or
is not recoverable, the carrying amount of the intangible is reduced by the
estimated shortfall of cash flows on a discounted basis. Accumulated
amortization at December 31, 2004 and 2003 was U.S.$3,413 and U.S.$3,371,
respectively. Amortization expense for the next five years will approximate
U.S.$150 per year.

The activity of identifiable intangible assets was as follows:

<TABLE>
<CAPTION>
                                       Balance at                                                   Foreign
                                       Beginning                                                    Currency     Balance at
                                         of Year     Additions    Amortization   Impairments      Translation   End of Year
                                       ------------------------------------------------------------------------------------

<S>                                      <C>           <C>           <C>           <C>              <C>          <C>
Year ended December 31, 2004             1,526                       (132)           (363)          303          1,334

Year ended December 31, 2003               343         4,482         (594)         (2,635)          (70)         1,526
</TABLE>

Research and Development

Research and development costs are expensed as incurred.

Shipping and Handling Costs

Revenue and costs associated with shipping products to customers are included in
sales and cost of sales, respectively.

Advertising Costs

Advertising costs of U.S.$971 in 2004, U.S.$783 in 2003, and U.S.$1,041 in 2002
are expensed as incurred.


                                      F-8
<PAGE>

Foreign Currency Translation

The functional currency of the Company's foreign subsidiaries is the applicable
local currency. For those subsidiaries, assets and liabilities are translated to
U.S. Dollars at year-end exchange rates. Income and expense accounts are
translated at the average monthly exchange rates in effect during the year. The
effects of foreign currency translation adjustments are included in accumulated
other comprehensive income (loss) as a component of stockholders' equity. Gains
and losses from foreign currency transactions are reported in the statement of
income under other expense (income), net.

Significant Accounting Policies and Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the dates of the financial statements and
the reported amounts of revenues and expenses during the reporting periods. On
an on-going basis, management evaluates its estimates and judgments, including,
but not limited to, those related to revenue recognition, pension actuarial
assumptions and methods, reserves for obsolescence and excess inventory, bad
debt, warranty, goodwill and intangibles, and valuation allowances for deferred
tax assets. Management bases its estimates and judgments on historical
experience and on various other factors believed to be reasonable under the
circumstances that form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions. The following summarizes specific accounting policies:

      Revenue Recognition - Revenue is recognized upon the transfer of title and
      risk of loss which is generally upon shipment. When a customer's
      acceptance is required, revenue is not recognized until the customer's
      acceptance is received. The Company accrues for anticipated returns and
      warranty costs upon shipment.

      Goodwill and Intangible Assets - The Company reviews goodwill and
      intangible assets for impairment whenever events or changes in
      circumstances indicate that the carrying amount of these assets may not be
      recoverable, and also reviews goodwill annually. Goodwill and intangible
      assets deemed to have indefinite lives are not subject to amortization,
      while all other identifiable intangibles are amortized over their
      estimated useful life. Intangible assets, such as purchased technology,
      are generally recorded in connection the acquisition of a business. The
      value assigned to intangible assets is determined by or with assistance of
      an independent valuation firm based on estimates and judgments regarding
      expectations for the success and life cycle of products and technology
      acquired. If actual results differ significantly from the estimates, or
      other indications are present, the Company may be required to record an
      impairment charge to write down the asset to its realizable value. In
      addition, goodwill is tested annually using a two-step process. The first
      step is to identify any potential impairment by comparing the carrying
      value of the reporting unit to its fair value. If a potential impairment
      is identified, the second step is to compare the implied fair value of
      goodwill with its carrying amount to measure the impairment loss. A severe
      decline in fair value could result in an impairment charge to goodwill,
      which could have a material adverse effect on the Company's business,
      financial condition and results of operations. The Company performs its
      annual impairment analysis during the third quarter.

      Bad Debts - The allowance for doubtful accounts is for estimated losses
      resulting from a customer's inability to make required payments. If the
      financial condition of our customers were to deteriorate, resulting in an
      impairment of their ability to make payments, additional allowances may be
      required.

      Warranties - The accrual for the estimated cost of product warranties is
      provided for at the time revenue is recognized. While we engage in
      extensive product quality programs and processes, including actively
      monitoring and evaluating the quality of our component suppliers, our
      warranty obligation is affected by product failure rates, material usage,
      and service delivery costs incurred in correcting a product failure.
      Should actual product failure rates, material usage or service delivery
      costs differ from our estimates, revisions to the estimated warranty
      liability may be required.

      Inventory - The reserve for estimated obsolescence or unmarketable
      inventory is equal to the difference between the cost of inventory and the
      estimated fair value based upon assumptions about future demand and market
      conditions. If actual future demand or market conditions are less
      favorable than those projected by management, additional inventory
      write-downs may be required.


                                      F-9
<PAGE>

      Pension Benefits - The pension benefit costs and credits are developed
      from actuarial valuations. Inherent in these valuations are key
      assumptions including discount rates and expected return on plan assets.
      The Company considers current market conditions, including changes in
      interest rates, in selecting these assumptions. Changes in the related
      pension benefit costs or credits may occur in the future in addition to
      changes resulting from fluctuations in our related headcount due to
      changes in the assumptions.

      Deferred Tax Assets - As of December 31, 2004, the Company had net
      deferred tax assets of approximately U.S.$38 million reflecting tax credit
      and loss carryforwards, basis differences primarily from intangible
      assets, and other deductions available to reduce taxable income in future
      years. A majority of the net deferred tax assets balance resides in the
      United States. In assessing the realization of the Company's deferred tax
      assets, we consider whether it is more likely than not the deferred tax
      assets will be realized. The ultimate realization of our deferred income
      tax assets depends upon our ability to generate future taxable income,
      including the implementation of tax planning strategies, during the
      periods in which our basis differences and other deductions become
      deductible and prior to the expiration of our net operating loss
      carryforwards. On a quarterly basis, the Company evaluates the
      recoverability of its deferred tax assets based upon historical results
      and forecasted results over future years, considering tax planning
      strategies, and matches this forecast against the basis differences,
      deductions available in future years and the limitations allowed for net
      operating loss carryforwards to ensure there is adequate support for the
      realization of the deferred tax assets. While we have considered future
      operating results, in conjunction with ongoing prudent and feasible tax
      planning strategies in assessing the need for the valuation allowance, in
      the event we were to determine that we would not be able to realize all or
      part of our net deferred tax assets in the future, an adjustment to the
      deferred tax assets would be charged as a reduction to income in the
      period such determination was made. Likewise, should we determine that we
      would be able to realize future deferred tax assets in excess of its net
      recorded amount, an adjustment to the deferred tax assets would increase
      income in the period such determination was made. For the year ended
      December 31, 2004, the Company's evaluation of the recoverability of our
      deferred tax assets, in accordance with SFAS 109, showed that an increase
      to our valuation allowance for its deferred income tax assets was
      required. An additional valuation allowance of U.S.$.8 million was
      recorded for the year ended December 31, 2004. If the Company generates
      future taxable income against which these tax attributes may be applied,
      some portion or all of the valuation allowance would be reversed and
      reported as income tax benefit in future periods.

      Although realization is not assured, the Company believes it is more
      likely than not the net deferred tax asset balance as of December 31, 2004
      will be realized. Differences between forecasted and actual future
      operating results could adversely impact our ability to realize our
      deferred income tax assets; however, differences between forecasted and
      actual future operating results are continually monitored to ensure the
      Company has adequate support for the realization of the deferred tax
      assets. The Company's analysis supporting the realization of the deferred
      tax assets places careful consideration on the net operating loss
      carryforward periods.

      Impairment of Long-Lived Assets - SFAS No. 144, "Accounting for the
      Impairment or Disposal of Long-Lived Assets," was early adopted by the
      Company on January 1, 2002. In accordance with SFAS No. 144, long-lived
      assets to be held and used by an entity are to be reviewed for impairment
      whenever events or changes in circumstances indicate the carrying amount
      of an asset may not be recoverable. If the sum of the expected future
      undiscounted cash flows is less than the carrying amount of the asset, an
      impairment loss is recognized by reducing the recorded value to fair
      value. During 2004 and 2003 an impairment charge was recognized and is
      included in loss from discontinued operations (see Note 3).

      Disposal of Long-Lived Assets/Discontinued Operations - SFAS No. 144,
      "Accounting for the Impairment or Disposal of Long-Lived Assets," was
      early adopted by the Company on January 1, 2002. Under SFAS No. 144, the
      definition of what constitutes a discontinued operation is broader,
      discontinued operations are no longer measured on a net realizable value
      basis, and future operating losses are no longer recognized before they
      occur (see Note 5).


                                      F-10
<PAGE>

Software Cost

The Company capitalizes internal-use software development costs in accordance
with the provisions of SOP 98-1, "Accounting for Costs of Computer Software
Developed or Obtained for Internal Use." The capitalized cost is amortized
beginning when it is placed into service on a straight-line basis over its
estimated life.

Stock-Based Compensation

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148 (SFAS 148), "Accounting for Stock-Based Compensation - Transition and
Disclosure - an Amendment of FASB Statement No. 123 (SFAS 123)." The Company has
elected to follow Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" (APB 25) and related interpretations in accounting
for its employee stock options. Under APB 25, because the exercise price of the
Company's employee stock options equals the market price of the underlying stock
on the date of grant, no compensation expense is recognized (see Note 19).

      For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information follows:

<TABLE>
<CAPTION>
                                                            2004                 2003                 2002
                                                        ----------           ----------           ----------
<S>                                                     <C>                  <C>                  <C>
Net income (loss), as reported                          $    9,421           $   (9,389)          $      105
Income from continuing operations                           11,460                3,114                2,933
Less: Stock based compensation expense, net of tax          (1,044)              (5,509)              (3,263)
Pro forma income (loss) from continuing operations          10,416               (2,395)                (330)
(Loss) from discontinued operations                         (2,039)             (12,503)              (2,828)
                                                        ----------------------------------------------------
Net Income (Loss) - pro forma                           $    8,377           $  (14,898)              (3,158)
                                                        ====================================================
Earnings (loss) per share
Diluted:
Continuing operations - as reported                     $     4.91           $     1.35           $     1.27
Discontinued operations - as reported                        (0.87)               (5.40)               (1.22)
                                                        ----------------------------------------------------
Total - as reported                                     $     4.04           $    (4.06)          $     0.05
                                                        ====================================================

Continuing operations - pro forma                       $     4.47           $    (1.03)          $    (0.14)
Discontinued operations - pro forma                          (0.87)               (5.40)               (1.22)
                                                        ----------------------------------------------------
Total - pro forma                                       $     3.59           $    (6.44)          $    (1.36)
                                                        ====================================================

Earnings (loss) per share
Basic:
Continuing operations - as reported                     $     4.95           $     1.35           $     1.27
Discontinued operations - as reported                        (0.88)               (5.40)               (1.22)
                                                        ----------------------------------------------------
Total - as reported                                     $     4.07           $    (4.06)          $     0.05
                                                        ====================================================

Continuing operations - pro forma                       $     4.50           $    (1.03)          $    (0.14)
Discontinued operations - pro forma                          (0.88)               (5.40)               (1.22)
                                                        ----------------------------------------------------
Total - pro forma                                       $     3.62           $    (6.44)          $    (1.36)
                                                        ====================================================
</TABLE>


                                      F-11
<PAGE>

Reclassification

Certain reclassifications have been made to prior years' financial statements to
conform to the current year presentation.

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board ('FASB') issued SFAS
No. 123(R), "Share-Based Payment", which is a revision of SFAS No. 123 and
supersedes APB Opinion No. 25. SFAS No. 123(R) requires all share-based payments
to employees, including grants of employee stock options, to be valued at fair
value on the date of grant, and to be expensed over the applicable vesting
period. Pro forma disclosure of the income statement effects of share-based
payments is no longer an alternative. SFAS No. 123(R) is effective for all
periods after July 1, 2005. In addition, companies must also recognize
compensation expense related to any awards that are not fully vested as of the
effective date. Compensation expense for the unvested awards will be measured
based on the fair value of the awards in accordance with the provisions of SFAS
No. 123. The Company is currently assessing the impact of adopting SFAS 123(R)
to its consolidated financial statements.

3. Acquisitions

New Vision Systems

In January 2003, the Company acquired 100% of the stock of a privately-held
company, New Vision Systems, a leader in advanced process control (APC) for
patterning processes in semiconductor manufacturing pursuant to an Agreement and
Plan of Merger which closed on January 3. New Vision Systems develops and
deploys a full suite of process control software compatible with tools from all
major photolithography and metrology equipment suppliers. These products improve
equipment productivity and chip yield in semiconductor fabrication.

 The transaction was accounted for under the purchase method of accounting for
 business combinations, and the results of operations for INFICON LT (or
 Patterning Solutions) (formerly New Vision Systems) have been included in the
 Company's consolidated financial statements, and reported as a separate
 reporting unit under the semiconductor vacuum instrumentation segment, for the
 year ended December 31, 2003 since the date of acquisition.

An independent valuation of the assets acquired and liabilities assumed from the
purchase of New Vision Systems was completed during the first quarter of 2003.
The valuation methodology was based on the income approach - discounted cash
flow method and was based upon the Company's financial projections, backlog,
non-competition and non-solicitation clauses and workforce value. The valuation
was based on a weighted average cost of capital of 17% and expected life of the
purchased technology.

The following table summarizes the estimated fair values of those assets and
liabilities.

      Liabilities assumed:
      Current liabilities                                               $4,047
      Long-term debt (intercompany)                                      5,890
                                                                        ------

      Total liabilities assumed                                         $9,937
                                                                        ------

      Less Tangible assets acquired:
      Current assets                                                    $  693
      Leases, licenses, furniture and equipment                            365
      Other assets                                                         955
                                                                        ------
      Total tangible assets acquired                                    $2,013
                                                                        ------

      Allocation of excess liabilities over assets:
      Goodwill                                                          $4,342
      Identifiable intangibles                                           3,582
                                                                        ------

      Total net liabilities assumed                                     $7,924
                                                                        ======


                                      F-12
<PAGE>

The intangible assets that made up the intangible asset balance, on the opening
balance sheet for New Vision Systems, include completed technology of U.S.$2,660
(10 year useful life), trade names of U.S.$382 (10 year useful life), certain
non-compete and non-solicitation agreements of U.S.$220 (5 year useful life) and
order backlog of U.S.$320 (1 year useful life). Of the total intangible assets,
of U.S.$7,924, the identifiable intangible balance of U.S.$3,582 is the
allowable amount that may be deducted for tax purposes.

As consideration for the stock of New Vision Systems, the Company assumed
liabilities in excess of assets, and entered into a contingent "Earn Out"
agreement through 2004 with the stockholders of New Vision Systems, not to
exceed $27 million, payable in a combination of the Company's ADRs, valued at
the current market price when payable, and cash, based on specific sales targets
of New Vision Systems in calendar years 2003 and 2004. As of December 31, 2004,
no amounts have been recorded for the contingent purchase price.

The following unaudited pro forma information summarizes the Company's
consolidated results of operations for the year ended December 31, 2002 as if
New Vision Systems acquisition had taken place at the beginning of 2002:

                                                              2002
                                                           ---------
      Net sales                                            $ 133,059

      Net (loss)                                           $  (7,646)
                                                           =========

      Basic & Diluted net (loss) per share                 $   (3.30)

The pro forma results for 2002 are not necessarily indicative of the results
that would have occurred had the acquisition been in effect during 2002.

During the third quarter of 2003, as a result of substantially lower than
expected financial performance for New Vision Systems, and in conjunction with
its annual test of goodwill, an impairment test of the intangible assets was
performed and the Company recorded an impairment charge of U.S.$7,370 to write
down the intangible assets associated with New Vision Systems. The impairment
charge, based on an independent valuation utilizing discounted cash flows, was
allocated as follows:

      Goodwill                                                 $4,342
      Identifiable intangibles                                  2,635
      PP&E                                                        393
                                                               ------
      Total                                                    $7,370
                                                               ======

In connection with the decision to dispose of this business, during March 2004
the remaining balance of the identifiable intangible assets of U.S.$363, were
written down to U.S. $0. (see Note 5)

Sentex Systems Inc.

In May 2003, the Company acquired 100% of the assets and assumed certain
liabilities of a privately-held company, Sentex Systems Inc. Sentex Systems,
founded in 1980, supplies sophisticated monitoring and analysis instruments
using gas chromatography (GC) technology to detect volatile organic compounds
(VOCs) for industrial and environmental monitoring, testing, and security.
Sentex product lines include continuous, on-line water monitors for applications
such as factory discharge water or water security, air monitors for spot
analysis or continuous on-site monitoring and explosives detectors for building
and site security and protection. Sentex products complement the HAPSITE fully
portable chemical identification systems (gas chromatograph/mass spectrometer or
GC/MS technology) used for fast on-scene detection and analysis of chemical
agents and toxic materials in air, soil and water. The financial results for
Sentex products are reported under the general vacuum instrumentation segment.


                                      F-13
<PAGE>

The transaction was accounted for under the purchase method of accounting for
business combinations, and the results of operations have been included in the
Company's consolidated financial statements as of the second quarter ending June
30, 2003. The valuation methodology was performed by Company with assistance
from an independent party and was based on the income approach - discounted cash
flow method and was based upon the Company's financial projections. The
valuation was based on a weighted average cost of capital of 11% and expected
life of the purchased technology.

A valuation of the assets and certain liabilities acquired from the purchase of
Sentex Systems Inc. was prepared by the Company. The following table summarizes
the estimated fair values of those assets and liabilities.

      Purchase price                                                  $ 1,500
                                                                      =======

      Tangible assets acquired:
      Current assets                                                  $   354
      Equipment and other                                                  35
                                                                      -------
      Total tangible assets acquired                                  $   389
                                                                      -------

      Less: Liabilities assumed
      Current liabilities                                             $   (89)

Allocation of excess purchase price over net assets was $1,200 to identifiable
intangible asset.

The acquired identifiable intangible asset (primarily gas chromatography and
completed software technology) has a useful life of 10 years. The intangible
asset balance is comprised of completed technology of U.S.$1,200 (10 year useful
life). The U.S.$1,200 is deductible for tax purposes.

The following unaudited pro forma information summarizes the Company's
consolidated results of operations for the years ended December 31, 2003 and
2002 as if Sentex Systems acquisition had taken place at the beginning of 2002:

                                                       2003           2002
                                                    ---------      ---------
      Net sales                                     $ 159,904      $ 131,301

      Net income (loss)                             $  (9,341)     $     290
                                                    =========      =========


      Diluted net income (loss) per share           $   (4.03)     $    0.13
      Basic net income (loss) per share             $   (4.03)     $    0.13

4. Sale of Diffusion Pump Business

During the second quarter of 2003, the Company sold its diffusion pump business.
There was no gain or loss realized during 2003 from the sale. The Company's
decision to sell the diffusion pump business was based upon its long-term
strategy of focusing financial and personnel resources on the Company's core
strategies.

The Company sold certain assets and intellectual property associated with its
diffusion pump business. The sales price was U.S.$1,400, with U.S.$230 paid at
signing. The balance is due based on 10% of buyers revenues derived from the
diffusion pump sales, with payments to be made twice a year . The payments
received in 2004 amounted to U.S.$180.

5. Discontinued Operations

Ultra Clean Processing Business

During 2003, the Company decided to divest of the ultra clean processing
business, based upon its long-term strategy of focusing on the Company's core
competencies in the front-end of the semiconductor manufacturing process. The
divestment was completed as of December 31, 2003. The divestment was structured
as a management buyout where selected assets were purchased for approximately
U.S.$614, with the payment terms allowing the Company the potential to recoup a
portion of the divestment costs over the next several years. The Company
received payments of approximately U.S.$125 during each of 2004 and 2003. The
Company has reported the results of this business, within the Consolidated


                                      F-14
<PAGE>

Statements of Income, as discontinued operations for the years ended December
31, 2004, 2003 and 2002. The ultra clean processing business serviced the
semiconductor market and were reported under the semiconductor vacuum
instrumentation segment.

      The balance of the reserves, relating to the discontinued operations, as
of December 31, are as follows:

                                                                   2004     2003
                                                                   ----   ------
      Reserve for doubtful accounts                                $ 92   $  467
      Reserve for staff reductions                                    0      122
      Reserve for excess/obsolete inventory                          40      272
      Reserve for receivable resulting from sale of UCP business    412      533
                                                                   ----   ------
      Total reserve for discontinued operations                    $544   $1,394
                                                                   ====   ======

During 2004 and 2003, the Company reduced certain accruals by U.S.$598 and $182,
respectively, based on adjustments of original estimates to actual costs. The
reduction of these accruals was recorded as income from discontinued operations.

Patterning Solutions Software Business (INFICON LT)

In March 2004, the Company retained the services of an investment bank in
connection with the disposal of its patterning solutions software business. The
Company's decision to exit this business is based upon its decision to further
focus its resources. During the first quarter 2004 the Company recorded an
impairment loss of U.S.$0.3 million to write-off the balance of its intangible
assets. During the third quarter 2004, the Company wrote-down a portion of its
deferred tax asset relative to specific loss carryforwards that were recorded as
part of the acquisition of the patterning solutions software business of
U.S.$1.4 million, due to reduced expectations on the proceeds from sale.
Additionally, during third quarter 2004, the Company recorded an impairment of
fixed assets of U.S.$45. After careful consideration, a decision was made to
phase out operations and fulfill existing customer contracts through 2005. The
patterning solutions software business had assets of U.S.$4.5 million and
liabilities of U.S.$0.8 as of December 31, 2004 (excluding intercompany
transactions). The patterning solutions software business services the
semiconductor market and was reported under the semiconductor vacuum
instrumentation segment.

The components of discontinued operations are as follows:

<TABLE>
<CAPTION>
                                                                                             2004
                                                                    -------------------------------------------------------
                                                                      Total          Ultra Clean       Patterning Solutions
<S>                                                                  <C>                   <C>                    <C>
Loss from operations, net of taxes                                   $ (1,328)             $  --                  $ (1,328)
Gain (loss) on disposal, net of taxes                                    (711)               598                    (1,309)
                                                                    ----------       ------------      --------------------
Income (loss) from discontinued operations, net of taxes             $ (2,039)             $ 598                  $ (2,637)

<CAPTION>
                                                                                             2003
                                                                    -------------------------------------------------------
                                                                      Total          Ultra Clean       Patterning Solutions
<S>                                                                 <C>                 <C>                       <C>
Loss from operations, net of taxes                                  $ (10,249)          $ (1,188)                 $ (9,061)
(Loss) on disposal, net of taxes                                       (2,254)            (2,254)
                                                                    ----------       ------------      --------------------
(Loss) from discontinued operations, net of taxes                   $ (12,503)          $ (3,442)                 $ (9,061)

<CAPTION>
                                                                                             2002
                                                                    -------------------------------------------------------
                                                                      Total          Ultra Clean       Patterning Solutions
<S>                                                                  <C>                <C>                          <C>
Loss from operations of discontinued operations, net of taxes        $ (2,828)          $ (2,828)                    $  --
</TABLE>

6. Other Income

In April 2004 the Company became aware it owned 22,793 shares of Prudential
Financial, Inc. (Prudential) stock resulting from Prudential's conversion from a
mutual company to a public stock company in the fourth quarter of 2001.
Prudential had been the Company's insurance carrier for a number of years and as
a result the Company earned these shares in the conversion. In considering the
appropriate accounting for this event, the Company considered a number of
quantitative and qualitative factors and recorded the value of the stock as
other income in the quarter it became known. We recorded current income for the
value of the stock at the time the Company first became aware of the shares. The
effect of this transaction was U.S.$880 and was recorded as an increase in other
income in the first quarter of 2004. The unrealized change in value, which was


                                      F-15
<PAGE>

not material, of the shares subsequent to the demutualization was recorded
retroactively through equity as the stock is classified as available-for-sale.
In the second quarter of 2004, the balance of the stock was sold. The effect on
net income from the sale on the balance of the stock was U.S.$158 and was
recorded as an increase in other income in the second quarter of 2004.

7. Inventories

Inventories consist of the following at December 31,:

                                                        2004             2003
                                                      -------------------------

      Raw material                                    $ 16,352         $ 14,866
      Work-in-process                                    1,009            1,054
      Finished goods                                     3,668            3,475
                                                      -------------------------
                                                      $ 21,029         $ 19,395
                                                      =========================

8. Property, Plant, and Equipment

The components of property, plant, and equipment consist of the following at
December 31,:

                                                             2004         2003
                                                           ---------------------

      Land                                                 $    700     $    700
      Buildings and improvements                             18,923       17,872
      Machinery and equipment                                27,589       22,844
                                                           ---------------------
                                                             47,212       41,416
      Less accumulated depreciation                          24,433       19,018
                                                           ---------------------
                                                           $ 22,779     $ 22,398
                                                           =====================

9. Accrued Liabilities

The components of accrued liabilities are as follows at December 31,:

                                                             2004         2003
                                                           ---------------------

      Salaries, wages and related costs                    $  6,632     $  3,735
      Warranty                                                2,244        2,514
      Commissions                                             2,647        2,321
      Deferred revenue                                          880        1,028
      Other                                                   2,678        3,313
                                                           ---------------------
                                                           $ 15,081     $ 12,911
                                                           =====================

10. Warranty

The activity of the warranty reserve was as follows:

<TABLE>
<CAPTION>
                                       Balance at                            Deduct:
                                      Beginning of     Add: Warranty     Claims against    Balance at End
                                          Year           Provision           Reserve           of Year
                                    -----------------------------------------------------------------------

<S>                                   <C>               <C>                 <C>               <C>
Year ended December 31, 2004          $   2,514         $     1,473         $  1,743          $   2,244

Year ended December 31, 2003          $   2,246         $     1,707         $  1,442           $   2,514
</TABLE>


                                      F-16
<PAGE>

11. Restructuring Charges

During the fourth quarter of 2002, the Company recorded restructuring charges of
U.S.$ 1,274 as part of a worldwide cost-reduction program in response to the
continued reduced demand and slowdown in the semiconductor capital equipment
industry. The U.S.$1,274 charged to restructuring primarily consisted of
severance and fringe benefits for approximately 33 employees who either elected
the voluntary severance program or were terminated. The affected employees were
located in the United States and Liechtenstein and are comprised of
manufacturing and salaried employees. Notification of termination and benefits
were communicated to employees in the fourth quarter of 2002 and the majority of
the terminations occurred in 2002 and early 2003. Both of the Company's segments
were affected by the restructuring charges.

12. Borrowing Arrangements

The Company has a U.S.$30.0 million working capital financing arrangement with
Credit Suisse. The financing arrangement can be either in the form of a current
account overdraft facility, fixed advances with a maximum maturity of twelve
months, bid/advance payment/performance bonds, issuance of letters of credit, or
as margin coverage for foreign exchange forward transactions. The working
capital financing automatically extended for one year on November 23, 2004. The
Company has U.S.$0 outstanding under the arrangement as of December 31, 2004 and
2003.

Additionally, the Company has revolving credit facilities with HypoVereinsbank
in Hong Kong Dollars, which approximates U.S.$1.8 million. These facilities can
be in the form of working capital financing and/or margin coverage arrangement
for foreign exchange forward transactions. The working capital financing
arrangement can be either in the form of a current account overdraft facility,
fixed advances with a maximum maturity of nine months, short term trust receipt
financing, issuance of letters of credit, or issuance of bank guarantees. The
working capital financing arrangement expires on June 30, 2006 and the Company
had U.S.$470 and U.S.$0, respectively, outstanding under the arrangement as of
December 31, 2004 and 2003.

13. Related Party Transactions

The following table summarizes transactions with Unaxis for the years end
December 31:

                                                      2004       2003      2002
                                                    ---------------------------
Selling, general & administrative expenses           3,541      3,515     3,996

Rent expense (inlcuded in SG&A expenses)             2,088      2,129     1,801

Net Sales                                           27,990     22,707    17,599

These SG&A charges represent allocations for expenses incurred by Unaxis on the
Company's behalf including costs for occupancy, finance, legal, tax, information
technology, and human resources functions. The amounts are primarily allocated
based on net sales, which management believes to be reasonable. INFICON and
Unaxis have entered into agreements following the separation of the companies
that governs various relationships for separating employee benefits and tax
obligations, indemnification and transition services. Rent expense is incurred
by the Company, which leases certain buildings from Unaxis, that are due to
expire between December 2005 and 2010. The accounts receivable-affiliates and
accounts payable-affiliates on the Consolidated Balance Sheets represent
balances with Unaxis subsidiaries.

14. Financial Instruments and Risk Management

The carrying amount of all reported balances in the balance sheet approximates
fair value.

The Company maintains a foreign currency exchange risk management strategy that
uses derivative instruments, in the form of forward exchange contracts, to hedge
against future movements in foreign exchange rates that affect certain foreign
currency denominated sales and related purchase transactions, caused by currency
exchange rate volatility. These contracts are designated as cash flow hedges and
generally have durations of less than one year. The Company attempts to match
the forward contracts with the underlying items being hedged in terms of
currency, amount and maturity. The primary currencies in which the Company has
exposure are the Japanese Yen, Swiss Franc, Euro, and U. S. Dollar. This
exposure arises in certain locations from intercompany purchases and sales of
inventory in foreign currency for resale in local currency, in addition to
intercompany billings relating to research and development and management
services.


                                      F-17
<PAGE>

The Company's accounting policy, for derivative financial instruments, is based
on its designation of such instruments as hedging transactions. An instrument is
designated as a hedge based in part on its effectiveness in risk reduction and
one-to-one matching of derivative instruments to underlying transactions. The
Company records all derivatives on the balance sheet at fair value. For
derivative instruments that are designated and qualify as cash flow hedges, the
effective portion of the gain or loss on the derivative instrument is reported
as a component of accumulated other comprehensive income and reclassified into
earnings in the same period or periods during which the hedged transaction
affects earnings. The gain or loss (ineffectiveness) on the derivative
instrument in excess of the hedged item, if any, is recognized in current
earnings during the period in which it occurs. The Company's unrealized net
losses under foreign currency contracts at December 31, 2004 and 2003, are
included in accumulated other comprehensive income, net of taxes. These
unrealized net losses are expected to be recognized into earnings over the next
twelve months. The Company recognized gains net of taxes from ineffective hedges
of U.S.$264 in 2002.

<TABLE>
<CAPTION>
                                                                                   2004          2003
                                                                                 --------      --------

<S>                                                                                <C>           <C>
Aggregate value of contracts for sale of U.S. Dollars                              2,300         2,200

Aggregate value of contracts for exchange of all other currencies                  3,000         4,269

Unrealized net losses under foreign currency contracts                                78            13
</TABLE>

The Company had (gains) losses from all foreign currency transactions and
foreign exchange contracts of U.S.$(122), U.S.$(398), and U.S.$573 for fiscal
years 2004, 2003, and 2002, respectively, which are recorded in other
income/expense, net.

15. Commitments and Contingencies

A summary of contractual commitments and contingencies as of December 31, 2004
is as follows:

<TABLE>
<CAPTION>
                           2005          2006          2007          2008          2009       Therafter       Total
                        ----------    ----------    ----------    ----------    ----------    ----------    ----------

<S>                     <C>           <C>           <C>           <C>           <C>           <C>           <C>
Operating Leases        $    4,978    $    4,717    $    4,667    $    4,746    $    4,789    $   14,240    $   38,137

Purchase Obligations           768           438                                                            $    1,206
                        ----------    ----------    ----------    ----------    ----------    ----------    ----------
Total                   $    5,746    $    5,155    $    4,667    $    4,746    $    4,789    $   14,240    $   39,343
                        ----------    ----------    ----------    ----------    ----------    ----------    ----------
</TABLE>

The Company leases some of its facilities and machinery and equipment under
operating leases, from Unaxis and third parties, expiring in years 2005 through
2014. Generally, the facility leases require the Company to pay maintenance,
insurance and real estate taxes. Rental expense under operating leases totaled
U.S.$6,216, U.S.$5,681, and U.S.$5,008 for the years ended December 31, 2004,
2003, and 2002, respectively.

Purchase obligations include amounts committed under legally enforceable
contracts or purchase orders for goods or services with defined terms as to
price, quantity, delivery and termination liability.


                                      F-18
<PAGE>

16. Supplemental Cash Flow Information

Cash receipts(payments) for the years ended December 31:

                                                      2004       2003      2002
                                                     ---------------------------

Income taxes, net                                     (998)    (2,200)   (1,062)

Interest, net                                           83        149        33

Sale of Diffusion Pump business (Note 4)               180        230        --

Sale of Ultra Clean Processing business (Note 5)       125        125        --

17. Income Taxes

For financial reporting purposes, income (loss) before income taxes included the
following:

<TABLE>
<CAPTION>
                                                                              2004         2003        2002
                                                                           ---------------------------------
<S>                                                                        <C>          <C>          <C>
Income (loss) from continuing operations before income taxes
   United States                                                           $  8,795     $  3,308     $(3,218)
   Foreign                                                                    7,326        3,492       6,031
                                                                           ---------------------------------
   Total income (loss) from continuing operations before income taxes      $ 16,121     $  6,800     $ 2,813
                                                                           =================================
Income (loss) from discontinued operations before income taxes
   United States                                                           $ (2,495)    $(12,515)          $
   Foreign                                                                      623       (3,917)     (3,251)
                                                                           ---------------------------------
   Total income (loss) from discontinued operations before income taxes    $ (1,872)    $(16,432)    $(3,251)
                                                                           =================================

Total income (loss) before income taxes                                    $ 14,249     $ (9,632)    $  (438)
                                                                           =================================
</TABLE>

Provision (benefit) for income taxes included the following:

                                                 2004          2003        2002
                                              ---------------------------------

Current:
   Federal                                    $    --      $    --      $    --
   State                                         (466)        (103)          31
   Foreign                                      1,068          (30)       1,118
                                              ---------------------------------
                                                  602         (133)       1,149
                                              ---------------------------------
Deferred:
   Federal                                      2,443       (1,330)      (1,388)
   Foreign                                      1,783        1,219         (303)
                                              ---------------------------------
                                                4,226         (111)      (1,691)
                                              ---------------------------------
Provision (benefit) for income taxes          $ 4,828      $  (243)     $  (542)
                                              =================================

         The differences between the United States federal statutory income tax
rate and the Company's effective tax rate were as follows:

<TABLE>
<CAPTION>
                                                                2004       2003      2002
                                                                ---------------------------

<S>                                                             <C>      <C>        <C>
U.S. federal statutory rate                                     34.0%     (34.0%)    34.0%
Effect of permanent differences                                 (3.1%)    (19.7%)    (2.6%)
Effect of foreign subsidiaries with different tax rates         (7.8%)   (249.7%)   (17.1%)
State taxes, net of federal benefit                              1.1%       7.1%     (0.8%)
Increase in valuation allowance                                   .8%     191.5%      6.0%
Write-off of deferred tax asset (Note 5)                         9.2%
Other                                                            (.3%)    (19.2%)    (0.3%)
                                                                ---------------------------

Effective tax rate                                              33.9%    (124.0%)    19.2%
                                                                ===========================
</TABLE>


                                      F-19
<PAGE>

Deferred tax assets and liabilities were comprised of the following:

                                                          2004            2003
                                                       ------------------------
Deferred tax assets:
   Accrued liabilities                                 $    847        $  1,250
   Loss carryforwards and tax credits                    15,330          14,100
   Basis differences/ intangible assets                  26,950          30,047
   Inventory                                                919             895
   Deferred revenue and other                               868             431
                                                       ------------------------
Total gross deferred tax assets                          44,914          46,723
     Less valuation allowances                           (5,130)         (4,269)
                                                       ------------------------
Total deferred tax assets                                39,784          42,454
                                                       ------------------------

Deferred tax liabilities:
   Accrued employee benefits                                757             283
   Property, plant, and equipment                           517             393
   Other                                                    281             348
                                                       ------------------------
Total deferred tax liabilities                            1,555           1,024
                                                       ------------------------

Net deferred tax asset                                 $ 38,229        $ 41,430
                                                       ========================

Presented as:
   Current deferred tax asset                          $  2,650        $  3,161
   Long-term deferred tax asset                          37,134          39,293
   Current deferred tax liability                        (1,005)           (545)
   Long-term deferred tax liability                        (550)           (479)
                                                       ------------------------
                                                       $ 38,229        $ 41,430
                                                       ========================

      During the year ended December 31, 2000, Unaxis Holding AG transferred the
assets and liabilities of various INFICON subsidiaries to newly created legal
entities that are wholly-owned by INFICON Holding AG. For income tax purposes,
the asset transfer was considered a taxable transaction creating a new income
tax basis of the assets and liabilities transferred. The transaction resulted in
a basis difference of approximately U.S.$84 million which will be deductible for
tax purposes over various periods, no longer than 15 years. As a result, a
deferred tax asset of U.S.$37,385 related to the basis difference was recorded
with a corresponding credit in stockholders' equity. In conjunction with the
business transfers and taxable transaction described above, it was agreed that
Unaxis would be responsible for the payment of taxes for the period up to the
date of transfer. The tax liability for the period through the transfer date was
estimated and recorded as part of the equity reclassification upon
reorganization of the Company.

      At December 31, 2004, the Company has federal and foreign net operating
loss carryforwards of approximately U.S.$56,400, which are available to offset
future taxable income, if any, which expire at various dates through 2023.
Realization of the deferred tax benefit is dependent on generating sufficient
taxable income to offset the deferred tax asset prior to its expiration. The
Company has recorded a valuation allowance of approximately U.S.$5,130, which
represents the tax benefit for net operating losses incurred for which the
Company is uncertain as to the amount, if any, of future tax benefits to be
received for the future utilization of such loss carryforwards.

      Undistributed earnings of INFICON's foreign subsidiaries, are permanently
reinvested. Distribution of earnings to INFICON would generally be exempt from
taxation in Switzerland in accordance with their participation exemption. The
participation exemption, in most cases, exempts income such as dividends,
interest, and capital gains from taxation in Switzerland if such income is
derived from qualifying investments in subsidiaries. Upon distribution of those
earnings in the form of dividends, withholding taxes ranging from 5% to 20%
would be payable upon the remittance of all previous unremitted earnings as of
December 31, 2004.


                                      F-20
<PAGE>

18. Employee Benefit Plans

      Certain INFICON employees (primarily United States, Liechtenstein, and
Germany) participate in the contributory and noncontributory defined benefit
plans. Benefits under the defined benefit plan are generally based on years of
service and or final average pay. The Company funds the pension plans in
accordance with the requirements of the Employee Retirement Income Security Act
of 1974, as amended, and the Internal Revenue Code in the United States and in
accordance with local regulations in foreign countries.

The following tables show reconciliations of defined benefit pension plans as of
December 31:

                                                        2004            2003
                                                     ------------------------
      Change in benefit obligation
      Benefit obligation, January 1                  $ 50,411        $ 46,281
      Service cost                                      2,232           2,336
      Interest cost                                     2,311           2,201
      Actuarial losses (gains)                          1,066            (752)
      Benefits paid                                    (3,184)         (5,161)
      Participant contributions                           822             892
      Plan amendments                                                     122
      Foreign currency translation adjustments          4,019           4,492
                                                     ------------------------
      Benefit obligation, December 31                $ 57,677        $ 50,411
                                                     ========================

      Change in plan assets
      Fair value of plan assets, January 1           $ 39,619        $ 36,124
      Actual return on plan assets                      1,393           2,233
      Company contributions                             2,939           2,278
      Participants' contributions                         822             892
      Benefits paid                                    (3,184)         (5,161)
      Foreign currency translation adjustments          3,196           3,253
                                                     ------------------------
      Fair value of plan assets, December 31         $ 44,785        $ 39,619
                                                     ========================

      Reconciliation of funded status
      Funded status                                  $(12,892)       $(10,792)
      Unrecognized prior service (benefit) cost           174             486
      Unrecognized actuarial (gains) losses             8,862           7,411
                                                     ------------------------
      (Accrued) prepaid benefit costs                $ (3,855)       $ (2,895)
                                                     ========================

      Range of assumptions
        Discount rate                               3.3% - 6.0%    3.7% - 6.0%
        Expected return on plan assets              2.3% - 8.0%    2.0% - 8.0%
        Rate of compensation increase               1.7% - 5.5%    1.3% - 5.5%


The following table summarizes the components of the net periodic benefit costs
for defined benefit pension plans for the periods ended December 31:

                                                           2004           2003
                                                         ----------------------

      Service cost                                       $ 2,232        $ 2,336
      Interest cost                                        2,311          2,201
      Expected return on plan assets                      (2,107)        (2,024)
      Amortization of prior service cost                      72            305
      Net amortization and deferralof actuarial
         gains / (losses)                                  1,103          1,235
                                                         ----------------------
      Net periodic benefit cost                          $ 3,611        $ 4,053
                                                         ======================


                                      F-21
<PAGE>

Additional Information:

Allocation of Assets

The asset allocation for the Company's US pension plan for the years ended
December 31, 2004, and the target allocation for 2005, by asset category,
follows:

      39 - 43%         Equity - US
      15 - 18%         Equity - International
       5 - 6%          Equity - US Real Estate Securities
       5 - 24%         Bonds
       7 - 31%         Fixed Income
      10 - 38%         Money Market

The Company's US pension plan assets are managed by outside investment managers;
assets are rebalanced at the end of each quarter. The Company's investment
strategy with respect to pension assets is to maximize return while protecting
principal. The investment manager will have the flexibility to adjust the asset
allocation and move funds to the asset class that offers the most opportunity
for investment returns.

Accumulated Benefit Obligation

The accumulated benefit obligation for the Plans is approximately U.S.$50,300.

Estimated Contributions

It is anticipated the Company will make contributions of U.S.$800 to the pension
plans for the fiscal year ending December 31, 2005.

The Company has a deferred compensation plan that covers certain former
executives (SERP). Participants in this plan are fully vested in all amounts
paid into the plan. During 2002, this benefit was transferred to the qualified
defined benefit plan and the Company contributed an actuarially determined
amount of U.S.$35 into the plan. The individuals will receive payments based
upon age at the date of termination and reduced by benefits payable under other
Company qualified retirement plans and benefits payable pursuant to social
security, and any debts or amounts that are owed to the Company by the
individuals.

The Company also participates in U.S. and foreign defined contribution plans for
certain locations. In addition, the Company maintains bonus and profit sharing
plans that provide cash awards to employees based upon operating results and
employee performance.

Expense related to these plans for the years ended December 31:

                                               2004          2003          2002
                                              ----------------------------------

Defined contribution plans                      313           593           569

Bonus and profit sharing plans                4,082         1,905         1,095

19. Stockholder's Equity

Under the Swiss Code of Obligations, the shareholders may decide on an increase
of the share capital in a specified aggregate par value up to 50% of the
existing share capital, in the form of authorized capital to be used at the
discretion of the Board of Directors. The Board of Directors is authorized to
issue at any time until May 7, 2005, up to 1,157,500 shares of par value: CHF 10
per share. Such issuance may be made by full underwriting or in partial amounts.
The Board of Directors is authorized to determine the issue price, period of
dividend entitlement, and the form of the contribution upon the issuance of the
shares. In addition, the General Meeting of Stockholders approved conditional
capital in the amount of 115,000 shares, which shall be issued upon the exercise
of option rights; which some employees and members of the Board of Directors
will be granted pursuant to the Employee Incentive Plan. The Board of Directors
will regulate the details of the issuances. As of December 31, 2004 and 2003,
114,100 and 115,000 shares, respectively, were available for issuance.


                                      F-22
<PAGE>

Share Purchase Plans

In connection with the Company's initial public offering in 2000, employees had
the opportunity to participate in one of two equity purchase programs. The two
programs are the leveraged share plan and the discounted share purchase plan.

      Leveraged Share Plan - The leveraged share plan was available to three
tiers of employees: the Chief Executive Officer, other executive officers, and
key employees. Depending on an eligible employee's tier, an eligible employee
may have purchased shares in the offering for a total purchase price between
U.S.$22,500 and U.S.$562,500. Approximately 56 employees participated in the
leveraged share plan purchasing either ADRs or shares totaling 38,109 and
19,872, respectively. Each ADR represents one-tenth of one share (or a right to
receive one-tenth of one share). The shares purchased under the leveraged share
plan may not be transferred or sold until the fourth anniversary of the closing
of the offering (November 9, 2004). The plan includes specific requirements for
employees who are terminated prior to the fourth anniversary of the closing of
the offering.

      Discounted Share Purchase Plan - The discounted share purchase plan was
offered to employees who are not eligible to participate in the leveraged share
plan. Under this plan, eligible persons were offered the opportunity to purchase
shares on the closing of the offering at a 30% discount to the offer price. Each
employee was entitled to purchase up to $8,439 worth of shares in the offering
at a 30% discount. Employees who participated in the discounted share purchase
plan purchased either ADRs or shares totaling 26,011 and 7,166, respectively.
The 30% discount was treated as compensation. None of the shares purchased in
the offering may be transferred or sold until the second anniversary (November
9, 2002) from the date of the closing of the offering, after which date they may
be either retained or sold. The plan includes specific requirements for
employees who are terminated prior to the second anniversary from the date of
closing.

The ADRs and shares issued under the leverage share plan and discounted share
purchase plan were included in the 315,000 shares offered by the Company as part
of the initial public offering.

Notes Receivable from Officers

In November 2000, certain officers and key employees purchased 16,480 shares of
common stock and paid the exercise price by issuing cash plus full recourse
promissory notes, denominated in U.S. Dollars, Swiss Francs, or Euro, to the
Company totaling U.S.$1,371. At December 31, 2004 and 2003, the outstanding
balance on the notes was U.S.$421 and U.S.$383, respectively. The remaining
notes, which have been offset against stockholders' equity for financial
statement presentation, are due in November 2007 and bear an interest rate equal
to 120% of the mid-term applicable federal rate (as defined in the Internal
Revenue Code). The interest is payable on a quarterly basis.

20. Stock Option Plans

      Leveraged Share Plan - The aggregate amount of shares that may be issued
in the form incentive stock options under the Leveraged Share Plan was 155,555
shares. All options are granted at prices equal to 100% of the market value of
the common stock at the date of grant. The options are non-transferable and
expire on the seventh anniversary of the date of grant. Fifty percent of the
options vest and become exercisable on the second anniversary of the date of the
grant. The remaining 50% of the options will vest and become exercisable on the
third anniversary of the date of grant. The plan includes specific requirements
for employees who are terminated prior to exercising their options or prior to
the options becoming vested.


                                      F-23
<PAGE>

Directors Stock Option Plan - In fiscal year 2001 the Board of Directors
approved the Directors Stock Option Plan. The Directors Stock Option Plan is
solely for members of the Board, who are not employees of INFICON. The Company
grants options to the eligible Directors, on May 15 and November 15 of each
year, commencing May 15, 2001. The number of options granted to the eligible
Directors represents 30% of their annual compensation. Options are
non-transferable and will vest immediately upon date of grant and become
exercisable one year after the grant date and are exercisable within a period of
seven years after the allocation date. All options are granted at prices equal
to 100% of the market value of the common stock at the date of grant. The plan
includes specific requirements for the Directors who are removed or resign from
the Board.

Key Employee Stock Option Plan - In fiscal year 2001 the Board of Directors
approved the Key Employee Stock Option Plan. The purpose of the plan is to
provide key employees of the Company with an opportunity to become shareholders,
and in addition, to obtain options on shares and allow them to participate in
the future success of the Company. It is intended that the plan will provide an
additional incentive for key employees to maintain continued employment,
contribute to the future success and prosperity, and enhance the value of the
Company. Accordingly, the Company will, from time to time during the term of
this plan, grant to such key employees options to purchase shares in such
amounts as the Company shall determine, subject to the conditions provided in
the plan. The plan is effective from May 15, 2001, and shall remain in effect
through May 15, 2011.

      The following is a summary of option transactions under the three Plans:

                                                                  Weighted
                                                Shares         Average Price
                                                ------         -------------

Outstanding December 31, 2002                  147,623           CHF 209.77

        Granted                                 42,410            CHF 61.19

        Forfeited                               (1,080)          CHF 143.45

        Outstanding December 31, 2003          188,953           CHF 177.29

        Granted                                 36,429           CHF 111.16

        Forfeited                              (11,140)          CHF 127.56

        Exercised                                 (900)           CHF 50.00
                                               -------

        Outstanding December 31, 2004          213,342           CHF 168.61
                                               =======

        Exercisable at December 31, 2004       150,007           CHF 198.05

      The following table summarizes information about stock options outstanding
and exercisable at December 31, 2004.

<TABLE>
<CAPTION>
                                              Outstanding Options              Options Exercisable
                                                    Average     Remaining                  Average
      Exercise Price                  Shares         Price         Term        Shares       Price
      --------------                  ------         -----         ----        ------       -----

<S>                                   <C>         <C>               <C>        <C>        <C>
      CHF  50.00 - CHF  67.50          26,025     CHF  50.00        4.8          8,550    CHF  50.00
      CHF  67.51 - CHF  90.00           9,052     CHF  71.81        4.4          6,053    CHF  72.34
      CHF  90.01 - CHF 112.50          14,723     CHF  98.17        5.5          4,284    CHF  94.84
      CHF 112.51 - CHF 135.00          26,876     CHF 117.22        5.9          1,776    CHF 124.00
      CHF 157.50 - CHF 180.00          22,416     CHF 165.88        3.5         15,094    CHF 166.31
      CHF 202.50 - CHF 225.00         114,250     CHF 225.00        2.1        114,250    CHF 225.00
                                      -------                                  -------
      Totals                          213,342                                  150,007
</TABLE>

The options are granted in Swiss Francs. The average rate for 2004 was
U.S.$1.00=CHF 1.243.


                                      F-24
<PAGE>

Pro forma information regarding net income is required by Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("FASB
123") (see Note 2). The fair value for these options was estimated at the date
of grant using a Black-Scholes option pricing model with the following
weighted-average assumptions for the years ended December 31:

                                                      2004           2003
                                                    --------       ---------

Risk free interest rate                               3.13%          2.02%

Expected volatility factor of stock price            62.81%         63.70%

Dividend Yield                                        0.00%          0.00%

Expected life of stock options                          5              5

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

21. Business Segments

INFICON is a global supplier of instrumentation for analysis, monitoring, and
control in the vacuum, semiconductor, refrigeration, automotive, security,
emergency response, and environmental markets, with headquarters and
manufacturing facilities in the United States, and administrative offices and
manufacturing in the United States, Germany, and Liechtenstein, in addition to
sales and service locations worldwide. INFICON operates in two primary business
segments: Semiconductor Vacuum Instrumentation and General Vacuum
Instrumentation.

The semiconductor vacuum instrumentation segment includes the PKC product line
which is developed for use in various semiconductor manufacturing applications.
The general vacuum instrumentation segment includes three major product lines:
leak detection and vacuum measurement and components and environmental health
and safety. These products are used in numerous markets including air
conditioning, refrigeration, automotive, security, emergency response, and
environmental applications.

Information on the Company's business segments (excluding discontinued
operations) was as follows:

<TABLE>
<CAPTION>
                                                             Years ended December 31
                                                          2004         2003          2002
                                                       ------------------------------------
<S>                                                    <C>          <C>           <C>
Sales:
Semiconductor vacuum instrumentation                   $  49,127    $  36,674     $  30,716
General vacuum instrumentation                           139,020      120,900        99,563
                                                       ------------------------------------
Total sales                                            $ 188,147    $ 157,574     $ 130,279
                                                       ====================================

Gross profit (1):
Semiconductor vacuum instrumentation                   $  26,180    $  18,359     $  14,627
General vacuum instrumentation                            61,364       52,241        43,288
                                                       ------------------------------------
Total gross profit                                     $  87,544    $  70,600     $  57,915
                                                       ====================================

Earnings (loss) before interest and taxes:
Semiconductor vacuum instrumentation (2)               $   4,308    $  (3,121)    $  (5,725)
General vacuum instrumentation (2)                        10,693        9,751         7,941
                                                       ------------------------------------
Total earnings (loss) before interest and taxes (2)    $  15,001    $   6,630     $   2,216
                                                       ====================================
</TABLE>


                                      F-25
<PAGE>

<TABLE>
<CAPTION>
                                                             Years ended December 31
                                                          2004         2003          2002
                                                       ------------------------------------
<S>                                                    <C>          <C>           <C>
Depreciation and amortization:
Semiconductor vacuum instrumentation                   $   1,720    $   2,208     $   1,363
General vacuum instrumentation                             3,143        3,014         2,516
                                                       ------------------------------------
                                                       $   4,863    $   5,222     $   3,879
                                                       ====================================
Capital expenditures:
Semiconductor vacuum instrumentation                   $   1,095    $   1,590     $   1,950
General vacuum instrumentation                             2,650        2,519         5,391
                                                       ------------------------------------
                                                       $   3,745    $   4,109     $   7,341
                                                       ====================================
Identifiable assets:
Semiconductor vacuum instrumentation                   $  67,427    $  55,467     $  52,796
General vacuum instrumentation                           104,738       95,207        95,132
                                                       ------------------------------------
                                                       $ 172,165    $ 150,674     $ 147,928
                                                       ====================================
Long-lived assets:
Semiconductor vacuum instrumentation                   $   9,449    $   9,996     $  14,314
General vacuum instrumentation                            16,829       16,514        15,523
                                                       ------------------------------------
                                                       $  26,278    $  26,510     $  29,837
                                                       ====================================
Sales by geographic location (3):
North America                                          $  51,434    $  48,241     $  42,325
Europe                                                    83,147       71,699        58,471
Asia-Pacific                                              51,783       35,899        28,744
Other                                                      1,783        1,735           739
                                                       ------------------------------------
Total sales                                            $ 188,147    $ 157,574     $ 130,279
                                                       ====================================
</TABLE>

(1)   Sales between business segments, which were not material, generally were
      priced at prevailing market prices.
(2)   The gain on receipt and sale of Prudential stock of $1,038 (see Note 6)
      has not been allocated to the segments, otherwise all income and expenses
      have been included in the appropriate segments.
(3)   The geographic location of a sale is determined by the country of
      destination.

22. Earnings Per Share

      The Company computes basic earnings per share, which is based on the
weighted average number of common shares outstanding, and diluted earnings per
share, which is based on the weighted average number of common shares
outstanding and all dilutive common equivalent shares outstanding. The dilutive
effect of options is determined under the treasury stock method using the
average market price for the period.

      The following table sets forth the computation of basic and diluted
earnings per share for the years ended December 31,:

<TABLE>
<CAPTION>
                                                            2004           2003           2002
                                                        ----------------------------------------
<S>                                                     <C>            <C>            <C>
Numerator for basic and diluted earnings per share:
     Income (loss) from continuing operations           $   11,460     $    3,114     $    2,933
     Income (loss) from discontinued operations             (2,039)       (12,503)        (2,828)
                                                        ----------------------------------------
     Net income                                         $    9,421     $   (9,389)    $      105

Denominator for basic and diluted earnings per share:
Weighted average shares outstanding  - Basic             2,315,900      2,315,000      2,315,000
Weighted average shares outstanding  - Diluted           2,332,703      2,315,000      2,315,000
Earnings per share:
         Diluted - Continuing operations                $     4.91     $     1.35     $     1.27
         Diluted - Discontinued operations                   (0.87)         (5.40)         (1.22)
                                                        ----------------------------------------
         Diluted - Total                                $     4.04     $    (4.06)    $     0.05

         Basic - Continuing operations                  $     4.95     $     1.35     $     1.27
         Basic - Discontinued operations                     (0.88)         (5.40)         (1.22)
                                                        ----------------------------------------
         Basic - Total                                  $     4.07     $    (4.06)    $     0.05
                                                        ----------------------------------------
</TABLE>


                                      F-26
<PAGE>

For the year ended December 31, 2004, the fully diluted earnings per share
calculation excluded 163,614 options to purchase shares since these shares would
have been anti-dilutive for 2004.

23. Quarterly Data (unaudited)

<TABLE>
<CAPTION>
                                                                   Quarter ended
                                                   March 31    June 30   September 30   December 31
                                                 --------------------------------------------------
2004
<S>                                                <C>         <C>          <C>          <C>
   Sales                                            47,328      49,810       43,705       47,304
   Gross profit                                     22,602      23,617       19,865       21,460
   Income (loss) from continuing operations          4,235       4,058        1,564        1,603
   Income (loss) from discontinued operations         (716)         23       (1,498)         152
   Net income (loss)                                 3,519       4,081           66        1,755
   Earnings (loss) per share:
            Diluted - Continuing operations        $  1.81     $  1.74      $  0.67      $  0.69
            Diluted - Discontinued operations        (0.31)       0.01        (0.64)        0.07
                                                   ---------------------------------------------
            Diluted - Total*                       $  1.50     $  1.75      $  0.03      $  0.75

            Basic - Continuing operations          $  1.83     $  1.75      $  0.68      $  0.69
            Basic - Discontinued operations          (0.31)       0.01        (0.65)        0.07
                                                   ---------------------------------------------
            Basic - Total*                         $  1.52     $  1.76      $  0.03      $  0.76

2003
   Sales                                            38,889      36,245       37,891       44,549
   Gross profit                                     17,382      15,734       17,013       20,471
   Income (loss) from continuing operations          1,555         412          987          160
   Income (loss) from discontinued operations       (1,512)     (1,972)      (9,623)         604
   Net income                                           43      (1,560)      (8,636)         764
   Earnings (loss) per share:
        Diluted
            Continuing operations                  $  0.67     $  0.18      $  0.43      $  0.07
            Discontinued operations                  (0.65)      (0.85)       (4.16)        0.26
                                                   ---------------------------------------------
            Total*                                 $  0.02     $ (0.67)     $ (3.73)     $  0.33
        Basic
            Continuing operations                  $  0.67     $  0.18      $  0.43      $  0.07
            Discontinued operations                  (0.65)      (0.85)       (4.16)        0.26
                                                   ---------------------------------------------
            Total*                                 $  0.02     $ (0.67)     $ (3.73)     $  0.33
</TABLE>

*     Total EPS amounts may not agree due to rounding

24. Subsequent Event

On February 17, 2005 the Company announced its intention to voluntarily delist
its American Depositary Shares ("ADS") from the Nasdaq National Market
("Nasdaq") and terminate its American Depositary Receipts ("ADR") program. The
Company gave notice to Nasdaq to delist the Company's ADSs, effective as of the
open of business, New York City time, on March 21, 2005, and to The Bank of New
York, the depositary for the Company's ADR program (the "Depositary"), to
terminate its ADR program, effective on or about March 19, 2005. In addition,
the Company has instructed the Depositary to cease accepting new deposits under
the ADR program effective as of February 17, 2005. The Company's outstanding
ADRs will remain trading on Nasdaq through the close of business Friday, March
18, 2005, and will be delisted from Nasdaq effective as of the open of business
on Monday, March 21, 2005.


                                      F-27
<PAGE>

25. Additional information required by Swiss Law

As required by article 663 paragraph 3 of the Swiss Code of Obligations, the
following supplementary information is disclosed:

<TABLE>
<CAPTION>
                                                            2004       2003       2002
                                                          -----------------------------

<S>                                                       <C>        <C>        <C>
Total personnel costs                                     $53,985    $47,388    $42,121
                                                          -----------------------------

Total depreciation of property, plant, and equipment        4,701      4,951      3,678
Total amortization and impairment on intangible assets        525      7,641        201
                                                          -----------------------------

Total amortization, impairment and depreciation           $ 5,226    $12,592    $ 3,879
                                                          -----------------------------
</TABLE>


The fire insurance values of property, plant, and equipment at December 31,:

                                                           2004           2003
                                                        -----------------------
      Buildings and improvements                        $ 18,086       $ 10,821
      Machinery and equipment                             19,902         26,024
                                                        -----------------------
                                                        $ 37,998       $ 36,845
                                                        -----------------------


                 Schedule I - Valuation and Qualifying Accounts
                               Inficon Holding AG

<TABLE>
<CAPTION>
                                    Balance at       Add:
                                   Beginning of   Charged to      Deduct:    Balance at
Allowance for doubtful accounts:       Year         Expense     Write-Offs   End of Year
                                   ------------   ----------    ----------   -----------

<S>                                    <C>            <C>          <C>          <C>
Year ended December 31, 2004           1,155           27            507          675

Year ended December 31, 2003           1,820          712          1,377        1,155

Year ended December 31, 2002           1,685          441            306        1,820

<CAPTION>
                                    Balance at       Add:
                                   Beginning of   Charged to      Deduct:    Balance at
Inventory Reserve:                     Year         Expense     Write-Offs   End of Year
                                   ------------   ----------    ----------   -----------

<S>                                    <C>          <C>              <C>        <C>
Year ended December 31, 2004           5,530            8            278        5,260

Year ended December 31, 2003           5,604          685            759        5,530

Year ended December 31, 2002           4,753        1,823            972        5,604
</TABLE>


                                      F-28
<PAGE>

                                   SIGNATURES


The registrant hereby certifies that it meets all of the requirements for filing
on Form 20-F and that it has duly caused and authorized the undersigned to sign
this annual report on Form 20-F on its behalf.


                                               INFICON Holding AG


Date: March 14, 2005                           /s/ Lukas  Winkler
                                               --------------------------
                                               Name: Lukas Winkler
                                               Title: President and Chief
                                                      Executive Officer


Date: March 14, 2005                           /s/ Peter G. Maier
                                               --------------------------
                                               Name: Peter G. Maier
                                               Title: Vice-President and Chief
                                                      Financial Officer