##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 20-F



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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended November 30, 2005

Commission file number 0-13742



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OCÉ N.V.

(Exact name of registrant as specified in its charter)



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The Netherlands

(Jurisdiction of incorporation or organization)

St. Urbanusweg 43, 5914 CA Venlo, the Netherlands

(Address of Principal Executive Offices)



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Securities
registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Ordinary Shares, nominal or par value Euro 0.50 per share

Securities registered pursuant to Section 15(d) of the Act: None



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

87,274,460 Ordinary Shares (nominal value Euro 0.50 per share)

30 Priority Shares (nominal value Euro 50 per share)

20,000,000 Cumulative Financing Preference Shares (nominal value Euro 0.50 per share)

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ̈No x

If this report is an annual or transition report, indicate by check mark
if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934.  Yes ̈No x.

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 ̈.

Indicate by check mark which financial statement item the registrant has elected to follow:  Item 17 x  Item 18 ̈

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.  Yes ̈No ̈.

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).  Yes ̈No x.

Name and address of person authorized to receive notices and communications from the Securities and Exchange Commission:



|                     |  |                               
|-------------------- |  | ------------------------------
|Daniel I. Booker     |  | J.T.M. van Bergen, Océ N.V.   
|Reed Smith LLP       |  | Secretariat of the Company    
|435 Sixth Avenue     |  | P.O. Box 101                  
|Pittsburgh, PA 15219 |  | 5900 MA Venlo, The Netherlands



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##### Table of Contents

TABLE OF CONTENTS



|     |  |                                                                              |  |     
|---- |  | ---------------------------------------------------------------------------- |  | ----
|Item |  | Description                                                                  |  | Page
|     |  | Part 1                                                                       |  |     
|     |  |                                                                             
|1    |  | Identity of Directors, Senior Management and Advisers                        |  | 3   
|     |  |                                                                             
|2    |  | Offer Statistics and Expected Timetable                                      |  | 3   
|     |  |                                                                             
|3    |  | Key Information                                                              |  | 3   
|     |  |                                                                             
|4    |  | Information on the Company                                                   |  | 14  
|     |  |                                                                             
|5    |  | Operating and Financial Review and Prospects                                 |  | 34  
|     |  |                                                                             
|6    |  | Directors, Senior Management and Employees                                   |  | 50  
|     |  |                                                                             
|7    |  | Major Shareholders and Related Party Transactions                            |  | 59  
|     |  |                                                                             
|8    |  | Financial Information                                                        |  | 61  
|     |  |                                                                             
|9    |  | The Offer and Listing                                                        |  | 62  
|     |  |                                                                             
|10   |  | Additional Information                                                       |  | 63  
|     |  |                                                                             
|11   |  | Quantitative and Qualitative Disclosures about Market Risk                   |  | 70  
|     |  |                                                                             
|12   |  | Description of Securities Other than Equity Securities                       |  | 71  
|     |  |                                                                             
|     |  | Part II                                                                      |  |     
|     |  |                                                                             
|13   |  | Defaults, Dividend Arrearages and Delinquencies                              |  | 71  
|     |  |                                                                             
|14   |  | Material Modifications to the Rights of Security Holders and Use of Proceeds |  | 71  
|     |  |                                                                             
|15   |  | Controls and Procedures                                                      |  | 72  
|     |  |                                                                             
|16A  |  | Audit Committee Financial Expert                                             |  | 72  
|     |  |                                                                             
|16B  |  | Code of Ethics                                                               |  | 72  
|     |  |                                                                             
|16C  |  | Principal Accountant Fees and Services                                       |  | 73  
|     |  |                                                                             
|16D  |  | Exemptions from the Listing Standards for Audit Committees                   |  | 74  
|     |  |                                                                             
|16E  |  | Purchases of Equity Securities by the Issuer and Affiliated Purchasers       |  | 74  
|     |  |                                                                             
|     |  | Part III                                                                     |  |     
|     |  |                                                                             
|17   |  | Financial Statements                                                         |  | 74  
|     |  |                                                                             
|18   |  | Financial Statements                                                         |  | 74  
|     |  |                                                                             
|19   |  | Exhibits                                                                     |  | 75  
|     |  |                                                                             
|     |  | Table of Contents to Consolidated Financial Statements                       |  | F-1 
|     |  |                                                                             
|     |  | Signatures                                                                   |  |     
|     |  |                                                                             
|     |  | Exhibit Index                                                                |  |     
|     |  |                                                                             
|     |  | Certifications                                                               |  |     



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##### Table of Contents

PART I



|Item 1 | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|------ | -----------------------------------------------------

Not applicable.



|Item 2 | OFFER STATISTICS AND EXPECTED TIMETABLE
|------ | ---------------------------------------

Not applicable.



|Item 3 | KEY INFORMATION
|------ | ---------------

Except where
otherwise indicated, as used herein, the following terms will have the following meanings:



| |  |  | the Company, Océ, we, us, our, the Group and similar terms refer to Océ N.V. and its
consolidated subsidiaries;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | references to a particular year (e.g., 2005) are to the Companys fiscal year ending November 30 (e.g., November 30, 2005);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | references to Ordinary Shares are to the Companys ordinary shares, nominal value 0.50 Euro per share; and
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | references to ADSs are to the Companys American Depositary Shares, which are Ordinary Shares that have been deposited with Morgan Guaranty Trust of New York
(Morgan Guaranty), as Depositary, and which are evidenced by American Depositary Receipts or ADRs.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

A. Selected
financial data

Exchange rate information

Amounts
set forth in this report are expressed either in Euros (Euro or ) or in United States dollars (dollars or $). Unless otherwise indicated, the amounts stated in dollars included in this report for
2005 were converted into dollars from Euros at an exchange rate of $1.179 to 1 Euro, which was the Noon Buying Rate on November 30, 2005. The Noon Buying Rate for a given date is the noon buying rate for cable transfers in foreign
currencies as certified for customs purposes by the Federal Reserve Bank of New York on the applicable date.

The following table sets forth the high, low
and average exchange rates for one Euro expressed in dollars based on the Noon Buying Rate on the dates and for the periods indicated. The average rates for each period are calculated by using the average of the exchange rates on the last day of
each month during the period.



|                         |  |      |  |      |  |         |  |           
|------------------------ |  | ---- |  | ---- |  | ------- |  | ----------
|Years ended November 30, |  | Low  |  | High |  | Average |  | Period-End
|2001                     |  | 0.84 |  | 0.95 |  | 0.90    |  | 0.90      
|2002                     |  | 0.86 |  | 1.02 |  | 0.94    |  | 0.99      
|2003                     |  | 0.99 |  | 1.20 |  | 1.12    |  | 1.20      
|2004                     |  | 1.18 |  | 1.33 |  | 1.24    |  | 1.33      
|2005                     |  | 1.16 |  | 1.37 |  | 1.26    |  | 1.18      



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|              |  |           |  |      |  |         |  |            |  |     
|------------- |  | --------- |  | ---- |  | ------- |  | ---------- |  | ----
|Months ended: |  | Low       |  | High |  | Average |  | Period-End
|2005          |  | September |  | 1.20 |  | 1.26    |  | 1.22       |  | 1.20
|              |  | October   |  | 1.19 |  | 1.22    |  | 1.20       |  | 1.20
|              |  | November  |  | 1.16 |  | 1.21    |  | 1.18       |  | 1.18
|              |  | December  |  | 1.17 |  | 1.21    |  | 1.19       |  | 1.18
|2006          |  | January   |  | 1.18 |  | 1.23    |  | 1.21       |  | 1.21
|              |  | February  |  | 1.18 |  | 1.22    |  | 1.19       |  | 1.19

Primary Currencies

As an international company, several foreign currencies are important to the business of the Company. The following is a list for each applicable currency of the average exchange rates (expressed in Euros for each currency) during the
applicable year and the exchange rates (expressed in Euros for each currency) as of November 30, 2001 through November 30, 2005. The average rates are calculated on the average of the daily rates per month weighted with the monthly
revenues.



|                     |  |                                     |  |                         |  |        |  |        |  |        |  |        |  |        |  |        |  |        |  |       
|-------------------- |  | ----------------------------------- |  | ----------------------- |  | ------ |  | ------ |  | ------ |  | ------ |  | ------ |  | ------ |  | ------ |  | ------
|                     |  | Average Rate During the Fiscal Year |  | Rate as of November 30,
|Applicable Currency  |  | 2001                                |  | 2002                    |  | 2003   |  | 2004   |  | 2005   |  | 2001   |  | 2002   |  | 2003   |  | 2004   |  | 2005  
|Pound sterling       |  | 0.62                                |  | 0.63                    |  | 0.68   |  | 0.68   |  | 0.68   |  | 0.62   |  | 0.64   |  | 0.70   |  | 0.70   |  | 0.68  
|United States dollar |  | 0.89                                |  | 0.93                    |  | 1.11   |  | 1.23   |  | 1.25   |  | 0.89   |  | 0.99   |  | 1.20   |  | 1.32   |  | 1.18  
|Australian dollar    |  | 1.72                                |  | 1.72                    |  | 1.75   |  | 1.68   |  | 1.64   |  | 1.71   |  | 1.77   |  | 1.65   |  | 1.72   |  | 1.59  
|Japanese Yen         |  | 107.53                              |  | 117.12                  |  | 130.14 |  | 133.73 |  | 136.65 |  | 109.82 |  | 121.76 |  | 131.25 |  | 136.64 |  | 140.85
|Swiss franc          |  | 1.50                                |  | 1.47                    |  | 1.51   |  | 1.55   |  | 1.55   |  | 1.47   |  | 1.48   |  | 1.55   |  | 1.52   |  | 1.55  

See Item 3.D, Risk Factors, Item 5, Executive Summary  Impact of Foreign
Currency Exchange Rates, and Item 11, Quantitative and Qualitative Disclosures about Market Risk, for a further discussion of the impact of foreign currency fluctuations and hedging on foreign exchange rates.

Selected Financial Information

The following table sets forth
certain selected consolidated financial information of Océ and has been derived from Océs audited Consolidated Financial Statements. This financial information should be read in conjunction with Item 5, Operating and
Financial Review and Prospects, and the Companys Consolidated Financial Statements and the Notes thereto included in this report. The Companys Consolidated Financial Statements have been prepared in accordance with accounting
principles generally accepted in the Netherlands (Dutch GAAP), and have been reconciled to generally accepted accounting principles in the United States of America (U.S. GAAP). U.S. GAAP varies in certain significant respects
from Dutch GAAP. For a discussion of the principal differences between Dutch GAAP and U.S. GAAP, see Note 27 to the Companys Consolidated Financial Statements. Except where expressly noted, all financial information included in this
report was prepared in accordance with Dutch GAAP.



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In October 2005, the Company acquired Imagistics International Inc. (Imagistics), a Delaware corporation
formerly listed on the New York Stock Exchange. The results of Imagistics for November 2005 have been included in the Companys Consolidated Financial Statements and in the Select Financial Information below.



|                                                                                               |  |                             |     |  |       |  |       |  |       |  |       |  |      
|---------------------------------------------------------------------------------------------- |  | --------------------------- | --- |  | ----- |  | ----- |  | ----- |  | ----- |  | -----
|                                                                                               |  | Years ended November 30(b),
|(In millions except per share amounts)                                                         |  | 2001                        |     |  | 2002  |  | 2003  |  | 2004  |  | 2005  |  | 2005 
|                                                                                               |  | Euro                        |     |  | Euro  |  | Euro  |  | Euro  |  | Euro  |  | $    
|CONSOLIDATED STATEMENT OF OPERATIONS DATA:                                                     |  |                             |     |  |       |  |       |  |       |  |       |  |      
|                                                                                               |  |                             |     |  |       | 
|Amounts in accordance with Dutch GAAP                                                          |  |                             |     |  |       |  |       |  |       |  |       |  |      
|Revenues                                                                                       |  | 3,234                       |     |  | 3,176 |  | 2,769 |  | 2,652 |  | 2,677 |  | 3,157
|Operating income                                                                               |  | 225                         |     |  | 226   |  | 125   |  | 110   |  | 110   |  | 130  
|Income before income taxes, equity in income of unconsolidated companies and minority interest |  | 156                         |     |  | 172   |  | 94    |  | 92    |  | 92    |  | 109  
|Exceptional item (net of tax)                                                                  |  | -95                         |     |  |      |  |      |  |      |  |      |  |     
|Net income                                                                                     |  | 10                          |     |  | 113   |  | 61    |  | 78    |  | 79    |  | 93   
|                                                                                               |  |                             |     |  |       | 
|Basic earnings per ordinary share(a)                                                           |  | 1.19                        | (e) |  | 1.30  |  | 0.69  |  | 0.89  |  | 0.92  |  | 1.08 
|Diluted earnings per ordinary share(a)                                                         |  | 1.18                        | (e) |  | 1.29  |  | 0.69  |  | 0.88  |  | 0.91  |  | 1.07 
|Dividends per ordinary share(a)(c)                                                             |  | 0.58                        |     |  | 0.58  |  | 0.58  |  | 0.58  |  | 0.58  |  | 0.68 
|                                                                                               |  |                             |     |  |       | 
|Amounts in accordance with U.S. GAAP(d)                                                        |  |                             |     |  |       |  |       |  |       |  |       |  |      
|Net income                                                                                     |  | 52                          |     |  | 65    |  | 51    |  | 59    |  | 8     |  | 10   
|Earnings per ordinary share(a)                                                                 |  |                             |     |  |       |  |       |  |       |  |       |  |      
|Basic                                                                                          |  | 0.56                        |     |  | 0.73  |  | 0.57  |  | 0.67  |  | 0.07  |  | 0.08 
|Diluted                                                                                        |  | 0.56                        |     |  | 0.73  |  | 0.56  |  | 0.66  |  | 0.08  |  | 0.09 



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|                                                          |  |                             |  |        |  |        |  |        |  |        |  |       
|--------------------------------------------------------- |  | --------------------------- |  | ------ |  | ------ |  | ------ |  | ------ |  | ------
|                                                          |  | Years ended November 30(b),
|(In millions except per share amounts)                    |  | 2001                        |  | 2002   |  | 2003   |  | 2004   |  | 2005   |  | 2005  
|                                                          |  | Euro                        |  | Euro   |  | Euro   |  | Euro   |  | Euro   |  | $     
|CONSOLIDATED BALANCE SHEET DATA:                          |  |                             |  |        |  |        |  |        |  |        |  |       
|                                                          |  |                             |  |        |  |       
|Amounts in accordance with Dutch GAAP                     |  |                             |  |        |  |        |  |        |  |        |  |       
|Total assets                                              |  | 3,128                       |  | 2,862  |  | 2,421  |  | 2,233  |  | 2,819  |  | 3,324 
|Long term debt                                            |  | 754                         |  | 757    |  | 381    |  | 438    |  | 227    |  | 268   
|Capital stock                                             |  | 565                         |  | 565    |  | 565    |  | 565    |  | 565    |  | 666   
|Shareholders equity                                      |  | 909                         |  | 771    |  | 713    |  | 714    |  | 781    |  | 921   
|Weighted average number of shares outstanding (x1,000)(a) |  | 85,241                      |  | 84,086 |  | 83,409 |  | 83,488 |  | 83,698 |  | 83,698
|                                                          |  |                             |  |        |  |       
|Amounts in accordance with U.S. GAAP(d)                   |  |                             |  |        |  |        |  |        |  |        |  |       
|Total assets                                              |  | 3,334                       |  | 3,053  |  | 2,622  |  | 2,429  |  | 3,036  |  | 3,579 
|Long term debt                                            |  | 754                         |  | 757    |  | 381    |  | 438    |  | 222    |  | 262   
|Capital stock                                             |  | 565                         |  | 565    |  | 565    |  | 565    |  | 565    |  | 666   
|Shareholders equity                                      |  | 1,282                       |  | 1,110  |  | 1,079  |  | 1,027  |  | 1,038  |  | 1,224 
|Weighted average number of shares outstanding (x1,000)(a) |  | 85,241                      |  | 84,086 |  | 83,409 |  | 83,488 |  | 83,698 |  | 83,698



|(a) | Based on the weighted average number of Ordinary Shares outstanding during each period including ADSs (with one ADS representing one Ordinary Share) and reduced by the number of
shares purchased by the Company in connection with its stock option plans.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | The Company has included financial information with respect to acquisitions that it made in 2001 and 2005 and the Company has excluded financial information with respect to a
disposition that it made in 2003. Inclusion and exclusion of such financial information is as of the date of the acquisition or disposition. The acquisition of Practical Print Solutions, Ltd. (now merged into Océ (UK) Ltd.) was effective
November 2001, the acquisition of Gretag Professional Imaging (now Océ Display Graphics Systems Inc.) was effective as of December 2001, the sale of the Companys South African operations was effective as of January 1, 2003 and the
acquisition of Imagistics was effective as of October 31, 2005.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Based on amount of cash dividend.
|--- | ---------------------------------



|(d) | See Note 27 of Notes to Consolidated Financial Statements.
|--- | ----------------------------------------------------------



|(e) | The amount stated is before exceptional items. After the exceptional items, the basic earnings and diluted earnings per Ordinary Share were Euro 0.08 and Euro 0.07 respectively in
2001.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dividends

The following table
sets forth the interim, final and total cash dividends paid in Euros to the holders of the Companys Ordinary Shares and translated into dollars based on the Noon Buying Rate at November 30 of the respective fiscal year. The actual
exchange rate applied by Morgan Guaranty, as the Depositary for the Companys ADSs, with respect to the dividends actually paid to the holders of the ADSs may vary from the Noon Buying Rate.



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|                         |         |                         |       |      |                            |       |      |   |         |      |       |      |   |       |      |  
|------------------------ | ------- | ----------------------- | ----- | ---- | -------------------------- | ----- | ---- | - | ------- | ---- | ----- | ---- | - | ----- | ---- | -
|Years ended November 30, |         | Euro per Ordinary Share |       |      | Dollars per Ordinary Share |      
|                         | Interim |                         | Final |      |                            | Total |      |   | Interim |      | Final |      |   | Total |     
|2001                     |         | 0.15                    |       | 0.43 |                            |       | 0.58 |   |         | 0.14 |       | 0.37 |   |       | 0.51 |  
|2002                     |         | 0.15                    |       | 0.43 |                            |       | 0.58 |   |         | 0.15 |       | 0.43 |   |       | 0.58 |  
|2003                     |         | 0.15                    |       | 0.43 |                            |       | 0.58 |   |         | 0.18 |       | 0.52 |   |       | 0.70 |  
|2004                     |         | 0.15                    |       | 0.43 |                            |       | 0.58 |   |         | 0.20 |       | 0.57 |   |       | 0.77 |  
|2005                     |         | 0.15                    |       | 0.43 | *                          |       | 0.58 | * |         | 0.18 |       | 0.50 | * |       | 0.68 | *

---

|* | Payment of final portion subject to approval by the shareholders of the Company at the Annual General Meeting of Shareholders to be held on April 20, 2006.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

B. Capitalization and indebtedness

Not applicable.

C. Reasons for the offer and use of proceeds

Not applicable.

D. Risk factors

Forward Looking Statements under the Private Securities Litigation Reform Act of 1995

This annual report contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (referred to
hereafter as the Exchange Act). These forward-looking statements, which may be expressed in a variety of ways, including the use of future or present tense language, refer to future events. Océ has based these forward-looking
statements on its current expectations and projections about future events.

Océs expectations and projections may change, and
Océs actual results, performance or achievements could be significantly different from the results expressed in or implied by these forward-looking statements based on various important factors, risks and uncertainties (some of which
are beyond Océs control), which are neither manageable nor foreseeable by Océ. When considering these forward-looking statements, readers should keep in mind these risks, uncertainties and other cautionary statements made in this
annual report or Océs other annual or periodic reports filed with the United States Securities and Exchange Commission (the SEC). In light of these risks, uncertainties and assumptions, the forward-looking events discussed
in this annual report might not occur. These factors, risks and uncertainties include, but are not limited to, changes in economic and business conditions, customer demand in competitive markets, the successful introduction of new products and
services into the markets, developments in technology, adequate pricing of products and services, competitive pricing pressures within Océs markets, the financing of Océs business activities, efficient and cost-effective
operations, changes in foreign currency exchange rates, fluctuations in interest rates, political uncertainties, changes in governmental regulations and laws, tax rates, successful acquisitions, joint ventures and disposals and the effects of recent
or further terrorist attacks and the war on terrorism.

Océs forward-looking statements speak only as of the date on which the statements are
made, and Océ undertakes no obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.

Océs business is affected by adverse economic conditions and resulting declines in customers investments in machines

Océs profitability may be adversely affected by global economic conditions and a prolonged economic
slowdown.

Océs revenues generally are obtained from three sources: revenues from product sales, revenue from rentals and services and
interest from financial leases. Océ groups its revenues based on whether the revenue is non-recurring revenue (revenues from sales of machines, software and professional services) or recurring revenue (revenues from services, materials,
rentals, interest and business services).



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##### Table of Contents

During a short-term economic slowdown, non-recurring revenues are adversely affected because customers are reluctant to
buy new machines, but this adverse impact is generally offset by recurring revenue from long-term maintenance and service contracts. During a prolonged economic slowdown, however, the reluctance of Océ customers to invest has an adverse
impact on both recurring and non-recurring revenue because both types of revenue are to a large extent based on the installed machine population. As long-term maintenance contracts expire during a prolonged economic slowdown, the Company enters into
fewer new long-term agreements to replace expiring contracts because less customers make investments in machines during the slowdown.

The Company
experienced a significant economic slowdown in 2002 through 2004, which had an impact first on non-recurring revenue in 2002 through 2004 and then on recurring revenue in 2005. In 2005 non-recurring revenues (excluding lease effects) increased by
more than 10%, which was largely attributable to color products and the slightly improved economy. Although recurring revenues (excluding lease effects) decreased overall by 1.1% in 2005, these revenues increased in the last quarter of 2005, and the
Company expects that these revenues will increase in 2006 as a result of the increase in non-recurring revenues.

The Company must
anticipate trends and respond to changing customer preferences with a pipeline of new products

The markets for Océs machines and
services are rapidly changing and becoming increasingly more complex. The market for black-and-white printers has reached maturity in terms of technology and, as a result, product development focuses on aspects such as cost-price, total cost of
ownership, operational reliability, environmental friendliness, ease of use and productivity, while the most important future trends are the shift toward color applications, high volume production printing and document management software.

Océs success depends in large part on its ability to develop and introduce new products and services in a timely manner that satisfy
increasingly sophisticated customer requirements, keep pace with technological developments and are accepted in the market. The Company believes that because it sells most of its machines through its direct sales force and the Companys
organization provides servicing for its machines, the Company is able to gather continuing feedback from its customers and to understand the changing demands of the market. The Company is then able to use this information to adapt its products and
services to address its customers requirements and to develop new products or adapt current products for its customers. There is no assurance that the Company will be successful in anticipating and developing new products, product enhancements
or new solutions and services to adequately address changing technologies and customer requirements or that the Companys products, enhancements, solutions or services will be successful in the marketplace or will generate increased revenue. In
addition, there is no assurance that the Company will be able to anticipate and develop technological improvements, adapt its products to emerging industry standards and changing customer preferences or requirements or produce high quality products,
enhancements and releases in a timely and cost-effective manner in order to compete with applications offered by its competitors.

The Company is highly dependent on its ability to research and develop new products and continue the pipeline of products in the years ahead

Océs competitive strength hinges on its ability to respond quickly to ever changing demands in the market by introducing distinctive products and providing systems and services to a diverse category of customers. Research and
the development of new technology plays a key role in enabling the Company to continue to respond to the market and introduce new products and update existing products. The Company offers technological concepts, which it has developed internally,
through the acquisition of businesses or by entering into joint ventures or development agreements with third parties, which give the Company a clear and distinctive profile. The most important elements of Océs product profile are
reliability, productivity, ease of use, environmental friendliness and a low total cost of ownership.

In order to continue to develop new technology,
Océ invests approximately 6 to 7% of its revenues annually in research and development. The process of developing new technologies, products and solutions is inherently complex and uncertain and involves significant time, resources, costs and
risks. Generally, the development of new technologies and products takes between five and ten years. Accurate anticipation of customers changing needs and emerging technological trends is critical. Océ must make long-term investments
and commit significant resources before knowing whether these investments will eventually result in products that achieve customer acceptance and generate the revenues required to provide anticipated returns from these investments. Océ may
experience difficulties in realizing the expected benefits from its investments in new technologies and companies. In addition, reliance on new technology may result in performance or quality problems as technology is implemented. There is no
assurance that the technology will be successful or timely or that it will respond to current market demands.



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Océs business model is founded on a strong and diverse in-house technology portfolio combined with close
interaction between the research and development component of the business and the sales and service component of the business. The close and continuing interaction between research and development, on one hand, and direct sales and services, on the
other hand, is crucial to the Companys strategy to provide high quality products and services in response to the demands of the market.

In addition,
because of the rapid developments in technology and in the markets in which Océ operates, there is a risk that changes in technology could render the Companys technology, products, enhancements and solutions outdated or obsolete, and
could result in the Companys inventory becoming, in part, obsolete or unsaleable. Although Océ attempts to reduce this risk by applying a clear depreciation method for its machines, there is no assurance that as technology changes,
Océ will not hold a larger than expected number of obsolete machines or machines that cannot be placed with customers. Océ constantly evaluates its research and development to maintain a tight focus on developing technologies that will
be successful in the future and in entering into alliances with third parties. For example, one of the key factors of success in producing manageable document flow is an effective interaction between hardware and software. To ensure that
Océs hardware and software products are compatible and provide the necessary components of a total document flow process, Océs research and development team includes a senior vice president who has specific responsibility
to develop compatible software programs.

Finally, Océ constantly reviews its product portfolio to evaluate relevant markets, to take full advantage
of product launches, to improve functionality and the cost of its machines and to offer advanced application software in order to provide total solutions for the document management needs of its customers.

Failure to adequately protect the Companys intellectual property could harm its business

Océs products (hardware and software) are based on technology that Océ owns. In order to protect its proprietary technology, as of November 30,
2005, Océ had 5,916 patents and patent applications pending throughout the world. In addition, prior to disclosing any proprietary technology to third parties, the Company requires these third parties to enter into protective arrangements
with respect to technology that is not covered by patents. There is no assurance that such measures will be adequate to protect the confidentiality of Océs intellectual property.

The Company faces significant competition

Océ operates in an environment of significant competition, driven by rapid technological advances and changing customer demands. In terms of size, Océ is a relatively small player compared to its direct competitors, and the
difference in size between Océ and several of its main competitors has a direct influence on the Companys competitive position. Bigger companies have greater resources available for research and development, are better able to invest in
new activities and products and are more resilient to downturns in economic conditions or setbacks in product development compared to a smaller company like Océ. To minimize this risk, Océ concentrates on areas and activities in which
it has the greatest chance of success given its know-how and capabilities. Accordingly, Océ concentrates mainly on professional markets which demand high quality products and services by offering technological concepts, products and services
that Océ develops internally.

Favorable pricing is challenging in a competitive market

Océs ability to succeed is dependent, in part, upon its ability to obtain competitive pricing for its products and ongoing services. Depending on competitive
market factors, the prices that Océ may be able to obtain in the future for its products and services may vary from historical levels. The Company has experienced increasing price pressure on its margins. In an effort to reduce the cost of a
product to a customer, the Company has taken steps to reduce its cost of production by transferring some of its Venlo-based manufacturing operations to Central Europe and the Far East. At the end of 2005, 20% of the Companys manufactured value
originated from those regions, and the Company expects this level to increase to 50% by the end of 2006.

The Companys success
is dependent on its ability to distribute its products and services in the countries in which it operates

Océ generally distributes and
sells most of its originally manufactured products and related services directly instead of through third party distributors or re-sellers. As a result, one of the Companys goals in the past several years has been to increase the quantity and
quality of its sales force. The acquisition of Imagistics in October 2005 significantly increased the Companys distribution capability in its Digital Document Systems Strategic Business Unit, especially in North America.



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The Company relies on third parties in connection with the production of its machines

Working with third parties is an essential part of Océs production strategy. Océ manufactures key strategic components for its
products (such as process drums, organic photoconductors, silicone materials and toners) internally. With respect to non-strategic components and modules, Océ generally engages third parties to supply parts and components in accordance with
specifications that have been precisely defined by Océ. These third parties are involved in Océ product development from an early stage to ensure that the non-strategic components and modules meet Océs high standards of
quality. Approximately 95% of the non-strategic components used in Océ products are manufactured in this manner.

Océ currently assembles its
final products internally at its facilities in the Netherlands; Czech Republic; Poing, Germany; and Vancouver, Canada. During 2004, Océ began implementation of its previously-announced plans to relocate portions of its manufacturing and
assembly activities (related to non-strategic manufacturing) in the Netherlands to Central Europe and the Far East (via outsourcing) in order to reduce its manufacturing expenses and by November 30, 2005, approximately 20% of this manufacturing
has been relocated. Relocation of these manufacturing and assembly operations to Central Europe and the Far East will require that the Companys supply chain is functioning effectively and efficiently. In order to ensure that this transition is
made smoothly and seamlessly to Océ and its customers, Océ has increased its cooperation with external logistic specialists. Although the Company intends for this transition to be seamless to its customers and is monitoring it closely,
there is no assurance that the Company will be successful in making this transition in the intended timeframe, proposed cost structure and with no impact on its production of machines.

Océ depends on third parties to manufacture non-strategic parts and components of its machines

As stated above, approximately 95% of the non-strategic parts and components for Océs machines are made by third parties. A particular component may be
available only from a limited number of suppliers. Suppliers may from time to time extend lead times, limit supplies, increase prices or fail to produce components in accordance with the Companys specifications due to capacity constraints or
other factors, which could adversely affect the Companys ability to deliver its products on a timely basis. Moreover, if one of the third parties to which the Company outsources manufacturing of components or sub-assemblies fails to perform,
or experiences delays or disruption to its manufacturing, or experiences financial difficulties, this could adversely affect the Companys sales and operating profit. Although Océ does not foresee any delays or interruptions arising out
of the transfer of manufacturing and assembling operations, temporary or significant delays in the supply of components or the assembly of machines could adversely impact Océs business.

The Company is highly dependent on information technology systems

The Companys operations rely on complex information technology systems and networks, which are potentially vulnerable to damage or interruption from a variety of sources. Although the Company takes precautions
against interruptions of the Companys information technology systems or networks or unrestricted disclosure of its proprietary information, a prolonged interruption or disclosure of proprietary data could have a material adverse effect on its
operations, sales and operating profit.

The Companys products and solutions could be subject to technology-based claims from
third parties

Because the Companys products and solutions include complex technology, the Company faces the risk of claims that it has
infringed third parties intellectual property rights. As the complexity of the technology and the overlap of product functionalities increase, the possibility of an inadvertent infringement and related intellectual property claim against the
Company increases. There may be patents and patent owners relevant to the Companys product lines that are unknown to the Company. In addition, although the Company endeavors to ensure that third parties with which it works possess appropriate
intellectual property rights and provide customary indemnification and warranties, the Company recognizes that it cannot fully avoid claims of intellectual property rights infringement created by third parties with which it works. Similarly, the
Company and its customers may face claims of infringement in connection with its customers use of the Companys products and services.

Any
claims, regardless of merit, may result in costly and time-consuming litigation, the payment of damages or other compensation, the invalidation of intellectual property rights on which the Company depends, diverting the attention of the
Companys personnel or product shipment delays or require the Company to develop non-infringing technology or to enter into royalty or licensing agreements. If the Company would be unable to develop non-infringing technology, or if royalty or
licensing agreements were not available on commercially acceptable terms, the Company could be precluded from making or selling the affected products.

Océs success is dependent in part on efficient operations and maximum productivity

Océs success is dependent in part on operations that are conducted with optimum efficiency with the goal that operating costs be maintained at the lowest possible level. The Company often evaluates its operations to achieve
operational



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excellence and, when necessary, restructures its operations from time to time. For instance, in 2005, the Company initiated a restructuring of its operations
in Europe which will result in the discontinuation of approximately 500 jobs, and the Company took similar measures in the United States in January 2006 in conjunction with the integration of Imagistics, which will result in the discontinuation of
approximately 250 jobs.

The Companys indebtedness increased significantly in 2005, and the Company has a significant amount of
short-term debt that matures in 2006

The Companys liquidity is based primarily on a combination of cash flow from operations and financing
from third parties. As of November 30, 2005, the Companys total indebtedness (short term and long term) was Euro 896 million, which is a much higher level than the Companys debt as of November 30, 2004 (which was Euro 481
million) due to its acquisition of Imagistics. As a result of this increased indebtedness (and the related increased interest expense), the Companys ability to generate cash flow before financing activities (free cash flow) has
become more important to the Companys liquidity. To achieve maximum free cash flow, the Company will continue to work to make its operations more efficient, increase its revenues and carefully manage its working capital. Additional attention
will be required with respect to cash management.

In addition, in connection with its acquisition of Imagistics, the Company borrowed Euro
438 million of short-term indebtedness which is due and payable by March 15, 2006, with an option to extend the final maturity date for an additional three months. The Company intends to refinance this indebtedness prior to its maturity
date.

The Company is in the process of outsourcing its leasing business, which has financial consequences

In 2001, the Company announced its plans to outsource its lease activities to third parties, which began in 2002 and is continuing. Outside the United States, Océ
continues to outsource its lease activities under private label arrangements to third party leasing companies. Under these arrangements, the outsourcing of Océs lease activities consists of two key elements. New end-user finance lease
arrangements are entered into directly by Océs vendor lease partners, prior to which Océ has sold the equipment and any software licenses to that vendor and Océs existing lease portfolio is transferred to its vendor
lease partners (under a sale or assignment agreement) on a non-recourse basis.

In the United States, Océs captive lease company,
Océ-Financial Services, Inc., is the party that enters into the finance lease arrangement with the end-user and then sells the end-user contracts and underlying assets to its vendor lease partners, also on a non-recourse basis. Although
leasing activities are provided through third parties, Océ continues to provide service and maintenance to its customers which have acquired the leased machines and products, to ensure that they receive high quality services. The outsourcing
of the lease activities has financial consequences as reflected in the Consolidated Financial Statements and Notes thereto included with this report.

The
outsourcing of the lease portfolio presently results in off-balance sheet treatment with respect to the assets and related liabilities of the financial leases outsourced in the United States, Europe and Australia. Future developments with respect to
the International Financial Reporting Standards (IFRS) or U.S. GAAP may adversely affect the off-balance sheet accounting treatment.

Diversity in revenues is important to the Companys stability

Océs strong technology base, the geographic markets
in which Océ operates and its long-term relationship with diverse categories of customers help Océ spread the risk related to a downturn in the economic cycle. In addition, outsourcing of production activities and flexible deployment
of personnel in the Companys manufacturing facilities help to offset some of the negative effects of a downturn in the economic cycle. On a geographic basis after the acquisition of Imagistics, the Companys revenue in the United States
is expected to grow to approximately 43% of its total revenue in 2006. A balanced spread of revenues and income among the various markets is essential for Océ to ensure that it is not dependent on the results in a limited number of countries.

The Companys financial results may be impacted by fluctuations in exchange rates and interest rates

Océ achieves approximately one third of its revenues within the Euro-zone and approximately two thirds of its revenues from outside of the Euro-zone.

As a multinational company, Océs Consolidated Financial Statements are affected by foreign currency fluctuations in two respects: transaction
exposures and translation exposures. Transaction exposures arise when net cash flows occur in currencies other than the Euro. For instance, a transaction exposure arises when products that are developed and manufactured
in the Euro-zone (and the corresponding expenses are recorded in Euros) are sold into the United States (and



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the corresponding revenues are recorded in U.S. dollars). Translation exposures arise when values in currencies other than the Euro (such as a
minority equity interest or shareholders equity) are measured over time but are converted into Euros based on a conversion rate on a certain date (such as November 30, 2005).

At Océ, transaction exposures are the subject of an active foreign exchange management policy which is implemented in close consultation with the Board of Executive Directors and which is described in further
detail on page 70 and further, in Item 11 of this report and in Note 24 to the Consolidated Financial Statements. Currency translation exposures, however, are not hedged. This risk is regarded as an inherent part of doing business as a
multinational company. In view of the increase in the United States operations, the equity position in U.S. dollars has increased and therefore the risk of translation exposures has risen.

Interest risks relate to the possible mismatch in exposures to fixed interest rates. Fixed interest revenues are generated by lease and rental contracts, while fixed
interest charges arise from the financing of these contracts. The extent to which this risk is hedged depends upon the overall risk profile. Océ hedges these fixed interest revenues for at least 60% via fixed interest loans, which is
described in further detail in Item 11 of this report. Because of the outsourcing of the lease activities, the Companys interest rate risk has been significantly reduced. With respect to the Companys credit facilities that are not
used for financing leases, the Companys policy is to maintain a balance between fixed and variable interest rates on the basis of interest rate expectations and developments. In such cases risk-averse action always has top priority.

Changes in the Companys markets could have an adverse effect on the value of the Companys long-lived assets

The Companys long-lived assets were Euro 1,129 million at November 30, 2005 and Euro 519 million at November 30, 2004.
Océ regularly reviews the value of these assets and recognizes an impairment when the carrying value of an asset is not supported by the Companys current expectations of future cash flows attributable to these assets. Significant
declines in stock prices, market capitalization and credit ratings of market participants, as well as the Companys ongoing review and refinement of its business plans, may result in substantial impairment write-downs of its long-lived assets
at any time. Recognition of impairments of long-lived assets has had a limited adverse affect on the Companys results and financial condition. See Item 5, Operating and Financial Review and Prospects, for a further discussion
of the impairment charges related to 2005.

The Company has risks related to its pension and post-retirement benefit plans

The Company currently maintains pension plans in many countries and many of such pension plans are defined benefit plans. The Companys
obligations to make contributions to fund defined benefit plan obligations are based on the current value of the assets of a plan as of November 30 of each year and pension obligations on that date. Because many plan assets are invested in
financial market instruments, if the financial markets do not provide the long-term returns that are expected under the funding calculation, the likelihood of Company contributions to its plans increases. The equity markets can be volatile, and
therefore the Companys estimate of future contribution requirements may change substantially in a relatively short period of time. Similarly, changes in interest rates can impact the Companys contribution requirements. Volatility in the
financial markets and fluctuations in interest rates may require the Company to contribute additional funds in the future. If the Company is required to make contributions to fund the pension plans, it will have an impact on the Companys
financial statements and cash flow available for other uses will be reduced.

The transition from accounting under Dutch GAAP to
accounting under IFRS may have a material effect on the Company

For financial years commencing on or after January 1, 2005, all publicly
listed companies in the European Union have to report on the basis of IFRS. Starting in fiscal year 2006, Océ will prepare its annual financial statements and quarterly reports on the basis of IFRS.

On October 31, 2005, Océ published details of the provisional pro forma effects of the conversion from Dutch GAAP to IFRS. This relates to the financial
information as from December 1, 2004 and for the three subsequent quarters of the 2005 financial year, ending on August 31, 2005. Up to and including the third quarter of the 2005 fiscal year net income under IFRS was Euro 0.1 million
higher than under Dutch GAAP. Future results under IFRS may become more volatile due to value changes in assets and liabilities which will be included in the Companys financial results at fair value and because of the change from systematic
amortization of capitalized goodwill (supplemented by impairment testing) to solely impairment testing.

The IFRS accounting standards for financial
instruments will be applied for the first time as from December 1, 2005. This will have consequences in particular for the Companys financing preference shares (described on page 65) and the minority



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interest item. Under Dutch GAAP, these items are classified as equity but under IFRS these items need to be classified as debt under the current contractual
arrangements. Océ is currently negotiating with the holders of depositary receipts representing the Companys Cumulative Financing Preference Shares to change the contractual arrangements in such a way that these financial instruments
would be classified as equity under IFRS too. Océs equity on the basis of IFRS was reduced on December 1, 2004 by Euro 69 million as a result of a change in the valuation of pension obligations (Euro 65 million) and
option plans (Euro 4 million).

In March 2006, for purposes of comparison, Océ will announce IFRS-based pro forma financial information for the
full 2005 fiscal year. This will also include the application of IFRS standards for financial instruments with effect from December 1, 2005.

The implementation of the Sarbanes-Oxley Section 404 requirements

Section 404 of the Sarbanes-Oxley Act of 2002 and
related regulations require us to include in our future annual reports on Form 20-F an assessment by management of the effectiveness of our internal control over financial reporting. In addition, PricewaterhouseCoopers (PwC), our
independent registered public accounting firm, must attest to and report on managements assessment. This requirement is currently expected first to apply to our annual report on Form 20-F for our fiscal year ending November 30, 2006. We
are evaluating our internal control systems to ensure that they will allow our management to report on, and PwC to attest to, our internal control over financial reporting.

If we have a material weakness in our internal control over financial reporting, we may be unable to prevent or detect material misstatements in a timely manner. Any failure to implement required new or improved
controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. If the assessment of our internal control identifies material weaknesses that must be disclosed,
we may receive an attestation with an adverse opinion from PwC as to the adequacy of our internal control over financial reporting. Furthermore, potential acquisitions of businesses that are currently not in compliance with Section 404
requirements could lead to disclosures on currently unforeseen deficiencies in our internal control over financial reporting.

Integration of Imagistics is important to the Companys continued success

In October 2005, Océ acquired Imagistics. It
is essential that Imagistics be integrated into the Océ Group quickly and effectively so that the potential synergy effects can be realized quickly. Achieving these synergies is of great importance because the acquisition has given rise to
higher interest costs (which will be approximately U.S. $40 million in 2006) because of the significant amount of debt taken on in connection with the transaction and the amortization of certain intangible fixed assets arising from the
transaction.

As a result of the acquisition, Océs risks have increased as a result of its greater exposure in the office market, which is the
most competitive market segment in the Document Management business.

If the integration of Imagistics into the Océ Group is not realized
successfully or projected synergies cannot be realized, this could have a significant impact.

Governmental policies may affect our
business

As a global company with operations in 80 countries, the Companys business is subject to direct and indirect regulation in each of
the countries in which it does business. As a result, changes in various types of regulation could affect the Companys business adversely. The implementation of new technological or legal requirements could impact the Companys products,
manufacturing or distribution processes, and could affect the timing of product introductions, the cost of production or products as well as their commercial success. Moreover, regulations that adversely affect the pricing of the Companys
products could affect net sales and operating profit. The impact of these changes in regulations could affect adversely the Companys business even where the specific regulations do not directly apply to the Company or its products.

The Company is subject to additional risks that may affect the printing industry in general

In addition to the risks listed above, other risk factors that could cause actual results and developments to differ materially from those expressed or implied include,
but are not limited to:



| |  |  | terrorist attacks or war;
| | - |  | -------------------------



| |  |  | the availability and cost of raw materials;
| | - |  | -------------------------------------------



| |  |  | import, export and tariff regulations;
| | - |  | --------------------------------------



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| |  |  | the ability to attract and retain skilled employees at reasonable costs;
| | - |  | ------------------------------------------------------------------------



| |  |  | claims or lawsuits and compliance with regulations and laws relating to competition, health, safety and the environment and the use of hazardous materials or other legal matters;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes to tax rates; and
| | - |  | -------------------------



| |  |  | the ability to enter into, and resulting success of, future business combinations, acquisitions and dispositions.
| | - |  | -----------------------------------------------------------------------------------------------------------------



|Item 4 | INFORMATION ON THE COMPANY
|------ | --------------------------

A. History and development of the
Company

Océ N.V. was organized as a stock corporation under the laws of the Netherlands in 1953, incorporating a business originally founded in
1877. Océ N.V. is an international holding company within the meaning of the Dutch Civil Code. The Companys executive offices are located at St. Urbanusweg 43, 5914 CA Venlo, the Netherlands. The Companys telephone and fax numbers
are 31-77-3592222 and 31-77-3544700, respectively.

Information about Océ, including the Annual Report 2005, is available through the Internet at
http://www.oce.com. The Company also distributes its Annual Report including its Consolidated Financial Statements and other quarterly information to Morgan Guaranty as Depositary for the Companys ADSs. Morgan Guaranty generally distributes
this information to the holders of the ADSs.

Océ is one of the worlds leading suppliers of professional printing and document management
systems. For offices, industry and the graphics market, the Company develops and manufactures systems for the production, distribution and management of documents, in color and black-and-white, in small format and in wide format. This relates to
printers, scanners, peripheral equipment and printing media as well as document management software and innovative products in the areas of system integration, outsourcing of document management activities and leasing of machines.

Océ focuses primarily on professional environments in which its products are well-known for their productivity and reliability, ease of use and favorable
total cost of ownership.

Océ is commercially active in 80 countries and has its own sales and service establishments in over 30
countries. The Company also operates research facilities in seven countries. In 2005, Océ, which employs more than 24,000 people, achieved revenues of Euro 2.7 billion and net income of Euro 79 million.

Imagistics Acquisition

On September 16, 2005, the Company
announced that it had entered into a definitive agreement with Imagistics, a Delaware corporation then listed for trading on the New York Stock Exchange, to acquire all of the outstanding shares of Imagistics for $42.00 per share in cash through
either a tender offer or a merger (or a combination of both). On September 20, 2005, Orange Merger Corp., a subsidiary of the Company, commenced a tender offer for all of Imagistics shares. Imagistics shareholders tendered
approximately 89.2% of Imagistics common stock in accordance with the terms of the tender offer. On October 28, 2005, the Company exercised its option, granted in the merger agreement, to purchase newly issued shares from Imagistics that,
when added to the number of shares owned by Orange Merger Corp., represented over 90% of Imagistics issued and outstanding common stock. On October 31, 2005, the Company acquired the remaining outstanding shares of Imagistics through a
merger of Orange Merger Corp. with and into Imagistics, with Imagistics becoming a wholly-owned subsidiary of the Company. Effective January 1, 2006, Océ established Océ-Imagistics, a new division that combines the office business
of Imagistics with the office and Digital Printing Centers business of Océ North Americas Digital Document Systems division. For additional information, see Item 5, Executive Summary - Acquisition of Imagistics on page
34.

Restructuring

In 2005, a restructuring of the
Company was initiated in Europe to achieve a reduction in costs. This restructuring will result in the discontinuation of approximately 500 jobs in Europe. In January 2006, the Company announced a restructuring in the United States, which will
result in the discontinuation of approximately 250 jobs in the U. S. In part, these changes run in parallel with the integration of Imagistics. For additional information, see Item 5, Executive Summary - Restructurings and
Significant accounting policies, assumptions, estimates and judgments - Identifying expenses in connection with restructuring on page 38.



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Outsourcing of Financial Leases

Historically, the Companys revenue has been generated from two types of business activities: commercial activities (selling and renting machines and providing services and media) and providing financial services
(financing the acquisition of Océ machines through financial lease arrangements).

Generally, more than 58% of the Companys machine sales are
financed through financial leases, and Océ branded leasing is an indispensable component of the one-stop shopping concept that Océ offers to its customers. Historically, Océ primarily handled the financing and
administration of its leasing activities internally. In 2001, based on extensive research, the Company announced that it intended to outsource the financing of its lease portfolio to third parties while retaining the one-stop shopping
concept for its customers through private label financing programs.

The Company has adopted two approaches to outsource its financial lease program. In
the United States, the Company has established a captive lease company, Océ-Financial Services, Inc. (Océ-Financial Services), which is responsible for all leasing activities in the United States. Under this structure,
Océ-Financial Services negotiates and enters into the initial leasing agreement with the customer. In due course, Océ-Financial Services sells the lease receivables (together with the title to the underlying machines) to third party
fundors. During 2005, Euro 66 million worth of lease contracts (together with the title to the underlying machines) were sold to four third party fundors in the United States. Océ-Financial Services carries out activities such as
invoicing and the collection of accounts receivable on behalf of third party fundors.

In Europe and the rest of the world, the Company has entered into
(or intends to enter into) private label agreements with third party fundors. In December 2001, Océ entered into a private label agreement with Telia Finans AB to outsource its financing lease portfolio and financing activities in
Scandinavia. In 2002, the Company entered into a private label agreement with De Lage Landen International B.V. (DLL), a subsidiary of Rabobank, to outsource its lease activities and the existing financing lease portfolio in the
Netherlands, Belgium, Spain, France, Germany and the United Kingdom/Ireland. In 2004, DLL acquired Telia Finans AB, allowing the Company to further standardize this process in the covered countries. In 2004, the Company entered into a private label
agreement with CIT Group Finance (Ireland) (CIT) for the outsourcing of lease activities in Italy, Switzerland, Australia, Central Europe and South East Asia.

During 2005, a total of Euro 66 million worth of financial lease receivables and underlying equipment were sold to external lease partners. The sale of the lease portfolio has meant that interest income from
leases have decreased in recent years. In 2004 this item amounted to Euro 68 million compared to Euro 36 million in 2005. As of the end of 2005, Océ had Euro 343 million of lease receivables remaining on its balance sheet,
which is approximately one-third of its original lease portfolio.

Principal Capital Expenditures and Divestitures

The following table sets forth the Companys principal capital expenditures and divestitures in tangible and intangible assets (including through the acquisition or
divestiture of interests in other companies) in 2003, 2004 and 2005:



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|                                       |  |      |  |      |  |      |  |     
|-------------------------------------- |  | ---- |  | ---- |  | ---- |  | ----
|(In millions)                          |  | 2003 |  | 2004 |  | 2005 |  | 2005
|                                       |  | Euro |  | Euro |  | Euro |  | $   
|Capital Expenditures                   |  |      |  |      |  |      |  |     
|Intangible assets (net)                |  | 11   |  | 9    |  | 15   |  | 17  
|Property, plant and equipment          |  | 97   |  | 87   |  | 96   |  | 114 
|Rental equipment (net)                 |  | 15   |  | 40   |  | 49   |  | 58  
|Other investments                      |  | 2    |  | -3   |  | -1   |  | -2  
|Capital Divestments                    |  |      |  |      |  |      |  |     
|Property, plant and equipment          |  | -17  |  | -13  |  | -11  |  | -13 
|Disposal of unconsolidated companies   |  |     |  | -1   |  |     |  |    
|Sale of financial lease portfolio      |  | -80  |  | -312 |  | -66  |  | -77 
|Acquisitions (Disposals) (net of cash) |  | -2   |  |     |  | 638  |  | 752 
|                                       |  |      |  |      |  |      |  |     
|Total                                  |  | 26   |  | -193 |  | 720  |  | 849 
|                                       |  |      |  |      |  |      |  |     

The Company expects that its 2006 capital expenditures will be approximately Euro 115 million for property,
plant and equipment. The Company has Euro 20 million of investments in progress, which primarily relate to investments in the Netherlands in new machines. The Company finances its capital investments through cash from operations and borrowings.
The Company believes that its cash flow from operations and borrowing capacity will provide adequate resources to meet current and future investment needs.

Océ did not make any significant acquisitions in 2003 or 2004. In 2005, Océ acquired Imagistics, as discussed under Item 4.A Imagistics Acquisition.

Except for the sale of its financing lease portfolios (as discussed above), the Company has made no material divestitures since 2001. The Company is not aware of any
public takeover offers by third parties in respect of the Companys Ordinary Shares.

B. Business Overview

Geographic Markets

Although the
Companys business activities are world-wide, its primary business is based in the United States, Germany, the Netherlands, France, the United Kingdom and the rest of Europe. The following table sets forth the geographic distribution of the
Companys revenues for the past three fiscal years based on its geographic regions:



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|                                               |  |                          |  |       |  |       |  |      
|---------------------------------------------- |  | ------------------------ |  | ----- |  | ----- |  | -----
|                                               |  | Years ended November 30,
|(In millions)                                  |  | 2003                     |  | 2004  |  | 2005  |  | 2005 
|                                               |  | Euro                     |  | Euro  |  | Euro  |  | $    
|United States                                  |  | 1,046                    |  | 925   |  | 931   |  | 1,097
|Germany                                        |  | 335                      |  | 333   |  | 323   |  | 381  
|The Netherlands                                |  | 284                      |  | 291   |  | 289   |  | 341  
|France                                         |  | 199                      |  | 191   |  | 195   |  | 230  
|United Kingdom                                 |  | 183                      |  | 180   |  | 182   |  | 214  
|Rest of Europe                                 |  | 519                      |  | 534   |  | 541   |  | 638  
|Countries outside Europe and the United States |  | 203                      |  | 198   |  | 216   |  | 255  
|                                               |  |                          |  |       |  |       |  |      
|Total                                          |  | 2,769                    |  | 2,652 |  | 2,677 |  | 3,156
|                                               |  |                          |  |       |  |       |  |      

Strategic Business Units

Océ has two strategic business units: Digital Document Systems (DDS) and Wide Format Printing Systems (WFPS). The following table shows the distribution of revenues for the past three
fiscal years achieved by each of the Companys strategic business units:



|                             |  |                          |  |       |  |       |  |      
|---------------------------- |  | ------------------------ |  | ----- |  | ----- |  | -----
|                             |  | Years ended November 30,
|(In millions)                |  | 2003                     |  | 2004  |  | 2005  |  | 2005 
|                             |  | Euro                     |  | Euro  |  | Euro  |  | $    
|Digital Document Systems     |  | 1,907                    |  | 1,834 |  | 1,843 |  | 2,173
|Wide Format Printing Systems |  | 862                      |  | 818   |  | 834   |  | 983  
|                             |  |                          |  |       |  |       |  |      
|Total revenues               |  | 2,769                    |  | 2,652 |  | 2,677 |  | 3,156
|                             |  |                          |  |       |  |       |  |      

Digital Document Systems or DDS Business Unit

The DDS strategic business unit focuses on document output and printing solutions for user environments with an intensive document flow. DDS comprises four business
groups:



| |  |  | The Corporate Printingbusiness group supplies integral solutions for document output management to corporate data centers, central repro departments and office environments,
in which the emphasis is on providing support for the core process (print-for-use). The customers served by this business group include financial institutions, telecom companies, energy suppliers, government authorities, educational institutions and
businesses engaged in trade and industry.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The customer base served by the Commercial Printingbusiness group includes marketing service businesses, digital printing firms, specialized printshops and reprographic
businesses, most of which use commercial applications (print-for-pay).
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Océ Business Servicesbusiness group uses the products and services of DDS and WFPS to take over from customers all their activities in the area of document
processing, printing and copying (complete outsourcing) so as to optimize their printing and document management processes.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

| |  |  | The Software & Professional Services business group serves Océ customers in all target groups by providing them with software products and project services to
support the implementation and use of digital solutions.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following is a summary of each customer segment within each group, the products
and services provided by each group and the primary competitors of each group with the DDS strategic business unit:



|                                  |  |                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                 |  |                                                                 
|--------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------
|                                  |  | Customer segments                                                                                                                                                                                                                                           |  | Products and services                                                                                                                                                                                                                                                                                           |  | Competitors                                                     
|Corporate Printing                |  | Segments in which Océ operates: Data
centers Central repro departments Extensive office
environments  Specifically in the sectors: Financial institutions Telecom and utility companies Government and education Trade, transport, industry and
consultancy |  | Office and departmental printers, black-and-white and color. (Very) high volume printers/copiers, black-and-white and color. Production printers, black-and-white and color, cutsheet and continuous
feed. High speed scanners. Workflow software for the management
of printing solutions. Financial services. |  | Canon IBM Kodak Konica/Minolta Kyocera Mita Ricoh Xerox         
|                                  |  |                                                                                                                                                                                                                                                             | 
|Commercial Printing               |  | Marketing Services General and specialized printing
works Digital print providers Reprographic businesses (quick
printers and copy shops)                                                                                                                   |  | (Very) high volume printers/copiers, black-and-white and color. Production printers, black-and-white and color, cutsheet and continuous
feed. Workflow software for the management of printing solutions. Financial services.                                                                                   |  | Canon HP (Indigo) IBM Kodak Ricoh Xerox                         
|                                  |  |                                                                                                                                                                                                                                                             | 
|Océ Business Services             |  | All customer segments of: Corporate
Printing Technical Document Systems                                                                                                                                                                                     |  | Taking over and carrying out (outsourcing) of document management processes for both wide and small format applications.                                                                                                                                                                                        |  | IKON Pitney Bowes Xerox Local suppliers                         
|                                  |  |                                                                                                                                                                                                                                                             | 
|Software & Professional Services* |  | All customer segments of: Corporate
Printing Commercial Printing Technical Document
Systems Display Graphics Systems Océ Business
Services                                                                                                                  |  | Integrated document management systems: input and output management software, document workflow software, document archiving software. Professional services: training, consultancy, implementation, support.                                                                                                   |  | Canon Hewlett-Packard IBM PLP Digital Systems Seal Systems Xerox

---

|* | The results of the business group Software & Professional Services are integrated in those of the business groups Corporate Printing, Commercial Printing, Technical
Document Systems and Display Graphics Systems.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

New DDS products introduced in 2005

The following table lists each new product introduced by the DDS unit in 2005, including the name of the product, the applicable business group and the customer segment
that the product is intended to serve:



|                     |  |                                   |  |                                                                                                                                                                                                                                                                                                             
|-------------------- |  | --------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Product              |  | Business group                    |  | Application                                                                                                                                                                                                                                                                                                 
|Océ VarioStream 9230 |  | Corporate and Commercial Printing |  | Very high volume continuous feed printer version, based on the Océ VarioStream 9000 that was introduced in 2004. This printer can print not only in black-and-white but also in two
highlight or CustomTone colors. The Océ VarioStream 9230 is the only product on the market that offers this possibility.
|                     |  |                                  
|Océ VarioPrint 5140  |  | Corporate and Commercial Printing |  | New model in the Océ VarioPrint 5000 series with a print speed of 137 ppm.                                                                                                                                                                                                                                  



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|                                                                               |  |                                   |  |                                                                                                                                                                                                                                                                                                                                                                    
|------------------------------------------------------------------------------ |  | --------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Product                                                                        |  | Business group                    |  | Application                                                                                                                                                                                                                                                                                                                                                        
|Océ VarioPrint 5115-, 5140- and 5160 Advanced                                  |  | Corporate and Commercial Printing |  | New models in the Océ VarioPrint 5000 series, which can automatically switch between PostScript, PDF, PCL and IPDS, and therefore offer optimum flexibility.                                                                                                                                                                                                       
|                                                                               |  |                                  
|Océ VarioPrint 5000, Océ VarioStream 7000 and Océ VarioStream 9000 user panels |  | Corporate and Commercial Printing |  | All very high volume production printers are now supplied as standard with a highly user-friendly operating panel.                                                                                                                                                                                                                                                 
|                                                                               |  |                                  
|Océ VarioPrint 1055, Océ VarioPrint 1065 and Océ VarioPrint 1075               |  | Corporate Printing                |  | New family of very advanced multifunctional printers/copiers/scanners for departmental use, with print speeds of 55, 62 and 72 ppm respectively. This multifunctional and user-friendly machine
features unique network management facilities, including a follow me print function and a mailbox with fingerprint recognition.                                  
|                                                                               |  |                                  
|Océ VarioPrint 2062 and Océ VarioPrint 2075                                    |  | Corporate Printing                |  | New family of very advanced multifunctional printers/copiers/scanners for limited-production environments, with print speeds of 62 and 72 ppm respectively.                                                                                                                                                                                                        
|                                                                               |  |                                  
|Océ CPS800 and Océ CPS900 Platinum                                             |  | Corporate and Commercial Printing |  | Full color printers/copiers for high-production environments: printrooms, central reprographic departments and commercial offices. The Platinum versions of the Océ CPS800 and Océ
CPS900 offer a substantially higher print quality.                                                                                                                              
|                                                                               |  |                                  
|Océ CPT60 and Océ CPT90                                                        |  | Corporate and Commercial Printing |  | The unparalleled color consistency of Océ CPS technology also allows CPS units to be deployed in production clusters, a unique solution that has still not been matched by competitors. An
Océ CPT60 (Color Production Tandem) consists of two CPS systems, while an Océ CPT90 consists of three.                                                                  
|                                                                               |  |                                  
|Océ CS171                                                                      |  | Corporate Printing                |  | Mid-volume all-in-one multifunctional with color capacity, offering affordable color possibilities in office environments which have high black-and-white printing volumes.                                                                                                                                                                                        
|                                                                               |  |                                  
|Océ CS520                                                                      |  | Corporate Printing                |  | Mid volume color printer/copier, specifically for use in corporate printrooms.                                                                                                                                                                                                                                                                                     
|                                                                               |  |                                  
|Océ MP1020, Océ MP1025 and Océ MP1035                                          |  | Corporate Printing                |  | Mid volume black-and-white all-in-one multifunctionals; a complete product line for the office environment in an economy price range.                                                                                                                                                                                                                              
|                                                                               |  |                                  
|Océ Count Logic                                                                |  | Software & Professional Services  |  | Software that keeps track of copier, printer and scanner operating data for a machine, user, group or project. The application records data on machine use, traces where costs should be allocated
and therefore gives a simple and complete overview of the entire printer population.                                                                            
|                                                                               |  |                                  
|Océ Assessment Service                                                         |  | Software & Professional Services  |  | Professional services backed by advanced tools that enable print behavior to be analyzed and document related needs to be identified for commercial offices and public sector organizations. This
information can be used to develop a complete business case, including proposals for improvements in document workflows that will bring substantial cost savings.
|                                                                               |  |                                  
|Océ PRISMA satellite new releases                                              |  | Software & Professional Services  |  | Print output management software for offices, printrooms and data centers. New functions enhance the pre-press processing of scanned and electronic office documents and facilitate the supply of
documents to the production line.                                                                                                                                



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|                                   |  |                                  |  |                                                                                                                                                                                                                                                                   
|---------------------------------- |  | -------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Product                            |  | Business group                   |  | Application                                                                                                                                                                                                                                                       
|Océ PRISMA production new releases |  | Software & Professional Services |  | Output management system, optimized for use in high volume to very high volume production centers. The latest releases focus specifically on supporting the workflows of documents that have
multi-highlight colors as printed on the Océ VarioStream 9000 family.

Corporate Printing Business Group

Market position. Corporate Printing offers integrated document output solutions for users in corporate environments in which documents play an
essential role.

Corporate Printing concentrates on three strategic, vertical market segments:



| |  |  | finance, telecommunication and utility companies;
| | - |  | -------------------------------------------------



| |  |  | public services (such as government, healthcare and education); and
| | - |  | -------------------------------------------------------------------



| |  |  | trade and industry (such as manufacturers, retail and wholesale trade, transport, logistics and consultancy).
| | - |  | -------------------------------------------------------------------------------------------------------------

Customers in the above segments concentrate primarily on improving the effectiveness of their documents and on achieving maximum efficiency and control over the process.
They are aware of the importance of an integrated approach to document processes and applications. Océ supplies products and services that enable the entire document output workflow to be analyzed and optimized, aimed at the implementation
and management of these products, which brings cost savings for the customer. The demand for color is steadily increasing. To meet this need Océ has developed an extensive Production Color Program, which comprises scaleable color printing
systems featuring the most consistent color quality that is currently available in the printing sector.

For the various corporate printing environments
Océ offers a range of complete software programs. These encompass innovative concepts, products and services that enable companies to manage their documents more efficiently and more effectively.

Developments in 2005. Imagistics is included in this business group from November 1, 2005 and thereafter. This groups sales force was
significantly increased in connection with the acquisition of Imagistics, particularly in the office and central reprographic segments from Imagistics. As a result of the increase in sales and service organizations, DDS can now provide services
throughout most of North America, which will enable Océ to better serve companies that operate nationally. The Océ product range for high-production corporate printing environments, consisting of the Océ VarioPrint and
Océ VarioStream printers and PRISMA software, was rated in the market as extremely innovative. As a result, machine sales showed healthy growth during 2005. Océ also put new versions and releases on the market during the course of
2005.

To strengthen its position in the office environment, Océ is working together with a leading supplier of OEM equipment to supplement
Océs product range with low volume machines for black-and-white and color.

For the high-production full color market segment, Océ
offers the Océ CPS800 printer/copier and the Océ CPS900 digital color printing system. These add a new dimension to scaleable production printing in color and have achieved very good sales results.

The new Océ VarioStream 9000 family for the high and very high volume segments has been positioned by Océ as the innovative leader in high volume and
digital multi-color printing. These machines can print not only in black-and-white but also in any desired highlight color as required by the customers house style, an option that Océ supplies under the name CustomTone Special. The
underlying technology forms the basis for a new series of printers, which have a color capacity that extends to full color and which will be introduced over the next few years.

Océ PRISMA software enables corporate customers to manage their documents in all their various printing environments and, optionally, to combine the separate document flows within one workflow management
process. Océ has developed a strong market proposition with a set of software modules for different printing environments. In 2005 Océ introduced new releases for these software packages.



20



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##### Table of Contents

Trends. In corporate environments, digitization of documents continues to advance. Document
processes in the office environment, in document production and transaction printing, which initially took place separately, are becoming more and more integrated. One of the results is that printing takes place on the same printers. Océ has
set the standard in the area of intelligent output management software that can control all document environments and applications, regardless of whether it relates to transaction documents, office applications or processes in reproduction
departments.

Although paper is not diminishing in importance, it is increasingly becoming more of a temporary working medium.

Lay-out and the use of color are becoming more important because they make the information that is presented easier to assimilate. The distribution and archiving of
documents will, however, take place more and more in digital form.

In the corporate environment, growth is particularly taking place in color,
multifunctional and scaleable printing solutions. Printing speeds are still increasing, while copiers and printers that can also print in color are replacing mid-volume black-and-white printers and therefore paving the way for a more widespread use
of color in office applications. Many customers realize that the costs of processing documents need to be made more manageable. As a result, a need is arising for a large number of decentralized printers to be replaced by a much smaller number of
high-production systems at departmental or central level, since these enable substantially lower costs to be achieved, while offering better quality and reducing the need for IT management. Increasingly, customers are also opting to outsource all or
part of their document production and processing activities. This decision is usually based on efficiency considerations, but outsourcing specialists such as Océ Business Services can also offer an extremely attractive product in terms of
cost.

Strategy. Océs strategy for Corporate Printing is focused on growth and on acquiring or strengthening a top
position in all high-production printing segments, supported by a global full-line range of products and services. In this area, Océ offers a complete range of VarioPrint, VarioStream and high-production color printing systems that cover the
entire spectrum of black-and-white and color. In addition, in the form of its PRISMA production and PRISMA satellite, Océ supplies high quality output management software that can efficiently control both Océ equipment and that of
third parties. To complete the portfolio, Océ cooperates in the low volume segment with strategic partners for the supply of a complete line of products for black-and-white and color. Intensive cooperation also exists with partners for
equipment in the area of pre-press and finishing and for advanced software applications.

In response to the growing demand from customers for complete
solutions  which create greater complexity  Océ is investing in its operational organization, and in sales and consultancy. In addition, through the Océ Business Services and Software & Professional Services
business groups, Océ offers an extensive range of services.

In all strategic markets, Océ is working on the constant strengthening of its
distribution channels. In this respect the acquisition of Imagistics represented an important step forward.

Commercial Printing
Business Group

Market position. The Commercial Printing business group focuses on customers who generate income from the
equipment itself. In businesses that produce direct mail (marketing services), Océ occupies a leading position world-wide with its high and very high volume printers. In this market, Océ also holds a strong position among digital print
providers. In addition, Océ is active in segments of the graphics market, especially for time-critical production runs, limited print runs and personalized documents or frequently changing documents such as user instructions.

In recent years, Océ has built up a strong position in the production of books and newspapers with a limited print run. Although digital printing is currently
used only to a limited extent in the graphics market, great potential exists in this market for limited print runs in combination with the traditional offset process.

In the highly demanding commercial printing segments, Océ is gaining ground both through the expansion of the range of its products and through a vertical market approach. In this market, reliability and
productivity are of the utmost importance and these are aspects for which Océ machines score high marks. In addition, Océ has used its lengthy experience of complex printing processes to develop software for integrated workflow
management which can flexibly and efficiently steer the complete order processing and production process, even where this incorporates non-Océ equipment.

Developments in 2005. In some of the printing markets of relevance to Océ, the level of investments in new equipment is increasing. In the graphics market, there was nominal increase in the total number
of machine placements. Nonetheless Océ is gaining ground in this market, primarily due to its increasingly improved and more extensive product range. The Océ CPS900 Platinum and the Océ VarioStream 9000 family met with great
success immediately after launch. Océ continues to invest in specialized sales staff in the regional sales organizations so as to improve even further the way it serves the commercial printing markets. Océs Digital Newspaper
Network has extended further with the opening of new



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##### Table of Contents

locations in Europe and the United States. Through this network, Océ enables the publishers of daily newspapers to print their international editions
anywhere in the world, which saves time and obviates the need for transport costs.

Trends. The growth in the commercial digital
printing segment is caused, on the one hand, by the outsourcing of printing work by the corporate environment to commercial printers and, on the other, by the migration of printed matter that was traditionally produced on offset presses to digital
printers. This migration is made possible by the decreasing costs and the increasingly higher quality and productivity of digital printers and the availability of workflow solutions that are tailored to the needs of the commercial segment. The shift
in favor of digital printing is being further strengthened by the growing demand for smaller print runs and personalized document production for which digital printing is more suitable than offset printing. In color printing, the biggest potential
growth is taking place in the most productive segments (contract printers, book printing and mailers). In absolute terms the share of color is still small due to the variable costs which are still relatively high.

Strategy. Océs aims to further consolidate the top position that the Company holds for continuous feed solutions in the most
productive segment of the digital printing market. The Océ VarioStream 9000 family is the benchmark for this market segment in terms of technology and innovation, firstly, because of its superior quality and, secondly, because it offers a
migration route to affordable high quality color printing.

In the graphics market, one of the growth markets for digital printing, Océ aims to
achieve a leading position by offering integrated digital printing solutions for both general printing firms and specialized businesses. Here, too, a key role will be played by the Océ VarioStream 9000 family and the advanced cut sheet color
printer, the Océ CPS900. Océ continues to strengthen the sales staff and sales support departments to ensure that these personnel possess the know-how and expertise to deal with the requirements, business goals and business processes
that are specific to this sector.

Océ intends to expand its position as a major supplier serving print shops and copy shops, customers for whom the
new mid volume and high volume printing systems such as the Océ VarioPrint 2110 and the full color Océ CPS800 and Océ CPS900 are highly suitable. Of great importance in this market is the bundling of hardware and software that
Océ can offer.

Software & Professional Services Business Group

Market position. The Software & Professional Services business group is the Océ center of expertise in the area of output and
document management. Together with the customers experts, this business group catalogs and analyzes the customers print output and document processes and develops proposals for improving them. These often take the form of new printing
configurations with intelligent software, which channels each print job to the most suitable and most cost effective equipment for that job. The systems that are used, both hardware and software, are designed and implemented by Océ using its
own working method, the Océ Solution Delivery Process.

Since the introduction of the first digital printers, Océ has been developing
software to control the increasingly integrated and complex printing processes and printing systems. This links up with the customers desire to add more value to their documents and, at the same time, to reduce the costs of document production
in their businesses.

Océ markets a complete range of DDS output management programs and applications under the name Océ PRISMA. For
corporate customers, four sets with workflow solutions have been developed: PRISMA for Office, PRISMA for Printrooms, PRISMA for Enterprise Resource Planning (ERP) and PRISMA for Transaction. For the commercial market, three sets are available:
PRISMA for Printshops, PRISMA for Printing-on-Demand and PRISMA for Mailers.

The Software and Professional Services business group also supports
Océ Business Services in the complete handling of document and printing processes that have been outsourced by customers.

Developments in 2005. The focus in 2005 was on the full introduction of the environment-specific and segment-specific workflows that were developed in 2004 and brought to market under the name Océ PRISMA. Each PRISMA solution
brings together the most important applications and output management system functions for a specific customer segment within a compact but complete combination of programs. The programs improve the customers working processes and efficiency
and the custom designed software bundles make implementation considerably simpler.

In 2005, Océ brought new applications to market, which will help
Océ customers to further boost the productivity of their output management solutions. Examples of these new applications are Océ PRISMA-Satellite for Office and Océ Document Designer Advanced which, on the basis of more than 50
advanced customization projects, became one of the leading printing solutions for variable data right from its very introduction.

Trends. Due to the strong advance of digitization, the enormous quantity of paper documents is being accompanied by an abundance of digital information. Not only the management of this information but also its processing is becoming



22



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##### Table of Contents

increasingly more complex, since in many cases the information has to be supplied in parallel on paper, by fax, by e-mail or as a PDF file. Customers are
increasingly asking for complete solutions in the form of one single package from one supplier. The Software & Professional Services business group can meet this need, firstly, through the PRISMA products package, supplemented by partner
products and, secondly, through the deployment of the extensive team of the Companys own system consultants, engineers and project managers. The design, integration and implementation of complex systems, comprising both Océ products and
third party equipment, are their specialty.

Strategy. Océ aims to achieve a substantial strengthening of its position in the
market for output management systems by expanding the breadth and depth of its range of products and services and by offering combinations of hardware, software and services that are targeted at specific user environments. With its Océ PRISMA
output management software, the Company is already one of the major players in the market. Océ is continuing to concentrate on the integration of partner systems as a supplement to its PRISMA products. The emphasis in this area will be on job
preparation, transmission to the printers and production locations and the management of the complete printing process.

In cooperation with partners,
Océ will gradually expand its output management systems to make them into complete document management solutions. Key roles are played here by reliability, productivity, durability, user-friendliness, a low total cost of ownership and, thanks
to standardization, simplicity of integration.

Océ Business Services Business Group

Market position. Océ Business Services is active in a distinct growth market for the outsourcing of document management processes and print
management activities. Its customers are medium sized and large companies which want to concentrate on their core activities and, as regards other activities, want to assure themselves of the best services that are available in the market. The
activities comprise all printroom processes, the operation and maintenance of complete copier/printer systems, machine fleet management, electronic and physical archives management, and scanning and mail room activities. In ten years time,
Océ has become one of the foremost companies in this field, both in the United States and in Europe. Because of its position at the heart of its customers document processes, Océ can offer top class expertise as a partner, not
only for the operational side of the processes but also for integrated document management.

In cooperation with Océs research and development
department (R&D), new services are being developed. During the entire contract period with a customer, possible improvements are continuously investigated, proposed and introduced. Océ acts, on the one hand, as the consultant
who implements best practices and, on the other hand, as the supplier of equipment and media. Working methods and results are based on service level agreements which take into account the customers objectives and the requirements set by each
specific situation. In this way the quality, effectiveness and productivity of the document management process are improved while the costs for the customer remain the same or are even reduced.

Developments in 2005.In 2005 Océs Business Service achieved its goal of profitable growth. Océ continues to focus on
improving the profitability of current contracts by means of cost control and by expanding the services it provides through the introduction of new concepts that offer high added value. In the autumn of 2005, for example, Océ Business
Services introduced Océ MAX, an analysis instrument for document processes, and  shortly afterwards  the e-Desk project, which enables employees in an office environment to contact all central
printing facilities in the business through one keystroke on a standard keyboard. Océ continues to regard the current activities in printrooms and mailrooms as a core activity but is also using that position as a launch pad that will lead to
more complex assignments.

Trends. The outsourcing market is comparatively big because an increasingly wide range of activities are
being contracted out. Particularly in the United States, the character of the market is changing now that more and more new entrants are providing services that cross over the traditional borders between the specialist areas. Since existing
suppliers are also expanding the package of services that they offer, competition is becoming more intense. In Europe, where outsourcing is still relatively new, it is possible to achieve a faster expansion in the direction of more complex
activities that are linked to the management of complete information flows.

Strategy.Océ is focusing on boosting its
profitable revenues from Business Services. That means a shift in emphasis away from mailroom and printroom services towards the more complex management of the physical and electronic document flows in businesses. For this purpose, investments are
being made in the development of these complex services in R&D and the operational departments. Selling, implementing and managing these services also require additional investments in sales and marketing. The main focus continues to be on those
processes in which printing plays an important role.



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##### Table of Contents

Wide Format Printing Systems or WFPS Business Unit

The Wide Format Printing Systems (WFPS) strategic business unit comprises three business groups.



| |  |  | The Technical Document Systems business group offers technical applications for customers such as construction companies, architectural and engineering offices, industrial,
utilities and telecom businesses and the government (print-for-use) and commercial applications specifically destined for use by reprographic businesses and digital print providers (print-for-pay).
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Display Graphics Systems business group supplies applications for the graphics industry and the world of advertising and focuses on indoor and outdoor advertising and
other forms of graphic communication.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Imaging Supplies business group specializes in the supply of print media to all customer categories and the supply of toners and inks.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



|                           |  |                                                                                                                                                                                                                      |  |                                                                                                                                                                                                  |  |                                                                     
|-------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------------------
|                           |  | Customer segments                                                                                                                                                                                                    |  | Products and services                                                                                                                                                                            |  | Competitors                                                         
|Technical Document Systems |  | Print-for-use Construction companies
Architectural and engineering offices Industrial companies Utility companies Telecom businesses Government  Print-for-pay Reprographic businesses Digital
print providers       |  | Wide format production printers for work group and office environments, in both black-and-white and color. Wide format scanners. Print management and distribution software.
Financial services. |  | Fuji-Xerox Hewlett-Packard KIP Ricoh Xerox                          
|                           |  |                                                                                                                                                                                                                      | 
|Display Graphics Systems   |  | Print-for-use Corporate and retail in-house
printing Printing works Advertising and design
agencies  Print-for-pay Digital print providers Reprographic businesses Photo processing laboratories Silkscreen printers |  | Wide format production printers (roll-to-roll and flatbed) for indoor and outdoor applications. Print workflow software. Financial services.                                                     |  | Durst Epson Hewlett-Packard/Scitex Mimaki Mutoh Nur Vutek           
|                           |  |                                                                                                                                                                                                                      | 
|Imaging Supplies           |  | All customer segments of: Technical Document
Systems Display Graphics Systems Corporate Printing
Commercial Printing Océ Business Services                                                                           |  | Wide format media. Display graphics media and
inks. Print media for office and for commercial graphic applications (business graphics media).                                                    |  | 3M Corporate Express Hewlett-Packard Intelicoat Paperlinx Sihl Xerox

New WFPS Products in 2005

The following table lists each new product introduced by the WFPS unit in 2005, including the name of the product, the applicable business group and the customer segment
that the product is intended to serve:



|           |  |                            |  |                                                                                                                                            
|---------- |  | -------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|Product    |  | Business group             |  | Application                                                                                                                                
|Océ TDS100 |  | Technical Document Systems |  | Wide format analog copier for workgroup and office environments in small construction companies and architectural and engineering offices. 
|           |  |                           
|Océ TDS320 |  | Technical Document Systems |  | Wide format digital copier for workgroup and office environments in small construction companies and architectural and engineering offices.



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|                   |  |                            |  |                                                                                                                                                                                                                                                                                                                                              
|------------------ |  | -------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Product            |  | Business group             |  | Application                                                                                                                                                                                                                                                                                                                                  
|Océ TDS450         |  | Technical Document Systems |  | Wide format reproduction system, specifically aimed at offices and workgroups, comprising a newly developed color scanner (Océ Direct Scan) which sets a new standard for ease of
use.                                                                                                                                                       
|                   |  |                           
|Océ TDS860         |  | Technical Document Systems |  | Highly productive, wide format printing system that can be fully adapted to meet the needs of commercial users in the high volume segment but is also suitable for corporate printing in
industrial environments. Offers a wide range of options in scanners, print speed and management software to enable customer-specific configurations.
|                   |  |                           
|Océ TCS500         |  | Technical Document Systems |  | Highly productive, wide format color printing system; successor to the Océ TCS400 for commercial and industrial environments.                                                                                                                                                                                                                
|                   |  |                           
|Océ Arizona T220VF |  | Display Graphics Systems   |  | Mid volume flatbed printer for the market for thermoplastically formed advertising displays.                                                                                                                                                                                                                                                 
|                   |  |                           
|Océ CS6100         |  | Display Graphics Systems   |  | Extra wide format (2.5 meters) mid volume color printer for durable, weather-resistant outdoor advertising.                                                                                                                                                                                                                                  
|                   |  |                           
|Océ CS7070         |  | Display Graphics Systems   |  | Hybrid, high speed inkjet printer, featuring drying with UV light; suitable for both roll-to-roll and rigid materials for advertising signs, exhibition materials and outdoor advertising on
buildings.                                                                                                                                      

Technical Document Systems Business Group

Market position. The Technical Document Systems (TDS) business group supplies wide format equipment for the scanning, copying,
printing, distribution and archiving of technical documents. Its customers are businesses and institutions that use wide format applications to support their own business processes, but also companies (such as specialized reprographics businesses)
that use Océ systems and applications for commercial purposes.

Océ holds a strong, leading position in this market, based on the quality,
productivity and user-friendliness of its systems. Océ has long been the pace-setter in terms of new developments, such as digitalization, scanning for archiving, electronic distribution and decentralized printing. The expertise that
Océ has gained with black-and-white documents forms an ideal launch pad for marketing color solutions to meet the growing demand for technical documents in color. Both in black-and-white and in color, Océs systems stand out
because of their high level of productivity in the entire process, from electronic distribution via printing and copying through to finishing.

The
activities of the TDS business group are mainly concentrated in Europe and the United States. Particularly in recent years, however, the Asian markets have also been rapidly growing in importance. Over the past years, Océ has made sizeable
investments in Japan and China. Apart from bringing organic business growth, this has led in Japan to the recent acquisition from Shacoh of its population of high volume, wide format machines. In China, too, the business is developing strongly.

Developments in 2005. In the black-and-white segment, an aggressive marketing approach plus the addition to the product portfolio
of the Océ TDS100 and the Océ TDS860 resulted in organic growth in revenues from printing systems. Printing volumes in this segment increased further. Revenues from services were maintained at the same level as 2004, despite
the fact that the servicing requirements of the systems were further reduced.

In all volume segments, Océ succeeded in selling more black-and-white
and color printers than in 2004. This was in part attributable to the many major and smaller scale innovations that were incorporated in both hardware and software to further enhance productivity and ease of use.

To maintain its leadership position as a supplier of very high production color printing systems, Océ introduced the Océ TCS500 at the end of 2005.
This printer represents a step change in productivity as compared to its predecessor, the Océ TCS400.

Black-and-white.
The Océ TDS500, a stand alone copier that is manufactured in Asia, was launched on the market during 2005 and has already achieved an equal number of placements as its successful predecessor, the Océ 7050. The fastest growing
product line, however, was the Océ TDS300, which has been on the market since 2004 for lower volumes in



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small companies. In part, this growth was brought about by the ongoing trend towards more decentralized printing on smaller printers.

The Océ TDS600 sold better in 2005 than in the previous year, thanks to intensive marketing efforts. At the beginning of 2005, the Océ TDS860 was
introduced. This extremely flexible and multi-configurable machine is targeted at the high and very high volume segments. The large number of placements of the Océ TDS860 in the past year showed that in this market a significant demand
exists for a machine with these qualities, which can serve both the high and the very high volume segment in a cost effective way. That need is topical now that more and more decentralized printing is also taking place in reprographic environments.

In the autumn of 2005, a number of new printing systems were introduced, including the Océ TDS320, successor to the Océ TDS300,
and the Océ TDS450 with a color scanner. As a result Océs current product portfolio in wide format black-and-white links up in full with the trends in the market: decentralization, for which low and mid volume products are
used, and flexibility in central environments, for which the high volume machines are deployed.

Color. In the color segment, the
Océ TCS400, both in the printer version and in the form of the combined printer/copier, resulted in a substantial strengthening of Océs market position. The recently introduced Océ TCS500 is expanding this
position further. This is mainly due to the fact that Océ was the first company to produce a color system that successfully incorporated a productivity concept that had been used and tested in the black-and-white segment. As its installed
population steadily grows, this machine is expected to be an important source of recurring revenues. Although many users are currently continuing to use black-and-white printing because of its lower costs and higher productivity, there is no doubt
that color will be the catalyst for growth in the future.

Trends. The TDS market is expected to remain fairly stable in the years
ahead. However, because of the rapid developments in electronic communication and archiving, there will be a further shift from centralized towards decentralized printing, in a location close to the user. In corporate environments, this means a
shift of the printing volume towards smaller machines. In various geographical markets, construction activities are starting to increase again. This is of importance for Océ in view of its strong market position among architectural and
engineering offices and in construction companies. Specialized reprographics businesses are also noticing the effects of this upswing in the form of an increase in turnover in black-and-white documents, which represent the greater part of their
business, and they are investing in the replacement and expansion of their machines and production management software.

Ongoing digitization is leading to
a decrease in the printing volume on analog machines. For the time being, however, a need continues to exist for analog systems within smaller organizations.

The shift to color is taking place slowly but surely, both in printing, scanning and copying. This is because, step-by-step, technological advances are tipping the price-versus-productivity balance more in the favor of color. Many
businesses therefore use a combination of color and black-and-white systems.

Strategy. By means of product innovation, a focus on
user needs and greater distributive strength, Océ will be able to gain market share. In this way, Océ can further build its strong position in Europe and the United States, continue its expansion in Japan and invest in building up a
strong position in various new and emerging markets, such as China. The program for developing new products is focused on improving the productivity, ease of use and investment value for the user. This applies not only to users in Europe and the
United States, but also to users in Asia. Continual training of the sales staff and the service organizations will enhance the strength of Océs distribution network and thus enable Océ to expand its market share further.
Océ continues to invest in black-and-white and color printing systems that improve the workflow and productivity of the end user of the systems. In this area, an important role will be played by Océs strong software products,
such as Océ Repro Desk and Océ PrintExec Workgroup and their successors.

Display Graphics Systems Business Group

Market position. The growing advertising market is the driving force behind the growth of the Display Graphics Systems
(DGS) business group, which focuses on the flexible and fast production of posters, banners, billboards and other wide format graphics products. Although they have only been on the market for a relatively short time, digital techniques
are increasingly replacing traditional analog techniques such as silk screen printing, photo printing, offset and traditional lettering. As a result of its improved print quality and the cost effective high production speed, the market for digital
printing is expected to continue to grow in the forthcoming years. Océ offers a complete range of advanced printers, software, media and inks world-wide, backed by a high-quality service and support organization. Since 2004, Océ has
also been active with display graphics via its sales organizations in Japan and most other Asian countries and is now optimally able to serve the major markets in this segment within the Asia/Pacific region.



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Océs subsidiary, Onyx Graphics, Inc. (Onyx) is a world market leader for color controller
software for display graphics printing systems. In this area Onyx, as a market leader, has a substantial proportion of the suppliers in the display graphics market as its customers.

Developments in 2005. Revenues from sales of hardware increased strongly within the DGS business group. Partly as a result of this, recurring
revenues  including revenues from inks and media  grew as well. In 2005, the DGS business group concentrated its activities in a single location in Vancouver, Canada. Operational costs are expected to be lowered in future years as a
result of the creation of a cohesive group with a tight focus, in which new products can be quickly developed, manufactured and delivered to the market. The launch of new products and inks specifically developed for industrial applications has
strengthened the product portfolio. One of Océ leading core competencies is its ability to offer customers complete solutions in the form of a combination of software, hardware, media, inks, service, financing and expertise. To complement the
sales of its own products, the business group also supplies third party products, in most cases sold under the Océ name.

Onyx again achieved good
results in 2005. With its Postershop product, Onyx is the global market leader in Raster Image Processors (RIPs) for wide format color printers. Onyx also offers support in the profiling of media and managing digital files. In addition, Onyx targets
its applications at various vertical markets, such as the printing of textiles. Onyx has also started expanding its position in Asia.

Trends. In this highly fragmented market, business consolidation is slowly starting to occur in the higher volume segment. An important factor for the growth of expenditures in the digital graphics display market is the success of
outdoor advertising, which is a particularly cost effective way of advertising. Another important aspect is that average print runs are decreasing, which often makes it more economical to use digital printers. This means that the demand from
traditional printing firms for digital printing is growing, since digital printers can produce these print runs at lower costs and also enable a faster response time.

Strategy. The DGS business group aims to achieve a leading position in the display graphics market. At the present time, the business group has built a balanced range for its customers as a result of a
combination of Océ-developed hardware and software and products from other digital equipment manufacturers. These are sourced from a limited number of partners with which the Company has long term relationships. In all cases, the products are
supplied to users together with the appropriate combination of inks and media for specialized applications. An important role is played by Océs strong, world-wide sales and service organization. This market approach will be continued
and intensified. The business group concentrates on the mid volume and high volume segments of the market.

Onyx is rebuilding its core technology so that
it can easily be augmented for targeted vertical markets and applications. Large format technologies have become more complex and the throughput of printers has become critical. This is why Onyx will focus more on workflow and color quality over the
next few years rather than on additional features.

Imaging Supplies Business Group

Market position. In the market segments in which Océ is active, the availability of the correct media and imaging supplies play a major
role. Media and imaging supplies therefore represent a significant element in Océs total offerings due to the importance of the interaction between media and hardware, especially with a view to the high quality of the color
applications. Throughout the world, the Imaging Supplies business group sells media, inks and toner for small and wide format applications on both Océ equipment and third party machines. Imaging Supplies has its own purchasing, product
development, production, converting and logistics systems. With factories in Europe and the United States, Océ is the worlds biggest converter of wide format media and also holds a prominent position in the black-and-white wide format
media. In wide format CAD and display graphics media, the market share is also growing. In small format paper, the business group has built up an attractive market share in Europe.

Developments in 2005. Although revenues decreased slightly due to the lower selling prices of paper, the profitability of the business group
increased. This was mainly achieved through improved control of logistics costs. In wide format media for the display graphics market the many years of investments in the product range and in creating brand awareness resulted in a substantial growth
in revenues. The market share in wide format media also showed an overall increase, partly because more media were supplied for use on Océ equipment, and partly through supplies to third parties under private labels. Another significant
factor was the sale of modified media to new users of Océ equipment. Emphasis was also placed on building up a high quality range to meet the high demands of the graphics market. The Océ CPS700, CPS800 and CPS900 machines and the
Océ VP2110 black-and-white printer particularly produce an excellent quality print when used in combination with Océ MC paper, which was first introduced in 2005. Sales in this segment are therefore growing quickly.



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Activities in the area of small format specialties (including photo printing paper and textile transfers), which are
produced in the Companys own (Arkwright) plants in the United States, have been considerably expanded.

To boost efficiency and increase the
commercial strength in Europe, the Imaging Supplies business group and the European sales organization of Arkwright have been combined.

Trends. The market for imaging supplies is highly competitive and fragmented. A consolidation is now gradually taking place which is forcing the remaining parties in the market to make drastic improvements in their logistics
processes. Market growth is being stimulated by the continuing digitization of printing processes. Technological know-how and expertise in the area of supplies and basic materials are of vital importance to ensure a good performance in this market.

Strategy. The strategy of the Imaging Supplies business group is aimed at expanding its position as a supplier of high quality
media for wide format printers in both the TDS and the DGS segment. In addition, the business group seeks to provide maximum support for the activities of DDS by offering a complete and competitive range of small format media for both color and
black-and-white applications. Thanks to the broad range offered by Imaging Supplies, Océ is able to enhance the value of the total solutions it offers to customers.

Sales and Services

Océ has a strong direct sales and service organization, which provides critical input in
the Companys research and development activities and in its overall success. The Company markets and sells its products primarily through its direct sales force of approximately 5,350 employees, sells its maintenance services through
approximately 5,100 of its employees and provides business services through approximately 6,800 of its employees. As a result, the Company has access to a constant flow of up-to-date market and customer feedback and information, which allows the
Company to anticipate and respond quickly to changing market needs.

The Company sells certain of its products through independent distributors and
original equipment manufacturers (OEMs) in regions or with respect to specific market segments, in particular where the Company does not have its own sales force. Approximately 6%, 5% and 5% of its revenues in 2005, 2004 and 2003,
respectively, were generated using independent distributors and OEMs.

Competition

The Companys business competes (in whole or in part) with a number of companies with significant financial resources and world-wide operations. The Companys primary competitors in each strategic business
unit are set forth on pages 18 and 24. In addition, new competitors are entering part of the markets that the Company serves as the markets rapidly evolve. The Companys success in the future will depend, in part, on its ability to put
distinctive systems on the market and to compete successfully in its current geographic and product markets and to expand into additional geographic and product markets. The Company believes that its direct sales and service force gives it a
competitive advantage because it is able to communicate on an ongoing basis directly with its customers to learn quickly about the changing demands of the market.

Research and Development

Technology plays a key role in the continuing success of the Company and its ability to respond to ever changing
demands in the market. The success of Océs products and services is attributable to the Companys ability to develop and market machines, software and services of a high quality and respond to its customers needs. To meet
these needs, Océ largely develops its technology and products internally at its research and development offices located in the Netherlands, Germany, Belgium, France, Canada, the United States and Romania. Product development takes place in a
centrally managed project group in which all relevant disciplines are represented. Accordingly, Océ has historically devoted a significant portion of its revenues to research and development. See Item 5, Operating and Financial
Review and Prospects, for a further discussion of the Companys research and development policies and details regarding the Companys historical expenditures on research and development.

Intellectual Property

As noted above, the Companys technology
is critical to its success. The Company relies on a combination of patents, copyrights, trade secrets and other measures to protect its proprietary technology. At November 30, 2005, Océ held 5,916 patents and patent applications pending
throughout the world. The Company considers its patent position to be important to protect its technology and proprietary information and its ability to conduct its business. The Company also believes that its trademark Océ, which
is registered in most areas of the world, is essential to its business. In addition, the Company



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requires any third party that may have access to its proprietary information to enter into arrangements to protect its proprietary information and
technology.

Manufacturing, Logistics and Suppliers

The Company manufactures its strategic parts internally (such as process drums, black-and-white and color toners, organic photoconductors and silicone materials). In combination with the machines in which they are included, these strategic
parts create unique properties that distinguish the Companys products from its competitors.

Most of the Companys non-strategic parts are
manufactured by external suppliers in the form of sub-assemblies and modules. The Company then manufacturers and assembles the finished products internally. In order to ensure that the components and sub-assemblies meet Océs
specifications, Océ generally involves its third party suppliers early in the development of a product.

During 2005, the Companys principal
manufacturing facilities were in Venlo, the Netherlands, Poing, Germany and Prague/Pardubice, Czech Republic. In 2004, however, the Company began implementation of its previously-announced plans to relocate part of its manufacturing and assembly
activities from the Netherlands to Central Europe and the Far East. These efforts continued in 2005. To support and speed up relocation activities, an Océ Asian Technology Center was set up in mid-2005. By the end of 2006, about
half the current Venlo production value is expected to originate from Asia. Ultimately, the facilities in Venlo will only manufacture complex systems, machines that are produced in small series, and strategic materials. The manufacturing activities
which are being relocated to Central Europe or the Far East relate only to non-strategic parts and components to be produced by third parties, most of which will be shipped to the Companys facilities to be included in the final assembly of
machines. The Company is in the process of outsourcing the final assembly of some of its machines to third parties in Central Europe or the Far East. The Company will continue to manufacture all of its strategic parts and to assemble its more
complicated machines internally.

Management believes that its external suppliers are capable to meet its current and future near and mid-term
requirements, and the Company has not experienced any meaningful increases in the prices of these materials nor difficulty in obtaining these materials from its external suppliers.

In recent years fundamental changes in the transport of machines, (service) components and supplies have brought a considerable reduction in logistics costs. There has also been a further improvement in delivery
reliability and response speed. Océ now applies an integral supply chain management system for Europe, North America and the Asia/Pacific region. Deliveries to customers are made through a number of logistics centers which are managed from
Venlo and Poing and which ensure an efficient supply of machines, spare parts and toners. Because Océs customers can compile their configuration from a broad range of models and options, the equipment that is supplied is often highly
specific. By ensuring that all components are available in a logistics center at all times, the systems can be configured and tailored to meet customer-specific requirements in locations that are close to the main sales areas. In this way delivery
times are reduced and transport costs minimized. For Europe and the United States such a logistics system was already operational and during 2005 a center was also set up in Singapore to handle the supply chain for the entire Asia/Pacific region.

Seasonality

The Company has historically experienced
that sales during the third quarter decrease due to the holiday season in Europe and increase in the fourth quarter.

Governmental Policies

As a global company with operations in 80 countries, the Companys business is subject to direct and indirect regulation in each of the countries
in which it does business. As a result, changes in various types of regulation could affect the Companys business adversely. The implementation of new technological or legal requirements could impact the Companys products, manufacturing
or distribution processes, and could affect the timing of product introductions, the cost of production or products as well as their commercial success. Moreover, regulations that adversely affect the pricing of the Companys products could
affect net sales and operating profit. The impact of these changes in regulations could affect adversely the Companys business even where the specific regulations do not directly apply to the Company or its products.

C. Organizational Structure

The Company is a holding company that
conducts its operations through a variety of subsidiaries. The following is a list of Océs principal subsidiaries which sets forth each subsidiarys name, principal location and country of incorporation, and a list of its minority
holdings. Océ owns 100% of the equity (and holds 100% of the voting power) of each subsidiary listed



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except for Océ Japan Corporation of which Océ owns 95% of the equity (and holds 95% of the voting power) since February 2005, and
Océ-Poland Limited, Sp. Z.o.o. of which Océ owns 97.5% of the equity and voting power since September 2005.



|                                                       |  |                  |  |                
|------------------------------------------------------ |  | ---------------- |  | ---------------
|Europe                                                 |  |                  |  |                
|Océ-Belgium N.V./S.A.                                  |  | Brussels         |  | Belgium        
|Océ Software Laboratories Namur S.A.                   |  | Gembloux         |  | Belgium        
|Océ Nordic Holdings ApS                                |  | Copenhagen       |  | Denmark        
|Océ-Danmark a/s                                        |  | Copenhagen       |  | Denmark        
|Océ Holding Deutschland Verwaltungsgesellschaft m.b.H. |  | Mülheim/Ruhr     |  | Germany        
|Océ-Deutschland G.m.b.H.                               |  | Mülheim/Ruhr     |  | Germany        
|Océ Printing Systems G.m.b.H.                          |  | Poing            |  | Germany        
|Océ Document Technologies G.m.b.H.                     |  | Konstanz         |  | Germany        
|Océ-Finland Oy                                         |  | Helsinki         |  | Finland        
|Océ-France S.A.                                        |  | Noisy-le-Grand   |  | France         
|Océ Print Logic Technologies S.A.                      |  | Créteil          |  | France         
|Océ-Hungária Kft.                                      |  | Budapest         |  | Hungary        
|Océ-Ireland Ltd.                                       |  | Dublin           |  | Ireland        
|Océ-Italia S.p.A.                                      |  | Milan            |  | Italy          
|Océ-Technologies B.V.                                  |  | Venlo            |  | The Netherlands
|Océ-Nederland B.V.                                     |  | s-Hertogenbosch |  | The Netherlands
|Arkwright Europe B.V.                                  |  | Venlo            |  | The Netherlands
|Océ-America, Inc.                                      |  | Venlo            |  | The Netherlands
|Océ Business Partners, Inc.                            |  | Venlo            |  | The Netherlands
|Océ General Partnership                                |  | Venlo            |  | The Netherlands
|Océ-Norge A.S.                                         |  | Oslo             |  | Norway         
|Océ-Österreich Ges.m.b.H.                              |  | Vienna           |  | Austria        
|Océ-Poland Limited, Sp. Z o.o.                         |  | Warsaw           |  | Poland         
|Océ-Portugal Equipamentos Gráficos S.A.                |  | Lisbon           |  | Portugal       
|Océ Software S.R.L.                                    |  | Timisoara        |  | Romania        
|Océ-Slovenká republika s.r.o.                          |  | Bratislava       |  | Slovakia       
|Océ-Iberia Holding Valores, S.L.                       |  | Barcelona        |  | Spain          
|Océ-España S.A.                                        |  | Barcelona        |  | Spain          
|Océ-Czech republika s.r.o.                             |  | Prague           |  | Czech Republic 



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|                                            |  |                          |  |                
|------------------------------------------- |  | ------------------------ |  | ---------------
|Océ (UK) Limited                            |  | Brentwood                |  | United Kingdom 
|Océ Imagistics (UK) Limited                 |  | Brentwood                |  | United Kingdom 
|Océ Svenska AB                              |  | Stockholm                |  | Sweden         
|Océ (Schweiz) A.G.                          |  | Glattbrugg               |  | Switzerland    
|                                            |  |                         
|North America                               |  |                          |  |                
|Océ-USA Holding, Inc.                       |  | Chicago, Illinois        |  | USA            
|Océ North America, Inc.                     |  | Chicago, Illinois        |  | USA            
|Océ Imagistics Inc.                         |  | Trumbull, Connecticut    |  | USA            
|Arkwright, Inc.                             |  | Fiskeville, Rhode Island |  | USA            
|Océ Business Services, Inc.                 |  | New York, New York       |  | USA            
|Océ Reprographic Technologies, Corp.        |  | Phoenix, Arizona         |  | USA            
|Océ-Canada, Inc.                            |  | Toronto                  |  | Canada         
|Onyx Graphics, Inc.                         |  | Salt Lake City, Utah     |  | USA            
|Océ Imagistics Canada Inc.                  |  | Mississauga              |  | Canada         
|Océ-Mexico S.A. de C.V.                     |  | Mexico City              |  | Mexico         
|                                            |  |                         
|Asia/Pacific                                |  |                          |  |                
|Océ-Australia Ltd.                          |  | Scoresby                 |  | Australia      
|Océ Office Equipment (Shanghai) Co., Ltd.   |  | Shanghai                 |  | China          
|Océ (Hong Kong China) Ltd.                  |  | Hong Kong                |  | Hong Kong      
|Océ-Japan Corporation                       |  | Tokyo                    |  | Japan          
|Océ Malaysia Sdn. Bhd.                      |  | Petaling Jaya            |  | Malaysia       
|Océ (Singapore) Pte. Ltd.                   |  | Singapore                |  | Singapore      
|Océ (Thailand) Ltd.                         |  | Bangkok                  |  | Thailand       
|                                            |  |                         
|Other countries                             |  |                          |  |                
|Océ-Brasil Comércio e Indústria Ltda.       |  | São Paulo                |  | Brasil         
|                                            |  |                         
|Direct Export/Emerging Market               |  |                          |  |                
|Océ Direct Export/Emerging Markets          |  | Venlo                    |  | the Netherlands
|                                            |  |                         
|Financing companies                         |  |                          |  |                
|Océ-Australia Finance Pty. Ltd.             |  | Scoresby                 |  | Australia      
|Océ-Interservices N.V./S.A.                 |  | Brussels                 |  | Belgium        
|Océ-Deutschland Financial Services G.m.b.H. |  | Mülheim/Ruhr             |  | Germany        



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|                                              |  |                     |  |          
|--------------------------------------------- |  | ------------------- |  | ---------
|Océ-France Financement S.A.                   |  | Saint-Cloud         |  | France   
|Océ-Renting S.A.                              |  | Barcelona           |  | Spain    
|Océ Financial Services, Inc.                  |  | Boca Raton, Florida |  | USA      
|                                              |  |                    
|Minority holdings                             |  |                     |  |          
|Heliozid Océ-Reprographic (Cyprus) Ltd. (25%) |  | Nicosia             |  | Cyprus   
|Datapost Pte. Ltd. (30%)                      |  | Singapore           |  | Singapore

D. Property, plants and equipment

The Company owns or leases the following material facilities:



|                 |  |                                                               |  |                         |  |                                      
|---------------- |  | ------------------------------------------------------------- |  | ----------------------- |  | -------------------------------------
|Location         |  | Principal Use/ Products Produced                              |  | Owned/Leased            |  | Approximate Square Feet/Square meters
|The Netherlands: |  |                                                               |  |                         |  |                                      
|Venlo            |  | Headquarters                                                  |  | Owned                   |  | 28,915 sq. mtr.                      
|                 |  | Research and Development                                      |  | Owned                   |  | 53,000 sq. mtr.                      
|                 |  | Manufacturing of Printing Equipment                           |  | Owned                   |  | 84,690 sq. mtr.                      
|                 |  | Manufacturing of Consumables                                  |  | Owned                   |  | 43,265 sq. mtr.                      
|                 |  | Warehouse supplies                                            |  | Operational lease       |  | 19,437 sq. mtr.                      
|                 |  | Warehouse spare parts                                         |  | Owned/Operational lease |  | 14,934 sq. mtr.                      
|s-Hertogenbosch |  | Offices                                                       |  | Owned                   |  | 10,930 sq. mtr.                      
|                 |  |                                                               | 
|Czech Republic:  |  |                                                               |  |                         |  |                                      
|Prague           |  | Manufacturing and Warehouse                                   |  | Operational lease       |  | 4,214 sq. mtr.                       
|Pardubice        |  | Manufacturing and Warehouse                                   |  | Operational lease       |  | 6,733 sq. mtr.                       
|                 |  |                                                               | 
|Germany:         |  |                                                               |  |                         |  |                                      
|Mülheim/Ruhr     |  | Offices and Warehouse                                         |  | Owned                   |  | 10,073 sq. mtr.                      
|Poing            |  | Offices Research and Development, Manufacturing and
Warehouse |  | 53% Owned 53% Owned     |  | 18,286 sq. mtr. 97,775 sq. mtr.      
|                 |  |                                                               | 
|France:          |  |                                                               |  |                         |  |                                      
|Noisy-le-Grand   |  | Offices                                                       |  | Owned                   |  | 14,000 sq. mtr.                      
|Créteil          |  | Offices and Research and Development                          |  | Owned                   |  | 6,418 sq. mtr.                       



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|                          |  |                                                                |  |                                     |  |                                      
|------------------------- |  | -------------------------------------------------------------- |  | ----------------------------------- |  | -------------------------------------
|Location                  |  | Principal Use/ Products Produced                               |  | Owned/Leased                        |  | Approximate Square Feet/Square meters
|England:                  |  |                                                                |  |                                     |  |                                      
|Brentwood                 |  | Offices                                                        |  | Operational lease                   |  | 38,360 sq. mtr.                      
|                          |  |                                                                | 
|United States of America: |  |                                                                |  |                                     |  |                                      
|Chicago, IL               |  | Offices Warehouse                                              |  | Operational lease Operational lease |  | 156,500 sq. ft. 202,000 sq. ft.      
|Boca Raton, FL            |  | Offices                                                        |  | Operational lease                   |  | 144,000 sq. ft.                      
|Trumbull, CT              |  | Offices                                                        |  | Owned                               |  | 77,128 sq. ft.                       
|Columbus, OH              |  | Warehouse                                                      |  | Operational lease                   |  | 217,864 sq. ft.                      
|Mount Laurel, NJ          |  | Warehouse                                                      |  | Operational lease                   |  | 106,000 sq. ft.                      
|Guilford, CT              |  | Manufacturing of Supplies                                      |  | Owned                               |  | 110,000 sq. ft.                      
|Fiskeville, RI            |  | Manufacturing of Supplies                                      |  | Owned                               |  | 250,000 sq. ft.                      
|Charleston, IL            |  | Manufacturing of Supplies                                      |  | Owned                               |  | 100,000 sq. ft.                      
|                          |  |                                                                | 
|Canada:                   |  |                                                                |  |                                     |  |                                      
|Richmond                  |  | Offices, Research and Development, Manufacturing and Warehouse |  | Operational lease                   |  | 45,800 sq. ft.                       

Each of the properties listed above is owned or leased by the Company free of any material encumbrances.

The land and buildings in Poing, Germany, are owned by a company in which Océ holds 53% and which is controlled by and fully consolidated by
Océ. The remaining 47% is owned by a third party and is included as a minority interest in the Consolidated Financial Statements of Océ. The lease has a twenty-year term with eleven years remaining. For 2006, the rent is a fixed amount
of Euro 6.7 million.

In addition to the principal properties listed above, Océ also owns and leases office and warehouse space throughout the world
where necessary to conduct its business. Certain facilities were subject to capitalized leases, amounting to Euro 0, Euro 0 million and Euro 7 million as of November 30, 2005, 2004 and 2003, respectively, and certain facilities were
subject to operational leases, amounting to Euro 58 million, Euro 49 million and Euro 51 million as of November 30, 2005, 2004 and 2003, respectively.

Océ believes that its production and other facilities are in good operating condition. As discussed above, a significant portion of the Companys parts and components are manufactured by third party
suppliers. The Company manufactures certain strategic components internally (namely, process drums, organic photoconductors, silicone materials and toners) and assembles its final machines at its own manufacturing facilities. The Companys
facilities currently have adequate production capacity to meet its needs in the short and mid-term future. The Company also believes that it can quickly increase its production capacity in the event that its production capacity needs increase.



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|Item 5 | OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|------ | --------------------------------------------

Executive Summary

Océ is one of the worlds leading suppliers of professional printing and document management systems. The Company develops and manufactures
systems for the production, distribution and management of documents in color and black-and-white and in small and wide format. The Companys products include printers, scanners, peripheral printing equipment and media as well as document
management software and other products to integrate printing and document production systems. The Company operates globally with activities in 80 countries, and has sales and services establishments in over 30 countries. The Company employed more
than 24,000 people on a worldwide basis as of November 30, 2005.

The Companys revenues have historically been derived from two types of
activities: commercial activities, which include that part of the Companys business relating to the sale of products and services, and financial activities, which include that part of the Companys business that provides financing to its
customers that desire to finance the acquisition of machines over a period of time. The Companys commercial revenues are further classified into non-recurring revenues, which are revenues from the sale of machines, software and
professional services, and recurring revenues, which are revenues from the sale of services, materials, rentals, interest and business services. Although the Companys financial revenues have decreased significantly since 2001 as a
result of the Companys gradual outsourcing of its financial lease portfolio, the Company has included details with respect to its financial activities in its Consolidated Financial Statements for 2005.

In Item 5 and elsewhere in this report, the term organic growth is used when comparing revenues from different fiscal years. We define organic growth as the change
compared to the prior fiscal year excluding the effects of acquisitions or dispositions and excluding currency effects.

Organic growth excluding lease
effects is defined as the change compared to the prior fiscal year excluding the effects of acquisitions or dispositions, currency effects, profit on the sale of the lease portfolio and excluding interest income from leases.

Océs revenues for 2005 were positive, with total revenues of Euro 2,677 million compared to Euro 2,652 million in 2004. The following factors had
an impact on Océs revenues in 2005:



| |  |  | Organic Growth in Non-Recurring Revenues and an Improvement in Recurring Revenues.On an organic basis, revenues in 2005 were generally the same as in 2004. If the
lease effects are excluded, total revenues increased on an organic basis by 2.1% from 2004 to 2005, and non-recurring revenues (excluding lease effects) increased on an organic basis by over 10% from 2004 to 2005. This is due primarily to the strong
growth in machine sales during 2005, particularly with color machines. Although recurring revenues (excluding lease effects) decreased on an organic basis by 1.1% from 2004 to 2005, recurring revenues moved in a positive direction in the second half
of 2005, and the Company achieved an organic increase in recurring revenues in the last quarter of 2005.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Sale of Financial Lease Portfolio. Historically, the Company derived a significant portion of its revenues from interest receivables on financial leases. In 2001,
Océ announced its intention to outsource its financial lease portfolio to third parties while retaining the one stop shopping concept for its customers through private label financing programs. The Company has adopted two
approaches to outsource its financial lease program. In the United States, the Company has established a captive lease company, Océ-Financial Services, that enters into the initial leasing agreements and later sells bundles of lease
receivables (together with the title to the underlying machines) to third party fundors. In Europe and the rest of the world, Océ has entered into (or intends to enter into) private label agreements with third party vendor lease companies.
Under these agreements, Océ has already or will transfer existing financial leases to its vendor lease partners and these vendor lease partners will directly enter into new financial leases, after having purchased the leased products from
Océ. Approximately two thirds of the existing financial lease portfolio was transferred in 2004 and 2005. The transfers of portions of the existing lease portfolio resulted in a book profit of Euro 31 million in 2004 and Euro
5 million in 2005. As of the end of 2005, Océ had Euro 343 million of lease receivables on its balance sheet compared to Euro 403 million in 2004. In 2005, as a result of the sale of the lease portfolio, revenue from leasing
(which includes interest over the period of the lease and book profits on the sale of the existing lease portfolio) decreased by Euro 58 million from 2004. For additional information, see Item 4.A, Outsourcing of Financial
Leases.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Acquisition of Imagistics.In October 2005, Océ acquired Imagistics for an aggregate purchase price of Euro 638 million. Imagistics offers its
customers complete solutions for document production, varying from stand-alone machines to complete networks for low, medium and high volume machines. Imagistics acquires its machines and systems from a few select original equipment manufacturers.
Imagistics operations are based in North America
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | (the United States and Canada) and the United Kingdom. Océs management believes that this acquisition is a good strategic fit because of the
complementary nature of the two companies product offerings. The combined companies strengthen each other by working together in different segments of the printing and document management markets  Imagistics in the low, medium and high
volume segments and Océ in the high and very high volume segments and the wide format segments. In addition, Océs direct sales and service organization has been significantly strengthened as a result of the acquisition,
particularly in the United States and Canada. At the time of the acquisition, Imagistics employed more than 3,200 people, of whom 1,300 work in services and more than 1,200 work in direct sales. Imagistics has a strong distribution system and client
network, particularly in the United States and Canada. Océs management believes that the acquisition of Imagistics provides Océ with a unique opportunity to penetrate the office and print market in North America. As a result of
the acquisition, Océs revenues in the United States for 2006 are expected to be U.S. dollar 1.7 billion, which will constitute approximately 43% of the Companys total revenues. The results of Imagistics for November 2005 have been
included in the Companys consolidated results, which had a contribution of Euro 37 million to revenues, although the impact on operating income was insignificant because of the significant costs that were incurred in November in
connection with the transaction and the amortization of intangible fixed assets as a result of the acquisition.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Restructurings. In its ongoing effort to maintain efficiencies and to reduce operating expenses, the Company announced a restructuring in Europe in the fourth quarter
of 2005. As a result, the Company took a provision of Euro 33 million to cover restructuring costs. For additional information, see Identifying expenses in connection with restructuring below.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Dutch Pension Provision. In 2005, the Company reached agreement with its social partners (trade unions and workers councils) in the Netherlands that pension
obligations in the Netherlands will be based on a career average salary rather than on the amount of an employees final pay at the end of his or her career. As a result of the plan amendment (which is treated as a curtailment under
Dutch GAAP), the Company released Euro 68 million from its pension provision to its earnings.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Impact of Foreign Currency Exchange Rates. As a global business, foreign currency fluctuations can have a positive or negative effect on the Companys financial
results. Generally, Océs Consolidated Financial Statements are effected by foreign currency fluctuations in two respects: transaction exposures and translation exposures, which are further discussed on page 43.
In particular, during 2005, the U.S. dollar was slightly weaker on average than in 2004, but the exchange rate of the U.S. dollar at November 30, 2005 was substantially higher than at November 30, 2004.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Because transactions denominated in foreign currencies are included at the exchange rate applicable at the time that the transaction takes place, mainly
the weaker U.S. dollar during 2005 had a net negative impact on the Companys income statement of Euro 8.7 million (translation, transaction and hedge). The higher exchange rate at the end of November 2005 had a positive net impact on the
Companys balance sheet of Euro 83.8 million with respect to total assets.

Costs of sales of products, rentals and service reflect primarily the
costs of components and sub-assemblies and labor.

Research and the development of technology are critical to Océs success. Accordingly,
Océ has historically devoted a significant portion of its revenue to research and development (approximately 6 to 7%). In 2005, Océ invested 7.2% of its revenues in research and development.

The discussion and analysis of Océs financial condition and results of operations in this Item 5 and elsewhere in this report is based on its
Consolidated Financial Statements, which have been prepared in accordance with Dutch GAAP. As further discussed in Note 27 to the Consolidated Financial Statements, Dutch GAAP differs from U.S. GAAP in several significant respects. The discussion
and analysis contains forward-looking statements concerning the Companys operations, economic performance and financial condition. For more detailed information regarding the risks involved in forward-looking statements, see Item 3,
Key Information.

Significant accounting policies, assumptions, estimates and judgments

When Océ prepares its financial statements, it selects certain accounting principles and methods and makes certain assumptions, estimates and judgments relating to
its financial condition and disclosure, which require managements subjective and complex consideration of a variety of matters, including the following:



| |  |  | valuing intangible and other long-lived assets;
| | - |  | -----------------------------------------------



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| |  |  | provision for inventory obsolescence;
| | - |  | -------------------------------------



| |  |  | provision for doubtful trade accounts receivable;
| | - |  | -------------------------------------------------



| |  |  | establishing assumptions as the basis of revenue recognition policy;
| | - |  | --------------------------------------------------------------------



| |  |  | capitalization of research and & development expenses;
| | - |  | ------------------------------------------------------



| |  |  | identifying expenses in connection with restructurings;
| | - |  | -------------------------------------------------------



| |  |  | determining contingent liabilities, including any contingent liabilities that Océ may incur in connection with significant litigation; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | valuing deferred taxes.
| | - |  | -----------------------

The Company bases its assumptions and estimates,
and makes its judgments, based on its historical experience, its expectations for the future and various other factors that it believes are reasonable under the circumstances. The Companys actual results may differ significantly from its
assumptions, estimates and judgments and its financial condition could be significantly different if the Company used different assumptions, estimates and judgments.

The following is a brief discussion of the significant assumptions, estimates and judgments that the Company makes which could impact its financial condition and results of operations. Our discussion of significant
accounting policies, assumptions, estimates and judgments is based upon the Companys Consolidated Financial Statements which have been prepared in accordance with Dutch GAAP. The principal differences between Dutch GAAP and U.S. GAAP are
discussed in Note 27 to the Companys Consolidated Financial Statements.

For further details on the accounting policies used in this report, see
Note 0 and the other Notes to the Companys Consolidated Financial Statements.

Valuing intangible and tangible long-lived
assets

As of November 30, 2005 and 2004, intangible long-lived assets amounted to Euro 550 million and Euro 37 million,
respectively, and tangible long-lived assets amounted to Euro 579 million and Euro 481 million, respectively. The increase is mainly related to the acquisition of Imagistics.

Intangible fixed assets are valued at acquisition or manufacturing costs, less accumulated amortization and any impairments. The Company amortizes intangible assets on a straight line based over their estimated
economic lifetime, up to a maximum period of 20 years. The Company estimates that the useful life of goodwill is 5 to 20 years, software is 3 to 7 years, technology is 5 to 10 years, customer base is 5 to 10 years, trademarks are 2 to 10 years and
other intangible assets are up to 5 years.

Similarly, tangible long-lived assets are valued at acquisition or manufacturing costs, less accumulated
depreciation and any impairments. The Company depreciates tangible long-lived assets on a straight line based on the expected useful lifetime of the relevant asset. In general, the Company estimates that the useful life of property and plants is 20
to 50 years, production machines is 8 to 10 years, equipment is 3 to 10 years and vehicles is 4 to 5 years.

Intangible fixed assets and tangible
long-lived assets are periodically reviewed to assess whether any impairment has occurred. The Company assesses the impairment of the carrying value of such assets under Dutch GAAP when factors indicate that the carrying value may not be
recoverable, and at least annually under U.S. GAAP. Factors that indicate potential impairment include, but are not limited to:



| |  |  | significant decreases in the market value of the intangible or long-lived assets;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | significant changes in the operating results or in cash flows associated with the use of the intangible or long-lived assets;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | significant changes in the use of the assets or the strategy for our overall business; and
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | significant negative industry or economic trends.
| | - |  | -------------------------------------------------

Under Dutch GAAP, the
Company measures the impairment of goodwill based on a discounted cash flow method employing estimates of future cash flows and a discount rate. Testing is only performed in case of a triggering event. Under U.S. GAAP,



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the Company is required to apply a two step test. First the fair value based on discounted cash flows and the carrying amount of the reporting unit including
goodwill should be compared (at least annually). If the fair value of the reporting unit is less then carrying amount, goodwill is considered to be impaired. Secondly the goodwill impairment is measured as the excess of the carrying amount of the
goodwill over its implied value.

Under Dutch GAAP, the Company measures the impairment of other long-lived assets based on a discounted cash flow method
employing estimates of future cash flows and a discount rate. Under U.S. GAAP, the company is required to apply a two step test. First the assets are measured against the undiscounted cash flows. If impairment exists, the entity must measure
impairment by comparing the assets carrying value to its fair value.

Océs projections for future cash flows are based on its current
estimates of the future growth of its business, and anticipated future economic, regulatory and political conditions. Océ estimates discount rates to be commensurate with the risk inherent in its current business model. If Océ
estimates change as a result of changes in the business model, printing and document management technology, general economic conditions, the regulatory environment or other reasons, Océ may have to adjust the carrying value of its intangible
or long-lived assets and recognize additional impairment charges on such assets.

Provision for inventory obsolescence

As of November 30, 2005 and 2004 inventories amounted to Euro 363.5 million and Euro 317.3 million. Allowances for obsolescence amount to
Euro 192.1 million and Euro 178.8 million at November 30, 2005 and 2004, respectively.

Purchased inventories are valued at purchase price,
plus any additional costs, by the first-in-first-out method. Inventories of semi-finished products, spare parts and finished products are valued at manufacturing cost including a mark-up for indirect costs relating to manufacturing. No interest
charge is applied.

Allowance is made for the risk of obsolescence. A large part of the inventory relates to printing and copying machines which have been
returned by the customers at the end of the operational lease term. These machines are included at their original cost price less cumulative depreciation. The cumulative depreciation of Euro 82 million and Euro 85 million is part of the
allowances for obsolescence at November 30, 2005 and 2004, respectively.

In determining provisions for inventory obsolescence, the Company bases its
assumptions and estimates, and makes its judgment based on the historical usage of the various product categories versus current inventory levels and specific identified obsolescence risks (e.g., end of life of related machines, the remaining
service period of these machines and the impact of new environmental regulations).

Provision for doubtful trade accounts receivable

As of November 30, 2005 and 2004, trade accounts receivable amounted to Euro 572.7 million and Euro 451.9 million. Allowances for
doubtful trade accounts receivable amount to Euro 57.5 million and Euro 54.0 million at November 30, 2005 and 2004, respectively.

The
Companys trade accounts receivable reflect a broad customer base nationally as well as internationally. The Company routinely assesses the financial strength of its customers. As a consequence, concentrations of credit risk are limited.

In determining allowances for doubtful trade accounts receivable the Company bases its assumptions and estimates, and makes its judgment based on ageing
and specific developments regarding the customers (e.g., creditworthiness and market developments). The allowance for doubtful accounts is reviewed periodically to assess the adequacy of the allowance.

Determination of appropriate revenue recognition treatment

Accounting for leases of machines and other equipment involves making complex assumptions and significant judgments. If a lease is accounted for as an operating lease, the Company recognizes revenue from the rental of
the machines over the lease term. If a lease is accounted for as a financing or capital lease, the Company recognizes the revenue from the sale of the machine at the beginning of the lease term and interest income from the financing of the machine
over the lease term.

Under Dutch GAAP, classification of leases as financing leases is based on the extent to which risks and rewards incident to
ownership of a leased asset are transferred to the lessee. Under U.S. GAAP, at least one of the following criteria is required to be met in order to account for a lease as a financing lease as opposed to an operating lease:



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| |  |  | ownership transfers by the end of the lease term;
| | - |  | -------------------------------------------------



| |  |  | the lessee has a bargain purchase option for the machine at the end of the lease term;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | the lease term is equal to or greater than 75% of the economic life of the machine; or
| | - |  | --------------------------------------------------------------------------------------



| |  |  | the present value of the minimum lease payments is equal to or greater than 90% of the fair market value of the machine.
| | - |  | ------------------------------------------------------------------------------------------------------------------------

Under U.S. GAAP, the economic life of the machine and the fair value of the machine at the beginning and the end of the lease term are estimated. The estimates are based
upon our historical experience with the economic lives of our equipment. In Océs experience, the most objective measure of the economic life of a machine is the original contract term because most equipment is returned by lessees at or
near the end of the contractual term. The predominant contractual lease term for Océs principal products is five years and only a small percentage of Océs leases are for original terms longer than five years. Accordingly,
Océ has determined the economic life of most of its products to be five years. Océ believes that five years is representative of the period during which a machine is expected to be economically usable, with normal repairs and
maintenance, for the purpose for which it was intended at the inception of the lease. Under Océs current product portfolio, generally a non-cancelable lease of 45 months or more would qualify as a financing lease.

At the beginning of a lease term, Océ also estimates the fair market value of the machine and the residual value of the machine at the end of the lease term.
Océ determines the residual value of a machine at the end of the lease term based on its forecasts of supply and demand for similar products, its expected date of retirement of the product, future product launch plans, the term of the lease,
customer behavior, re-manufacturing strategies, competition and technological changes. Because the Company is the developer, manufacturer and servicer of its products, the Company does not believe it has any significant risks to recovery of its
recognized residual values.

In addition, the Company sells its equipment and services on a stand-alone basis and also enters into bundled arrangements
that contain multiple deliverable elements. These multiple element arrangements typically include equipment, services, supplies and financing components for which the customer pays a single defined price for all elements. These arrangements
typically also include a variable service component for copy volumes in excess of a stated minimum. When separate prices are listed in these multiple element arrangements with Océs customers, they may not be representative of the fair
values of those elements because the prices of the different components of the arrangement may be altered in customer negotiations, although the aggregated consideration may remain the same. Therefore, revenues under these arrangements are allocated
based upon estimated fair values of each element. The fair value of each element is estimated based on a review of a number of factors including average selling prices for the elements when they are sold on a stand-alone basis. The average selling
prices are based on managements best estimates of market conditions and competitive pricing considerations. The principal change in estimate relating to such revenue allocations among multiple elements is made with respect to the estimated
fair value of those elements and their related margins. The margins of maintenance and interest percentages are based on an arms length approach. This is a significant factor considered in Océs revenue allocations process along
with other factors, such as pricing changes and customer discounts, which also affect the overall allocation process.

Capitalization
of research and development expenses

In fiscal year 2005, Océ spent Euro 193 million on research and development (2004: Euro 207
million).

Product development expenses are capitalized if they meet the criteria of an identifiable project that is expected to generate economic benefits
in the future and whose manufacturing cost can be reliably measured.

In determining the development expenses to be capitalized the Company bases its
assumptions and estimates, and makes it judgment based on the expected future cash flows generated by the products which are the result of the current research and development expenses. Other important estimates in this assessment process are the
required internal rate of return and the decision as to where research turns into development.

Identifying expenses in connection
with restructuring

In December 2004, Océ in the United States announced that the business activities of Océ Display Graphics Systems
Inc., which was headquartered in San Jose, California, will be taken over by the Océ business in Canada. The related restructuring costs amounted to Euro 2.0 million. In November 2005 the Company announced a restructuring in Europe which will
result in the reduction of approximately 500 jobs. Measures have also been taken in the United States to increase profitability. In part, these run in parallel with the integration of Imagistics. The restructuring and integration costs relate to
personnel costs and costs for future lease obligations. In January 2006, the Company announced a similar restructuring in the United States



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in connection with its integration of Imagistics into the Océ Group which will result in the reduction of approximately 250 jobs.

Under Dutch GAAP and U.S. GAAP, restructuring expenses are accrued based on the similar criteria. However the measurement of a liability for one-time termination
benefits under U.S. GAAP differs from Dutch GAAP. Under U.S. GAAP, SFAS No. 146 Accounting for Costs Associated with Exit or Disposal Activities, the measurement of a liability for one-time termination benefits depends on whether
employees are required to render service until they are terminated in order to receive the termination benefits. If this period extends beyond the minimum retention period, the liability shall be determined at its fair value at termination date and
is recognized ratably over the future service period. Under Dutch GAAP the liability is measured at its fair value and is fully recognized at the communication date.

The recognition of a liability regarding the integration costs in connection with onerous rent contracts differs under U.S. GAAP from Dutch GAAP. Under U.S. GAAP, SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, a liability for costs that will continue to be incurred under a contract for its remaining term without economic benefit to the entity is recognized when the Company ceases to use the right conveyed
by the contract. For rental contracts the premises actually need to be vacated in order for the liability to be recognized. Under Dutch GAAP, a provisions for onerous contracts is determined as the unavoidable cost associated with contractual
commitments, reduced by the net positive cash flows, if any, and when management has commited to a firm plan.

Determining
Contingencies

The Companys determination of the treatment of contingent liabilities in its Consolidated Financial Statements is based on
Océs view of the expected outcome of the contingency. Océ consults with legal counsel on matters related to litigation and other experts both within and outside its group with respect to matters in the ordinary course of
business. Océ accrues a liability if an adverse outcome is probable and the amount can be reasonably estimated. If either the likelihood of an adverse outcome is only reasonably possible or an estimate is not determinable, Océ
discloses any matter that it believes is material in a note to the financial statements. Actual outcome may differ from Océs assessment and could have an adverse impact on its financial condition and results of operations.

The Company is involved in a number of legal actions. Based on currently available information and legal opinion, we believe that the outcomes of these legal actions
will either have no significant adverse effect on the financial position of the Company, or that any possible adverse effects are adequately reflected in the provisions.

Valuing deferred taxes

As part of the process of preparing the Companys Consolidated Financial
Statements, Océ is required to estimate its income taxes in each of the jurisdictions in which it operates. This process involves estimating our actual current tax exposure in the relevant jurisdictions and assessing temporary differences
resulting from differing treatment of balance sheet items, such as leases. These differences result in deferred tax assets and liabilities, which are included within Océs consolidated balance sheet. Océ must then assess the
likelihood that the deferred tax assets will be recovered from future taxable income. If recovery, in whole or in part, is not likely, Océ does not recognize these assets or Océ only recognizes a portion of these assets, as
appropriate. To the extent the likely recovery of deferred tax assets changes, the Company includes an expense or a gain within the tax charge on the statement of operations for the relevant period.

Significant management judgment is required in determining the provision for income taxes, the deferred tax assets and liabilities and the valuation of deferred tax
assets. In the event that actual results differ from these estimates due to future changes in income tax laws or results from final review of our tax returns by taxing authorities, Océ may need to establish an additional valuation allowance
which could impact our financial position and results of operations.

New accounting pronouncements

Dutch GAAP

During 2005, Book 2 of the
Netherlands Civil Code was changed significantly backdated to January 1, 2005. These changes were needed to align Dutch law to modernized EU directives, as well as to enable non-listed companies to apply IFRS in their (consolidated) annual
accounts. The main changes relate to various possibilities to apply IFRS in both consolidated and entity accounts and the possibility to account for a broad range of assets and liabilities at fair value. Given the fact that Océs
financial year started on December 1, 2004, these changes have not impacted the 2005 Dutch GAAP financial statements of



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the Company. The Company will prepare IFRS compliant financial statements for the first time for the financial year starting December 1, 2005. The
opening balance sheet date is December 1, 2004.

IFRS

After March 31, 2004 (the date of the stable platform) the IASB changed 17 of the existing standards and issued another seven new standards. Other than certain amendments to the accounting for
financial instruments, all new standards will be effective after 2005. Not all the new standards and interpretations have been endorsed by the European Union yet.

U.S. GAAP

In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS
No. 151, Inventory Costsan amendment of ARB No. 43, Chapter 4 (SFAS No. 151). This Statement amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for
abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). This Statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of abnormal. In
addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The provisions of this Statement shall be effective for inventory costs incurred
during fiscal years beginning after June 15, 2005. The Company is currently in the process of evaluating the impact of SFAS No. 151.

In December
2004, the FASB issued SFAS 153 regarding exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29. The guidance in APB Opinion No. 29, Accounting for Nonmonetary Transactions, is based on the principle that exchanges of
nonmonetary assets should be measured based on the fair value of the assets exchanged. The guidance in that Opinion, however, included certain exceptions to that principle. This Statement amends Opinion 29 to eliminate the exception for nonmonetary
exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are
expected to change significantly as a result of the exchange. It is expected that SFAS 153 will have no impact on the Companys financial statements.

In December 2004, the FASB issued a revision of FASB statement No. 123, Accounting for Stock-Based Compensation (SFAS No. 123(R)). This statement supersedes Accounting Principles Board (APB) Opinion
No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance. SFAS No. 123(R) addresses the accounting for share-based payment transactions in which a company receives employee services in exchange for either
equity instruments of the company or liabilities that are based on the fair value of the companys equity instruments or that may be settled by the issuance of such equity instruments. SFAS No. 123(R) eliminates the ability to account for
share-based compensation transactions using the intrinsic method that we currently use and generally requires that such transactions be accounted for using a fair-value-based method and recognized as expense in our Consolidated Statement
of Operations. In January 2005, the SEC issued Staff Accounting Bulletin No. 107, which provides supplemental implementation guidance for SFAS No. 123(R). In April 2005, the SEC extended the compliance requirement date of SFAS
No. 123(R), with the result that this requirement will be effective for Océ beginning December 1, 2005. We are in the process of evaluating SFAS No. 123(R), and its adoption may have a material impact on our results of
operations. Uncertainties, however, including our future stock-based compensation strategy, stock price volatility, selection of stock option-pricing model, estimated forfeitures and employee stock option exercise behavior, make it difficult to
determine the actual impact.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections (SFAS
No. 154) which replaces Accounting Principles Board Opinions No. 20 Accounting Changes and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements  An Amendment of APB Opinion
No. 28. SFAS No. 154 provides guidance on the accounting for and reporting of accounting changes and error corrections. SFAS No. 154 establishes retrospective application, or application as of the earliest practicable date, as
the required method for reporting a change in accounting principle and restatement with respect to the reporting of a correction of an error. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years
beginning after December 15, 2005.

In June 2005, the FASB issued a FASB Staff Position (FSP) interpreting FASB Statement 143,
Accounting for Asset Retirement Obligations, specifically FSP 143-1, Accounting for Electronic Equipment Waste Obligations (FSP 143-1). FSP 143-1 addresses the accounting for obligations associated with Directive 2002/96/EC,
Waste Electrical and Electronic Equipment, which was adopted by the European Union (EU). The FSP provides guidance on how to account for the effects of the Directive but only with respect to historical waste associated with products placed on the
market on or before August 13, 2005. FSP 143-1 is effective the later of the first reporting period ending after June 8, 2005, or the date of the adoption of the law by the applicable EU-member country. The adoption of FSP 143-1 did not
have a material impact on the Consolidated Financial Statements.



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In June 2005, the EITF reached a consensus on Issue No. 05-06, Determining the Amortization Period for
Leasehold Improvements (EITF No. 05-06). EITF No. 05-06 provides guidance for determining the amortization period used for leasehold improvements acquired in a business combination or purchased after the inception of a lease
(collectively referred to as subsequently acquired leasehold improvements). EITF No. 05-06 provides that the amortization period used for the subsequently acquired leasehold improvements to be the lesser of (a) the subsequently acquired
leasehold improvements useful lives, or (b) a period that reflects renewals that are reasonably assured upon the acquisition or the purchase. EITF No. 05-06 is effective on a prospective basis for subsequently acquired leasehold
improvements purchased or acquired in periods beginning after the date of the FASBs ratification, which was on June 29, 2005.

A. Operating
Results

The following information provides an analysis of the Companys total revenue, gross margin, operating income and net income for each of
the three most recently completed fiscal years. For further discussion and analysis of the Companys results and factors that had an impact on results, as well as trends and developments, see Item 4.B, Business Overview, and
Item 5, Executive Summary.

Results of fiscal year 2005 compared to fiscal year 2004

Revenues

Total revenues in 2005 were Euro
2,677 million compared to total revenues in 2004 of Euro 2,652 million. This increase of 0.9% was mainly achieved as a result of the acquisition of Imagistics (+1.4%) and of exchange rate effects (-0.4%).

Revenues from commercial activities in 2005 were Euro 2,641 million compared to Euro 2,584 million in 2004, which represents an increase of 2.2%. Revenues from
financial activities were Euro 36 million in 2005 compared to Euro 68 million in 2004.

Non-recurring revenues (which are revenues from the sale
of machines, software and professional services) in 2005 were Euro 794 million, compared to non-recurring revenues in 2004 of Euro 735 million, which is a growth of 6.9 % on an organic basis. Recurring revenues (which are revenues
from the sale of services, materials, rentals, interest and business services) were Euro 1,883 million in 2005 compared to Euro 1,917 million in 2004, which is a decline of 2.8% on an organic basis.

Revenues of the DDS business unit were Euro 1,843 million in 2005 compared to Euro 1,834 million in 2004, which is a decline of 1.1 % on an organic basis.
Within the DDS business unit, non-recurring revenues were Euro 526 million in 2005 compared to Euro 487 million in 2004, which is a growth of 6.4 % on an organic basis. The growth in sales was achieved on the basis of products that
Océ launched in the past two years. In March 2006 several new products will be launched during the Océ Open House event; these are expected to generate new impetus for sales. Recurring revenues in the DDS business unit were Euro
1,317 million in 2005 compared to Euro 1,347 million in 2004, which is a decline of 3.8 % on an organic basis.

The development of recurring
revenues stabilized in the fourth quarter of 2005, due to the fact that the increase in maintenance contracts for digital machines now largely compensates for the decreased servicing work on analogue copiers. However, in view of the large number of
new machine placements in 2005, revenues from services are expected to increase in 2006.

Color is becoming increasingly important in DDS. In 2005, the
Océ CPS800/900 booked the strongest growth in sales compared to all other DDS product lines. The number of machines installed on customer premises has meanwhile increased to such an extent that revenues from servicing contracts for color
machines form a solid basis for the recovery in the recurring revenues.

Outsourcing of document management activities is still an important trend in the
market. This trend helped the Business Services group to achieve growth again in the fourth quarter of 2005.

Revenues of the WFPS business unit were Euro
834 million in 2005 compared to Euro 818 million in 2004, which is a growth of 2.1% on an organic basis. Within the WFPS business unit, non-recurring revenues were Euro 268 million in 2005 compared to Euro 248 million in 2004,
which is a growth of 7.8% on an organic basis. In the technical documents market, Océ is achieving growth with both black-and-white and color systems. Sales of color printers in the graphics market have



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shown a strong increase. In 2006, Océ will be adding several new color printers to its product line in response to the trend towards the increasing
use of color in the wide format market.

Recurring revenues in the WFPS business unit were Euro 566 million in 2005 compared to Euro 570 million
in 2004, which is a decline of 0.3% on an organic basis.

Revenues from maintenance contracts and sales of toner and ink cartridges made a strong
contribution to total income.

Gross Margin

Gross margin was Euro 1,072 million in 2005 compared to Euro 1,103 million in 2004, and represents an equivalent of 40% of the Companys total revenues in 2005 compared to 41.6% of the Companys
total revenues in 2004. Gross margin as percentage of total revenues in 2005 was 1.6% lower than in 2004. Of the decrease in the gross margin, 1.4% is attributable to the decrease in interest income as a result of the outsourcing of the financial
lease portfolio and the decrease of the profit from the sale of a portion of the existing financial lease portfolio. The volume/mix effect amounted to +0.1% and the hedging effect was -0.3%.

Operating Expenses

Total operating expenses
consist of four types of expenses: selling expenses, research and development expenses, general and administrative expenses and impairment costs. In 2005, operating expenses (before release pension provision and restructuring costs 2005) were Euro
997 million in 2005 compared to Euro 993 million in 2004, which represented 37.2% and 37.4% of the Companys total revenues in 2005 and 2004, respectively. The Euro 4 million increase was primarily due to the consolidation of the
results of Imagistics for November 2005. The table below shows the impact on the cost of sales and operating expenses of the release of the pension provision and the restructuring costs:



|                                    |  |                  |  |                    |  |        
|----------------------------------- |  | ---------------- |  | ------------------ |  | -------
|                                    |  | pensionprovision |  | restructuringcosts |  | total  
|(in thousands)                      |  | Euro             |  | Euro               |  | Euro   
|Cost of sales                       |  | -8,029           |  | 8,029              |  |       
|Selling expenses                    |  | -14,185          |  | 10,185             |  | -4,000 
|Research and development expenses   |  | -21,366          |  | 6,866              |  | -14,500
|General and administrative expenses |  | -24,780          |  | 8,045              |  | -16,735
|                                    |  |                  |  |                    |  |        
|Total                               |  | -68,360          |  | 33,125             |  | -35,235
|                                    |  |                  |  |                    |  |        

Selling Expenses

Selling expenses were Euro 617 million in 2005 compared to Euro 615 million in 2004, which represents 23.0% of the Companys total revenues in 2005 compared to 23.2%, of the Companys total
revenues in 2004. The decrease in selling expenses as a percentage of total revenues in 2005 compared to 2004 is the result of the exceptional items.

Before release of the pension provision and restructuring costs, selling expenses were Euro 621 million in 2005, which represented 23.2% of the Companys total revenues in 2005.

Research and Development

Expenditures in
research and development were Euro 196 million in 2005 compared to Euro 208 million in 2004, which represents 7.3% of the Companys total revenues in 2005 compared to 7.8% of the Companys total revenues in 2004. Before release
of the pension provision and restructuring costs, research and development expenses were Euro 210 million in 2005, which represented 7.8% of the Companys total revenues in 2005. The Company incurred a repayment liability of Euro
3 million in 2005 compared to Euro 2 million in 2004 with respect to a governmental development credit for a color printer that was launched in 2001. The Company may have additional repayment liabilities in future years depending on the
future revenues of this color printer. For a further discussion of these governmental credits, see Notes 0 and 14 to the Consolidated Financial Statements.



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General and Administrative Expenses

The Companys general and administrative expenses were Euro 149 million in 2005 compared to Euro 162 million in 2004, which represents 5.6% of the
Companys total revenues in 2005 compared to 6.1% of the Companys total revenues in 2004. These expenses decreased by 8.3% from 2004 to 2005.

Before release of the pension provision and restructuring costs, general and administrative expenses were Euro 165 million in 2005, which represented 6.2% of the Companys total revenues in 2005.

Impairment

An impairment of intangible and
tangible fixed assets occurred in 2005 and 2004 of Euro 0.6 million and Euro 7.9 million, respectively. These impairments relate to a part of the fixed assets of Arkwright Incorporated for an amount of Euro 0.6 million and, for 2004,
the goodwill of Océ Display Graphics Systems Inc. for an amount of Euro 7.0 million, the goodwill of Océ Mexico S.A. de C.V. for an amount of Euro 0.2 million, the customer base of Océ-Finland Oy for an amount of Euro
0.1 million, the customer base of Océ Denmark A.S. for an amount of Euro 0.2 million and a part of the fixed assets of Océ Display Graphics Systems Inc. for an amount of Euro 0.4 million.

In 2005 the discontinuation of certain activities led to the impairment of tangible fixed assets. In 2004, the trigger for impairment of the intangible fixed assets was
lower positive cash flow than previously expected.

Operating Income

Operating income was Euro 110 million in both 2005 and 2004, which represents 4.1% of the Companys total revenues in 2005 and 4.2%, of the Companys total
revenues in 2004.

Before release of the pension provision and restructuring costs, operating income was Euro 75 million in 2005, which represented
2.8% of the Companys total revenues.

Financial Expenses (Net)

The Companys financial expenses (net) were Euro 18 million in 2005 and 2004. The Companys financial expenses increased significantly in the fourth
quarter of 2005 compared to the prior quarters as a result of the borrowings that the Company made in connection with the acquisition of Imagistics. The Companys net debt at November 30, 2005 was Euro 754 million compared to Euro
168 million at November 30, 2004.

Income Taxes

The Companys effective income tax rate was 12.7% in 2005 compared to 13.2% in 2004. Over the past two years, apart from the fact that more income has been generated in countries with a relatively low tax rate,
the decrease in the Companys effective income tax rate is a result of several factors including the definitive settlement of certain tax risks in 2004, which resulted in the release of previously accrued provisions for income taxes, and in
2005, the Company receiving a research and development tax credit that favorably impacted the 2005 effective tax rate.

Net Income

Net income was Euro 79 million in 2005 compared to Euro 78 million in 2004. On a basic earnings per ordinary share basis, net income in
2005 was Euro 0.92 per share compared to Euro 0.89 per share in 2004.

Impact of Foreign Currency Fluctuations

As a global business, foreign currency fluctuations can have a positive or negative effect on the Companys financial results. As a
multinational company, Océs Consolidated Financial Statements are effected by foreign currency fluctuations in two respects: transaction exposures and translation exposures. Transaction exposures
arise when net cash flows occur in currencies other than the Euro. For instance, a transaction exposure arises when products that are developed and manufactured in the Euro-zone (and the corresponding expenses are recorded in Euros) are sold into
the United States (and the corresponding revenues are recorded in U.S. dollars). Translation exposures arise when values in currencies other than the Euro (such as a minority equity interest or shareholders equity) are measured
over time but are converted into Euros based on a conversion rate on a certain date (such as November 30, 2005).

For example, during 2005, the U.S.
dollar was slightly weaker on average than in 2004. However, the exchange rate of the U.S. dollar at November 30, 2005 was substantially higher than at November 30, 2004. Compared to the Companys results for 2004, this had the
following impact on income and on the Companys balance sheet:



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|                                                      |  |      
|----------------------------------------------------- |  | -----
|(In millions of Euros)                                |  |      
|Translation result                                    |  | +0.5 
|Transaction result                                    |  | -1.6 
|Net influence of hedging (2004 versus 2005)           |  | -7.6 
|                                                      |  |      
|Total influence of exchange rates on operating income |  | -8.7 
|                                                      | 
|On the balance sheet the translation result was:      |  |      
|Total assets                                          |  | +83.8
|Total shareholders equity                            |  | +36.6

With respect to transaction exposures, Océ attempts to offset the effects of foreign exchange rate
fluctuations in the long term relating to the sales of its machines by incurring expenses and buying components of the machines and related supplies, where possible, in the same currency in which the revenues from the sales of the machines are
achieved (matching principle) and by raising the local added value content. The relocation of part of the Companys manufacturing activities to the Far East will help to reduce the Companys net level of the foreign exchange
exposure since these goods will be paid for in U.S. dollars. In addition, Océ attempts to offset the effects of foreign exchange rate fluctuations relating to the sales of its services by incurring payroll expenses in the same currency in
which the revenues are achieved. Finally, the Company also attempts to offset the short-term consequences of foreign exchange fluctuations through an active currency management policy. The Companys current policy is to hedge on a rolling
twelve month basis up to 80% of its anticipated foreign currency net transaction exposure (principally, in U.S. dollar, Japanese Yen and Pounds Sterling). For this purpose, the Company uses a number of financial instruments, particularly forward
foreign exchange contracts, which are listed in Note 24 to the Consolidated Financial Statements and further described in Item 11, Quantitative and Qualitative Disclosures about Market Risk. At November 30, 2005, the contract
value of forward foreign exchange contracts was Euro 237 million. The policy that is pursued therefore provides cover for the transaction risk over the coming 12 months. However, if the Euro remains strong for a prolonged period, this will have a
negative effect on Océs results in view of the limitation of the period during which hedging takes place.

Océ does not hedge against
its translation exposures because it believes that this is a risk that is an inherent part of doing business as a multinational company.

Results of
fiscal year 2004 compared to fiscal year 2003

Revenues

Total revenues in 2004 were Euro 2,652 million compared to total revenues in 2003 of Euro 2,769 million. Total revenues in 2004 were 4.2% lower than in 2003, which was primarily attributable to adverse exchange
rate effects.

Revenues from product sales amounted to Euro 1,564 million in 2004 compared to Euro 1,553 million in 2003, and revenues from
product sales increased by 0.7% from 2003 to 2004. Earnings from rentals and service were Euro 1,020 million in 2004 compared to Euro 1,119 million in 2003, which was a decrease of 8.8%. Interest income from financial leases was Euro
68 million in 2004 compared to Euro 97 million in 2003, which was a 30.1% decrease from 2003 to 2004.

Revenues of the DDS business unit were
Euro 1,834 million in 2004 compared to Euro 1,907 million in 2003. Although revenues of the DDS business unit increased organically by 0.3% from 2003 to 2004, this increase was offset by adverse exchange rate effects. Sales of machines in
the DDS business unit increased organically by 13% from 2003 to 2004 which was primarily attributed to the success of the Companys renewed product offerings.

Revenues of the WFPS business unit were Euro 818 million in 2004 compared to Euro 862 million in 2003. The revenue of the WFPS business unit decreased organically by 1.0% from 2003 to 2004, which was primarily attributable to the
decrease in revenues from media, price pressure and lower lease revenues.

Gross Margin

Gross margin was Euro 1,103 million in 2004 compared to Euro 1,165 million in 2003, and represents an equivalent of 41.6% of the Companys total revenues
in 2004 compared to 42.1% of the Companys total revenues in 2003. Gross margin in 2004 was 0.5% lower than in 2003. This decrease was attributable to the effect of the Companys foreign currency hedging.



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Operating Expenses

Total operating expenses were Euro 993 million in 2004 and Euro 1,040 million in 2003. This decrease is the cumulative result of the factors described below with respect to selling expenses, research and
development, general and administrative expenses and impairment.

Selling Expenses

Selling expenses were Euro 615 million in 2004 compared to Euro 624 million in 2003, which represents 23.2%, of the Companys total revenues in 2004
compared to 22.5% of the Companys total revenues in 2003. The reduction in selling expenses from 2003 to 2004 was the result of exchange rate effects. The increase in selling expenses as a percentage of total revenues in 2004 compared to 2003
is the result of investments in the sales force.

Research & Development

Expenditures in research and development were Euro 208 million in 2004 compared to Euro 208 million in 2003, which represents 7.8% of the Companys total
revenues in 2004 compared to 7.5% in 2003. The Company incurred a repayment liability of Euro 2 million in 2004 compared to Euro 1 million in 2003 with respect to a governmental development credit for a color printer that was launched in
2001. The Company may have additional repayment liabilities in future years depending on the future revenues of this color printer. For a further discussion of these governmental credits, see Notes 0 and 14 to the Consolidated Financial Statements.

General and Administrative Expenses

The Companys general and administrative expenses were Euro 162 million in 2004 compared to Euro 183 million in 2003, which represents 6.1% of the Companys total revenues in 2004 compared to 6.6% of the Companys
total revenues in 2003. These expenses decreased by 11.6% from 2003 to 2004.

Impairment

In 2004 an impairment of intangible and tangible fixed assets occurred of Euro 7.9 million which related to the goodwill of Océ Display Graphics Systems Inc.
for an amount of Euro 7.0 million, the goodwill of Océ Mexico S.A. de C.V. for an amount of Euro 0.2 million, the customer base of Océ-Finland Oy for an amount of Euro 0.1 million, the customer base of Océ-Danmark
a/s. for an amount of Euro 0.2 million and a part of the fixed assets of Océ Display Graphics Systems Inc. for an amount of Euro 0.4 million. In 2003 an impairment of intangible and tangible fixed assets occurred of Euro
25.2 million which related to the goodwill of Practical Print Solutions for an amount of Euro 13.5 million, to the customer base and technology of Océ Display Graphics Systems Inc. for an amount of Euro 9.3 million and to a
part of the fixed assets of Arkwright of Euro 2.4 million.

Operating Income

Operating income in 2004 was Euro 110 million compared to Euro 125 million in 2003 , which represents 4.2%, of the Companys total revenues in 2004 and
4.5% of the Companys total revenues in 2003. Operating income decreased 11.6% from 2003 to 2004. This decrease was primarily attributable to exchange rates partially offset by lower impairment costs.

Financial Expenses (Net)

The Companys
financial expenses (net) were Euro 18 million in 2004 compared to Euro 31 million in 2003. The decrease in financial expenses (net) from 2003 to 2004 was caused by a reduction in the outstanding amount of the Companys loans partially
offset by slightly higher interest rates. The net debt was Euro 168 million in 2004 compared to Euro 494 million in 2003.

Income Taxes

The Companys effective income tax rate was 13.2% in 2004 compared to 32.4%. The decrease in the Companys
effective income tax rate from 2003 to 2004 was due primarily to the release of a provision of Euro 7 million as a result of the definitive settlement of the tax risks to which these provisions related and the fact that relatively more profit
was achieved in countries with a relatively low tax rate.



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Net Income

Net income was Euro 78 million in 2004 compared to Euro 61 million in 2003, which was an increase of 27.0% from 2003 to 2004. On a basic earnings per ordinary share basis, net income in 2004 increased by
28.6% from 2003 to Euro 0.89 per share.

Breakdown of commercial and financial activities

The Companys revenues are derived from two principal activities: commercial activities (revenue derived from selling machines, software and services) and financial
activities (revenue derived from offering financial leases). Historically, in assessing the financial position of the Company as a whole, a distinction was made between these two types of activities.

The revenue from financial activities is derived from the interest from financial leases. The costs of financial activities comprise the costs of financing the lease
portfolio and the administrative and selling expenses and the related bad debt risk. Where the financial activities are financed from interest-bearing capital, it has been assumed that this has been done fully on a fixed-interest basis. The costs of
financing are then allocated on the basis of the average amount of fixed interest-bearing capital. For the administrative and selling expenses, including provisions for doubtful accounts, a cost level has been applied which corresponds to that of
external captive lease companies with similar activities, which publish annual accounts. For the financing of the financial activities the Companys policy is to maintain a ratio of 0.15 between the equity and the balance sheet total. This
ratio is a standard used by captive companies in the financial services industry which publish their own annual accounts. The remaining part of the equity is allocated to the commercial activities.

As of November 30, 2005, the Company sold approximately two thirds of its financial lease portfolio to third parties and the proceeds from this sale have been
invested in the Companys commercial core activities (primarily, the acquisition of Imagistics). As a result, the relative importance and size of the Companys financial activities has decreased while the relative importance and size of
the Companys commercial activities has increased. For this reason, after 2005, the Company will no longer provide a separate analysis of the breakdown of these activities for 2006 and thereafter.

The following table sets forth a breakdown of the results in Euros from commercial activities compared to revenue from financial activities:



|                                      |  |            |  |       |  |       |  |      
|------------------------------------- |  | ---------- |  | ----- |  | ----- |  | -----
|(In millions)                         |  |            |  | 2003  |  | 2004  |  | 2005 
|                                      |  |            |  | Euro  |  | Euro  |  | Euro 
|Revenue                               |  | Commercial |  | 2,672 |  | 2,584 |  | 2,641
|                                      |  | Financial  |  | 97    |  | 68    |  | 36   
|                                      |  |            |  |       |  |       |  |      
|                                      |  | Total      |  | 2,769 |  | 2,652 |  | 2,677
|                                      |  |            |  |       |  |       |  |      
|Operating income                      |  | Commercial |  | 56    |  | 62    |  | 92   
|                                      |  | Financial  |  | 69    |  | 48    |  | 18   
|                                      |  |            |  |       |  |       |  |      
|                                      |  | Total      |  | 125   |  | 110   |  | 110  
|                                      |  |            |  |       |  |       |  |      
|Net income                            |  | Commercial |  | 36    |  | 53    |  | 74   
|                                      |  | Financial  |  | 25    |  | 25    |  | 5    
|                                      |  |            |  |       |  |       |  |      
|                                      |  | Total      |  | 61    |  | 78    |  | 79   
|                                      |  |            |  |       |  |       |  |      
|Cash flow before financing activities |  | Commercial |  | 195   |  | -9    |  | -553 
|                                      |  | Financial  |  | 133   |  | 379   |  | 46   
|                                      |  |            |  |       |  |       |  |      
|                                      |  | Total      |  | 328   |  | 370   |  | -507 
|                                      |  |            |  |       |  |       |  |      

B. Liquidity and Capital Resources

Sources of Cash

The Company currently expects
to fund operations and capital expenditures from a combination of cash flows from operating activities, available cash and cash equivalent balances, availability under current credit facilities and cash generated from the sale of the Companys
financing lease portfolio.



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Cash flows provided by operating activities were Euro 164 million for 2005 compared to Euro 137 million for 2004 and Euro
340 million for 2003. The increase in cash flows from operating activities in 2005 resulted mainly from lower inventories and higher trade accounts payable. At November 30, 2005, the Company had cash available amounting to Euro 143 million compared
to Euro 313 million for November 30, 2004 and Euro 56 million at November 30, 2003. This decrease from 2004 to 2005 is attributable primarily to the acquisition of Imagistics in October 2005.

At November 30, 2005, Océ and its Dutch subsidiaries had available Euro 795 million of credit and the Companys subsidiaries outside of the
Netherlands had available Euro 144 million of credit. The credit facilities consist of short term bridge loans (US$ 750 million) maturing March 2006 (subject to a three month extension) and multi year stand-by credit contracts expiring up to
October 2008. At November 30, 2005, the used portion of these credit facilities amounted to Euro 489 million of short term debt and Euro 93 million of long term debt.These lines of credit expire between March 2006 and October
2008.

As further discussed in Item 4, the Company is in the process of outsourcing the financing of its lease activities to third party companies,
which involves transferring its current lease portfolio to these third party companies in exchange for payments equal to the fair value of the portfolio (which, at a minimum, will be the book value) and placing new financial leases directly with the
Companys vendor lease partners or selling them to the vendor lease partners shortly after origination. In connection with this process, the Company intends to continue to transfer its lease portfolio to third parties under various private
label program agreements. The transfer has been gradual and based on a country by country analysis. At the end of 2005, approximately two thirds of the existing lease portfolio had been completed. The Company intends to continue to outsource its
financial leasing portfolio in Europe, Asia and Australia in 2006.

Cash Flow from Investing Activities and Capital Expenditures

Cash flow from investing activities consists of capital expenditures (such as the acquisition of property, plants and equipment), the sale of the
financial lease portfolio and acquisitions or dispositions.

Cash flows from investing activities were Euro -671 million for 2005 (of which Euro
638 million relates to the acquisition of Imagistics), Euro +234 million for 2004 and Euro -12 million for 2003. Net capital expenditures were Euro 100 million for 2005 compared to Euro 83 million for 2004 and Euro
92 million for 2003. Capital expenditures increased in 2005 over 2004 due primarily to more investments in property, plant and equipment.

The Company
sold Euro 66 million of its financial lease portfolio to third parties in 2005 compared to Euro 312 million in 2004 and Euro 82 million in 2003.

In October 2005, the Company acquired Imagistics for an aggregate purchase price of Euro 638 million. To finance its acquisition of Imagistics, the Company borrowed an aggregate amount of U.S. dollar 750 million in short term bridge
loans, which have a maximum maturity date of nine months (subject to a three month extension). The Company is in the process of replacing the short term bridge loans with longer term arrangements, which the Company intends to complete prior to the
maturity date of the bridge loans.

Aggregate cash flows used in financing activities were Euro -340 million, Euro 114 million and Euro
295 million for 2005, 2004 and 2003, respectively. The Companys debt position is comprised of borrowings under bank lines of credit, short-term borrowings, and current and long-term portions of debt. As noted above, the Company incurred
significant debt in connection with the acquisition of Imagistics, but a significant portion of this debt was funded indirectly through increased borrowing capacity created by repayment of debt in 2004 and 2003 with the proceeds from the
Companys sale of its financial lease portfolio. In 2004, the Company repaid approximately Euro 60 million outstanding debt and in 2003 the Company repaid approximately Euro 240 million of outstanding debt. As of November 30,
2005, the Companys net debt was Euro 754 million compared to Euro 168 million and Euro 494 million, as of November 30, 2004 and 2003, respectively. The weighted-average interest for 2005 (including cash and cash
equivalents) of 5.7% increased from 4.7% in 2004, which increased from 4.4% in 2003.

The Company paid dividends of Euro 52 million during 2005,
compared to Euro 52 million during 2004 and Euro 52 million during 2003.

The Company purchases its Ordinary Shares from time to time to cover
obligations under stock option plans. In 2005, Océ purchased 116,430 of its Ordinary Shares for an aggregate price of Euro 1.5 million. In 2004 Océ purchased none of its Ordinary Shares. As of November 30, 2005, the Company held
3,564,872 Ordinary Shares in treasury, and it has no current intention of selling those shares other than in connection with its obligations under stock option plans.



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As of November 30, 2005, the Companys principal sources of liquidity consist of Euro 143 million of cash
and cash equivalents and Euro 939 million available borrowings under credit lines. The Company also expects to raise cash from the sale of the remaining portion of its financial lease portfolio in Europe, Asia and Australia in 2006. Finally,
the Company may from time to time raise additional cash through debt and equity markets. The Companys liquidity is affected by many factors, some of which are based on the normal ongoing operations of its business, the industry in which it
operates and the uncertainties of global economies. Although the Companys cash requirements will fluctuate based on the timing and extent of these factors, management believes that cash generated from operations, together with the liquidity
provided by existing cash balances, will be sufficient to satisfy the liquidity requirements for 2006. The Company expects capital expenditures in 2006 to be approximately Euro 115 million. In addition, the Company has for 2006 operating lease
commitments in an amount of approximately Euro 90 million. Finally, the Company expects that its interest expense will increase to Euro 49 million during 2006.

C. Research and Development

Research and development are critical to the success of the Company. The Company
employed 1,805 people in seven countries at the end of 2005 to engage in research and development activities (compared to approximately 1,868 and 1,928 employees at the end of 2004 and 2003, respectively). Océs research and development
activities are located in seven countries: the Netherlands, Germany, France, Belgium, Romania, Canada and the United States.

Océs strategy is
to develop machines that are more user-friendly, reliable and productive than competing products. In its search for alternative solutions over the years Océ has developed various innovative technologies of its own. These technologies are, at
the time of introduction into the market, leading-edge and have helped considerably to enhance the distinctive characteristics of Océs products.

Because of its long term focus on research and development, Océ possesses a broad range of technology for printing in black-and-white and in color. Océ currently focus on continuing to refine this technology and to develop new
technology. The most important developments at the present time are taking place in the area of printing technology (color and black-and-white) and software development.

Océ believes software development is essential to the success of its business in the future to make the link between its customers work process and the Océ machines. In the area of software
development Océ has rapidly implemented a number of upgrades and new releases to ensure that all components of its products connect and work well with each other.

Over the past five years, the Company has spent 6 to 7% of its total revenues on research and development. The following table sets forth the aggregate amounts spent in research and development over the past five
years:



|                        |  |                                   |   |  |                   
|----------------------- |  | --------------------------------- | - |  | ------------------
|Years endedNovember 30, |  | R&D expenditure(in million Euros) |   |  | Percent ofRevenues
|2001                    |  | 203                               |   |  | 6.3               
|2002                    |  | 215                               |   |  | 6.8               
|2003                    |  | 212                               |   |  | 7.7               
|2004                    |  | 207                               |   |  | 7.8               
|2005                    |  | 193                               | * |  | 7.2               



|* | Including Euro 15 million exceptional items (restructuring and pension provision).
|- | ----------------------------------------------------------------------------------

Excluding Imagistics, the Company spent approximately 7.3% of its total revenues on research and development in 2005. Research and development expenditures do not include substantial additional costs relating to the
participation of non-research and development personnel in research and development projects. In addition, research and development expenditures are net of (a) development credits advanced under a program of the Netherlands government which are
not repaid or charged to income until and unless the project for which the advance is made is commercially successful and (b) direct grants provided by the government of the Netherlands which are not required to be repaid. The development
credits and grants (net of provisions for repayment of prior development credits) were Euro -2.9 million in 2005, Euro -1.6 million in 2004, Euro +4.0 million in 2003, Euro +1.8 million in 2002 and Euro +3.7 million in 2001.



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D. Trends

The
Companys Board of Executive Directors takes the view that it is too early to give a forecast for 2006. They, however, believe that the Companys revenues in 2006 will increase as a result of the acquisition of Imagistics and organic
growth with respect to both recurring and non-recurring revenues.

However, the Companys Board of Executive Directors believes that savings derived
from the integration of Imagistics and from the restructurings in Europe and the United States, which were announced in 2005 and at the beginning of 2006, will result in a reduction in operating expenses by the end of 2006. However, the Company
expects that the reduction in operating expenses will be offset by an increase in additional investments in research and development and by amortization of intangible fixed assets.

In 2005, the Company continued the implementation of its in previous years announced plans to transfer parts of its manufacturing activities from the Netherlands to Central Europe and the Far East. The Company expects
that by the end of 2006, approximately half of the current production value in Venlo, the Netherlands will be produced in Asia. The Company intends this transfer to result in a reduction in manufacturing costs in 2006 and thereafter. The Company
expects that this transfer will be seamless to its operations and customers. Finally, in light of the Companys increased size as a result of the acquisition of Imagistics and the Companys increasing reliance on suppliers and contract
manufacturers, the Company intends to streamline and strengthen its logistics and purchasing organizations in 2006.

For a discussion of the trends for
each of the Companys business groups, see Item 4, Digital Document Systems or DDS Business Unit and Wide Format Printing Systems or WFPS Business Unit.

E. Off-balance sheet arrangements

There are no off-balance sheet
arrangements that have or are reasonably likely to have a current or future effect on the Companys financial condition, results of operations or cash flows that are material to investors.

F. Tabular disclosure of contractual obligations



|                                                                                                                        |  |                       |  |                  |  |           |  |           |  |                 
|----------------------------------------------------------------------------------------------------------------------- |  | --------------------- |  | ---------------- |  | --------- |  | --------- |  | ----------------
|                                                                                                                        |  | Payment due by period
|                                                                                                                        |  | Total                 |  | Less than 1 year |  | 1-3 years |  | 3-5 years |  | More than5 years
|Contractual Obligations                                                                                                 |  |                       |  |                  |  |           |  |           |  |                 
|Long-Term Debt Obligations                                                                                              |  | 872                   |  | 652              |  | 211       |  | 2         |  | 7               
|Capital (Finance) Lease Obligations                                                                                     |  | 12                    |  | 5                |  | 6         |  | 1         |  |                
|Operating Lease Obligations                                                                                             |  | 315                   |  | 90               |  | 109       |  | 58        |  | 58              
|Other Long-Term Liabilities Reflected on the Companys Balance Sheet under the GAAP of the primary financial statements |  | 513                   |  | 86               |  | 12        |  | 17        |  | 398             
|                                                                                                                        |  |                       |  |                  |  |           |  |           |  |                 
|Total                                                                                                                   |  | 1,712                 |  | 833              |  | 338       |  | 78        |  | 463             
|                                                                                                                        |  |                       |  |                  |  |           |  |           |  |                 

Océ has obligations under defined contribution schemes which amounted to Euro 11 million in 2005.

The contractual obligations and commercial commitments table above does not reflect obligations under purchase orders that arise in the ordinary course of
business and that are typically fulfilled within ninety days. The Company also enters into supply agreements and distribution agreements in the ordinary course of business, some of which make the purchase of minimum quantities of products a
condition to exclusivity or to obtaining or retaining more favorable pricing. Since failure to purchase the minimum amounts under these agreements generally does not result in a breach of contract, but only in an option on the part of the vendor to
terminate the Companys exclusivity or increase the product prices the Company pays to the vendor, they are not included in the contractual obligations and commercial commitments table above. An estimate of the purchase obligations at its two
largest manufacturing facilities which are due within one year is approximately Euro 129 million.



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|Item 6 | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|------ | ------------------------------------------

A. Directors and
Senior Management

Under Dutch law and the Companys Articles of Association, the Company is managed by a Board of Executive Directors, all of whom
are employees of the Company, whose activities are generally supervised by a Board of Supervisory Directors, none of whom are employees of the Company.

Set forth below is information as of March 7, 2006 concerning the Supervisory Directors, Executive Directors and senior managers of the Company.

Board of Supervisory Directors as at March 7, 2006



|                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|J.L. Brentjens (Born: 1940) Chairman   |  | Post(s) held: former Chairman of the Board of Directors of VNU N.V. Nationality: Dutch. Appointed: 2001. Current term of office until 2009. Maximum period of office until 2013. Supervisory directorships: Chairman of the Supervisory Board of Heijmans N.V. and member of the Supervisory Board of VNU N.V., Fortis OBAM N.V. and Holdingmaatschappij P. Bakker Hillegom B.V. Other posts: Vice-chairman
of Van Leer Group Foundation, Chairman of the Board of the Nijmegen Catholic University Foundation and board member of several foundations.                                                                                                                                         
|                                       | 
|F.J. de Wit (Born: 1939) Vice-Chairman |  | Post(s) held: former Chairman of the Board of Directors of N.V. KNP B.T. Nationality: Dutch. Appointed: 1997. Current term of office until 2009. Maximum period of office
until 2009. Supervisory directorships: Member of the Supervisory Board of PontMeyer N.V. Other posts: member of the Advisory Board of Keyser & Mackay (International) C.V. and board member of several foundations.                                                                                                                                                                                                                                                                                                   
|                                       | 
|M. Arentsen (Born: 1939)               |  | Post(s) held: former member of the Board of Executive Directors of CSM N.V. Nationality: Dutch. Appointed: 2004. Current term of office until 2008. Maximum period of office until 2016. Supervisory directorships: Chairman of the Board of Supervisory Directors of CSM Nederland B.V., Klaverblad Onderlinge Verzekeringsmaatschappij U.A. and Royal
Frans Maas Groep N.V. and member of the Supervisory Board of Directors of Zuivelcooperatie Campina U.A., Incotec B.V. and Van der Moolen Holding N.V. Other posts: board member of several foundations.                                                                                                                                 
|                                       | 
|A. Baan (Born: 1942)                   |  | Post(s) held: former member of the Board of Management of Royal Philips Electronics N.V. and a former member of the Group Management Committee
of Royal Philips Electronics N.V. Nationality: Dutch. Appointed: 2003. Current term of office until 2007. Maximum period of office until 2015. Supervisory directorships: Non-executive director of Imperial Chemical
Industries ICI PLC and International Power PLC (London), member of the Supervisory Board of Royal Volker Wessels Stevin N.V., Wolters Kluwer N.V. and Hagemeyer N.V. Other posts: director Port of Singapore Authority Europe and member of the Supervisory Board of the Netherlands Authority for Financial Markets (AFM).



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|                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|P. Bouw (Born: 1941)         |  | Post(s) held: former Chairman of Koninklijke Luchtvaart Maatschappij N.V. (KLM). Nationality: Dutch. Appointed: 1998. Current term of office until 2006. Maximum period of office
until 2010. Supervisory directorships: Chairman of the Supervisory Board of CSM N.V. and Swiss International Airlines A.G. (Switzerland) and member
of the Supervisory Board of NUON N.V. Other posts: part-time professor in Business Administration at Twente University, Chairman of the Board of
Trustees of Amsterdam Free Reformed University/Windesheim and VU Medical Centre, Chairman of the Banking Council and member of the board of several foundations.
|                             | 
|J.V.H. Pennings (Born: 1934) |  | Post(s) held: former Chairman of the Board of Executive Directors of Océ N.V. Nationality: Dutch. Appointed: 1998. Current term of office until 2006. Maximum period of office
until 2010. Supervisory Directorships: Chairman of the Supervisory Board of AZL N.V., Essent N.V. and N.V. Industriebank Liof, vice-chairman of the
Supervisory Board of Wolters Kluwer N.V. and member of the Supervisory Board of Berenschot Groep B.V. Other posts: board member of several
foundations.                                                                                                                                                             

All of the members of the Board of Supervisory Directors are independent (as the term independence is
defined under the NASDAQ listing rules applicable to the Company).

Under the Companys Articles of Association, the Board of Supervisory Directors
consists of at least three and no more than eight members. Currently, the Board of Supervisory Directors consists of six members. Supervisory Directors are appointed by the shareholders of the Company at the general meeting of shareholders. Each
Supervisory Director is appointed for terms of four years and may serve up to a maximum of twelve years. Each Supervisory Director serves until his resignation, death or removal by shareholders. At each general meeting of shareholders the term of at
least one Supervisory Director expires. A Supervisory Director who has not served as a Supervisory Director for twelve years may be immediately reappointed. Vacancies that exist in the Board of Supervisory Directors are filled by shareholders,
generally at the first general meeting of shareholders held after the vacancy occurs or is created. The holders of the Companys Priority Shares (further described in Item 10.B) may make binding nominations for all vacancies in the
Supervisory Board, and the shareholders of the Company have the right to approve or reject the nominations. If the holders of the Companys Priority Shares do not make a binding nomination, then the Board of Supervisory Directors has the right
to make nominations, which may be overruled by the holders of the Ordinary Shares. Except on the proposal of the holder of Priority Shares, no Supervisory Director can be removed without a vote of two-thirds of the votes cast which vote must consist
of not less than a majority of all votes shareholders are entitled to cast.

At the annual general meeting of shareholders on April 15, 2005, Messrs.
Brentjen and De Wit were reappointed as Supervisory Directors. Messrs. Bouw and Pennings have indicated to the Board that they will resign at the time of the close of the annual general meeting of shareholders to be held on April 20, 2006. A
proposal will be made to the annual general meeting of shareholders on April 20, 2006 to elect two new members to the Board of Supervisory Directors to fill these vacancies.



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Board of Executive Directors as at March 7, 2006



|                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|R.L. van Iperen (Born: 1953) |  | Post: Chairman, Board of Executive Directors. Nationality: Dutch. Appointed: as member of the Board of Executive Directors in May 1995 and as Chairman of the Board of Executive
Directors in September 1999. Functional responsibilities: Strategy, Corporate Personnel and Organization, Research & Development, Manufacturing
& Logistics, Secretariat of the Company and Legal Affairs, Corporate Communications. Geographical responsibilities: the Netherlands, United
States (Chairman), Germany, Switzerland, Italy, Belgium and Japan. Other posts: Member of the Advisory Board of Technical University Eindhoven and
member of the Advisory Board of Rabobank Nederland. Prior posts held: Employed by Océ since 1978. After holding several positions within R&D,
appointed assistant director in 1986. Assumed responsibility for the Printing Systems business unit in 1989. Managing Director of Océ-Belgium N.V. from 1992 until his appointment as a member of the Executive Board.
|                             | 
|J. van den Belt (Born: 1946) |  | Post: Member Board of Executive Directors. Nationality: Dutch. Appointed: March 2001. Functional responsibilities: Finance and Administration, Treasury, Tax, Internal Audit, Information Technology, Investor Relations and financing companies. Geographical responsibilities:France, Spain and Portugal. Prior posts held: From 1970 employed by Unilever in
the Netherlands and the United Kingdom. Since 1977 employed by N.V. Royal Dutch Petroleum Company (Shell). Until 1997 several management posts with Shell in the field of treasury and controlling and as Chief Financial Officer (CFO) in various
countries in Latin America, the United Kingdom and the Netherlands. From 1997 to 2000 CFO of Shell in Brazil. Since September 1, 2000 employed by Océ as CFO.                                                                                                                                                                                                                    
|                             | 
|J.F. Dix (Born: 1946)        |  | Post: Member Board of Executive Directors. Nationality: Dutch. Appointed: May 1998. Functional responsibilities: United States (CEO), Direct Export, Emerging Markets and Marketing Communications. Geographical
responsibilities:United States, Canada, Mexico, United Kingdom, Nordic, Australia, Central Europe, Far East and Brazil. Prior posts held: From
1970 to 1972 director of family business Trappenfabriek Dix B.V., Utrecht. Joined Douwe Egberts N.V. in 1972; from 1973 to 1977 served as director in Denmark. Employed by Océ since March 1, 1977. After several management posts, appointed
Managing Director of Océ-Belgium N.V. in 1985. Mr. Dix worked for Océ in the United States from 1988 to 1998 and since 1992 as President of Océ-USA, Inc. until his appointment as member of the Executive Board. He has been a
member of the Executive Board of Océ N.V. since 1998 and with effect since September 15, 2004, he was appointed CEO of Océ-USA Holding, Inc.          

The number of members serving on the Board of Executive Directors is established under Océs Articles
of Association by the holders of the Priority Shares. Currently, the holders of the Priority Shares have established that the Board of Executive Directors will consist of three members, who are appointed by the shareholders of the Company at each
annual general meeting of shareholders. Subject to being overruled by a shareholders vote, the holders of Priority Shares may make binding nominations for all vacancies in the Executive Board.

Executive Directors serve until their resignation (mandatory at age 60 for the Chairman and at age 62 for the remaining members), death or removal by shareholders.
Except on the proposal of the holder of Priority Shares, no Executive Director can be removed without a vote of two-thirds of the votes cast which vote must consist of not less than a majority of all votes shareholders are entitled to cast.

None of the members of the Executive Board perform any principal business activities outside the Company. There are no family relationships between any of
the members of the Executive Board and any of the members of the Supervisory Board.



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##### Table of Contents

Senior Managers as at March 7, 2006

In addition to the Executive Directors, the following members of the Companys senior management team assist the Executive Board in managing the Company:



|                  |  |                                                                                |  |                             
|----------------- |  | ------------------------------------------------------------------------------ |  | ----------------------------
|Name              |  | Position                                                                       |  | Served in SuchCapacity Since
|M.J.A. Frequin    |  | Executive Vice President  DDS                                                 |  | 2004                        
|T. Egelund        |  | Executive Vice President  WFPS                                                |  | 2004                        
|W.H.M. Orbons     |  | Senior Vice President  Research and Development for WFPS and Cutsheet Systems |  | 2000                        
|P. Feldweg        |  | Senior Vice President  Research and Development of Continuous Feed Systems    |  | 2002                        
|M. Pracchi        |  | Senior Vice President  Research and Development of Software                   |  | 2002                        
|N.J. Koole        |  | Senior Vice President  Manufacturing and Logistics                            |  | 1997                        
|P.H.G.M. Creemers |  | Senior Vice President  Corporate Personnel and Organization                   |  | 1998                        
|R. van der Hoek*  |  | Senior Vice President  Group Controlling                                      |  | 2006                        
|P. Hagedoorn      |  | Senior Vice President and Chief Information Officer                            |  | 2003                        
|P.M. Vincent      |  | Senior Vice President  Corporate Finance                                      |  | 2004                        
|J. Hol            |  | Senior Vice President  Corporate Communications                               |  | 2005                        



|* | Ad interim
|- | ----------

There is no arrangement or understanding with major
shareholders, customers or others pursuant to which any senior manager became a member of senior management. In addition, none of the senior managers are permitted to perform any principal activities outside of the Company.

B. Compensation

Supervisory Directors

In 2005, the Company paid Euro 221,145, in the aggregate, as compensation to the members of the Board of Supervisory Directors in exchange for
their service on the Board of Supervisory Directors. At the 1998 General Meeting of Shareholders, the Companys shareholders fixed the compensation of the Board of Supervisory Directors at Euro 40,840 for the Chairman and Euro 27,227 for each
other member. These amounts automatically increase on an annual basis if the Dutch CBS Price Index figure for household consumption in September of the preceding year is at least 10% higher than the prior index figure. The compensation of the
Supervisory Directors during 2005 was Euro 46,355 for the Chairman of the Board of Supervisory Directors and Euro 30,903 for each other member.

Executive Directors

The Board of Supervisory Directors determines the remuneration of the members of the Board of Executive
Directors. Generally, remuneration of the members of the Board of Executive Directors is comprised of four components: base salary, variable salary, grants of stock options and pension benefits.

The following table sets forth the amount of compensation paid and benefits granted to each member of the Board of Executive Directors in 2005. The amounts set forth are
denominated in Euros.



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|                |  |             |  |                 |         |  |         |  |                         
|--------------- |  | ----------- |  | --------------- | ------- |  | ------- |  | ------------------------
|                |  | Base Salary |  | Variable Salary |         |  | Total   |  | Pension Contributions(1)
|R.L. van Iperen |  | 612,780     |  | 240,000         | (2)     |  | 852,780 |  | 368,001                 
|J. van den Belt |  | 411,737     |  | 180,000         | (2)     |  | 591,737 |  | 122,017                 
|J.F. Dix        |  | 461,392     |  | 270,000         | (2) (3) |  | 731,392 |  | 117,498                 

---

|(1) | The Company contributes certain amounts to its pension plans on behalf of the members of the Board of Executive Directors.
|--- | --------------------------------------------------------------------------------------------------------------------------

|(2) | The amount of variable salary paid is based on a combination of the performance of the Company and the individual Executive Director during the financial year. The targets
established are based, in part, on the Companys financial performance (such as net income and return on assets) and, in part, on the individual targets (such as implementing strategic plans, policies or operations). Amounts of the variable
salary that accrue for a particular year are actually paid in the following financial year. Accordingly, the amounts listed above for each of Messrs. van Iperen, van den Belt and Dix are amounts which will be paid in 2006 for performance during
2005, which is in accordance with Dutch GAAP.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Mr. Dix was awarded an additional, discretionary bonus of 20% in connection with his activities in the United States and the results that were achieved there in 2005.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table sets forth in Euro at November 30, 2005 the accrued pension entitlements payable to the members of the Board of
Executive Directors and the pension amounts that would be payable to them annually on the basis of their years of service at the end of 2005. The pension scheme applicable to the Dutch Executive Directors was modified effective as of January 1,
2003. The prior pension scheme was based on a defined benefit system. The new pension scheme is a defined benefit system with a maximum pension salary of Euro 243,938 in combination with a defined contribution system for the salary in excess of the
maximum pension salary.



|                |  |     |  |                 |  |                                         |  |                       |  |                                               
|--------------- |  | --- |  | --------------- |  | --------------------------------------- |  | --------------------- |  | ----------------------------------------------
|                |  | Age |  | FinalPensionAge |  | Increase in AccruedEntitlements in 2005 |  | AccruedPension Rights |  | Capital Build-Up inDefined ContributionsScheme
|R.L. van Iperen |  | 52  |  | 60              |  | 6,014                                   |  | 228,350               |  | 296,540                                       
|J. van den Belt |  | 59  |  | 62              |  | 4,009                                   |  | 40,135                |  | 205,378                                       
|J.F. Dix        |  | 59  |  | 62              |  | 9,325                                   |  | 200,311               |  | 179,370                                       

C. Board practices

The information required in Item 6.C.1 of this report relating to the Supervisory Directors and the Executive Directors is included in the discussions in Item 6.A above.

The members of the Board of Supervisory Directors do not have service contracts with the Company and are not entitled to any benefits upon termination of their service
on the Board of Supervisory Directors. Each member of the Board of Executive Directors has entered into an employment agreement with the Company, each of which is filed as an exhibit to this report. Except for Mr. van den Belt, none of these
agreements expressly require the Company to pay severance in the event any Executive Directors employment is terminated. The Companys policy, however, is to pay severance that is reasonable in light of the Executive Directors
relationship with the Company, market practices for similar companies and any requirements under applicable law.

If Mr. van den Belt is terminated by
the Company, then under the terms of his agreement, Mr. van den Belt will be entitled to a severance payment equal to 24 months of his base salary (unless Mr. van den Belt would have been required to terminate his employment during the 24
months period before his retirement, in which case, his severance payment will be equal to his base salary for the period from the date of his termination to the date of his retirement).

The Supervisory Board has established a Remuneration Committee, Selection and Nomination Committee and an Audit Committee.

The Remuneration Committee consists of F.J. de Wit (Chairman), J.L. Brentjens and J.V.H. Pennings. It is supported and assisted by the chairman of the Board of Executive
Directors and by the director of Corporate Personnel & Organisation. The Remuneration Committee monitors and evaluates the remuneration policy for the management and directors of the Company



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and makes recommendations regarding the remuneration of the Board of Executive Directors to the Supervisory Board. The Remuneration Committee has adopted a
charter. The Remuneration Committee is required to meet when appropriate.

The Selection and Nomination Committee consists of J.L. Brentjens (Chairman),
F.J. de Wit and J.V.H. Pennings and, as an advisory member, the chairman of the Board of Executive Directors supported by the director Corporate Personnel & Organisation. The Selection and Nomination Committee selects and nominates
candidates for appointment as a member of the Board of Executive Directors and as members of the Supervisory Board of Directors. This committee meets periodically to assess the functioning of individual supervisory directors and executive directors.

In October 2002, the Board of Supervisory Directors adopted an audit charter to establish an Audit Committee. The purpose of the Audit Committee is to
assist the Supervisory Board in fulfilling its oversight responsibilities by monitoring the Companys financial reporting process, systems of internal control and financial risk management policies; responsible for engaging the Companys
registered public accounting firm employed to audit the Companys books and monitoring the independent auditors performance; providing an avenue of communication among the independent auditors, the Companys internal audit department
and the Board of Executive Directors and providing an avenue of communication for employees of the Company or others who have concerns regarding the Companys financial reporting, internal controls, auditing matters and ethical matters. During
2005, the Audit Committee consisted of three members: M. Arentsen (Chairman and financial expert), P. Bouw and F.J. de Wit.

In accordance with its
Charter, the Audit Committee is required to meet a minimum of four times each year, but may meet more frequently if any member requests an additional meeting. In addition the committee is required to meet privately in executive session at least one
time each year with the Companys Vice President - Internal Audit Department and the independent auditors. The committee will also meet privately in executive session at any time that the Board of Executive Directors, the Vice President -
Internal Audit Department or the independent auditors request a meeting. For additional discussion of the Audit Committee, see Item 16A Audit Committee Financial Expert.

Exemptions from Certain Nasdaq Corporate Governance Rules

Nasdaq may provide exemptions from the Nasdaq corporate
governance standards to a foreign private issuer when those standards are contrary to a law, rule or regulation of any public authority exercising jurisdiction over such issuer or contrary to generally accepted business practices in the
issuers country of domicile, except to the extent that such exemptions would be contrary to United States federal securities laws. The Company, as a foreign private issuer, was granted an exemption in 1994 from certain corporate governance
requirements contained in Nasdaqs rules. Based on this exemption, the Company is exempt from provisions relating to quorum standards at shareholder meetings as set forth in Nasdaq Rule 4350(f) and for proxy solicitations as set forth in Nasdaq
Rule 4350(g). In addition, the Company notified Nasdaq on December 5, 2005 that the Company followed its home country practice to approve the Imagistics Share Incentive Plan 2005 in lieu of compliance with Nasdaq Rule 4350(i). The exemptions
and business practices followed by the Company in lieu of Nasdaq rules are more particularly described below:



| |  |  | The Company is exempt from Nasdaqs quorum requirements applicable to meetings of ordinary shareholders. In accordance with the laws and generally accepted business practice in
the Netherlands, the Companys Articles of Association do not contain a general quorum requirement for meetings of ordinary shareholders.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Company is exempt from Nasdaqs requirements relating to the solicitation of proxies and provision of proxy statements for general meetings of shareholders. The Netherlands
does not have a regulatory regime for soliciting proxies and the solicitation of proxies is not a generally accepted business practice in the Netherlands.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Company is exempt from Nasdaqs requirements relating to shareholder approval of the Imagistics Share Incentive Plan 2005. Approval of such plan is not required under the
laws of the Netherlands.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Netherlands Corporate Governance Code

In the Netherlands, the Dutch corporate governance code, Code Tabaksblat, consisting of 21 principles and 113 best practice provisions, has been applicable to the Company since December 2003. This code was given legal
status with effect from January 1, 2005.

D. Employees

The Company employed 24,164, 21,315 and 22,204 employees (in full time equivalents) world-wide, at November 30, 2005, 2004, and 2003, respectively. The number of employees as of the end of 2005 increased as a result of the acquisition
of Imagistics. The Company believes that its employee relations and relations between management and the various



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##### Table of Contents

memberships to which Océ employees belong are excellent. Since 1991, the Company has not experienced any significant strike, work stoppage or labor
dispute.

The following table sets forth for the past three years the number of employees employed by the Company based on the employees main
category of activity and by geographic distribution.

Employees by category



|                                                            |  |        |  |        |  |       
|----------------------------------------------------------- |  | ------ |  | ------ |  | ------
|                                                            |  | 2003   |  | 2004   |  | 2005  
|Research and Development                                    |  | 1,928  |  | 1,868  |  | 1,805 
|Manufacturing and Logistics                                 |  | 2,514  |  | 2,512  |  | 2,453 
|Business Services                                           |  | 7,149  |  | 6,693  |  | 6,806 
|Sales                                                       |  | 4,140  |  | 4,192  |  | 5,356 
|Service                                                     |  | 4,327  |  | 4,013  |  | 5,078 
|Accounting and other staff                                  |  | 2,146  |  | 2,037  |  | 2,666 
|                                                            |  |        |  |        |  |       
|Total number of employees at November 30,                   |  | 22,204 |  | 21,315 |  | 24,164
|                                                            |  |        |  |        |  |       
|Weighted average number of employees during the fiscal year |  | 22,346 |  | 21,760 |  | 21,657

Distribution of employees by geographical areas



|                                               |  |        |  |     |  |        |  |     |  |        |  |    
|---------------------------------------------- |  | ------ |  | --- |  | ------ |  | --- |  | ------ |  | ---
|                                               |  | 2003   |  | %   |  | 2004   |  | %   |  | 2005   |  | %  
|United States                                  |  | 8,969  |  | 40  |  | 8,340  |  | 39  |  | 10,913 |  | 45 
|The Netherlands                                |  | 4,061  |  | 18  |  | 3,922  |  | 18  |  | 3,947  |  | 16 
|Germany                                        |  | 3,063  |  | 14  |  | 3,028  |  | 14  |  | 2,912  |  | 12 
|United Kingdom                                 |  | 1,041  |  | 5   |  | 1,016  |  | 5   |  | 1,199  |  | 5  
|France                                         |  | 1,203  |  | 6   |  | 1,160  |  | 5   |  | 1,174  |  | 5  
|Rest of Europe                                 |  | 2,903  |  | 13  |  | 2,879  |  | 14  |  | 2,890  |  | 12 
|Countries outside Europe and the United States |  | 964    |  | 4   |  | 970    |  | 5   |  | 1,129  |  | 5  
|                                               |  |        |  |     |  |        |  |     |  |        |  |    
|Total number of employees at November 30,      |  | 22,204 |  | 100 |  | 21,315 |  | 100 |  | 24,164 |  | 100
|                                               |  |        |  |     |  |        |  |     |  |        |  |    

E. Share ownership

At November 30, 2005, the members of the Supervisory Board held 2,969 Ordinary Shares (in the aggregate) and no rights arising from options listed on the Euronext Options Exchange. At November 30, 2005, none of the members of the
Board of Executive Directors held any Ordinary Shares. The Executive Directors are entitled to purchase Ordinary Shares in connection with the Companys stock option plan and restricted shares under the share plan, as further described below.

The Company currently has two types of incentive share plans: a stock option/stock appreciation rights plan, referred to as the stock option plan, and a
restricted share plan, referred to as the share plan.

Stock Option Plan

As an incentive for the achievement of the Companys objectives over the long term, Océ operated under an option plan up to and including the 2004 financial
year in which decisions were taken each year to the granting to members of the Board of Executive Directors and certain senior executives of the Company options to purchase Océs Ordinary Shares and/or share



56



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appreciation rights (SARS) in respect of Océs Ordinary Shares to encourage achievement of the long term objectives of the Company.

The holder of a SAR has the right to receive a value equal to the difference between the stock market price of the Companys Ordinary Shares (based
on trading on the Euronext Amsterdam stock exchange) on the day of exercise and the exercise price that was fixed on the day of granting the SAR. Upon exercise of a SAR, the holder may receive the payment either in cash or the Companys
Ordinary Shares.

Participants in the stock option plan are required to abide by a code of conduct and observe a waiting period before they may exercise
their options or SARS. The waiting period is typically two to three years after the date on which the options or SARS were granted.

Most of the options
and SARS granted under the stock option plan are unconditional, which means that no conditions must be met before the holder may exercise the options or SARS (other than abiding by a code of conduct and observing the waiting period, as noted above).
A limited category of participants have also been awarded conditional options or SARS. A holder of conditional options or SARS may exercise the options or SARS only after the Company meets certain performance criteria, which is typically based on
the Companys earnings per share (EPS) or operating income per share (OIPS). In the event that the Company achieves the required criteria growth, option rights will become unconditional.

Participation in the Companys stock option plan is regulated under Dutch law to prevent the misuse of inside information. Participants in the stock option plan are
prohibited from trading in Océ options on the Euronext Options Exchange in Amsterdam and are not allowed to dispose of or pledge their options. To exercise their options, participants are required to transfer their options to an independent
trustee designated by the Company, which then exercises the options according to the instructions given by the participants. Participants can only give such instructions if they are not in possession of inside information of the Company and the
Company has not imposed a trading restriction on the exercise of options. The Company typically restricts the exercise of options for a period of 9 stock exchange trading days before publication of the Companys quarterly results.

As at November 30, 2005, a total of 2,627,000 unconditional option rights or SARS in respect of Ordinary Shares were outstanding at an average exercise price of
Euro 12.22. In addition, as at November 30, 2005, a total of 876,000 conditional options with an average exercise price of Euro 11.67 were outstanding. The average remaining duration of these options is five years.

The Companys policy is to repurchase in the open market its Ordinary Shares required to be issued in connection with exercises of options or SARS. The Company may
also issue Ordinary Shares that it holds in its treasury to cover commitments under existing stock option plans. During 2005, 116,430 Ordinary Shares were repurchased by the Company to cover commitments under the existing stock option plan to be
issued in connection with exercises of options and SARS.

The following table sets forth as at November 30, 2005, the options granted to the members
of the Board of Executive Directors after their appointment to the Board.



|                |  |                          |  |                           |  |                        |  |             |  |                 |  |                  
|--------------- |  | ------------------------ |  | ------------------------- |  | ---------------------- |  | ----------- |  | --------------- |  | -----------------
|                |  | Stock Option Planin Year |  | Number of Options Granted |  | Exercise Price in Euro |  | Outstanding |  | Expiration Date
|R.L. van Iperen |  | 2001                     |  |                           |  | 42,000                 |  | 18.10       |  | 42,000          |  | November 29, 2006
|                |  | 2002                     |  | Unconditional             |  | 21,000                 |  | 9.77        |  | 21,000          |  | November 28, 2010
|                |  | 2003                     |  | Unconditional             |  | 21,000                 |  | 10.75       |  | 21,000          |  | November 27, 2011
|                |  | 2004                     |  | Unconditional             |  | 21,000                 |  | 12.21       |  | 21,000          |  | November 26, 2012
|                |  | 2004                     |  | Conditional               |  | 42,000                 |  | 12.21       |  | 42,000          |  | November 26, 2012
|                |  |                          |  |                           |  |                       
|J. van den Belt |  | 2001                     |  |                           |  | 35,000                 |  | 18.10       |  | 35,000          |  | November 29, 2006
|                |  | 2002                     |  | Unconditional             |  | 17,500                 |  | 9.77        |  | 17,500          |  | November 28, 2010
|                |  | 2003                     |  | Unconditional             |  | 17,500                 |  | 10.75       |  | 17,500          |  | November 27, 2011
|                |  | 2004                     |  | Unconditional             |  | 17,500                 |  | 12.21       |  | 17,500          |  | November 26, 2012
|                |  | 2004                     |  | Conditional               |  | 35,000                 |  | 12.21       |  | 35,000          |  | November 26, 2012



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|         |  |                         |  |                           |  |                       |  |             |  |                 |  |                  
|-------- |  | ----------------------- |  | ------------------------- |  | --------------------- |  | ----------- |  | --------------- |  | -----------------
|         |  | StockOption Planin Year |  | Number of Options Granted |  | ExercisePrice in Euro |  | Outstanding |  | Expiration Date
|J.F. Dix |  | 2001                    |  |                           |  | 35,000                |  | 18.10       |  | 35,000          |  | November 29, 2006
|         |  | 2002                    |  | Unconditional             |  | 17,500                |  | 9.77        |  | 17,500          |  | November 28, 2010
|         |  | 2003                    |  | Unconditional             |  | 17,500                |  | 10.75       |  | 17,500          |  | November 27, 2011
|         |  | 2004                    |  | Unconditional             |  | 17,500                |  | 12.21       |  | 17,500          |  | November 26, 2012
|         |  | 2004                    |  | Conditional               |  | 35,000                |  | 12.21       |  | 35,000          |  | November 26, 2012

The following table sets forth a summary of the Companys outstanding options and SARS held, in the
aggregate, by the Companys employees as of November 30, 2005.



|                       |  |                           |  |                        |  |                   |  |                            |  |             |  |                  |  |                       
|---------------------- |  | ------------------------- |  | ---------------------- |  | ----------------- |  | -------------------------- |  | ----------- |  | ---------------- |  | ----------------------
|Stock Option Plan Year |  | Number of Options Granted |  | Exercise Price in Euro |  | Options Forfeited |  | Exercised Number ofOptions |  | Outstanding |  | Expiration Date*
|2001                   |  |                           |  | 847,500                |  | 18.10-24.44       |  | 443,500                    |  |            |  | 404,000          |  | November 29, 2006     
|2002                   |  | Unconditional             |  | 716,000                |  | 9.77-13.19        |  | 29,000                     |  | 220,500     |  | 466,500          |  | November 28, 2009/2010
|2002                   |  | Conditional               |  | 392,000                |  | 9.77              |  | 392,000                    |  |            |  |                 |  | November 28, 2009/2010
|2003                   |  | Unconditional             |  | 793,000                |  | 10.75-14.51       |  | 14,000                     |  | 182,000     |  | 597,000          |  | November 27, 2010/2011
|2003                   |  | Conditional               |  | 470,000                |  | 10.75             |  | 470,000                    |  |            |  |                 |  | November 27, 2010/2011
|2004                   |  | Unconditional             |  | 692,500                |  | 12.21-16.48       |  | 16,000                     |  | 33,000      |  | 643,500          |  | November 26, 2011/2012
|2004                   |  | Conditional               |  | 446,000                |  | 12.21             |  | 62,000                     |  |            |  | 384,000          |  | November 26, 2011/2012
|2005                   |  | Unconditional             |  | 523,000                |  | 11.25-15.19       |  | 7,000                      |  |            |  | 516,000          |  | November 30, 2012/2013
|2005                   |  | Conditional               |  | 492,000                |  | 11.25             |  |                           |  |            |  | 492,000          |  | November 30, 2012/2013
|                       |  |                           |  |                        |  |                   |  |                            |  |             |  |                  |  |                       
|Total                  |  |                           |  | 5,372,000              |  |                   |  | 1,433,500                  |  | 435,500     |  | 3,503,000        |  |                       

---

|* | The length of the exercise period varies depending on where the individual holder resides.
|- | ------------------------------------------------------------------------------------------

Share Plan

In 2004, the option plan for the
members of the Board of Executive Directors was replaced by a restricted share plan. At the beginning of 2005, a conditional right to shares was granted to the members of the Board of Executive Directors for the first time. In 2005, the option plan
for the other participants was also replaced by a performance-based restricted share plan. At the beginning of 2006, a conditional right to shares will also be granted to these participants for the first time. As a consequence, no more option rights
and/or SARS were granted in 2005.

Under the new share plan, Océ grants Ordinary Shares that are subject to certain conditions or restrictions. This
grant is conditional on the achievement of certain performance criteria that are fully focused on the creation of shareholders value as defined by the Supervisory Board. Each year, a three year plan with a conditional granting period commences
in which the Companys performance is measured at the end of the relevant period against that of a peer group of companies. The relative ranking that Océ achieves in the peer group determines the definitive number of shares that are
granted. This number corresponds to a percentage (at most 60%) of the fixed reference salary divided by the price of the share on the stock market on the first day of the performance period. The shares from this plan thus acquired after three years
must be retained by the members of the Board of Executive Directors for a further period of three years.



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##### Table of Contents

The following table sets forth as at November 30, 2005, the restricted shares granted to the members of the Board of
Executive Directors.



|                |  |               |  |                                    |  |                                                      |  |                                 |  |                  
|--------------- |  | ------------- |  | ---------------------------------- |  | ---------------------------------------------------- |  | ------------------------------- |  | -----------------
|                |  | SharePlanYear |  | Number ofConditionalShares Granted |  | Stock Price at firstday of PerformancePeriod in Euro |  | ConditionallyOutstanding Shares |  | Expiration Date  
|R.L. van Iperen |  | 2005          |  | 28,685                             |  | 12.55                                                |  | 28,685                          |  | February 28, 2008
|J. van den Belt |  | 2005          |  | 21,514                             |  | 12.55                                                |  | 21,514                          |  | February 28, 2008
|J.F. Dix        |  | 2005          |  | 21,514                             |  | 12.55                                                |  | 21,514                          |  | February 28, 2008

Other Arrangements

Employees of the Company may elect to receive convertible personnel debentures under the Companys annual profit-sharing plan. The term of the debentures is 6 years, with an average interest rate for 2005 of 4.2%
(4.3% for 2004). The average conversion price is Euro 11.94 (Euro 14.66 for 2004).



|Item 7 | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|------ | -------------------------------------------------

A description of
the Companys equity securities and the rights of the holders of the Companys equity securities under the Companys Articles of Association is included in Item 10.B Memorandum and Articles of Association, below.

A. Major shareholders

As further discussed in
Item 10.B, the authorized capital of Océ N.V. is Euro 175,001,500 and is divided into four classes of capital stock:



| |  |  | 145,000,000 Ordinary Shares, nominal value Euro 0.50 per share;
| | - |  | ---------------------------------------------------------------



| |  |  | 30 Priority Shares, nominal value Euro 50 per share;
| | - |  | ----------------------------------------------------



| |  |  | 30,000,000 Cumulative Financing Preference Shares, nominal value Euro 0.50 per share; and
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | 175,000 Cumulative Protective Preference Shares, nominal value Euro 500 per share.
| | - |  | ----------------------------------------------------------------------------------

The relative rights and powers of the holders of each class of capital stock (including voting rights and the rights and powers of the holders of the Priority Shares and the Cumulative Protective Preference Shares to
delay or prevent an unwanted change of control of the Company) are further described in Item 10.B.



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##### Table of Contents

The Company believes that the following entities own the following shares of its capital stock as of December 31,
2005:



|                                                                        |  |                                                        |  |              |  |                  |   
|----------------------------------------------------------------------- |  | ------------------------------------------------------ |  | ------------ |  | ---------------- | --
|Title of Class                                                          |  | Identity of Person or Group                            |  | Amount Owned |  | Percent of Class |   
|Ordinary Shares                                                         |  | ING Groep N.V.                                         |  | 7,487,456    |  | 8.58             | %*
|                                                                        |  | Supervisory Directors                                  |  | 2,969        |  |                 |   
|Priority Shares                                                         |  | Foundation Fort Ginkel                                 |  |             |  | 100              | % 
|Cumulative Financing Preference Shares                                  |  | Stichting Administratiekantoor Preferente Aandelen Océ |  | 20,000,000   |  | 100              | % 
|Depositary Receipts representing Cumulative Financing Preference Shares |  | Rabobank Nederland Participatie maatschappij
B.V.      |  | 6,000,000    |  | 30.0             | % 
|                                                                        |  | Fortis N.V.                                            |  | 6,000,000    |  | 30.0             | % 
|                                                                        |  | New NIB Partners LP                                    |  | 6,000,000    |  | 30.0             | % 
|                                                                        |  | ING Groep N.V.                                         |  | 2,000,000    |  | 10.0             | % 



|* | As of December 31, 2005 according to Schedule 13G/A as filed by ING Group N.V. with the SEC on February 14, 2006.
|- | -----------------------------------------------------------------------------------------------------------------

The Company is unable to determine the number of record holders in the United States. Based on information that the Company has gathered, the Company believes that
approximately 21% of its Ordinary Shares are held by United States residents.

To the Companys knowledge, it is not directly or indirectly owned or
controlled by another corporation, foreign government or individual. Except as otherwise described in Item 10.B, the Company does not know of any arrangements which may at a subsequent date result in a change of control of the Company.

B. Related party transactions

As discussed in
Item 4, the Company has entered into an agreement with DLL relating to the outsourcing of its financial lease activities in Europe. DLL is a wholly-owned subsidiary of Rabobank. Rabobank is also one of the lenders that are parties to the bridge
loan facility the Company entered into in connection with the acquisition of Imagistics. Mr. van Iperen is a member of the advisory board of Rabobank Nederland. The agreement between DLL and the Company and the bridge loan facility were
negotiated on an arms length basis.

Except as described in Item 6.A, Directors and Senior Management and Item 10.B,
Memorandum and Articles of Association, the Company is not a party to any transactions or loans with any other party that controls the Company, is controlled by the Company or is under common control with the Company, or any associates,
individuals or enterprises with significant control over the Company or key management personnel.

As described in Note 12 to the Consolidated Financial
Statements, the Company made interest free loans to each of the following Executive Directors to assist such Executive Directors in payment of taxes that they owed in connection with the grants of options under the Companys stock option plan
in the amount of Euro 0.1 million to each of Messrs. van lperen, Dix and van den Belt. These loans are interest-free and were made available prior to November 30, 2002. Repayment takes place upon exercise or cancellation of the annual
tranche of options in respect of which the loan was provided.

C. Interests of experts and counsel.

Not applicable.



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##### Table of Contents

|Item 8 | FINANCIAL INFORMATION
|------ | ---------------------

A. Consolidated Financial Statements and
Other Financial Information

The Companys Consolidated Financial Statements are set forth on pages F-1 through F-41.

Dividend policy

Under the Companys Articles of Association,
the Company is required to pay to the holders of the Cumulative Protective Preference Shares, if issued, a dividend per share equal to the percentage of the amount paid on each Cumulative Protective Preference Share and which percentage is the
average of the three months EURIBOR (Euro Interbank Offered Rate)  weighted according to the number of days during which such percentage was in force  increased or decreased by a premium or discount equal to, at most, two
percentage points as fixed by the Executive Board with the approval of the Supervisory Board. No Cumulative Protective Preference Shares are outstanding. The Company is required to pay a dividend to the holders of the Cumulative Financing Preference
Shares equal to 3.716% of the amount paid up on each Cumulative Financing Preference Share. This amount was amended on December 1, 2004 and may be amended every eight years thereafter. With respect to 2005, the Company will pay a dividend equal
to Euro 0.11 (rounded) per Cumulative Financing Preference Share. After a dividend has been paid on the preference shares, the Company is then required to pay a dividend to the holders of the Priority Shares equal to 4% of the par value of these
shares. With respect to 2005, the Company will pay a dividend equal to Euro 2 per Priority Share.

Finally, under the law of the Netherlands and under
the Companys Articles of Association, after payment of dividends on the Priority Shares and the Preference Shares, the Company is then required to pay to the holders of its Ordinary Shares a minimum cash dividend equal to 5% of the par value
of these shares, divided pro rata among the outstanding Ordinary Shares. In addition, the Executive Board, with the approval of the Supervisory Board, may set aside in reserves part or all of the remaining annual profits to be paid as an additional
dividend on the Ordinary Shares and, with the approval of the shareholders, may also pay an additional dividend out of paid in capital and retained earnings. The Companys general policy is to distribute approximately one-third of the net
income attributable to holders of its Ordinary Shares. The dividend distributions in 2001 through 2005 deviated from this policy because of the importance that the Company places on a stable distribution of dividends. In 2005, the Company paid a
total cash dividend per ordinary share equal to Euro 0.58 per share, which constitutes 63.0% of the Companys net income for 2005. At its general annual meeting to be held in April 2006, the Company will propose a new dividend policy that
will remain unchanged with respect to its underlying principle, which is reliability and consistency in the dividend that is distributed to the holders of its Ordinary Shares. The new policy will incorporate as a precondition for this underlying
principle maintenance of healthy balance sheet ratios, which the Company interprets as meaning maintaining an implicit investment grade rating.

Océs objective, within the framework of the above precondition, is to seek to distribute to holders of Ordinary Shares a constant, but preferably steadily growing dividend, in line with the development in income. The income
and/or free cash flow must be more than sufficient to enable the achievement of this objective. In practice, more than one-third of the net income attributable to holders of Ordinary Shares was distributed in the form of dividend in recent years.
Now that the proceeds from the sale of the lease portfolio have been productively invested by acquiring Imagistics, an amended dividend policy will be worked out on the basis of the considerations set forth above.

Legal proceedings

The Company through its subsidiaries is involved
in several legal proceedings relating to the normal conduct of its business. The Company does not expect any liability arising from these proceedings to have a significant effect on its financial position or profitability. The Company believes that
it has established reserves sufficient to address all probable liabilities relating to these legal proceedings in accordance with the standards discussed in Significant Accounting Policies included in Item 5, Operating and
Financial Review and Prospects.

B. Significant changes

On December 1, 2005, Océ in Japan acquired the population of high volume, wide format machines from Shacoh. The consideration paid for this acquisition was Euro 0.8 million. On January 16, 2006, Océ announced a
restructuring in the United States. Following on from the acquisition of Imagistics, approximately 250 jobs will be discontinued in the United States. The related restructuring costs will amount to approximately Euro 1.7 million. Except as otherwise
disclosed in this report, as of the date of this report, there has been no significant change in the Companys business or financial condition since November 30, 2005.



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##### Table of Contents

|Item 9 | THE OFFER AND LISTING
|------ | ---------------------

A. Offer and Listing Details

Since 1958, the year in which the Companys stock became publicly traded, the principal market for the Companys Ordinary Shares has been the
Stock Market of Euronext Amsterdam N.V. (the Euronext Amsterdam). The Companys Ordinary Shares are also listed on the stock exchanges in Düsseldorf, Frankfurt am Main and Switzerland on the Electronic Stock Exchange
(EBS).

In the United States, ADSs, evidenced by ADRs, have been quoted and traded on The Nasdaq National Market under the symbol
OCENY since November 8, 1984. Morgan Guaranty is the depositary for the ADRs (the Depositary). One Océ ADS represents one Océ Ordinary Share. Less than 1% of the outstanding Ordinary Shares are represented
by ADSs.

The table below sets forth for the periods indicated the high and low stock prices of Océs Ordinary Shares (expressed in Euros) on
the Euronext Amsterdam stock exchange as reported by the Officiële Prijscourant, the official daily newspaper of the Euronext Amsterdam stock exchange, and the low bid and high asked prices of the ADSs (expressed in dollars) on The
Nasdaq National Market.



|                         |  |                |  |                                           |  |                        |  |            |  |        
|------------------------ |  | -------------- |  | ----------------------------------------- |  | ---------------------- |  | ---------- |  | -------
|                         |  |                |  | Euronext AmsterdamEuro per Ordinary Share |  | Nasdaq Dollars per ADS
|                         |  |                |  | High                                      |  | Low                    |  | High Asked |  | Low Bid
|Annual highs and lows    |  |                |  |                                           |  |                        |  |           
|2001                     |  |                |  | 18.90                                     |  | 6.15                   |  | 17.50      |  | 6.37   
|2002                     |  |                |  | 14.05                                     |  | 6.80                   |  | 13.05      |  | 6.69   
|2003                     |  |                |  | 13.70                                     |  | 6.50                   |  | 15.59      |  | 7.49   
|2004                     |  |                |  | 16.10                                     |  | 10.60                  |  | 20.45      |  | 13.15  
|2005                     |  |                |  | 13.54                                     |  | 10.80                  |  | 17.93      |  | 13.30  
|                         |  |                |  |                                          
|Quarterly highs and lows |  |                |  |                                           |  |                        |  |           
|2004                     |  | First quarter  |  | 16.10                                     |  | 11.60                  |  | 20.45      |  | 14.13  
|                         |  | Second quarter |  | 15.95                                     |  | 12.18                  |  | 19.20      |  | 15.00  
|                         |  | Third quarter  |  | 13.83                                     |  | 11.60                  |  | 16.90      |  | 14.30  
|                         |  | Fourth quarter |  | 13.17                                     |  | 10.60                  |  | 16.25      |  | 13.15  
|                         |  |                |  |                                           | 
|2005                     |  | First quarter  |  | 12.62                                     |  | 10.80                  |  | 16.87      |  | 14.20  
|                         |  | Second quarter |  | 13.11                                     |  | 11.22                  |  | 17.50      |  | 14.00  
|                         |  | Third quarter  |  | 13.09                                     |  | 11.60                  |  | 15.50      |  | 13.30  
|                         |  | Fourth quarter |  | 13.54                                     |  | 11.68                  |  | 16.75      |  | 13.45  



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##### Table of Contents

|                       |  |           |  |                                           |  |                        |  |            |  |        
|---------------------- |  | --------- |  | ----------------------------------------- |  | ---------------------- |  | ---------- |  | -------
|                       |  |           |  | Euronext AmsterdamEuro per Ordinary Share |  | Nasdaq Dollars per ADS
|                       |  |           |  | High                                      |  | Low                    |  | High Asked |  | Low Bid
|Monthly highs and lows |  |           |  |                                           |  |                        |  |           
|2005                   |  | August    |  | 12.72                                     |  | 11.98                  |  | 15.40      |  | 14.66  
|                       |  | September |  | 13.54                                     |  | 12.20                  |  | 16.75      |  | 15.03  
|                       |  | October   |  | 13.20                                     |  | 11.68                  |  | 16.20      |  | 13.45  
|                       |  | November  |  | 12.63                                     |  | 11.85                  |  | 15.05      |  | 13.85  
|                       |  | December  |  | 12.37                                     |  | 11.86                  |  | 15.20      |  | 14.00  
|                       |  |           |  |                                           | 
|2006                   |  | January   |  | 14.53                                     |  | 12.09                  |  | 17.65      |  | 14.75  
|                       |  | February  |  | 14.71                                     |  | 13.80                  |  | 18.05      |  | 15.95  

B. Plan of distribution

Not applicable.

C. Markets

The markets on which the Companys Ordinary Shares are traded and listed are discussed in Part A, The Offer and Listing Details, in this Item 9.

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

The following is a summary of the Companys current Articles of Association, as amended. Dutch corporate governance law is determined by
legislation and codes of best practices. The Dutch corporate governance code was adopted in December 2003. As a result of this legislation, the Company amended its Articles of Association in 2004, which amendments were approved by its shareholders
at an extraordinary meeting on September 8, 2004 and confirmed by notarial deed dated December 23, 2004. Any references in this report to the Articles of Association should be read in conjunction with the Articles, as amended, as filed
herewith.



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General

Océ N.V. is an international holding company organized under the corporation law of the Netherlands. The Companys objects are described in Article 2 of the Companys Articles of Association, as
amended, an English translation of which has been filed as Exhibit 1 to this report, and are as follows:



| |  |  | to invest directly or indirectly in companies and to manage and fund its subsidiaries; and
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | to do all acts as are directly or indirectly connected with the operation of its subsidiaries.
| | - |  | ----------------------------------------------------------------------------------------------

The Company shall (and shall cause it subsidiaries to):



| |  |  | act in a manner to protect the Companys invested capital and to cause the Companys subsidiaries to yield profits;
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | promote the prosperity and the welfare of the Companys employees;
| | - |  | ------------------------------------------------------------------



| |  |  | provide satisfactory service to the Companys customers; and
| | - |  | ------------------------------------------------------------



| |  |  | contribute to the progress and welfare of the communities in which the Company and its subsidiary companies operate.
| | - |  | --------------------------------------------------------------------------------------------------------------------

Directors

The Company is managed by a Board
of Executive Directors, all of whom are employees of the Company, whose activities are generally supervised by a Board of Supervisory Directors, none of whom are employees of the Company.

Under Article 23 at the Articles of Association, if a member of the Board of Executive Directors, in his private capacity, enters into an agreement with the Company or
conducts any legal proceedings against the Company, then the Company may only be represented in those matters by a member of the Board of Executive Directors, a Supervisory Director or other person selected by the shareholders at a general meeting.
Article 23 further provides that if a member of the Board of Executive Directors has an interest which conflicts with that of the Company in any other way, he shall be authorized to represent the Company in the same way as the other members of the
Board of Executive Directors. The articles do not address the right of a Supervisory Director to vote on a matter in which he is materially interested.

The number of members serving on the Boards of Supervisory Directors and Executive Directors is determined from time to time by the holders of the Priority Shares. In addition, the holders of the Priority Shares have the right to make the
binding nominations for Supervisory and Executive Directors, and the shareholders of the Company have the right to fill any vacancies on the Supervisory and Executive Boards, typically at the next general meeting of shareholders after the vacancy
exists. In the case of binding nominations, the right of the holders of Priority Shares may be overruled by a vote of two-thirds of the votes cast by the shareholders and the vote must be by a majority of all votes, which all shareholders are
entitled to cast.

At each general meeting of shareholders, at least one Supervisory Director must resign; however, a Supervisory Director may be
immediately re-appointed. Each member of the Board of Executive Directors serves until resignation (which is agreed at the age of 60 for the chairman and 62 for each other member), death or removal, with or without cause, by the shareholders. Except
on a proposal by the holders of the Priority Shares, no Supervisory or Executive Director may be removed without a vote of two-thirds of the votes cast by the shareholders and the vote must be a majority of all votes which all shareholders are
entitled to cast.

The remuneration of the Supervisory Board is fixed by the general meeting of shareholders, and the remuneration of the Executive
Directors is fixed by the Supervisory Board upon the recommendation of the Remuneration Committee.

Article 19 of the Articles of Association outlines the
procedures to be followed by the Boards of Supervisory and Executive Directors relating to investments and financing activities of the Company. Decisions of the Board of Executive Directors relating to a substantial change in the identity or
character of the Company or its business must be approved by the general meeting of shareholders, which events specifically include transfer of the business or substantially all of the business to a third party, entering into or terminating
long-term cooperation of the Company or a subsidiary with a third party or as a partner with unlimited liability in limited or general partnership if such cooperation or termination is of far-reaching importance, and acquiring or disposing of
capital of a company that has a value of at least one-third of the total assets of the Company on a consolidated basis. Under Article 19, the Board of Supervisory adopts an annual budget of proposed investments and financing. The Executive Directors
may not adopt a resolution without the prior approval of the Board of Supervisory Directors to enter into any new credit facility, borrow any money or make any investments that are not included within the plan or exceed Euro 5 million.



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General Description of the Companys Capital Stock

The authorized capital of Océ N.V. is Euro 175,001,500 and is divided into four classes of capital stock:



| |  |  | 145,000,000 Ordinary Shares, nominal value Euro 0.50 per share;
| | - |  | ---------------------------------------------------------------



| |  |  | 30 Priority Shares, nominal value Euro 50 per share;
| | - |  | ----------------------------------------------------



| |  |  | 30,000,000 Cumulative Financing Preference Shares, nominal value Euro 0.50 per share; and
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | 175,000 Cumulative Protective Preference Shares, nominal value Euro 500 per share.
| | - |  | ----------------------------------------------------------------------------------

Priority Shares

All Priority Shares are issued and held by Foundation Fort Ginkel. The directors of
Foundation Fort Ginkel are J.L. Brentjens (Chairman), R.L. van Iperen and F.J. de Wit. Under the Articles of Association, the holders of the Priority Shares have the exclusive rights to:



| |  |  | determine the number of members of the Companys Supervisory and Executive Boards;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | make binding nominations for the Supervisory and Executive Boards;
| | - |  | ------------------------------------------------------------------



| |  |  | approve the issuance of authorized but unissued shares; and
| | - |  | -----------------------------------------------------------



| |  |  | propose to a general meeting of shareholders changes in the Companys articles of association.
| | - |  | ----------------------------------------------------------------------------------------------

The by-laws of the Foundation Fort Ginkel provide that its three directors shall be the Chairman of the Companys Supervisory Board, the Chairman of the Companys Executive Board and another member of the
Companys Supervisory Board.

Cumulative Protective Preference Shares

Although none of the Cumulative Protective Preference Shares are currently issued, the Company has an irrevocable obligation to issue to the Lodewijk Foundation, Venlo,
upon its request to the Company, a number of Cumulative Protective Preference Shares equal to the total nominal value of the Ordinary Shares and the Cumulative Financing Preference Shares. The directors of the Lodewijk Foundation are N.J. Westdijk
(Chairman), S.D. de Bree, M.W. den Boogert and F.J.G.M. Cremers. The by-laws provide that none of the directors of the Foundation may be a member of the Supervisory or Executive Boards of the Company or its subsidiaries or be a member of the family
of a member of such Boards; an employee of the Company or its subsidiaries; an advisor (including auditor, notary and attorney) with whom the Company or its subsidiaries has a regular ongoing relationship; a person who was formerly a member of the
Companys Supervisory or Executive Boards or an employee of the Company or its subsidiaries; a person who was, within the past three years, an advisor with whom the Company or its subsidiaries had a regular ongoing relationship; or a director
or employee of a bank or other financial institution with which the Company has a permanent and significant relationship.

Cumulative
Financing Preference Shares

The Foundation Stichting Administratiekantoor Preferente Aandelen Océ holds all of the Cumulative
Financing Preference Shares. The Foundation has issued registered depository receipts, nominal value Euro 0.50, to a number of institutional investors. The Foundation has four members, three of which are appointed by the shareholders of the Company,
one of which is appointed by the holders of the depository receipts and one member by the Executive Board of the Company. The directors of the Foundation Stichting Administratiekantoor Preferente Aandelen Océ are H. de Ruiter
(Chairman), S. Bergsma, J. M. Boll and L. Traas.

Ordinary Shares

As of November 30, 2005, 87,274,460 Ordinary Shares were outstanding. Océ has outstanding ADSs representing Océs Ordinary Shares, which have been
deposited with Morgan Guaranty as Depositary, and evidenced by ADRs. The ADRs are publicly traded on The Nasdaq National Market.

Voting Rights

Each class of stock has the following voting rights at the general meeting of shareholders:



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| |  |  | Cumulative Protective Preference Shares with a nominal value of  500  Each holder has 1,000 votes per share;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | Cumulative Financing Preference Shares with a nominal value of  0.50  Each holder has 1 vote per share;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | Priority Shares with a nominal value of  50  Each holder has 100 votes per share; and
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | Ordinary Shares with a nominal value of  0.50  Each holder has 1 vote per share.
| | - |  | ----------------------------------------------------------------------------------

As soon as practicable after receipt of notice of any meeting of shareholders or of holders of Ordinary Shares, the Depositary is required to mail to each record holder of ADRs a notice containing the information set
forth in such notice of meeting and advising such ADR holder that the holder will be entitled, subject to any applicable provision of Dutch law and the Companys Articles of Association, to instruct the Depositary how to vote the Ordinary
Shares represented by the ADRs. The Depositary will, to the extent practicable, vote Ordinary Shares it holds as depositary in accordance with instructions received from ADR holders and will not vote any Ordinary Shares it holds as depositary unless
it receives specified voting instructions. Any holder of one or more ADS(s) will be entitled to attend (but not vote at) any general meeting of shareholders or of the holders of Ordinary Shares in accordance with the procedures in the notice from
the Depositary and subject to the applicable provisions of Dutch law and the Companys Articles of Association.

Dividends

The requirements under the Articles of Association and the Companys related policy regarding the payment of dividends are set forth in
Item 8 Financial Information.

Liquidation Rights

In the event of liquidation of the Company, the assets remaining after payment of all debts, liquidation expenses and taxes are to be distributed in the following order
of priority: to the holders of Preference Shares, if any, the nominal value of their shares, or in the case of not fully-paid shares, the amount paid thereon, plus any shortfall in dividends; to the holders of Priority Shares, the nominal value of
their shares; and the residue, if any, to the holders of Ordinary Shares in proportion to the nominal value of the shares held by them.

Changes in the Rights of Shareholders

The Articles of Association may only be amended at any general meeting of shareholders by a
majority of the votes cast, but only if the amendment has been proposed by the holders of the Priority Shares.

General Meetings of
Shareholders

The annual general meeting of shareholders must be held within six months after the close of the fiscal year. General meetings of
shareholders will be convened by the Executive Board not later than on the fifteenth day prior to such meeting. Notice of any general meeting of shareholders must be advertised in at least one daily newspaper having national circulation in the
Netherlands and in the Official Price Journal of the Euronext Amsterdam. All holders of Priority or Finance Preference Shares will be admitted after the Company receives written notification and holders of bearer shares will be admitted by showing a
voucher of deposit of their shares. Shareholders of the Company who solely or jointly represent 1% of the Companys issued and outstanding capital stock or capital stock with a value or Euro 50 million may present proposals for
consideration up to 30 days prior to the date of the meeting, provided that this provision will not be applicable if in the opinion of the Supervisory Board or the Executive Board, a major interest is opposed thereto.

There are no limitations under Dutch law or in the Companys Articles of Association on the right of persons who are not citizens or residents in the Netherlands to
hold or vote Ordinary Shares. See also Share ownership under Item 6.E.

The Companys Articles of Association do not require
shareholders to disclose their shareholdings. The Substantial Shareholders Notification Act (WMZ) however requires holders of voting securities of a corporation whose shares are listed on a Dutch stock exchange to notify the Autoriteit
Financiële Markten (Dutch Securities Board) of the number of shares they hold if that number reaches, exceeds or falls below specified thresholds. These thresholds are 5%, 10%, 25%, 50% and 662/3% of the Companys outstanding voting rights. Each Executive Director and Supervisory Director is required to notify the Dutch Securities
Board if he acquires or sells any equity or debt securities of the Company.

Extraordinary Meetings of Shareholders

Extraordinary meetings of the shareholders may be held at the request of the Board of Executive Directors, the chairman of the Supervisory
Directors, two Supervisory Directors or shareholders that hold at least 10% of the Companys issued and



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outstanding capital stock. The agenda for the meeting will be presented by the party that called the meeting. Shareholders of the Company, who solely or
jointly represent 1% of the Companys issued and outstanding capital stock or capital stock with a value of Euro 50 million, may also present proposals for consideration up to 30 days prior to the date of the meeting, provided that this
provision will not be applicable if in the opinion of the Supervisory Board or Executive Board, a major interest is opposed thereto. Resolutions may be adopted by an absolute majority unless otherwise permitted by law or in the Companys
Articles of Association.

Repurchase by the Company of its Own Shares

Each year, the general meeting of shareholders has given its authorization for the issue of shares and for the limiting or preclusion of the related statutory pre-emptive
right. On April 15, 2005, the general meeting of shareholders designated the Board of Executive Directors for a period of eighteen months as the body authorized as from the date of that meeting to resolve on the further issue and the granting
of rights to subscribe to Ordinary Shares and Financing Preference Shares up to a maximum of 10% of the entire share capital outstanding as at April 15, 2005, which percentage will be increased to 20% in the event of mergers or acquisitions,
subject to the restriction that, following such issue, the total number of Financing Preference Shares does not exceed 20% of the entire issued capital after such issue.

Liability to Further Calls or Assessments

All outstanding Ordinary, Priority and Financing Preference Shares
are, when issued and paid for, fully paid and non-assessable. Protective Preference Shares may be issued against partial payment, provided that the portion of the par value to be paid in respect of every protective preference share shall -
regardless of when it was issued - be equal and that, when subscribing to a protective preference share, at least one-fourth of the par value must be paid up. Payment must be made in cash, in so far as no other contribution has been agreed upon,

Issuance of Additional Shares

Subject to approval of the Board of Supervisory Directors and the holders of Priority Shares, shares of the Companys authorized but unissued capital stock may be issued at such times and on such conditions as may be authorized by the
shareholders at a general meeting or by the Executive Directors if authorized by the shareholders. Such authorization to the Board of Executive Directors may be given for a maximum period of five years.

Except for certain issues of Ordinary Shares in a merger, in exchange for property or to employees, the holders of Ordinary Shares have pre-emptive rights with regard to
Ordinary Shares to be issued, pro rata based on the number of their Ordinary Shares. Holders of Priority Shares and holders of Preference Shares have no pre-emptive rights in respect of any Ordinary Shares to be issued.

Pre-emptive rights in respect of Ordinary Shares may be limited or precluded by resolution of a general meeting of shareholders. In the notice of the meeting, the
reasons for the proposal and the intended issue price must be explained in writing. Pre-emptive rights may, subject to the approval of the Priority Shareholders and of the Board of Supervisory Directors, also be limited or precluded by the Board of
Executive Directors by a resolution of a general meeting conferring such power for a maximum of five years. The power may from time to time be extended, but never for a period longer than five years.

Certificates for Shares and their Transfer

All shares of the Companys capital stock are registered shares. The Ordinary Shares are included in the giro depository, as referred to in the Act of Giral Securities Transactions (Wet Giraal Effectenverkeer). Transfers and deliveries
of Ordinary Shares are made by institutions affiliated with the giro depository on behalf of the shareholders. Ownership of Priority Shares and Preference Shares are registered in a register maintained by the Board of Executive Directors.

Change of Control

The
arrangements with Foundation Fort Ginkel and the Lodewijk Foundation permit these foundations together to exercise control of the management of the Company and to prevent acquisition of control of the Company by any person in a transaction not
approved by management.

Indemnification

The Company will reimburse members of the Board of Executive Directors and the Supervisory Board, as well as their former members, for costs related to the fulfillment of their duties, which costs include the cost of defense against claims
for compensation on the grounds of acts or omissions in fulfillment of their duties and other legal or administrative proceedings



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in which they are involved as members of such Boards. The Company will also indemnify members of such Boards, as well as their former members, against any
financial loss that is a direct result of these claims. These provisions do not apply if and to the extent it is definitively established that the act or omission that gave rise to the claim was manifestly improper or seriously culpable. The Company
is authorized to take out professional liability insurance on the members of such Boards.

C. Material contracts

The following is a summary of certain terms of the material contracts included as exhibits to this report. This summary is qualified by reference to the actual terms of
the agreements.

In November 2002, the Company entered into a private label agreement with De Lage Landen International B.V. (DLL). Under the
terms of this agreement, the Company agreed to outsource its lease activities and transfer existing financial leases in the Netherlands, Belgium, Spain, France, Germany and the United Kingdom/Ireland to DLL upon terms and conditions to be agreed
upon. The initial term of this agreement is five years, and after the fourth year of the agreement, either party must give twelve months notice to terminate the agreement. See also the discussion regarding this agreement under Item 4
Outsourcing of Financial Leases.

The Company has entered into service contracts with each of the three members of the Board of Executive
Directors of the Company. Specifically, the Company entered into a service contract dated February 1, 1995 with R. L. van Iperen, a service contract dated March 10, 1998 with J.F. Dix, and a service contract dated November 22, 2000
with J. van den Belt (the Service Contracts).

Each of the Service Contracts set forth, among other things, the responsibilities, conditions to
employment and remuneration of the respective member of the Board of Executive Directors. See also the discussion in Item 6 Compensation, which outlines in more detail the remuneration of each of the Members of the Board of
Executive Directors.

The Company entered into a Credit Facility Agreement, dated September 16, 2005 (the Credit Agreement), among
Océ, as borrower, ABN AMRO Bank N.V., Coöperatieve Central Raiffeisen-Boerenleenbank B.A. and ING Bank N.V. as mandated lead arrangers, ING Bank N.V. as facility agent (the Agent) and the banks from time to time parties
thereto (the Banks) to borrow funds to acquire Imagistics. Under the Credit Agreement, the Banks made an unsecured revolving credit facility of up to $750 million available to Océ to acquire Imagistics and, to the extent not
utilized for that purpose following the completion of such transaction, for general corporate purposes. Loans may be, at the option of Océ, drawn for a term of one, two or three months, or as otherwise agreed by Océ and the Banks, but,
in any event, for a term not extending beyond the final maturity date. Loans may be drawn at any time until one month prior to the final maturity date. The final maturity date of any and all loans under the Credit Agreement is March 15, 2006,
with an option to extend the final maturity date for an additional three months. Océ is currently considering various refinancing alternatives of the loans drawn under the Credit Agreement, which may include other borrowing or the use of
other cash resources. Loans bear interest at LIBOR plus the applicable margin and the costs, if any, to the Banks of complying with the requirements of certain central banks. Océ is obligated to pay an agency fee to the Agent, an up-front fee
to the original Banks and a commitment fee on the undrawn, uncancelled portion of the credit facility under the Credit Agreement at a rate per annum equal to 40% of the applicable margin. The loans drawn under the Credit Agreement are subject to
mandatory repayment in certain limited circumstances. Voluntary repayments of the loans and voluntary reduction of the credit facility are permitted, in whole or in part, at the option of Océ in minimum principal amounts, without premium or
penalty, subject to payment of an additional fee under certain circumstances. The Credit Agreement contains customary representations and warranties, conditions precedent, covenants, events of default, indemnities and other provisions.

D. Exchange controls

There are no legislative or other legal
provisions currently in force in the Netherlands or arising under the Companys Articles of Association restricting remittances of dividends, interest or other payments to non-resident holders of securities of the Company. Cash dividends
payable in Euros on Ordinary Shares of the Company may be officially transferred from the Netherlands and converted into any other currency. There are no limitations, under the laws of the Netherlands or the Companys Articles of Association,
on the right of foreigners to hold or vote the Companys Ordinary Shares.

E. Taxation

The statements below are only a summary of current tax laws of the Netherlands and the Tax Convention of December 18, 1992 between the United States of America and
the Netherlands (the U.S. Tax Treaty) and are not to be read as extending by implication to matters not specifically referred to herein. As to individual tax consequences, investors in Océ Ordinary Shares or Océ ADRs should
consult their own tax advisors.



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Withholding tax

In general, a cash dividend distributed by a company resident in the Netherlands (such as the Company) is subject to a withholding tax imposed by the Netherlands at a rate of 25%.

Pursuant to the provisions of the U.S. Tax Treaty, dividends paid by the Company to a shareholder who is a resident of the United States for tax purposes, are generally
eligible for a reduction in the Dutch withholding tax rate to 15%, unless (i) the beneficial owner of the dividends carries on business in the Netherlands through a permanent establishment, or performs independent personal services in the
Netherlands from a fixed base, and the Ordinary Shares form part of the business property of such permanent establishment or pertain to such fixed base (in which case, the dividends are included with the owners other business income for Dutch
tax purposes and are not subject to Dutch withholding tax), or (ii) the beneficial owner of the dividends is not entitled to the benefits of the U.S. Tax Treaty under its treaty-shopping provisions. Dividends paid to qualifying
exempt U.S. pension trusts and qualifying exempt U.S. organizations are exempt from Dutch withholding tax under the U.S. Tax Treaty. However, qualifying exempt U.S. organizations must accept payment of the dividend net of the 25% withholding tax and
then apply for a refund.

For U.S. tax purposes, the gross amount (including the withheld amount) of dividend distributed on Ordinary Shares will be
dividend income to the U.S. shareholder, not eligible for the dividends received deduction generally allowed to corporations. However, subject to certain conditions and limitations, the Dutch withholding tax will be treated as a foreign income tax
that is eligible for credit against the shareholders U.S. income taxes.

Capital gains

Capital gains upon the sale or exchange of Ordinary Shares or ADS by a non-resident individual or corporation are exempt from Dutch income tax, corporation tax or
withholding tax, unless (i) such gains are effectively connected with a permanent establishment of the shareholders trade or business in the Netherlands or (ii) are derived from a direct, indirect or deemed substantial participation
in the share capital of a company (such substantial participation not being a business asset). In general, an individual has a substantial participation if he holds either directly or indirectly and either independently or jointly with his spouse or
steady partner, at least 5% of the total issued share capital or particular class of shares of a company. For determining a substantial participation, other shares held by close relatives are taken into account. The same applies to options to buy
shares. Generally, a deemed substantial participation exists if (in part) a substantial participation has been disposed of, or is deemed to have been disposed of, on a non-recognition basis. Under the U.S. Tax Treaty however, the Netherlands may
only tax a capital gain derived from a substantial participation if the selling holder has been a resident of the Netherlands at any time during the five-year period preceding the sale, and owned at the time of sale either alone or together with
relatives, at least 25% of any class of shares.

Net wealth tax

The Netherlands does not impose a net wealth tax with respect to the ownership of Ordinary Shares by a non-resident individual or corporation.

Estate and gift taxes

Except where Ordinary
Shares are attributable to a permanent establishment or permanent representative of the shareholder in the Netherlands, no estate, inheritance or gift taxes are imposed by the Netherlands on the transfer of Ordinary Shares if, at the time of death
or transfer, the shareholder or transferor is not a resident of the Netherlands.

Under Dutch law, inheritance or gift
taxes (as the case may be) are due, however, if such shareholder or transferor:



| |  |  | is a Dutch national and has been a resident of the Netherlands at any time during the ten years preceding death or transfer; or
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | is not a Dutch national but has been a resident of the Netherlands at any time during the twelve months immediately preceding the transfer (for the Netherlands gift taxes only).
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F. Dividends and paying agents

Not
applicable.

G. Statement by experts

Not applicable.



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H. Document on display

Copies of the documents concerning the Company referred to herein may be obtained by writing to the Secretary of the Company. In addition the Companys 2005 (in Dutch or English) Annual Report is available on request from the Secretary
of the Company. The annual report is also published in English and in Dutch on the Companys web site at:http://www.oce.com.

The Company is
also subject to certain of the reporting requirements of the Exchange Act. As a foreign private issuer, the Company is exempt from the rules under the Exchange Act prescribing certain disclosure and procedural requirements for proxy
solicitations, and the officers, directors and principal shareholders of the Company are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act, with respect to their
purchases and sales of shares. In addition, the Company is not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, the Company
will file with the SEC, within six months after the end of each fiscal year, an annual report on Form 20-F containing financial statements audited by an independent accounting firm. The Company also publishes unaudited interim financial information
after the end of each quarter, which it furnishes to the SEC under cover of a Form 6-K.

You may read and copy any document the Company files with the SEC
at its public reference facility at 450 Fifth Street, N.W., Washington DC 20549. The SEC also maintains a website that contains reports and other information regarding registrants that are required to file electronically with the SEC. The address of
this website is http://www.sec.gov. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.

I. Subsidiary information

Not applicable.



|Item 11 | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

The
information provided in this Item 11 may constitute forward looking statements, which are discussed in Item 3, Key Information.

As a global business, Océ faces market risks with respect to foreign exchange rates and interest rate risks. Océ has adopted several risk management policies in an attempt to minimize these risks.

Foreign Exchange Risks

As a global company with operations in 80
countries, Océ achieves approximately two-thirds of its revenues outside of the Euro-zone. In order to minimize its risks related to differences between the Euro (the currency in which Océ prepares its financial statements) and
currencies outside of the Euro-zone, the prices charged by Océ are generally denominated in customers local currency. In addition, to the greatest extent possible, the expenses related to the revenues from sales in non-Euro currencies
are also denominated in the same currency as the revenue from the sale (such as labor expenses). However, because most of Océ machines are manufactured in the Euro-zone, a foreign exchange risk arises with respect to the flow of machines from
the Euro-zone to outside the Euro-zone. At Océ, these net currency flows (also called transaction exposure) are subject to an active foreign exchange management policy, which is implemented in close consultation with the Board of
Executive Directors. The relocation of part of the Companys manufacturing activities to the Far East will help to reduce the Companys net level of the foreign exchange exposure since these goods will be paid for in U.S. dollars.

The Companys current policy is to hedge on a rolling twelve month basis up to 80% of its foreign currency transactions (mainly in the U.S. dollar).
For this purpose, the Company uses a number of financial instruments, particularly forward foreign exchange contracts, which are listed in Note 24 to the Consolidated Financial Statements. The contract value and the fair value of forward foreign
exchange contracts as of November 30, 2005 and 2004, respectively, were:



| |  |  | For future cash flows in 2005 Euro 237.2 million and Euro -9.9 million, and in 2004 Euro 225.0 million and Euro 7.9 million; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | For (intercompany) loans in 2005 Euro 197.0 million and Euro 0.2 million, and in 2004, Euro 79.8 million and Euro 1.3 million.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------

The Company does not, however, hedge against currency translation exposures.



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The hypothetical impact on operating income if the U.S. dollar (which is relevant for the Company, because its U.S.
revenues are expected to amount to approximately 43% of its total revenues in 2006) decreases against the Euro by 10% would be an additional loss of Euro 5.8 million for 2006 assuming that no other measures had been taken as protective measures
against this decrease.

Interest Rate Risk

Most of the
Companys interest revenues originate from market placements of machines under financial lease contracts as described in Item 4, Information on the Company. Océ financial lease contracts usually contain a fixed interest
that corresponds to the rates charged by external leasing businesses. These contracts are generally financed by interest-bearing capital with an interest rate fixed for the duration of the contracts.

Océ uses interest rate instruments to manage its risk related to fixed and variable interest rate exposures, which are listed in Note 24 to the Consolidated
Financial Statements attached hereto. Océs primary objective is to prevent a disparity between the portfolio of rentals and leases and the financing obtained by the Company to support the portfolio of the Company. Océs goal
is to achieve a ratio of 60% to 80% between the fixed-interest assets and related liabilities. The Company had entered into interest rate swap contracts with the contract value/notional principal value of Euro 580.2 million with a market value
of Euro 12.8 million at November 30, 2005. The contract value/notional principal value was Euro 431.5 million with a market value of interest rate instruments of Euro 21.0 million at November 30, 2004.

The aggregate hypothetical loss in earnings on an annual basis on all financial instruments and derivative instruments, held by the Company at November 30, 2005,
that would have resulted from a hypothetical increase in interest rates of 10 percent, sustained for one year, is considered not to be significant in view of the hedging operations undertaken.

The compensating effect on the interest sensitivity of new lease contracts is not taken in consideration due to uncertainty. This effect, however, is not considered to
be significant.

Debt Risk

The Company is party to
several long term debt contracts to fund the Company, which are listed in Note 11 to the Consolidated Financial Statements.

Other Risk

The Company is also exposed to risk due to fluctuations of the purchase price of paper. This risk typically has a limited effect on the Companys gross margin
because the cost increases are passed on to customers via sales price increases. Credit risks are reduced by doing business solely with financial institutions that have a high credit rating, with fixed limits being applicable to each institution.



|Item 12 | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|------- | ------------------------------------------------------

Not applicable.

PART II



|Item 13 | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|------- | -----------------------------------------------

None.



|Item 14 | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|------- | ----------------------------------------------------------------------------

As a result of the adoption of the Dutch corporate governance code in December 2003, during 2004 the Company amended its Articles of Association which amendments were effective in 2005. A copy of the Articles of
Association, as amended, are included as an exhibit to this report on Form 20-F. The amendments affect the Companys Ordinary Shares, Preference Shares and Priority Shares. The amendments are reflected in the description of the Articles of
Association in Item 10.B, Memorandum and Articles of Association above. The general effect of the modifications were to reflect changes in the



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legislation governing the Company as a result of the adoption of the Dutch corporate governance code and to reflect other developments in the area of
corporate governance and for reasons of a practical nature.



|Item 15 | CONTROLS AND PROCEDURES
|------- | -----------------------

Evaluation of Disclosure Controls and
Procedures

The Companys principal executive officer and principal financial officer have evaluated the effectiveness of the Companys
disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) at November 30, 2005 (the Evaluation Date). Based upon their evaluation, the principal executive
officer and principal financial officer concluded that the Companys disclosure controls and procedures are effective at the reasonable assurance level that information required to be disclosed by the Company in the reports filed or submitted
by it under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and that information required to be disclosed by the Company in such reports is accumulated and
communicated to the Companys management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. While the Board of Executive Directors believes that
the present design of the Companys disclosure controls and procedures are effective at the reasonable assurance level that the controls and procedures will achieve their objectives, future events affecting Océs business may cause
the Company to significantly modify its disclosure controls and procedures or its internal control over financial reporting. The design of a control system inherently has limitations, including that the benefits of controls must be considered
relative to their costs. Additionally, controls can be circumvented by the individual acts of some persons, or by collusion of two or more people. Therefore, even effective disclosure controls and procedures can only provide reasonable assurance of
achieving their control objective.

Changes in Internal Controls over Financial Reporting

During the year ended November 30, 2005, there have not been any changes in the Companys internal control over financial reporting (as such term is
defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.



|Item 16A | AUDIT COMMITTEE FINANCIAL EXPERT
|-------- | --------------------------------

The members of the Audit
Committee are all independent members of the Supervisory Board (as the term independence is defined under the NASDAQ listing rules applicable to the Company). The Supervisory Board has determined that Mr. Arentsen qualifies as the
Audit Committee financial expert.



|Item 16B | CODE OF ETHICS
|-------- | --------------

The Company has adopted a Code of Ethics, which
states its ethical principles with respect to various subjects. The Code of Ethics is applicable to the following employees of the Company:



| |  |  | the Members of the Executive Board of Océ N.V.;
| | - |  | -----------------------------------------------



| |  |  | the Group Controller;
| | - |  | ---------------------



| |  |  | the Corporate Treasurer;
| | - |  | ------------------------



| |  |  | the Group Internal Auditor;
| | - |  | ---------------------------



| |  |  | the Manager of the Corporate Tax Department
| | - |  | -------------------------------------------



| |  |  | the Manager Investors Relations;
| | - |  | --------------------------------



| |  |  | the Controllers of the Océ operating companies;
| | - |  | -----------------------------------------------



| |  |  | the Controllers of the Strategic Business Units; and
| | - |  | ----------------------------------------------------



| |  |  | any employee designated by the Group Controller, who will keep a current register of such designated persons.
| | - |  | -------------------------------------------------------------------------------------------------------------

The Companys Code of Ethics is posted on it website at www.oce.com. No amendments were made to, and no waivers were granted under the Companys Code of
Ethics in respect of, the Companys principal executive officer, principal financial officer or principal accounting officer in 2005.



72



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##### Table of Contents

|Item 16C | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|-------- | --------------------------------------

PricewaterhouseCoopers
Accountants N.V. has served as the Companys principal independent accountant for each of the three year periods ended November 30, 2005. The following table presents the aggregate fees in Euros for audit services and other services
rendered by PricewaterhouseCoopers in 2005 and 2004.



|                                               |  |       |  |      
|---------------------------------------------- |  | ----- |  | -----
|Year ended November 30, (Amounts in thousands) |  | 2004  |  | 2005 
|Audit Fees                                     |  | 2,597 |  | 2,734
|Audit-Related Fees                             |  | 1,130 |  | 954  
|Tax Fees                                       |  | 666   |  | 812  
|All Other Fees                                 |  |      |  |     
|                                               |  |       |  |      
|Total                                          |  | 4,393 |  | 4,500
|                                               |  |       |  |      

Audit Fees

Audit fees paid by the Company to PricewaterhouseCoopers relate to the services provided by PricewaterhouseCoopers for the audit of the Companys annual Consolidated Financial Statements included in this annual report on Form 20-F and
for services that are normally provided in connection with local statutory and regulatory filings or engagements of the Company.

Audit-Related Fees

Audit-related fees paid by the Company to PricewaterhouseCoopers relate to services provided by PricewaterhouseCoopers to the Company that are
reasonably related to the performance of the audit of the Companys Consolidated Financial Statements.

The audit-related fees mainly include the
following services provided by PricewaterhouseCoopers to the Company in 2005:



| |  |  | advisory services related to Sarbanes-Oxley Section 404;
| | - |  | --------------------------------------------------------



| |  |  | advice related to the conversion from Dutch GAAP to IFRS;
| | - |  | ---------------------------------------------------------



| |  |  | accounting consultation relating to Dutch GAAP, U.S. GAAP and IFRS; and
| | - |  | -----------------------------------------------------------------------



| |  |  | due diligence work related to the acquisition of Imagistics.
| | - |  | ------------------------------------------------------------

The
audit-related fees mainly include the following services provided by PricewaterhouseCoopers to the Company in 2004:



| |  |  | advisory services related to Sarbanes-Oxley Section 404;
| | - |  | --------------------------------------------------------



| |  |  | advice related to the conversion from Dutch GAAP to IFRS; and
| | - |  | -------------------------------------------------------------



| |  |  | accounting consultation relating to Dutch GAAP, U.S. GAAP and IFRS.
| | - |  | -------------------------------------------------------------------

Tax Fees

Tax fees paid by the Company to PricewaterhouseCoopers relate to services provided in the area of tax compliance and tax advice.

All Other Fees

None.

Pre-Approval Policies

During 2004 the Audit Committee adopted
procedures to pre-approve audit, audit related, tax and other services to be provided by its independent public accountants. Under the Audit Committees pre-approval procedures, at the beginning of each fiscal year, the Audit Committee reviews
and pre-approves a summary of all audit and tax services expected to be performed by the independent accountants in the coming fiscal year, which includes a detailed description of the proposed



73



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##### Table of Contents

work and an estimate of the cost of the project. Any additional audit-related, additional tax and additional other services to be provided by the
Companys independent accountant must be pre-approved individually by the Audit Committee.

During 2005, none of the audit-related, tax-related or
other services were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2.01 of Regulation S-X.



|Item 16D | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|-------- | ----------------------------------------------------------

Not applicable.



|Item 16E | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|-------- | ----------------------------------------------------------------------

On April 15, 2005, at the general meeting of shareholders, the shareholders approved a plan to authorize the Company to purchase up to 10 percent of the issued and outstanding capital of the Company. This authorization is permitted for
18 months after the date of the general meeting (which is until October 15, 2006). The shareholders authorization requires that the minimum purchase price that may be paid for an ordinary share is its stated nominal value of Euro 0.50 and
that the maximum amount that may be paid for an ordinary share is up to 10% in excess of the average highest rates which have been quoted for the ordinary shares in the official price journal of Euronext Amsterdam during the five consecutive trading
days prior to the day of purchase.

The Companys policy is to purchase ordinary shares to satisfy its issuance requirements under its stock option
plan. These purchases are made either before or upon exercise of an option. During 2005, the Company purchased a total of 116,430 ordinary shares in connection with its stock option plan for an aggregate purchase price of Euro 1.5 million.

The following table sets forth all purchases of ordinary shares made by Océ or any of its affiliated purchasers during 2005 on a
monthly basis:



|               |  |                                 |  |                                       |  |                                                                              |  |                                                                       
|-------------- |  | ------------------------------- |  | ------------------------------------- |  | ---------------------------------------------------------------------------- |  | ----------------------------------------------------------------------
|               |  | Total Number ofShares Purchased |  | Average Price PaidPer Share (in Euro) |  | Total Number ofShares Purchasedas Part of PubliclyAnnounced Plansor
Programs |  | Maximum Numberof Shares that maybe PurchasedUnder the Plans orPrograms
|December 2004  |  | 0                               |  | 0                                     |  | 0                                                                            |  | *                                                                     
|January 2005   |  | 0                               |  | 0                                     |  | 0                                                                            |  | *                                                                     
|February 2005  |  | 0                               |  | 0                                     |  | 0                                                                            |  | *                                                                     
|March 2005     |  | 0                               |  | 0                                     |  | 0                                                                            |  | *                                                                     
|April 2005     |  | 0                               |  | 0                                     |  | 0                                                                            |  | *                                                                     
|May 2005       |  | 0                               |  | 0                                     |  | 0                                                                            |  | *                                                                     
|June 2005      |  | 0                               |  | 0                                     |  | 0                                                                            |  | *                                                                     
|July 2005      |  | 0                               |  | 0                                     |  | 0                                                                            |  | *                                                                     
|August 2005    |  | 0                               |  | 0                                     |  | 0                                                                            |  | *                                                                     
|September 2005 |  | 0                               |  | 0                                     |  | 0                                                                            |  | *                                                                     
|October 2005   |  | 116,430                         |  | 13.03                                 |  | 116,430                                                                      |  | *                                                                     
|November 2005  |  | 0                               |  | 0                                     |  | 0                                                                            |  | *                                                                     

---

|* | Up to 10% of the issued and outstanding capital of the Company.
|- | ---------------------------------------------------------------

On
October 7, 2002, Océ celebrated its 125thAnniversary. On this occasion, each employee received a
certificate representing a gift of 5 Ordinary Shares of the Company. The end date of the Océ Jubilee Plan was October 7, 2005. On this date Océ purchased the shares (116,430) contained in the Océ Jubilee Plan.

PART III



|Item 17 | FINANCIAL STATEMENTS
|------- | --------------------

See
Item 19.



|Item 18 | FINANCIAL STATEMENTS
|------- | --------------------

See
Item 19.



74



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##### Table of Contents

|Item 19 | EXHIBITS
|------- | --------

(a) The following financial statements are being filed as part of this annual report:



|                                                                                           |  |     
|------------------------------------------------------------------------------------------ |  | ----
|                                                                                           |  | Page
|                                                                                           | 
|Report of the Independent Registered Public Accounting Firm                                |  | F-2 
|                                                                                           | 
|Consolidated Statements of Operations for the years ended November 30, 2003, 2004 and 2005 |  | F-3 
|                                                                                           | 
|Consolidated Balance Sheets as of November 30, 2004 and 2005                               |  | F-4 
|                                                                                           | 
|Consolidated Statements of Cash Flows for the years ended November 30, 2003, 2004 and 2005 |  | F-6 
|                                                                                           | 
|Notes to Consolidated Financial Statements                                                 |  | F-8 
|                                                                                           | 
|Schedule:                                                                                  |  |     
|                                                                                           | 
|Valuation and qualifying accounts as of November 2003, 2004 and 2005                       |  | F-41
|                                                                                           | 
|See also Table of Contents to Consolidated Financial Statements on page F-1              |  |     

(b) The following exhibits are being filed as part of this annual report:



| | 1. | Articles of Association as confirmed by notarial deed as of April 9, 1999, as amended as confirmed by notarial deed as of December 23, 2004 (English translation)*
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | Material Contracts
| | -- | ------------------



| | (a) | Service Contract between the Company and R.L. van Iperen (English translation)**
| | --- | --------------------------------------------------------------------------------



| | (b) | Service Contract between the Company and J. van den Belt (English translation)**
| | --- | --------------------------------------------------------------------------------



| | (c) | Service Contract between the Company and J.F. Dix (English translation)**
| | --- | -------------------------------------------------------------------------



| | (d) | Redacted Private Label Program Agreement between the Company and De Lage Landen International B.V. (English translation) (Portions of this exhibit were omitted pursuant to a request
for confidential treatment and were filed separately with the office of the Secretary of the Securities and Exchange Commission).**
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | Credit Facility Agreement, dated September 16, 2005, among the Company, as borrower, ABN AMRO Bank N.V., Coöperatieve Central Raiffeisen-Boerenleenbank B.A. and ING Bank
N.V. as mandated lead arrangers, ING Bank N.V. as facility agent (the Agent) and the banks from time to time parties thereto ***
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 8. | Subsidiaries of Océ N.V.****
| | -- | ----------------------------



| | 12. | Certifications required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.****
| | --- | -------------------------------------------------------------------------------------------------



| | 13. | Certifications required under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.****
| | --- | -------------------------------------------------------------------------------------------------------------------------------

---

|* | Filed as an Exhibit to the Companys Annual Report on Form 20-F for the fiscal year ended November 30, 2004 and incorporated herein by reference.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------



|** | Filed as an Exhibit to the Companys Annual Report on Form 20-F, as amended, for the fiscal year ended November 30, 2002 and incorporated herein by reference.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------



|*** | Filed as Exhibit 99.1(b)(1) to the Companys Schedule TO with respect to Imagistics International Inc. on September 19, 2005 and incorporated herein by reference.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



|**** | Filed herewith.
|---- | ---------------



75



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OCÉ N.V. AND SUBSIDIARIES

TABLE OF CONTENTS TO CONSOLIDATED FINANCIAL STATEMENTS



|                                                                                           |  |     
|------------------------------------------------------------------------------------------ |  | ----
|                                                                                           |  | Page
|Report of the Independent Registered Public Accounting Firm                                |  | F-2 
|                                                                                           | 
|Consolidated Statements of Operations for the years ended November 30, 2003, 2004 and 2005 |  | F-3 
|                                                                                           | 
|Consolidated Balance Sheets as of November 30, 2004 and 2005                               |  | F-4 
|                                                                                           | 
|Consolidated Statements of Cash Flows for the years ended November 30, 2003, 2004 and 2005 |  | F-6 
|                                                                                           | 
|Notes to Consolidated Financial Statements                                                 |  | F-8 
|                                                                                           | 
|Schedule:                                                                                  |  |     
|                                                                                           | 
|II Valuation and qualifying accounts as of November 30, 2003, 2004 and 2005                |  | F-41



F-1



---

##### Table of Contents

REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Executive Directors

and the shareholders of Océ N.V.

In our opinion, the accompanying
consolidated financial statements listed in the index appearing on F-1 present fairly, in all material respects, the financial position of Océ N.V. and its subsidiaries at November 30, 2005 and 2004, and the results of their operations
and their cash flows for each of the three years in the period ended November 30, 2005 in conformity with accounting principles generally accepted in the Netherlands. In addition, in our opinion, the financial statement schedules listed in the
index appearing on F-1 present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedules are the
responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit 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.

Accounting principles generally accepted in the Netherlands
vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and effect of such differences is presented in Note 27 to the consolidated financial statements.

Amsterdam, The Netherlands,

March 7, 2006

PricewaterhouseCoopers Accountants N.V.



|                 
|-----------------
|                 
|/s/ P.R. Baart RA
|P.R. Baart RA    



F-2



---

##### Table of Contents

OCÉ N.V. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS



|                                                                                               |  |                                         |  |           |  |           |  |          
|---------------------------------------------------------------------------------------------- |  | --------------------------------------- |  | --------- |  | --------- |  | ---------
|                                                                                               |  | Years ended November 30,               
|                                                                                               |  | 2003                                    |  | 2004      |  | 2005      |  | 2005     
|                                                                                               |  | (in thousands except per share amounts)
|                                                                                               |  | Euro                                    |  | Euro      |  | Euro      |  | $*       
|Net sales                                                                                      |  | 1,552,760                               |  | 1,563,783 |  | 1,630,602 |  | 1,922,480
|Rental and service revenues                                                                    |  | 1,118,939                               |  | 1,020,493 |  | 1,010,334 |  | 1,191,184
|Interest from financial leases                                                                 |  | 97,564                                  |  | 68,177    |  | 36,339    |  | 42,844   
|                                                                                               |  |                                         |  |           |  |           |  |          
|Total revenues                                                                                 |  | 2,769,263                               |  | 2,652,453 |  | 2,677,275 |  | 3,156,508
|                                                                                               |  |                                         |  |          
|Cost of sales                                                                                  |  | 943,820                                 |  | 938,855   |  | 1,008,148 |  | 1,188,606
|Cost of rentals and service                                                                    |  | 660,230                                 |  | 610,203   |  | 597,294   |  | 704,210  
|                                                                                               |  |                                         |  |           |  |           |  |          
|Gross margin                                                                                   |  | 1,165,213                               |  | 1,103,395 |  | 1,071,833 |  | 1,263,692
|                                                                                               |  |                                         |  |          
|Selling expenses                                                                               |  | 623,660                                 |  | 614,969   |  | 616,938   |  | 727,370  
|Research and development expenses                                                              |  | 208,321                                 |  | 208,105   |  | 195,614   |  | 230,629  
|General and administrative expenses                                                            |  | 183,226                                 |  | 162,044   |  | 148,602   |  | 175,202  
|Impairment                                                                                     |  | 25,175                                  |  | 7,888     |  | 562       |  | 663      
|                                                                                               |  |                                         |  |           |  |           |  |          
|                                                                                               |  | 1,040,382                               |  | 993,006   |  | 961,716   |  | 1,133,864
|                                                                                               |  |                                         |  |           |  |           |  |          
|Operating income                                                                               |  | 124,831                                 |  | 110,389   |  | 110,117   |  | 129,828  
|                                                                                               |  |                                         |  |          
|Financial expense (net)(Note 20)                                                               |  | 30,552                                  |  | 18,089    |  | 17,813    |  | 21,002   
|                                                                                               |  |                                         |  |           |  |           |  |          
|Income before income taxes, equity in income of unconsolidated companies and minority interest |  | 94,279                                  |  | 92,300    |  | 92,304    |  | 108,826  
|                                                                                               |  |                                         |  |          
|Income taxes (Note 19)                                                                         |  | 30,522                                  |  | 12,196    |  | 11,752    |  | 13,855   
|                                                                                               |  |                                         |  |           |  |           |  |          
|Income before equity in income of unconsolidated companies and minority interest               |  | 63,757                                  |  | 80,104    |  | 80,552    |  | 94,971   
|                                                                                               |  |                                         |  |          
|Equity in income of unconsolidated companies                                                   |  | 90                                      |  | 507       |  | 580       |  | 684      
|                                                                                               |  |                                         |  |           |  |           |  |          
|Income before minority interest                                                                |  | 63,847                                  |  | 80,611    |  | 81,132    |  | 95,655   
|                                                                                               |  |                                         |  |          
|Minority interest in net income of subsidiaries                                                |  | 2,385                                   |  | 2,535     |  | 2,294     |  | 2,705    
|                                                                                               |  |                                         |  |           |  |           |  |          
|Net income                                                                                     |  | 61,462                                  |  | 78,076    |  | 78,838    |  | 92,950   
|                                                                                               |  |                                         |  |          
|Basic earnings per ordinary share                                                              |  | 0.69                                    |  | 0.89      |  | 0.92      |  | 1.08     
|                                                                                               |  |                                         |  |           |  |           |  |          
|Diluted earnings per ordinary share                                                            |  | 0.69                                    |  | 0.88      |  | 0.91      |  | 1.07     
|                                                                                               |  |                                         |  |           |  |           |  |          
|Net income in accordance with US GAAP (Note 27)                                                |  | 50,718                                  |  | 59,302    |  | 8,184     |  | 9,649    
|                                                                                               |  |                                         |  |           |  |           |  |          
|Earnings per ordinary share in accordance with US GAAP                                         |  |                                         |  |           |  |           |  |          
|Basic                                                                                          |  | 0.57                                    |  | 0.67      |  | 0.07      |  | 0.08     
|                                                                                               |  |                                         |  |           |  |           |  |          
|Diluted                                                                                        |  | 0.56                                    |  | 0.66      |  | 0.08      |  | 0.09     
|                                                                                               |  |                                         |  |           |  |           |  |          

---

|* | See Note 0 Summary of significant accounting principles
|- | -------------------------------------------------------

The accompanying Notes are an integral part of these Consolidated Financial Statements.



F-3



---

##### Table of Contents

OCÉ N.V. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



|                                                |  |                |  |           |  |          
|----------------------------------------------- |  | -------------- |  | --------- |  | ---------
|                                                |  | November 30,  
|                                                |  | 2004           |  | 2005      |  | 2005     
|                                                |  | (in thousands)
|                                                |  | Euro           |  | Euro      |  | $*       
|CURRENT ASSETS:                                 |  |                |  |           |  |          
|                                                |  |                | 
|Cash and cash equivalents (Note 1)              |  | 313,060        |  | 142,699   |  | 168,242  
|Prepaid expenses                                |  | 17,025         |  | 23,813    |  | 28,076   
|Accounts receivable (Note 2)                    |  | 535,415        |  | 697,805   |  | 822,712  
|Financial lease receivables (Note 7)            |  | 172,495        |  | 133,052   |  | 156,868  
|Inventories (Note 3)                            |  | 317,335        |  | 363,523   |  | 428,594  
|                                                |  |                |  |           |  |          
|Total current assets                            |  | 1,355,330      |  | 1,360,892 |  | 1,604,492
|                                                |  |                | 
|FIXED ASSETS:                                   |  |                |  |           |  |          
|                                                |  |                | 
|Intangible fixed assets (Note 4)                |  | 37,207         |  | 550,039   |  | 648,496  
|                                                |  |                | 
|Property, plant and equipment (Notes 5 and 15)  |  | 423,490        |  | 455,080   |  | 536,539  
|Rental equipment (Note 6)                       |  | 57,891         |  | 123,719   |  | 145,865  
|                                                |  |                |  |           |  |          
|Tangible fixed assets                           |  | 481,381        |  | 578,799   |  | 682,404  
|                                                |  |                | 
|Investments in minority interests in associates |  | 1,553          |  | 1,563     |  | 1,843    
|Financial lease receivables (Note 7)            |  | 230,962        |  | 210,107   |  | 247,716  
|Other long term assets (Note 8)                 |  | 126,654        |  | 118,060   |  | 139,193  
|                                                |  |                |  |           |  |          
|                                                |  | 359,169        |  | 329,730   |  | 388,752  
|                                                |  |                | 
|Total fixed assets                              |  | 877,757        |  | 1,458,568 |  | 1,719,652
|                                                |  |                |  |           |  |          
|TOTAL ASSETS                                    |  | 2,233,087      |  | 2,819,460 |  | 3,324,144
|                                                |  |                |  |           |  |          

---

|* | See Note 0 Summary of significant accounting principles
|- | -------------------------------------------------------

The accompanying Notes are an integral part of these Consolidated Financial Statements.



F-4



---

##### Table of Contents

OCÉ N.V. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



|                                                    |  |                                     |  |           |  |          
|--------------------------------------------------- |  | ----------------------------------- |  | --------- |  | ---------
|                                                    |  | November 30,                       
|                                                    |  | 2004                                |  | 2005      |  | 2005     
|                                                    |  | (in thousands except share amounts)
|                                                    |  | Euro                                |  | Euro      |  | $*       
|CURRENT LIABILITIES:                                |  |                                     |  |           |  |          
|Borrowings under bank lines of credit (Note 9)      |  | 15,052                              |  | 12,336    |  | 14,544   
|Current portion of long term debt (Note 9 and 11)   |  | 27,790                              |  | 656,880   |  | 774,461  
|Accounts and notes payable, trade                   |  | 132,411                             |  | 194,042   |  | 228,776  
|Other current- and accrued liabilities (Note 17)    |  | 306,014                             |  | 341,670   |  | 402,829  
|Deferred income (Note 10)                           |  | 45,155                              |  | 56,238    |  | 66,305   
|                                                    |  |                                     |  |           |  |          
|Total current liabilities                           |  | 526,422                             |  | 1,261,166 |  | 1,486,915
|                                                    |  |                                     | 
|LONG TERM DEBT:                                     |  |                                     |  |           |  |          
|Long term debt (Note 11)                            |  | 438,409                             |  | 227,112   |  | 267,765  
|                                                    |  |                                     |  |           |  |          
|Total long term debt                                |  | 438,409                             |  | 227,112   |  | 267,765  
|                                                    |  |                                     | 
|LONG TERM LIABILITIES (PROVISIONS):                 |  |                                     |  |           |  |          
|Deferred income taxes (Note 19)                     |  | 6,918                               |  | 45,019    |  | 53,077   
|Long term provisions (Note 12)                      |  | 509,059                             |  | 467,925   |  | 551,684  
|                                                    |  |                                     |  |           |  |          
|Total long term liabilities                         |  | 515,977                             |  | 512,944   |  | 604,761  
|                                                    |  |                                     | 
|COMMITMENTS AND CONTINGENT LIABILITIES              |  |                                     |  |           |  |          
|(Note 14)                                           |  |                                     |  |           |  |          
|                                                    |  |                                     | 
|MINORITY INTEREST                                   |  | 38,209                              |  | 37,406    |  | 44,102   
|                                                    |  |                                     | 
|SHAREHOLDERS EQUITY (Note 13):                     |  |                                     |  |           |  |          
|Priority Shares                                     |  | 2                                   |  | 2         |  | 2        
|(30 with a nominal or par value Euro 50)            |  |                                     |  |           |  |          
|Ordinary Shares                                     |  |                                     |  |           |  |          
|(87,274,460) with a nominal or par value Euro 0.50) |  | 43,634                              |  | 43,637    |  | 51,448   
|Financing Preference Shares                         |  |                                     |  |           |  |          
|(20,000,000 with a nominal or par value Euro 0.50)  |  | 10,000                              |  | 10,000    |  | 11,790   
|Paid-in capital                                     |  | 511,445                             |  | 511,485   |  | 603,041  
|Legal reserve                                       |  | 2,441                               |  | 2,255     |  | 2,659    
|Other reserve                                       |  | 208,863                             |  | 238,375   |  | 281,044  
|Accumulated translation adjustment                  |  | -140,391                            |  | -103,760  |  | -122,333 
|Net income                                          |  | 78,076                              |  | 78,838    |  | 92,950   
|                                                    |  |                                     |  |           |  |          
|Total shareholders equity                          |  | 714,070                             |  | 780,832   |  | 920,601  
|                                                    |  |                                     |  |           |  |          
|TOTAL LIABILITIES & SHAREHOLDERS EQUITY            |  | 2,233,087                           |  | 2,819,460 |  | 3,324,144
|                                                    |  |                                     |  |           |  |          

---

|* | See Note 0 Summary of significant accounting principles
|- | -------------------------------------------------------

The accompanying Notes are an integral part of these Consolidated Financial Statements.



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##### Table of Contents

OCÉ N.V. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                    |  |                          |  |          |  |          |  |         
|----------------------------------------------------------------------------------- |  | ------------------------ |  | -------- |  | -------- |  | --------
|                                                                                    |  | Years ended November 30,
|                                                                                    |  | 2003                     |  | 2004     |  | 2005     |  | 2005    
|                                                                                    |  | (in thousands)          
|                                                                                    |  | Euro                     |  | Euro     |  | Euro     |  | $*      
|CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                        |  | 37,385                   |  | 55,709   |  | 313,060  |  | 369,098 
|                                                                                    |  |                          |  |         
|CASH FLOW FROM OPERATING ACTIVITIES:                                                |  |                          |  |          |  |          |  |         
|Net income                                                                          |  | 61,462                   |  | 78,076   |  | 78,838   |  | 92,950  
|Adjustments to reconcile net income to cash flow generated by operating activities: |  |                          |  |          |  |          |  |         
|Depreciation and amortization                                                       |  | 173,370                  |  | 147,626  |  | 145,606  |  | 171,669 
|Impairment                                                                          |  | 25,175                   |  | 7,888    |  | 562      |  | 663     
|Additions to rental equipment                                                       |  | -83,025                  |  | -116,797 |  | -113,015 |  | -133,245
|Proceeds from sale of rental equipment                                              |  | 67,747                   |  | 77,268   |  | 64,134   |  | 75,614  
|Financial lease receivables                                                         |  | 45,347                   |  | 74,337   |  | 6,068    |  | 7,154   
|Equity in income of investments in minority interests                               |  | 271                      |  | -402     |  | -66      |  | -78     
|Net income for minority interests                                                   |  | 2,385                    |  | 2,535    |  | 2,294    |  | 2,705   
|Long term liabilities (provisions)                                                  |  | -41,241                  |  | -104,640 |  | -30,357  |  | -35,791 
|Changes in working capital:                                                         |  |                          |  |          |  |          |  |         
|Accounts receivable and other receivables                                           |  | 70,786                   |  | 30,938   |  | -21,144  |  | -24,929 
|Provisions for financial lease receivables, inventories and accounts receivable     |  | 52,140                   |  | 42,470   |  | 21,307   |  | 25,121  
|Inventories                                                                         |  | 5,458                    |  | -63,003  |  | 15,724   |  | 18,539  
|Trade accounts payable                                                              |  | -31,342                  |  | 1,806    |  | 44,848   |  | 52,876  
|Net change in other working capital accounts **                                     |  | -8,992                   |  | -41,329  |  | -50,813  |  | -59,909 
|                                                                                    |  |                          |  |          |  |          |  |         
|Total cash flow from operating activities                                           |  | 339,541                  |  | 136,773  |  | 163,986  |  | 193,339 
|                                                                                    |  |                          |  |         
|CASH FLOW FROM INVESTING ACTIVITIES:                                                |  |                          |  |          |  |          |  |         
|Additions to intangible fixed assets                                                |  | -11,497                  |  | -9,354   |  | -14,722  |  | -17,357 
|Additions to property, plant and equipment                                          |  | -97,129                  |  | -86,738  |  | -96,479  |  | -113,749
|Divestments of (additions to) other long term financial assets                      |  | -1,925                   |  | 3,340    |  | 1,340    |  | 1,580   
|Divestments of intangible fixed assets                                              |  | 94                       |  |         |  | 38       |  | 45      
|Proceeds from sale of property, plant and equipment                                 |  | 16,599                   |  | 12,910   |  | 10,964   |  | 12,926  
|Acquisition of minority interests                                                   |  | -17                      |  |         |  |         |  |        
|Proceeds from disposition of minority interests                                     |  | 5                        |  | 1,305    |  |         |  |        
|Proceeds from sale of lease portfolio                                               |  | 79,768                   |  | 312,254  |  | 65,610   |  | 77,354  
|(Acquisitions) disposal at net asset value (net of cash)                            |  | 2,379                    |  |         |  | -638,229 |  | -752,472
|                                                                                    |  |                          |  |          |  |          |  |         
|Total cash flow from investing activities                                           |  | -11,723                  |  | 233,717  |  | -671,478 |  | -791,673
|                                                                                    |  |                          |  |         
|CASH FLOW FROM FINANCING ACTIVITIES:                                                |  |                          |  |          |  |          |  |         
|Proceeds from long term debt                                                        |  | 9,116                    |  | 141,476  |  | 18,104   |  | 21,345  
|Repayment of long term debt                                                         |  | -329,623                 |  | -76,524  |  | -240,337 |  | -283,357
|Borrowings and current portion of long term debts                                   |  | 81,727                   |  | -124,822 |  | 615,487  |  | 725,659 
|Movement repurchased shares Option Plan                                             |  | -924                     |  | 1,074    |  | 1,662    |  | 1,959   
|Dividends paid                                                                      |  | -51,963                  |  | -51,971  |  | -51,855  |  | -61,137 
|Minority interests                                                                  |  | -3,361                   |  | -3,099   |  | -3,092   |  | -3,645  
|                                                                                    |  |                          |  |          |  |          |  |         
|Total cash flow from financing activities                                           |  | -295,028                 |  | -113,866 |  | 339,969  |  | 400,824 
|                                                                                    |  |                          |  |         
|Effect of exchange rate changes                                                     |  | -14,466                  |  | 727      |  | -2,838   |  | -3,346  
|                                                                                    |  |                          |  |         
|CASH AND CASH EQUIVALENTS, END OF YEAR                                              |  | 55,709                   |  | 313,060  |  | 142,699  |  | 168,242 

---

|* | See Note 0 Summary of significant accounting principles
|- | -------------------------------------------------------



|** | See details on next page
|-- | ------------------------

The accompanying Notes are an
integral part of these Consolidated Financial Statements.



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##### Table of Contents

OCÉ N.V. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                               |  |                          |  |         |  |         |  |        
|-------------------------------------------------------------- |  | ------------------------ |  | ------- |  | ------- |  | -------
|                                                               |  | Years ended November 30,
|                                                               |  | 2003                     |  | 2004    |  | 2005    |  | 2005   
|                                                               |  | (in thousands)          
|                                                               |  | Euro                     |  | Euro    |  | Euro    |  | $*     
|SPECIFICATION OF NET CHANGE IN OTHER WORKING CAPITAL ACCOUNTS: |  |                          |  |         |  |         |  |        
|Prepaid expenses                                               |  | 5,138                    |  | 6,360   |  | -2,924  |  | -3,448 
|Income taxes                                                   |  | 12,205                   |  | -31,173 |  | -25,206 |  | -29,718
|Value added taxes, social security and other taxes payable     |  | 2,929                    |  | 1,823   |  | -3,898  |  | -4,596 
|Pension liabilities                                            |  | -2,395                   |  | -586    |  | 534     |  | 630    
|Other liabilities                                              |  | -3,229                   |  | -8,665  |  | 4,621   |  | 5,448  
|Accrued liabilities                                            |  | -17,037                  |  | -9,764  |  | -18,777 |  | -22,138
|Deferred income                                                |  | -6,603                   |  | 676     |  | -5,163  |  | -6,087 
|                                                               |  |                          |  |         |  |         |  |        
|                                                               |  | -8,992                   |  | -41,329 |  | -50,813 |  | -59,909
|                                                               |  |                          |  |        
|Supplemental cash flow information:                            |  |                          |  |         |  |         |  |        
|                                                               |  |                          |  |        
|Income taxes paid (net)                                        |  | -24,624                  |  | -92,627 |  | -15,662 |  | -18,465
|Interest received (net)                                        |  | 61,540                   |  | 44,373  |  | 24,441  |  | 28,816 
|                                                               |  |                          |  |        
|Non cash transactions:                                         |  |                          |  |         |  |         |  |        
|                                                               |  |                          |  |        
|Conversion of convertible bonds into share capital             |  | 8                        |  | 40      |  | 43      |  | 51     

---

|* | See Note 0 Summary of significant accounting principles
|- | -------------------------------------------------------

The accompanying Notes are an integral part of these Consolidated Financial Statements.



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##### Table of Contents

OCÉ N.V. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



|0. | Summary of significant accounting principles
|-- | --------------------------------------------

Basis of
presentation

The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the
Netherlands (Dutch GAAP). These accounting principles vary in certain significant respects from accounting principles generally accepted in the United States of America (US GAAP). For a description of the significant differences and the related
effect on the Consolidated Financial Statements, see Note 27 to the Consolidated Financial Statements. Amounts in the accompanying Consolidated Financial Statements have been stated in Euros, the currency of the Netherlands, the country in which
Océ N.V. is incorporated.

The financial year of the Company commences at December 1 and closes at November 30 of the subsequent year.

The dollar amounts at November 30, 2005 and for the period then ended have been presented solely for the convenience of readers of these financial
statements in the United States of America and have been translated from Euros at the rate of $ 1.179 per Euro 1, the Noon Buying Rate on November 30, 2005. Such translation should not be construed as a representation that the Euro amounts
could be converted into dollars at this or any other rate.

New accounting principles applied

The accounting principles applied in financial year 2005 are unchanged compared to the previous financial year.

Principles of consolidation

The Consolidated Financial Statements
include the accounts of the parent company, Océ N.V., and its subsidiaries (the Company). An entity is regarded as a subsidiary, if Océ directly or indirectly holds a majority controlling interest in it. Investments in
minority interests, in which the Company has an investment of between 20% - 50% and has no controlling interest, are accounted for at the attributable net asset value.

The Consolidated Financial Statements include the accounts of all majority-owned subsidiaries and entities over which the Company has financial and operating control and variable interest entities in which the Company
has determined it is the primary beneficiary.

For names of subsidiaries and investments in minority interests see pages 30, 31 and 32 of the
Companys annual report on form 20-F, to which these Consolidated Financial Statements and Notes are attached.

The principle changes in Océ
Group companies during the past financial year are the following:

On October 31, 2005 Océ acquired 100% of the shares in Imagistics
International Inc. Imagistics International Inc. is a sales and service organization in the area of printing and document management with operations in the United States, Canada and the United Kingdom. The total purchase consideration amounts to
Euro 638 million.



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|                                                                                                                |  |                
|--------------------------------------------------------------------------------------------------------------- |  | ---------------
|The acquisition of Imagistics International Inc. had the following effect on the assets and
liabilities of Océ: |  | Fair valueEuro 
|                                                                                                                |  | ( in thousands)
|Goodwill                                                                                                        |  | 351,412        
|Software                                                                                                        |  | 21,817         
|Customer base                                                                                                   |  | 90,819         
|Trade marks and other                                                                                           |  | 39,552         
|Tangible fixed assets                                                                                           |  | 77,185         
|Other long term assets                                                                                          |  | 479            
|Inventories                                                                                                     |  | 66,220         
|Accounts receivable                                                                                             |  | 102,575        
|Prepaid expenses                                                                                                |  | 2,558          
|Long term provisions                                                                                            |  | -2,291         
|Deferred income taxes                                                                                           |  | -33,605        
|Current liabilities                                                                                             |  | -78,492        
|                                                                                                                |  |                
|Total purchase consideration                                                                                    |  | 638,229        
|                                                                                                                |  |                

The goodwill arising form the acquisition of Imagistics International Inc. mainly relates to the anticipated
operational synergy effects and to the acquired personnel.

Intercompany transactions and account balances have been eliminated upon consolidation.
Unrealized gains on transactions between Group companies are eliminated. Unrealized losses are eliminated unless it is clear that no margin will be realized on inventories transferred.

Assumptions, estimates and judgments

When Océ prepares its financial statements, it selects certain
accounting principles and methods and makes certain assumptions, estimates and judgments relating to its financial condition and disclosure, which require managements subjective and complex consideration of a variety of matters.

The Company bases its assumptions and estimates, and its judgments, on its historical experience, its expectations for the future and various other factors that it
believes are reasonable under the circumstances. The Companys actual results may significantly differ from its assumptions, estimates and judgments and its financial condition could be significantly different if the Company had used different
assumptions, estimates and judgments.

Foreign exchange

Balance sheet items expressed in foreign currencies are translated into Euros at the closing exchange rate at the end of the reporting period. Translation differences related to foreign subsidiaries balance sheet items are added to,
or charged against, shareholders equity. Foreign currency profit and loss items are translated into Euros at the average exchange rate during the period. The difference between the average and the closing rate is added to, or charged against,
shareholders equity.

Revenue recognition

In the
normal course of business, the Company generates revenue through the sale of equipment, services, and supplies and income associated with the financing of its equipment sales. The Company recognizes revenue when realized or realizable and earned,
which is when the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the sales price is fixed or determinable; and collectibility is reasonably assured. More specifically, revenue related to the
Companys sales of its products and services are recognized as follows:

Equipment:

Revenue recognition criteria on sale of equipment are generally met when the equipment is delivered and installed at the customer site. In instances in which the
agreement with the customer contains a customer acceptance clause, revenue is deferred until customer acceptance is obtained.



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The Company may offer customer financing to assist customers in their acquisition of Océ products. At the time a
financing transaction is consummated, which qualifies as a sales-type lease, the Company records the total lease receivable net of unearned interest income, plus the estimated residual value of the equipment. Unearned interest income is recognized
as finance income using the interest method over the term of the lease. Leases not qualifying as sales-type leases are accounted for as operating leases for which revenue is recognized ratably over the lease term. The underlying equipment is
depreciated on a straight-line basis over the assets estimated useful life.

When machines are sold to a distributor the revenues are accounted for
at the moment of transfer.

Services:

Service revenues are derived primarily from maintenance contracts on equipment sold or leased to customers and are recognized ratably over the term of the service contracts.

Supplies:

Supplies revenue
generally is recognized upon shipment.

Multiple Element Arrangements:

The Company sells its equipment and services on a stand-alone basis and also enters into bundled arrangements that contain multiple deliverable elements. These multiple
element arrangements typically include equipment, services, supplies and financing components for which the customer pays a single defined price for all elements. These arrangements typically also include a variable component for copy volumes in
excess of stated minimums. When separate prices are listed in these multiple element arrangements with our customers they may not be representative of the fair values of those elements because the prices of the different components of the
arrangement may be altered in customer negotiations, although the aggregate consideration may remain the same. Therefore, revenues under these arrangements are allocated based upon estimated fair values of each element.

The fair value of each element is estimated based on a review of a number of factors including average selling prices for the elements when they are sold on a
stand-alone basis. The average selling prices are based on managements best estimates of market conditions and competitive pricing considerations. The principal change in estimate relating to such revenue allocations among multiple elements is
made with respect to the estimated fair value of those elements and their related margins. This is a significant factor considered in our revenue allocation process along with other factors, such as pricing changes and customer discounts, which also
affect the overall allocation process.

Costs

Consumption of raw materials and other cost items are included on the basis of historical costs. Depreciation on fixed production assets is charged at a fixed percentage of the acquisition value of the relevant asset. Depreciation of rental
equipment amounts to a fixed percentage of the all-in manufacturing costs plus the costs of ensuring that the equipment can operate effectively on the customers premises. Government contributions to operating costs are deducted directly from
these costs.

Rental expenditure in respect of property, plant and equipment, in which the risks and rewards of ownership of the property, plant and
equipment are retained or almost entirely borne by the lessor, is recognized as costs on a straight-line basis over the period of the lease.

Research
and development expenses

Research costs are charged direct to the Statement of Operations. Product development costs are capitalized when it is
probable that the project will be a success considering its commercial and technological feasibility, and costs can be measured reliably.

Development
credits and subsidies

Development credits granted by the government are recognized as a reduction of research and development expenses. These credits
are subject to a contingent repayment. Upon determination of commercial success of a project, a current liability is created to cover the repayment in respect of that project and is charged to research and development costs. Actual repayments to the
government are made as sales of the relevant product occur and are charged to the relevant development credit liabilities. See Note 14 to the Consolidated Financial Statements.



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Subsidies received from the government are included in the Statement of Operations as an income item in the year of
entitlement thereto.

Financial expenses (net)

Besides
interest received and interest paid, expenses related to raising loans and the effect of interest rate instruments are included. The effect of interest rate instruments is also shown under this heading.

Income tax

Income tax is calculated on the commercial results at the
rates applicable in the various countries. This method implies that provisions are made for deferred income taxes. The entitlement to loss compensation is taken into consideration in so far as there is a reasonable expectation that it can be
realized. Allowance is made for dividend withholding tax that cannot be offset at the moment of dividend distribution by an affiliated company.

Option
Plan

To encourage the long term achievement of the Companys objectives Océ operates a Stock Option Plan under which decisions are taken
each year on the granting to certain senior company executives of option rights and/or Share Appreciation Rights (SARs) in respect of ordinary shares in Océ.

Options have an exercise price equivalent to the stock market price on the date of granting. The difference between the stock market price of the shares on the day of exercise and the exercise price is charged to
equity having taken into account the repurchased shares for this option plan.

In 2004 the option plan for the members of the Board of Executive Directors
was replaced by a share plan. At the beginning of 2005 a conditional right to shares was granted to the members of the Board of Executive Directors for the first time. In 2005 the option plan for the other participants was also replaced by a share
plan. At the beginning of 2006 a conditional right to shares will also be granted to these participants for the first time. As a consequence, no option rights and/or SARs were granted in 2005.

Share plan

The Share Plan (of March 1, 2005) comprises the
conditional granting of shares in Océ. This grant is conditional on the achievement of certain performance criteria that are fully focused on the creation of shareholders value. Each year a three-year plan with a conditional granting
period starts in which the Companys performance is measured at the end of the relevant period against that of a peer group of companies. The relative ranking that Océ achieves in the peer group determines the definitive number of shares
that are granted. This number corresponds to a percentage (at most 60%) of the fixed reference salary divided by the price of the shares on the stock market on the first day of the performance period. The shares from this plan thus granted after
three years must be retained by the members of the Board of Executive Directors for a further period of three years.

Earnings per share

Earnings per ordinary share are calculated by dividing the net income attributable to holders of ordinary shares by the weighted average number of ordinary shares
outstanding during the year. In making this calculation the ordinary shares purchased by the Company are deducted from the number of ordinary shares outstanding. To calculate the average number of outstanding shares on the basis of full conversion,
the basis is formed by the weighted average number of shares in issue and the potential increase as a result of conversion of outstanding options. The assumption applied for the conversion arising from convertible debenture bonds is that these are
converted in full. An adjustment is also made to net income to eliminate interest charges, whilst allowing for the effect of taxation. The calculation of the increase arising from options is based on the value of the options granted, i.e. the number
of options times the exercise price, divided by the average share price during the financial year. This increase is only applied if the average share price is higher than the exercise price of the options upon grant. In making this calculation no
adjustment is made to net income.

Intangible fixed assets

Intangible fixed assets are valued at historical cost, less cumulative amortization and any impairments.

As of fiscal year 2001 goodwill and
other intangible assets arising from acquisitions are capitalized and amortized on a straight line basis over the estimated economic lifetime, with a maximum of twenty years. Amortization of goodwill can be charged to the Statement of Operations
over a period that is longer than 5 years, since the synergy benefits arising from strategic acquisitions are in



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many cases realized over the longer term. Software development costs, including costs incurred to purchase third party software, are capitalized when the
Company has determined that the software is technologically feasible and additional functionality is created and generates economic benefits for several years. Capitalization of software costs ceases when the software is substantially complete and
is ready for its intended use.

Product development costs are shown under the heading Technology and are capitalized if they meet the criteria
of an identifiable project that probably will generate economic benefits in the future and whose manufacturing cost can be reliably measured.

Straight-line amortizations are charged at fixed percentages of the value of the historical cost and are based on the estimated economic lifetime of the assets, as follows:



|                     |  |               
|-------------------- |  | --------------
|      Goodwill      |  | 5 to 20 years,
|                     | 
|      Software      |  | 3 to 7 years, 
|                     | 
|      Technology    |  | 5 to 10 years,
|                     | 
|      Customer base |  | 5 to 10 years,
|                     | 
|      Trade marks   |  | 2 to 10 years,
|                     | 
|      Other         |  | 5 years.      

Property, plant and equipment

Property, plant and equipment are valued at historical cost, less cumulative depreciation and any impairments. Subsequent costs are capitalized if it is probable that future economic benefits associated with the asset
will accrue to Océ and if the costs can be reliably measured. All other costs of repair and maintenance are charged directly to the Statement of Operations.

If the risks and rewards attaching to the ownership of the rented assets are almost entirely for the account of Océ, then the rental agreement is classified as a finance lease. Finance leases are capitalized at the fair market value
of the rented assets or the net present value of the minimum lease obligations, whichever is lower. The lease payments are allocated partially to liabilities and partially to interest, calculated on an annuities basis. Assets leased via a finance
lease agreement are written off over the lease period or the assets useful economic life, whichever is less.

Straight-line depreciation is charged
at a fixed percentage of the historical costs and is based on the estimated economic lifetime of the assets, as follows:



|                                    |  |                
|----------------------------------- |  | ---------------
|      Property and plant           |  | 20 to 50 years,
|                                    | 
|      Production machines          |  | 8 to 10 years, 
|                                    | 
|      Factory and office equipment |  | 3 to 10 years, 
|                                    | 
|      Vehicles                     |  | 4 or 5 years.  

Depreciation of specific pieces of equipment used for the manufacture of machines takes place pro rata to the
expected number of units to be manufactured.

Certain assets which are acquired under a financial lease contract are capitalized.

Rental equipment

Rental equipment is valued at historical
manufacturing costs plus directly related indirect costs for making it effectively operational at the customer. Depreciation takes place on a straight-line basis over the estimated economic lifetime of 3 to 5 years.

Inventories

Purchased inventories are valued at purchase price, plus
any additional costs, by the First-in-First-out method. Inventories of semi-finished products, spare parts and finished products are valued at manufacturing cost including a mark-up for indirect costs relating to manufacturing. No interest charge is
applied. Allowance is made for the risk of obsolescence.

Accounts receivable

Trade debtors, finance leases with a duration of less than 1 year, other debtors as well as amounts receivable from minority interests are shown at nominal value less an allowance to cover bad and doubtful debts.



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The Companys accounts receivable result from its trade and lease operations and reflect a broad customer base
nationally as well as internationally. The Company routinely assesses the financial strength of its customers. As a consequence, concentrations of credit risk are limited.

Cash and cash equivalents

These include cash in hand, bank deposits that are repayable on call, balances in bank
accounts, cheques and bills of exchange received.

The Companys cash equivalents represent high quality securities placed at major international
banks and financial institutions of high repute. This policy limits the exposure to credit risk.

Minority interest in associates

Minority interests in associates are included at the attributable net asset value as determined by the accounting principles applied in these Consolidated Financial
Statements.

Financial lease receivables

This
comprises the long term receivables and residual values in respect of financial lease contracts. The valuation is based on the present value of the contracted terms, taking into account the risk of uncollectability.

Other long term assets

Other long term assets include mortgages,
loans, guarantee deposits and deferred tax assets, which are valued at nominal value, after taking into account the risk of uncollectability.

Impairment of long lived assets

The Company reviews the carrying value of its long-lived assets, including goodwill and other intangible
assets, whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The Company assesses recoverability of the carrying value of the asset by grouping assets at the lowest level for which there
are identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company then estimates the discounted future cash flows expected to result from the asset grouping, including the proceeds from disposal. An
impairment loss would be recognized when the estimated discounted future cash flows expected to result from the use of the asset and its disposal are less than its carrying value. In such instances, the carrying value of long-lived assets is reduced
to the estimated fair value, as determined using an appraisal or discounted cash flow, as appropriate.

Deferred income taxes

The provision for deferred taxation is calculated on the differences between valuation of assets and liabilities for financial reporting and tax purposes, based on the
effective rate of corporate tax in the various countries. Deferred tax assets are recognized for net operating loss carry forwards when it is probable that such carry forwards will be realized.

Long term provisions

Pension liabilities exist both under
defined contribution schemes and under defined benefit schemes. In most countries the latter schemes are mostly funded externally. In the case of a defined contribution scheme the contribution is booked as a charge in the
year to which it relates. In defined benefit schemes the entitlements are calculated according to the projected unit credit method. All actuarial gains and losses, above a threshold of 10% of the (highest of the) pension liabilities or
fair value of the pension assets, are charged to the Statement of Operations over the remaining periods of service. Changes in pension plans and back service costs are charged direct to the Statement of Operations provided that they are
unconditional in nature or if they are the result of a significant change. These calculations are made annually by qualified actuaries. The pension liabilities as recognized in the balance sheet are shown at the net present value of the promised
pension entitlements at balance sheet date, less the fair value of the pension assets and after adding or deducting the actuarial gains or losses and the back service costs that have not yet been incorporated in the result.

Early retirement liabilities relate to specific mostly individual agreements.



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##### Table of Contents

Liabilities arising from the termination of employment contracts relate in most cases to the legal obligation to make a
severance payment which is based on years of service and is related to the salary of the relevant employee at the moment of termination. Payment takes place upon leaving company service. Liabilities in respect of long-service awards are also
included under this heading.

The restructuring provision relates to costs connected with the reorganization of business activities.

Other provisions relate, amongst others, to (legal) proceedings, warranty commitments and onerous contracts in respect of buildings.

Provisions are included at the nominal value of the expected costs needed to settle the liabilities; in cases where the time-based value of money has a material effect,
valuation takes place on the basis of the net present value.

Derivative financial instruments

The Company enters into a variety of interest rate swaps and forward currency contracts to manage interest rate and foreign currency exposures, these contracts off set
the risk inherent in the exposures. The Company accounts for some transactions as hedges to manage the accounting risk regarding derivative financial instruments. In addition the transaction must have a satisfactory level of correlation between the
financial instrument and the designated item or transactions being hedged.

Interest Rate Swaps are measured at fair value and recognized in the Statement
of Operations over the period of the contract. For those contracts for which fair value hedge accounting is applied, the underlying financial instruments are also measured at the fair value.

Realized and unrealized gains and losses on foreign currency contracts relating to hedges of the (intercompany) loans are recognized in the Statement of Operations over
the period of the contract.

Unrealized gains and losses on foreign currency contracts relating to hedges of the future cash flows are recognized in Other
Comprehensive Income over the period of the contract (cash flow hedge) and are recognized under cost of goods sold at maturity of the contract.



|1. | Cash and cash equivalents
|-- | -------------------------

Cash and cash equivalents include time
deposits of Euro 286.7 million and Euro 103.1 million at November 30, 2004 and 2005, respectively. For the purpose of the Consolidated Statements of Cash Flows, prepared in accordance with IAS 7, the Company considers all highly
liquid instruments with an original maturity date of three months or less as cash equivalents.



|2. | Accounts receivable
|-- | -------------------

Accounts receivable consist of the following:



|                          |  |                |  |        
|------------------------- |  | -------------- |  | -------
|                          |  | November 30,  
|                          |  | 2004           |  | 2005   
|                          |  | (in thousands)
|                          |  | Euro           |  | Euro   
|Trade accounts receivable |  | 451,911        |  | 572,705
|Discounted trade bills    |  | -11            |  | -27    
|Current income tax        |  | 25,555         |  | 59,509 
|Other                     |  | 57,960         |  | 65,618 
|                          |  |                |  |        
|Total                     |  | 535,415        |  | 697,805
|                          |  |                |  |        

Allowances for doubtful trade accounts receivable amount to Euro 54.0 million and Euro 57.5 million at
November 30, 2004 and 2005, respectively.



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##### Table of Contents

|3. | Inventories
|-- | -----------

Inventories consist of the following:



|                                       |  |                |  |        
|-------------------------------------- |  | -------------- |  | -------
|                                       |  | November 30,  
|                                       |  | 2004           |  | 2005   
|                                       |  | (in thousands)
|                                       |  | Euro           |  | Euro   
|Raw materials and other materials      |  | 35,723         |  | 61,441 
|Semi-finished products and spare parts |  | 135,087        |  | 134,916
|Finished products and trade stock      |  | 146,525        |  | 167,166
|                                       |  |                |  |        
|Total                                  |  | 317,335        |  | 363,523
|                                       |  |                |  |        

Allowances for obsolescence amount to Euro 178.8 million and Euro 192.1 million at November 30,
2004 and 2005, respectively.

Part of the inventory relates to printing and copying machines which have been returned by the customers at the end of the
operational lease term. These machines are included at their original cost price less cumulative depreciation. This cumulative depreciation of Euro 82 million (2004: Euro 85 million) is part of the allowances for obsolescence.



F-15



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##### Table of Contents

|4. | Intangible fixed assets
|-- | -----------------------

Intangible fixed assets consist of the
following (in thousands):



|                                 |  |          |  |          |  |            |  |              |  |                     |  |        
|-------------------------------- |  | -------- |  | -------- |  | ---------- |  | ------------ |  | ------------------- |  | -------
|                                 |  | Goodwill |  | Software |  | Technology |  | Customerbase |  | Trademarksand other |  | Total  
|                                 |  | Euro     |  | Euro     |  | Euro       |  | Euro         |  | Euro                |  | Euro   
|At December 1, 2003              |  |          |  |          |  |            |  |              |  |                     |  |        
|Acquisition value                |  | 28,087   |  | 47,312   |  | 7,399      |  | 11,669       |  | 4,756               |  | 99,223 
|Accumulated amortization         |  | 18,705   |  | 16,179   |  | 3,481      |  | 11,148       |  | 989                 |  | 50,502 
|                                 |  |          |  |          |  |            |  |              |  |                     |  |        
|Book value                       |  | 9,382    |  | 31,133   |  | 3,918      |  | 521          |  | 3,767               |  | 48,721 
|                                 |  |          |  |          |  |           
|Movements in book value in 2004: |  |          |  |          |  |            |  |              |  |                     |  |        
|Expenditure                      |  | 756      |  | 6,608    |  | 1,990      |  |             |  |                    |  | 9,354  
|Reclassification                 |  |         |  | 7,891    |  | -73        |  | 268          |  |                    |  | 8,086  
|Amortization                     |  | 1,063    |  | 15,749   |  | 1,588      |  | 201          |  | 444                 |  | 19,045 
|Impairment                       |  | 7,207    |  |         |  |           |  | 280          |  |                    |  | 7,487  
|Foreign currency translations    |  | -264     |  | -1,560   |  | -271       |  |             |  | -327                |  | -2,422 
|                                 |  |          |  |          |  |            |  |              |  |                     |  |        
|At November 30, 2004             |  | 1,604    |  | 28,323   |  | 3,976      |  | 308          |  | 2,996               |  | 37,207 
|                                 |  |          |  |          |  |           
|Acquisition value                |  | 11,652   |  | 71,859   |  | 8,737      |  | 10,969       |  | 4,305               |  | 107,522
|Accumulated amortization         |  | 10,048   |  | 43,536   |  | 4,761      |  | 10,661       |  | 1,309               |  | 70,315 
|                                 |  |          |  |          |  |            |  |              |  |                     |  |        
|Book value at November 30, 2004  |  | 1,604    |  | 28,323   |  | 3,976      |  | 308          |  | 2,996               |  | 37,207 
|                                 |  |          |  |          |  |           
|Movements in book value in 2005: |  |          |  |          |  |            |  |              |  |                     |  |        
|Expenditure                      |  |         |  | 14,052   |  | 170        |  | 483          |  | 17                  |  | 14,722 
|Divestments                      |  |         |  | 38       |  |           |  |             |  |                    |  | 38     
|                                 |  |          |  |          |  |            |  |              |  |                     |  |        
|Net expenditure                  |  |         |  | 14,014   |  | 170        |  | 483          |  | 17                  |  | 14,684 
|                                 |  |          |  |          |  |           
|Acquisition subsidiary           |  | 351,412  |  | 21,817   |  |           |  | 90,819       |  | 39,552              |  | 503,600
|Amortization                     |  | 1,758    |  | 13,998   |  | 1,641      |  | 948          |  | 1,100               |  | 19,445 
|Foreign currency translations    |  | 8,343    |  | 1,957    |  | 216        |  | 2,207        |  | 1,270               |  | 13,993 
|                                 |  |          |  |          |  |            |  |              |  |                     |  |        
|At November 30, 2005             |  | 359,601  |  | 52,113   |  | 2,721      |  | 92,869       |  | 42,735              |  | 550,039
|                                 |  |          |  |          |  |           
|Acquisition value                |  | 362,068  |  | 102,275  |  | 8,828      |  | 94,054       |  | 45,318              |  | 612,543
|Accumulated amortization         |  | 2,467    |  | 50,162   |  | 6,107      |  | 1,185        |  | 2,583               |  | 62,504 
|                                 |  |          |  |          |  |            |  |              |  |                     |  |        
|Book value at November 30, 2005  |  | 359,601  |  | 52,113   |  | 2,721      |  | 92,869       |  | 42,735              |  | 550,039
|                                 |  |          |  |          |  |            |  |              |  |                     |  |        



|                                                                  |  |                |  |       
|----------------------------------------------------------------- |  | -------------- |  | ------
|Recognition of amortization costs in the Statement of Operations: |  | 2004           |  | 2005  
|                                                                  |  | (in thousands)
|                                                                  |  | Euro           |  | Euro  
|Cost of sales                                                     |  | 3,225          |  | 4,211 
|Selling expenses                                                  |  | 8,059          |  | 5,066 
|Research and development expenses                                 |  | 1,611          |  | 1,533 
|General and administrative expenses                               |  | 6,150          |  | 8,635 
|                                                                  |  |                |  |       
|Total                                                             |  | 19,045         |  | 19,445
|                                                                  |  |                |  |       



F-16



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##### Table of Contents

|5. | Property, plant and equipment
|-- | -----------------------------

Property, plant and equipment consists of the following (in thousands):



|                                 |  |                    |  |                     |  |                    |  |                                     |  |                                                 |  |          
|-------------------------------- |  | ------------------ |  | ------------------- |  | ------------------ |  | ----------------------------------- |  | ----------------------------------------------- |  | ---------
|                                 |  | Property and plant |  | Production machines |  | Other fixed assets |  | Under constructionand pre- payments |  | Not in production process andinvestmentproperty |  | Total    
|                                 |  | Euro               |  | Euro                |  | Euro               |  | Euro                                |  | Euro                                            |  | Euro     
|At December 1, 2003              |  |                    |  |                     |  |                    |  |                                     |  |                                                 |  |          
|Acquisition value                |  | 338,104            |  | 434,134             |  | 431,341            |  | 18,292                              |  | 19,048                                          |  | 1,240,919
|Accumulated depreciation         |  | 151,301            |  | 326,849             |  | 317,428            |  |                                    |  | 14,814                                          |  | 810,392  
|                                 |  |                    |  |                     |  |                    |  |                                     |  |                                                 |  |          
|Book value                       |  | 186,803            |  | 107,285             |  | 113,913            |  | 18,292                              |  | 4,234                                           |  | 430,527  
|                                 |  |                    |  |                     |  |                   
|Movements in book value in 2004: |  |                    |  |                     |  |                    |  |                                     |  |                                                 |  |          
|Expenditure                      |  | 1,936              |  | 23,111              |  | 44,413             |  | 16,592                              |  | 686                                             |  | 86,738   
|Divestments                      |  | 1,410              |  | 911                 |  | 10,589             |  |                                    |  |                                                |  | 12,910   
|                                 |  |                    |  |                     |  |                    |  |                                     |  |                                                 |  |          
|Net expenditure                  |  | 526                |  | 22,200              |  | 33,824             |  | 16,592                              |  | 686                                             |  | 73,828   
|                                 |  |                    |  |                     |  |                   
|Reclassification                 |  | 3,688              |  | 4,040               |  | 3,878              |  |                                    |  | -947                                            |  | 10,659   
|Depreciation                     |  | 10,202             |  | 32,848              |  | 42,223             |  |                                    |  | 216                                             |  | 85,489   
|Impairment                       |  | 85                 |  | 206                 |  | 110                |  |                                    |  |                                                |  | 401      
|Foreign currency translations    |  | -1,354             |  | -1,934              |  | -2,164             |  | -138                                |  | -44                                             |  | -5,634   
|                                 |  |                    |  |                     |  |                    |  |                                     |  |                                                 |  |          
|At November 30, 2004             |  | 179,376            |  | 98,537              |  | 107,118            |  | 34,746                              |  | 3,713                                           |  | 423,490  
|                                 |  |                    |  |                     |  |                   
|Acquisition value                |  | 349,396            |  | 428,331             |  | 420,489            |  | 34,746                              |  | 13,018                                          |  | 1,245,980
|Accumulated depreciation         |  | 170,020            |  | 329,794             |  | 313,371            |  |                                    |  | 9,305                                           |  | 822,490  
|                                 |  |                    |  |                     |  |                    |  |                                     |  |                                                 |  |          
|Book value at November 30, 2004  |  | 179,376            |  | 98,537              |  | 107,118            |  | 34,746                              |  | 3,713                                           |  | 423,490  
|                                 |  |                    |  |                     |  |                   
|Movements in book value in 2005: |  |                    |  |                     |  |                    |  |                                     |  |                                                 |  |          
|Expenditure                      |  | 17,417             |  | 36,451              |  | 57,683             |  | -15,253                             |  | 181                                             |  | 96,479   
|Divestments                      |  | 3,077              |  | 1,549               |  | 6,338              |  |                                    |  |                                                |  | 10,964   
|                                 |  |                    |  |                     |  |                    |  |                                     |  |                                                 |  |          
|Net expenditure                  |  | 14,340             |  | 34,902              |  | 51,345             |  | -15,253                             |  | 181                                             |  | 85,515   
|                                 |  |                    |  |                     |  |                   
|Acquisition subsidiary           |  | 7,982              |  | 3,725               |  | 13,319             |  |                                    |  | 1,722                                           |  | 26,748   
|Depreciation                     |  | 10,395             |  | 32,320              |  | 45,361             |  |                                    |  | 302                                             |  | 88,378   
|Impairment                       |  |                   |  | 562                 |  |                   |  |                                    |  |                                                |  | 562      
|Foreign currency translations    |  | 1,847              |  | 2,157               |  | 4,107              |  | 88                                  |  | 68                                              |  | 8,267    
|                                 |  |                    |  |                     |  |                    |  |                                     |  |                                                 |  |          
|At November 30, 2005             |  | 193,150            |  | 106,439             |  | 130,528            |  | 19,581                              |  | 5,382                                           |  | 455,080  
|                                 |  |                    |  |                     |  |                   
|Acquisition value                |  | 370,320            |  | 467,686             |  | 464,744            |  | 19,581                              |  | 15,079                                          |  | 1,337,410
|Accumulated depreciation         |  | 177,170            |  | 361,247             |  | 334,216            |  |                                    |  | 9,697                                           |  | 882,330  
|                                 |  |                    |  |                     |  |                    |  |                                     |  |                                                 |  |          
|Book value at November 30, 2005  |  | 193,150            |  | 106,439             |  | 130,528            |  | 19,581                              |  | 5,382                                           |  | 455,080  
|                                 |  |                    |  |                     |  |                    |  |                                     |  |                                                 |  |          

The book value of Other fixed assets contains an amount of Euro 10.3 million for financial leases
(2004: Euro 4.7 million).



F-17



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##### Table of Contents

|                                                                  |  |                |  |       
|----------------------------------------------------------------- |  | -------------- |  | ------
|Recognition of depreciation costs in the Statement of Operations: |  | 2004           |  | 2005  
|                                                                  |  | (in thousands)
|                                                                  |  | Euro           |  | Euro  
|Cost of sales                                                     |  | 49,945         |  | 50,161
|Selling expenses                                                  |  | 16,871         |  | 21,957
|Research and development expenses                                 |  | 12,630         |  | 10,174
|General and administrative expenses                               |  | 6,043          |  | 6,086 
|                                                                  |  |                |  |       
|Total                                                             |  | 85,489         |  | 88,378
|                                                                  |  |                |  |       



|6. | Rental equipment
|-- | ----------------

Rental equipment consists of the following:



|                             |  |                |  |        
|---------------------------- |  | -------------- |  | -------
|                             |  | 2004           |  | 2005   
|                             |  | (in thousands)
|                             |  | Euro           |  | Euro   
|At December 1, 2003/2004     |  |                |  |        
|Cost                         |  | 364,469        |  | 302,798
|Accumulated depreciation     |  | 301,190        |  | 244,907
|                             |  |                |  |        
|Book value                   |  | 63,279         |  | 57,891 
|                             |  |                |  |        
|                             |  |               
|Movements in book value:     |  |                |  |        
|Acquisition subsidiary       |  |               |  | 50,437 
|Installed on rental          |  | 116,797        |  | 113,015
|Divestments                  |  | 77,268         |  | 64,134 
|Depreciation                 |  | 43,092         |  | 37,783 
|Foreign currency translation |  | -1,825         |  | 4,293  
|                             |  |                |  |        
|At November 30               |  | 57,891         |  | 123,719
|                             |  |               
|Cost                         |  | 302,798        |  | 353,644
|Accumulated depreciation     |  | 244,907        |  | 229,925
|                             |  |                |  |        
|Book value at November 30    |  | 57,891         |  | 123,719
|                             |  |                |  |        

In the Statement of Operations depreciation is included in full under Cost of sales.



|7. | Financial lease receivables
|-- | ---------------------------

Financial lease receivables consist of
the following:



|                                    |  |                |  |         
|----------------------------------- |  | -------------- |  | --------
|                                    |  | 2004           |  | 2005    
|                                    |  | (in thousands)
|                                    |  | Euro           |  | Euro    
|Financial lease receivables (gross) |  | 490,806        |  | 418,694 
|Unearned interest                   |  | -71,528        |  | -64,302 
|Residual value                      |  | 3,190          |  | 4,633   
|                                    |  |                |  |         
|                                    |  | 422,468        |  | 359,025 
|Allowance for uncollectibility      |  | -19,011        |  | -15,866 
|                                    |  |                |  |         
|Finance lease receivables (net)     |  | 403,457        |  | 343,159 
|To current lease receivables        |  | -172,495       |  | -133,052
|                                    |  |                |  |         
|Total long term lease receivables   |  | 230,962        |  | 210,107 
|                                    |  |                |  |         



F-18



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##### Table of Contents

The gross finance lease receivables can be subdivided into the following durations:



|                                            |  |                |  |        
|------------------------------------------- |  | -------------- |  | -------
|                                            |  | 2004           |  | 2005   
|                                            |  | (in thousands)
|                                            |  | Euro           |  | Euro   
|Less than one year                          |  | 172,495        |  | 133,052
|More than one year but less than five years |  | 316,071        |  | 280,982
|More than five years                        |  | 2,240          |  | 4,660  
|                                            |  |                |  |        
|Total                                       |  | 490,806        |  | 418,694
|                                            |  |                |  |        



|8. | Other long term assets
|-- | ----------------------



|                                    |  |                |  |        
|----------------------------------- |  | -------------- |  | -------
|                                    |  | 2004           |  | 2005   
|                                    |  | (in thousands)
|                                    |  | Euro           |  | Euro   
|Book value at December 1, 2003/2004 |  | 106,503        |  | 126,654
|Acquisition subsidiary              |  |               |  | 479    
|New amounts receivable              |  | 31,284         |  | 3,455  
|Repayments                          |  | -7,608         |  | -17,790
|Foreign currency translations       |  | -3,525         |  | 5,262  
|                                    |  |                |  |        
|Book value at November 30           |  | 126,654        |  | 118,060
|                                    |  |                |  |        

This item includes deferred tax claims of Euro 98.6 million (in 2004: Euro 106.6 million). An amount of Euro
0.7 million (2004: Euro 1.1 million) was provided to personnel in the form of loans.

Other long term assets also include an amount of Euro
0.3 million (2004: Euro 0.4 million) for loans provided to the Board of Executive Directors. The specification of this amount is as follows: R.L. van Iperen Euro 0.1 million, J. van den Belt Euro 0.1 million and J.F. Dix Euro 0.1
million. These loans are interest-free and were made available prior to November 30, 2002.

Repayment takes place upon exercise or cancellation of the
annual tranche of options in respect of which the loan was provided.



|9. | Borrowings under bank lines of credit and short term borrowings
|-- | ---------------------------------------------------------------

Borrowing facilities at November 30, 2005 amounted to Euro 795 million (2004: Euro 373 million) for the parent company and its Dutch subsidiaries. At November 30, 2005 Euro 438 million (2004: no amount) of this facility
was utilized. These facilities are denominated in U.S. dollar.

Borrowing facilities for the subsidiaries outside of the Netherlands totaled Euro
144 million at November 30, 2005 (2004: Euro 287 million). At November 30, 2005 these facilities were fully utilized. These facilities are denominated in various currencies.

At November 30, 2005 the used portion of these facilities amounted to Euro 489 million (2004: Euro 33 million), classified as current portion short term and
Euro 93 million (2004: Euro 93 million), classified as long term debt, bearing interest of 4.4 % in 2005.

Commitment fees of approximately Euro
1.6 million were paid for unused credit facilities in 2005 (2004 Euro 1.1 million and 2003 Euro 1.3 million).



|10. | Deferred income
|--- | ---------------

These amounts
represent advance billings related to rental and maintenance contracts for copying equipment.



F-19



---

##### Table of Contents

|11. | Long term debt
|--- | --------------

Other long term
debt consists of the following:



|                                                                                                                |  |                |  |        
|--------------------------------------------------------------------------------------------------------------- |  | -------------- |  | -------
|                                                                                                                |  | November 30,  
|                                                                                                                |  | 2004           |  | 2005   
|                                                                                                                |  | (in thousands)
|                                                                                                                |  | Euro           |  | Euro   
|LOANS                                                                                                           |  |                |  |        
|U.S. dollar denominated, average interest of 4.3% and 4.7%, maturing through 2008                               |  | 84,215         |  | 482,223
|Euro denominated, average interest of 5.9% and 6.3%, maturing through 2013                                      |  | *320,258       |  | 278,824
|Norwegian Crown denominated, average interest 3.1%, maturing through 2007                                       |  |               |  | 226    
|Swedish Crown denominated, average interest 2.7% and 2.4%, maturing through 2008                                |  | 1,456          |  | 1,728  
|Danish Crown denominated, average interest 3.0%, maturing through 2008                                          |  |               |  | 38,705 
|Czech Crown denominated, average interest of 3.3% and 2.7%, maturing through 2008                               |  | 5,604          |  | 6,610  
|Swiss Franc denominated, average interest 1.0% and 1.4%, maturing through 2008                                  |  | 30,992         |  | 31,786 
|Australian Dollar denominated, average interest 6.5%, maturing through 2008                                     |  |               |  | 2,400  
|Canadian Dollar denominated, average interest 3.7%, maturing through 2006                                       |  |               |  | 2,834  
|Pound Sterling denominated, average interest 5.4%, maturing through 2008                                        |  |               |  | 7,764  
|Japanese Yen denominated, average interest 0.8% and 0.9%, maturing through 2008                                 |  | 2,122          |  | 1,263  
|Mexican Peso denominated, average interest 9.3% and 10.1%, maturing through 2008                                |  | 249            |  | 1,571  
|Singapore Dollar denominated, average interest 2.6% and 4.1%, maturing through 2008                             |  | 1,380          |  | 971    
|Hungarian Florin denominated, average interest 11.4% and 6.8%, maturing through 2008                            |  | 609            |  | 1,144  
|Slovak Koruna denominated, average interest 4.6% and 3.8%, maturing through 2007                                |  | 1,317          |  | 1,521  
|Convertible Euro debenture bonds to Company Personnel, average interest of 4.4% and 4.2%, maturing through 2012 |  | 11,619         |  | 11,156 
|Thailand Bath denominated, average interest 3.1% and 7.5%, maturing through 2008                                |  | 1,147          |  | 1,453  
|Capitalized lease obligations, average interest of 6.0% and 8.8%, maturing through 2010                         |  | 5,231          |  | 11,813 
|                                                                                                                |  |                |  |        
|Total other long term debt                                                                                      |  | 466,199        |  | 883,992
|Current portion                                                                                                 |  | 27,790         |  | 656,880
|                                                                                                                |  |                |  |        
|Total long term portion                                                                                         |  | 438,409        |  | 227,112
|                                                                                                                |  |                |  |        



|* | The fixed interest rates of the Euro loans have been fully swapped into variable interest rates (see Note 24).
|- | --------------------------------------------------------------------------------------------------------------

Aggregate principal repayments applicable to these borrowings for the next years are as follows:



|                          |  |                
|------------------------- |  | ---------------
|Years ending November 30, |  | Euro           
|                          |  | ( in thousands)
|2006                      |  | 656,880        
|2007                      |  | 158,276        
|2008                      |  | 58,456         
|2009                      |  | 2,138          
|2010                      |  | 1,438          
|Thereafter                |  | 6,804          
|                          |  |                
|Total                     |  | 883,992        
|                          |  |                

The duration of convertible debentures to Company personnel is 6.5 years. The average interest is 4.2% (2004:
4.3%) and the average conversion price is Euro 11.94 (2004: Euro 14.66).

To finance the acquisition of Imagistics International Inc. Océ took out a
bridging loan for a maximum period of nine months. This loan will be converted into a long term financing arrangement in 2006.



F-20



---

##### Table of Contents

|12. | Long term provisions
|--- | --------------------

The composition of provisions is as follows
(in thousands):



|                              |  |                    |  |                          |  |                                           |  |                        |  |        |  |         
|----------------------------- |  | ------------------ |  | ------------------------ |  | ----------------------------------------- |  | ---------------------- |  | ------ |  | --------
|                              |  | Pensionliabilities |  | Earlyretirementprovision |  | Liabilitiesterminationemploymentcontracts |  | Restructuringprovision |  | Other  |  | Total   
|                              |  | Euro               |  | Euro                     |  | Euro                                      |  | Euro                   |  | Euro   |  | Euro    
|At December 1, 2003           |  | 431,727            |  | 12,122                   |  | 30,502                                    |  | 52,035                 |  | 40,393 |  | 566,779 
|Additions                     |  | 53,160             |  | 5,580                    |  | 2,988                                     |  | 11,351                 |  | 7,905  |  | 80,984  
|Release                       |  |                   |  |                         |  |                                          |  | -14,709                |  | -9,865 |  | -24,574 
|Usage                         |  | -75,408            |  | -1,504                   |  | -983                                      |  | -23,734                |  | -9,983 |  | -111,612
|Foreign currency translations |  | -2,233             |  | -3                       |  | -51                                       |  | -142                   |  | -89    |  | -2,518  
|                              |  |                    |  |                          |  |                                           |  |                        |  |        |  |         
|At November 30, 2004          |  | 407,246            |  | 16,195                   |  | 32,456                                    |  | 24,801                 |  | 28,361 |  | 509,059 
|                              |  |                    |  |                          |  |                                          
|Acquisition subsidiary        |  |                   |  |                         |  |                                          |  |                       |  | 2,291  |  | 2,291   
|Additions                     |  | 53,892             |  | 5,591                    |  | 3,833                                     |  | 21,976                 |  | 17,184 |  | 102,476 
|Release                       |  | -68,532            |  | -673                     |  | -6                                        |  | -1,354                 |  | -2,241 |  | -72,806 
|Usage                         |  | -47,811            |  | -5,943                   |  | -2,151                                    |  | -16,405                |  | -4,337 |  | -76,647 
|Foreign currency translations |  | 2,156              |  | 13                       |  | 90                                        |  | 309                    |  | 984    |  | 3,552   
|                              |  |                    |  |                          |  |                                           |  |                        |  |        |  |         
|At November 30, 2005          |  | 346,951            |  | 15,183                   |  | 34,222                                    |  | 29,327                 |  | 42,242 |  | 467,925 

The short term part of these provisions is approximately Euro 163 million (2004: Euro 85 million).

The table below displays a rollforward of the restructuring provision from November 30, 2003 to November 30, 2005 (in millions).



|                     |  |                  |  |           |  |         |  |          |  |                 
|-------------------- |  | ---------------- |  | --------- |  | ------- |  | -------- |  | ----------------
|Type of costs        |  | BalanceNov. 2003 |  | Additions |  | Release |  | Utilized |  | BalanceNov. 2004
|                     |  | Euro             |  | Euro      |  | Euro    |  | Euro     |  | Euro            
|Write-down of assets |  | 5.2              |  |          |  |        |  | -5.2     |  |                
|Personnel costs      |  | 46.8             |  | 11.3      |  | -14.7   |  | -18.6    |  | 24.8            
|                     |  |                  |  |           |  |         |  |          |  |                 
|Total long term part |  | 52.0             |  | 11.3      |  | -14.7   |  | -23.8    |  | 24.8            
|                     |  |                  |  |           | 
|Type of costs        |  | BalanceNov. 2004 |  | Additions |  | Release |  | Utilized |  | BalanceNov. 2005
|                     |  | Euro             |  | Euro      |  | Euro    |  | Euro     |  | Euro            
|Write-down of assets |  |                 |  |          |  |        |  |         |  |                
|Personnel costs      |  | 24.8             |  | 22.2      |  | -1.3    |  | -16.4    |  | 29.3            
|                     |  |                  |  |           |  |         |  |          |  |                 
|Total long term part |  | 24.8             |  | 22.2      |  | -1.3    |  | -16.4    |  | 29.3            

In 2005, agreement was reached in the Netherlands on a significant change in the pension scheme, which means that
with effect from January 1, 2006 pension entitlements will be based on career average instead of final pay.

The resultant reduction of Euro
68.4 million of the provision for pensions was credited to the Statement of Operations in the 2005 financial year.

In 2005 a restructuring was
initiated to achieve a further reduction in costs. This will result in the discontinuation of approximately 500 jobs in Europe. Measures have also been taken in the United States to increase profitability. In part, these run parallel with the
integration of Imagistics International Inc. The restructuring and integration costs relate to personnel costs and costs in connection with onerous contracts in respect of buildings.



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##### Table of Contents

|                                                                                |  |                  |  |                    |  |        
|------------------------------------------------------------------------------- |  | ---------------- |  | ------------------ |  | -------
|Recognition of these two effects in the Statement of Operations (in
thousands): |  | pensionprovision |  | restructuringcosts |  | total  
|                                                                                |  | Euro             |  | Euro               |  | Euro   
|Cost of sales                                                                   |  | -8,029           |  | 8,029              |  |       
|Selling expenses                                                                |  | -14,185          |  | 10,185             |  | -4,000 
|Research and development expenses                                               |  | -21,366          |  | 6,866              |  | -14,500
|General and administrative expenses                                             |  | -24,780          |  | 8,045              |  | -16,735
|                                                                                |  |                  |  |                    |  |        
|Total                                                                           |  | -68,360          |  | 33,125             |  | -35,235
|                                                                                |  |                  |  |                    |  |        

Of the total restructuring and integration costs of Euro 33.1 million, an amount of Euro 22 million has
been included under the restructuring provision and Euro 11.1 million under other provisions.



|13. | Shareholders equity
|--- | --------------------

The changes in shareholders equity
are summarized below (in thousands):



|                                                    |  |                             |  |                |     |  |                 |  |                 |  |                |  |            |  |                                |  |                            
|--------------------------------------------------- |  | --------------------------- |  | -------------- | --- |  | --------------- |  | --------------- |  | -------------- |  | ---------- |  | ------------------------------ |  | ---------------------------
|                                                    |  | Financing Preference shares |  | Ordinaryshares |     |  | Paid in capital |  | Legal reserve * |  | Other reserves |  | Net income |  | Accumul.translationadjustments |  | Total Share- holders equity
|                                                    |  | Euro                        |  | Euro           |     |  | Euro            |  | Euro            |  | Euro           |  | Euro       |  | Euro                           |  | Euro                       
|Balance November 30, 2002                           |  | 10,000                      |  | 43,633         | (a) |  | 511,400         |  | 1,295           |  | 139,800        |  | 112,531    |  | -47,879                        |  | 770,780                    
|                                                    |  |                             |  |                |     |  |                 | 
|Net income                                          |  |                             |  |                |     |  |                 |  |                 |  |                |  | 61,462     |  |                                |  | 61,462                     
|Transfer                                            |  |                             |  |                |     |  |                 |  | -703            |  | 113,234        |  | -112,531   |  |                                |  |                           
|Dividends (b)                                       |  |                             |  |                |     |  |                 |  |                 |  | -51,963        |  |            |  |                                |  | -51,963                    
|Conversions of convertible loans                    |  |                             |  |                |     |  | 8               |  |                 |  |                |  |            |  |                                |  | 8                          
|Purchase of shares                                  |  |                             |  |                |     |  |                 |  |                 |  | -892           |  |            |  |                                |  | -892                       
|Results on shares purchased via exercise of options |  |                             |  |                |     |  |                 |  |                 |  | -32            |  |            |  |                                |  | -32                        
|Foreign currency translations                       |  |                             |  |                |     |  |                 |  |                 |  |                |  |            |  | -66,598                        |  | -66,598                    
|                                                    |  |                             |  |                |     |  |                 |  |                 |  |                |  |            |  |                                |  |                            
|Balance November 30, 2003                           |  | 10,000                      |  | 43,633         | (a) |  | 511,408         |  | 592             |  | 200,147        |  | 61,462     |  | -114,477                       |  | 712,765                    
|                                                    |  |                             |  |                |     |  |                 | 
|Net income                                          |  |                             |  |                |     |  |                 |  |                 |  |                |  | 78,076     |  |                                |  | 78,076                     
|Transfer                                            |  |                             |  |                |     |  |                 |  | 1,849           |  | 59,613         |  | -61,462    |  |                                |  |                           
|Dividends (b)                                       |  |                             |  |                |     |  |                 |  |                 |  | -51,971        |  |            |  |                                |  | -51,971                    
|Conversions of convertible loans                    |  |                             |  | 3              |     |  | 37              |  |                 |  |                |  |            |  |                                |  | 40                         
|Purchase of shares                                  |  |                             |  |                |     |  |                 |  |                 |  | 1,266          |  |            |  |                                |  | 1,266                      
|Result on shares purchased via exercise of options  |  |                             |  |                |     |  |                 |  |                 |  | -192           |  |            |  |                                |  | -192                       
|Foreign currency translations                       |  |                             |  |                |     |  |                 |  |                 |  |                |  |            |  | -25,914                        |  | -25,914                    
|                                                    |  |                             |  |                |     |  |                 |  |                 |  |                |  |            |  |                                |  |                            
|Balance November 30, 2004                           |  | 10,000                      |  | 43,636         | (a) |  | 511,445         |  | 2,441           |  | 208,863        |  | 78,076     |  | -140,391                       |  | 714,070                    
|                                                    |  |                             |  |                |     |  |                 | 
|Net income                                          |  |                             |  |                |     |  |                 |  |                 |  |                |  | 78,838     |  |                                |  | 78,838                     
|Transfer                                            |  |                             |  |                |     |  |                 |  | -186            |  | 78,262         |  | -78,076    |  |                                |  |                           
|Dividends (b)                                       |  |                             |  |                |     |  |                 |  |                 |  | -50,412        |  |            |  |                                |  | -50,412                    
|Conversions of convertible loans                    |  |                             |  | 3              |     |  | 40              |  |                 |  |                |  |            |  |                                |  | 43                         
|Purchase of shares                                  |  |                             |  |                |     |  |                 |  |                 |  | 2,902          |  |            |  |                                |  | 2,902                      
|Result on shares purchased via exercise of options  |  |                             |  |                |     |  |                 |  |                 |  | -1,240         |  |            |  |                                |  | -1,240                     
|Foreign currency translations                       |  |                             |  |                |     |  |                 |  |                 |  |                |  |            |  | 36,631                         |  | 36,631                     
|                                                    |  |                             |  |                |     |  |                 |  |                 |  |                |  |            |  |                                |  |                            
|Balance November 30, 2005                           |  | 10,000                      |  | 43,639         | (a) |  | 511,485         |  | 2,255           |  | 238,375        |  | 78,838     |  | -103,760                       |  | 780,832                    
|                                                    |  |                             |  |                |     |  |                 |  |                 |  |                |  |            |  |                                |  |                            



|* | The legal reserve is established according to Dutch Company Law and is generally unavailable for distribution.
|- | --------------------------------------------------------------------------------------------------------------

|(a) | These amounts include Euro 1,500, representing the nominal value of 30 priority shares of Euro 50.
|--- | --------------------------------------------------------------------------------------------------

|(b) | Dividends per ordinary shares have been Euro 0.58 (rounded), Euro 0.58 and Euro 0.58 for respectively 2003, 2004 and 2005. The dividend of cumulative financing preference shares is
included.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-22



---

##### Table of Contents

Information regarding the various classes of shares at November 30, 2005 is as follows:



|                             |  |                   |  |                                 |  |                       
|---------------------------- |  | ----------------- |  | ------------------------------- |  | ----------------------
|Authorized capital           |  | Authorized shares |  | Nominal value per share in Euro |  | Voting rightsper share
|Priority Shares              |  | 30                |  | 50                              |  | 100                   
|Ordinary Shares              |  | 145,000,000       |  | 0.50                            |  | 1                     
|Financing Preference Shares  |  | 30,000,000        |  | 0.50                            |  | 1                     
|Protective Preference Shares |  | 175,000           |  | 500                             |  | 1000                  



|                                |  |                    |  |                    |  |                   
|------------------------------- |  | ------------------ |  | ------------------ |  | ------------------
|Ordinary Shares                 |  | 2003OrdinaryShares |  | 2004OrdinaryShares |  | 2005OrdinaryShares
|Balance at beginning of period  |  | 87,262,525         |  | 87,263,488         |  | 87,268,562        
|Conversion of convertible loans |  | 963                |  | 5,074              |  | 5,898             
|                                |  |                    |  |                    |  |                   
|Balance at end of period        |  | 87,263,488         |  | 87,268,562         |  | 87,274,460        
|                                |  |                    |  |                    |  |                   

Convertible loans consist of convertible Euro debenture bonds issued to Company personnel (see Note 11).



|                                    |  |           |  |           |  |          
|----------------------------------- |  | --------- |  | --------- |  | ---------
|Purchased number of ordinary shares |  | 2003      |  | 2004      |  | 2005     
|Balance beginning of the year       |  | 3,768,942 |  | 3,856,942 |  | 3,750,442
|Purchased                           |  | 100,000   |  |          |  | 116,430  
|Exercise of options                 |  | -12,000   |  | -106,500  |  | -302,000 
|                                    |  |           |  |           |  |          
|Balance end of the year             |  | 3,856,942 |  | 3,750,442 |  | 3,564,872
|                                    |  |           |  |           |  |          

The purchased ordinary shares are relating to the Stock Option Plan.

Priority shares

All priority shares
are issued and outstanding. They are held by Stichting Fort Ginkel, Venlo, the Netherlands, the directors of which are: J.L. Brentjens (Chairman), R.L. van Iperen and F.J. de Wit.

The Articles of Association grant certain rights to the holders of priority shares, including the following:



| |  |  | the determination of the number of members of the Supervisory and Executive Boards;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | the preparation of a binding nomination list to the shareholders for the appointment of Supervisory and Executive Directors;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | the alteration of the Articles of Association; and
| | - |  | --------------------------------------------------



| |  |  | approval for the issue of shares not yet issued.
| | - |  | ------------------------------------------------

In any one year not
more than Euro 60 in dividends may be distributed on all the priority shares together.

Financing Preference Shares

All Financing Preference Shares are held by the Stichting Administratiekantoor Preferente Aandelen Océ in return for the issuance to a number of
institutional investors of registered depositary receipts with limited cancellability. The directors of this Foundation are H. de Ruiter (Chairman), S. Bergsma, J.M. Boll and L. Traas. 20 million Financial Preference Shares are outstanding in
the financial years 2003, 2004 and 2005.

Protective Preference Shares

Since 1979 the Company has been subject to an irrevocable obligation to issue to the Lodewijk Stichting, headquartered in Venlo, Protective Preference Shares upon the
request of forementioned foundation. This obligation currently relates to a number of Protective



F-23



---

##### Table of Contents

Preference Shares having a number of votes at most equal to the total number of votes of the Ordinary Shares and Financing Preference Shares of the Company
outstanding at the time of such request. The Directors of the Lodewijk Stichting are:

N.J. Westdijk (Chairman), S.D. de Bree, M.W. den Boogert and F.J.G.M.
Cremers.

No Protective Preference Shares are outstanding.



|14. | Commitments and contingent liabilities
|--- | --------------------------------------

The Company is contingently
liable for the following items:



|                                                                                                                                                                                                               |  |               |  |     
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- |  | ----
|                                                                                                                                                                                                               |  | November 30, 
|                                                                                                                                                                                                               |  | 2004          |  | 2005
|                                                                                                                                                                                                               |  | (in millions)
|                                                                                                                                                                                                               |  | Euro          |  | Euro
|Government development credits and related surcharges (maximum position of repayment obligation) depending on the commercial success of
related development projects for which these credits have been granted |  | 49.2          |  | 48.0
|Guarantee commitments                                                                                                                                                                                          |  | 2.8           |  | 2.5 

In the ordinary course of business, the Company has incurred commitments pursuant to terms of leases and other
contracts such as those for capital expenditures and purchase commitments.

Repurchase commitments at November 30, 2005 of Euro 7.7 million
(2004: Euro 7.9 million) exist on lease contracts with third parties. The estimated market value is higher than the repurchase commitment.

The Company is
involved in a number of legal actions. Based on currently available information and legal expert opinions, we believe that the outcomes of these legal actions will either have no significant adverse effect on the financial position, operations or
cash flows of the Company, or that any possible adverse effects are adequately reflected in the provisions.



|15. | Capital leases
|--- | --------------

The Company has
included the following assets financed by capitalized leases in property, plant and equipment.



|                              |  |                |  |       
|----------------------------- |  | -------------- |  | ------
|                              |  | November 30,  
|                              |  | 2004           |  | 2005  
|                              |  | (in thousands)
|                              |  | Euro           |  | Euro  
|Equipment and vehicles        |  | 7,410          |  | 16,971
|Less accumulated depreciation |  | 2,718          |  | 6,633 
|                              |  |                |  |       
|Total                         |  | 4,692          |  | 10,338
|                              |  |                |  |       



F-24



---

##### Table of Contents

At November 30, 2005 minimum lease payments are as follows (in thousands):



|                                                |  |       
|----------------------------------------------- |  | ------
|Years ending November 30,                       |  | Euro  
|2006                                            |  | 4,761 
|2007                                            |  | 3,768 
|2008                                            |  | 2,449 
|2009                                            |  | 746   
|2010                                            |  | 89    
|Thereafter                                      |  |      
|                                                |  |       
|Present value of future minimum rental payments |  | 11,813
|                                                |  |       

The short term portion is shown under Bank borrowings. The interest rate amounts to 8.8% (2004: 6%).



|16. | Operating leases
|--- | ----------------

The Company has future minimum rental commitments
under operating leases of approximately Euro 313 million and Euro 315 million at November 30, 2004 and 2005, respectively. Sublease rental income is insignificant. Future rental payments (in thousands) are as follows:



|                              |  |        
|----------------------------- |  | -------
|Years ending November 30,     |  | Euro   
|2006                          |  | 89,848 
|2007                          |  | 62,312 
|2008                          |  | 46,639 
|2009                          |  | 30,825 
|2010                          |  | 27,143 
|Thereafter                    |  | 57,899 
|                              |  |        
|Total minimum rental payments |  | 314,666
|                              |  |        

Total rental expense was Euro 102 million, Euro 103 million and Euro 118 million for the years
ended November 30, 2003, 2004 and 2005, respectively.



|17. | Other current- and accrued liabilities
|--- | --------------------------------------

The other current and
accrued liabilities consists of the following (in thousands):



|                                                           |  |         |  |        
|---------------------------------------------------------- |  | ------- |  | -------
|                                                           |  | 2004    |  | 2005   
|                                                           |  | Euro    |  | Euro   
|Current liabilities:                                       |  |         |  |        
|Value added taxes, social security and other taxes payable |  | 57,999  |  | 60,175 
|Pension liabilities                                        |  | 1,699   |  | 2,505  
|Dividend (preference shares)                               |  | 3,551   |  | 2,108  
|Income taxes                                               |  | 10,622  |  | 3,967  
|Other                                                      |  | 12,784  |  | 22,795 
|Accrued liabilities:                                       |  |         |  |        
|Salaries and payroll taxes                                 |  | 144,949 |  | 156,477
|Other                                                      |  | 74,410  |  | 93,643 
|                                                           |  |         |  |        
|Total                                                      |  | 306,014 |  | 341,670
|                                                           |  |         |  |        



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---

##### Table of Contents

|18. | Expenses
|--- | --------

Material costs

Material costs amount to Euro 753.5 million (2004: Euro 674.7 million) and have been included in full under the heading Cost of sales in the Statement of
Operations.

Depreciation costs

Depreciation costs
consist of the following (in thousands):



|                              |  |         |  |        
|----------------------------- |  | ------- |  | -------
|                              |  | 2004    |  | 2005   
|                              |  | Euro    |  | Euro   
|Intangible fixed assets       |  | 19,045  |  | 19,445 
|Property, plant and equipment |  | 85,489  |  | 88,378 
|Rental equipment              |  | 43,092  |  | 37,783 
|                              |  |         |  |        
|Total                         |  | 147,626 |  | 145,606
|                              |  |         |  |        

Payroll expenses

Payroll expenses consist of the following (in thousands):



|                             |  |           |  |          
|---------------------------- |  | --------- |  | ---------
|                             |  | 2004      |  | 2005     
|                             |  | Euro      |  | Euro     
|Wages and salaries           |  | 966,595   |  | 964,915  
|Social security              |  | 193,638   |  | 221,690  
|Pension costs for:           |  |           |  |          
|- defined contribution plans |  | 13,969    |  | 11,430   
|- defined benefit plans      |  | 53,377    |  | -13,997  
|                             |  |           |  |          
|Total                        |  | 1,227,579 |  | 1,184,038
|                             |  |           |  |          



|                                     |  |        |  |       
|------------------------------------ |  | ------ |  | ------
|Employees by category                |  | 2004   |  | 2005  
|                                     |  | number |  | number
|                                     |  |        |  |       
|Business Services                    |  | 6,693  |  | 6,806 
|Sales                                |  | 4,192  |  | 5,356 
|Service                              |  | 4,013  |  | 5,078 
|Accounting and other                 |  | 2,037  |  | 2,666 
|Manufacturing and Logistics          |  | 2,512  |  | 2,453 
|Research and Development             |  | 1,868  |  | 1,805 
|                                     |  |        |  |       
|Numbers of employees at November 30  |  | 21,315 |  | 24,164
|                                     |  |        |  |       
|Of whom, employed in the Netherlands |  | 3,922  |  | 3,947 
|                                     |  |       
|Weighted average number of employees |  | 21,760 |  | 21,657

Research and development expenses

Research and development expenses consist of the following (in thousands):



|                                                        |  |         |  |        
|------------------------------------------------------- |  | ------- |  | -------
|                                                        |  | 2004    |  | 2005   
|                                                        |  | Euro    |  | Euro   
|Total expenditure on research and development           |  | 206,555 |  | 192,705
|Development credit repayable and net subsidies received |  | 1,550   |  | 2,909  
|                                                        |  |         |  |        
|Total                                                   |  | 208,105 |  | 195,614
|                                                        |  |         |  |        



F-26



---

##### Table of Contents

|19. | Income taxes
|--- | ------------

The additional information concerning the income tax
expense consists of the following:



|            |  |                         |  |       |  |     
|----------- |  | ----------------------- |  | ----- |  | ----
|            |  | Years endedNovember 30,
|            |  | 2003                    |  | 2004  |  | 2005
|            |  | (in millions)          
|            |  | Euro                    |  | Euro  |  | Euro
|Netherlands |  | -14.9                   |  | 3.2   |  | 9.3 
|Foreign     |  | 34.0                    |  | 61.0  |  | -7.0
|            |  |                         |  |       |  |     
|Current     |  | 19.1                    |  | 64.2  |  | 2.3 
|            |  |                         | 
|Netherlands |  | 10.9                    |  | -10.4 |  | 7.9 
|Foreign     |  | 0.5                     |  | -41.6 |  | 1.6 
|            |  |                         |  |       |  |     
|Deferred    |  | 11.4                    |  | -52.0 |  | 9.5 
|            |  |                         |  |       |  |     
|Total       |  | 30.5                    |  | 12.2  |  | 11.8
|            |  |                         |  |       |  |     

The income tax charges as shown in the accompanying Consolidated Statements of Operations differ from the amounts
computed by applying the Dutch federal statutory income tax rates to income before income taxes and minority interests.

A reconciliation of the Dutch
statutory income tax rate to the effective income tax rate is set forth below:



|                                                    |  |                          |  |       |  |     
|--------------------------------------------------- |  | ------------------------ |  | ----- |  | ----
|                                                    |  | Years ended November 30,
|                                                    |  | 2003                     |  | 2004  |  | 2005
|                                                    |  | %                        |  | %     |  | %   
|Dutch statutory tax rate                            |  | 34.5                     |  | 34.5  |  | 31.5
|Non-deductible expenses                             |  | 6.6                      |  | 2.2   |  | 2.8 
|Tax credits                                         |  | -3.3                     |  | -2.2  |  | -7.2
|Foreign taxes deviating from the Dutch tax rate     |  | -4.8                     |  | -12.5 |  | -9.6
|Movement in unrecognized deferred income tax assets |  | -1.7                     |  | -6.7  |  | -0.4
|Other                                               |  | 1.1                      |  | -2.1  |  | -4.4
|                                                    |  |                          |  |       |  |     
|Effective income tax rate                           |  | 32.4                     |  | 13.2  |  | 12.7
|                                                    |  |                          |  |       |  |     

The Tax credits item includes a income tax reduction of Euro 4.9 million in respect of research
and development activities in the United States.

In 2004 the Movement in unrecognized deferred income tax assets includes a release of Euro
7.0 million. This release resulted from the definitive settlement of the tax risks to which these provisions related.

Deferred taxes exist for the
following time differences:



|                                      |  |                          |  |         |  |       
|------------------------------------- |  | ------------------------ |  | ------- |  | ------
|                                      |  | Years ended November 30,
|                                      |  | 2003                     |  | 2004    |  | 2005  
|                                      |  | (in thousands)          
|                                      |  | Euro                     |  | Euro    |  | Euro  
|Valuation tangible fixed assets       |  | 25,244                   |  | 25,682  |  | 2,389 
|Inventory obsolescence                |  | -2,088                   |  | -4,542  |  | 10,131
|Sundry provisions / accrued expenses  |  | 25,633                   |  | -9,789  |  | 9,579 
|Tax benefit of tax loss carry-forward |  | 114                      |  | -1,141  |  | -9,723
|Leasing                               |  | -40,605                  |  | -67,767 |  | -3,894
|Other                                 |  | 3,150                    |  | 5,490   |  | 1,006 
|                                      |  |                          |  |         |  |       
|                                      |  | 11,448                   |  | -52,067 |  | 9,488 
|                                      |  |                          |  |         |  |       



F-27



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##### Table of Contents

The composition of deferred income taxes, as shown in the Consolidated Balance Sheet, is as follows:



|                                                         |  |               |  |                 |  |            |  |                
|-------------------------------------------------------- |  | ------------- |  | --------------- |  | ---------- |  | ---------------
|                                                         |  | 2004          |  | 2005           
|                                                         |  | (in millions)
|                                                         |  | assetsEuro    |  | liabilitiesEuro |  | assetsEuro |  | liabilitiesEuro
|Intangible fixed assets                                  |  | 19.9          |  |                |  | 23.3       |  | 34.0           
|Leasing                                                  |  |              |  | 37.9            |  |           |  | 6.7            
|Other fixed assets                                       |  | 45.5          |  | 0.7             |  | 29.1       |  |               
|Current assets                                           |  | 44.2          |  |                |  | 30.6       |  | 0.1            
|Other long term liabilities                              |  | 71.1          |  |                |  | 42.3       |  |               
|Current liabilities                                      |  | 0.1           |  | 20.3            |  | 0.3        |  | 19.0           
|                                                         |  |               |  |                 |  |            |  |                
|Total deferred tax assets/liabilities                    |  | 180.8         |  | 58.9            |  | 125.6      |  | 59.8           
|                                                         |  |               |  |                
|Net deferred tax position                                |  | 128.8         |  | 6.9             |  | 110.8      |  | 45.0           
|Tax loss carry forwards                                  |  | 14.4          |  |                |  | 24.0       |  |               
|Valuation allowance                                      |  | -36.6         |  |                |  | -36.2      |  |               
|                                                         |  |               |  |                 |  |            |  |                
|Provision for deferred income tax assets and liabilities |  | 106.6         |  | 6.9             |  | 98.6       |  | 45.0           
|                                                         |  |               |  |                 |  |            |  |                

Deferred tax assets form part of the balance sheet caption Other long term assets.

The valuation allowance is related to tax loss carry forwards and certain deferred tax assets for which realization is less than probable. At November 30, 2005 no
provision is made for withholding taxes on dividends of approximately Euro 0.6 million relating to undistributed earnings of certain subsidiaries which management intends to reinvest indefinitely.

Operating loss carry forwards existing at November 30, 2005 expire as follows (in millions):



|       |  |      |  |      |  |            |  |           |  |      
|------ |  | ---- |  | ---- |  | ---------- |  | --------- |  | -----
|Year   |  | 2009 |  | 2010 |  | thereafter |  | unlimited |  | Total
|Amount |  | 1.1  |  | 0.3  |  | 5.5        |  | 17.1      |  | 24.0 



|20. | Financial expense (net)
|--- | -----------------------

Financial expense consists of:



|                                      |  |                          |  |        |  |       
|------------------------------------- |  | ------------------------ |  | ------ |  | ------
|                                      |  | Years ended November 30,
|                                      |  | 2003                     |  | 2004   |  | 2005  
|                                      |  | (in thousands)          
|                                      |  | Euro                     |  | Euro   |  | Euro  
|Interest and similar income items     |  | -5,753                   |  | -6,440 |  | -7,076
|Interest charges and similar expenses |  | 34,589                   |  | 22,103 |  | 22,311
|Other financial expenses              |  | 1,716                    |  | 2,426  |  | 2,578 
|                                      |  |                          |  |        |  |       
|Financial expense (net)               |  | 30,552                   |  | 18,089 |  | 17,813
|                                      |  |                          |  |        |  |       

Amounts of interest capitalized in each year were immaterial.



|21. | Foreign exchange results
|--- | ------------------------

Results on foreign exchange hedging are
included in cost of goods sold for an amount of Euro 22.4 million (profit), Euro 6.3 million (profit) and Euro 1.3 million (loss) in 2003, 2004 and 2005, respectively.



|22. | Minimum future rental copying income
|--- | ------------------------------------

Copiers are rented generally
for periods of one to three years. The rental contracts vary as to terms, but in general contain a provision for fixed monthly rental receipts with additional contingent receipts, based on actual number of copies made.



F-28



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##### Table of Contents

At November 30, 2005, minimum future receipts totaled approximately Euro 347 million to be received as follows
(in millions):



|                          |  |     
|------------------------- |  | ----
|Years ending November 30, |  | Euro
|2006                      |  | 173 
|2007                      |  | 101 
|2008                      |  | 44  
|2009                      |  | 20  
|2010                      |  | 7   
|Thereafter                |  | 2   
|                          |  |     
|Total                     |  | 347 
|                          |  |     



F-29



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##### Table of Contents

|23. | Segment information
|--- | -------------------

Below segment information is shown per
Strategic Business Unit:



|                                                                                   |  |                           |  |                         |  |      
|---------------------------------------------------------------------------------- |  | ------------------------- |  | ----------------------- |  | -----
|                                                                                   |  | WideFormatPrintingSystems |  | DigitalDocumentsSystems |  | Total
|                                                                                   |  | (in millions)            
|                                                                                   |  | Euro                      |  | Euro                    |  | Euro 
|2003                                                                               |  |                           |  |                         |  |      
|Total revenues                                                                     |  | 862                       |  | 1,907                   |  | 2,769
|Operating income                                                                   |  | 55                        |  | 70                      |  | 125  
|Net income                                                                         |  | 30                        |  | 31                      |  | 61   
|                                                                                   |  |                           | 
|Assets                                                                             |  | 674                       |  | 1,747                   |  | 2,421
|Liabilities                                                                        |  | 391                       |  | 1,279                   |  | 1,670
|Shareholders equity and minority interests                                        |  | 283                       |  | 468                     |  | 751  
|                                                                                   |  |                           | 
|Net expenditure in tangible and intangible fixed assets                            |  | 24                        |  | 82                      |  | 106  
|Depreciation                                                                       |  | 32                        |  | 125                     |  | 157  
|Amortization                                                                       |  | 6                         |  | 11                      |  | 17   
|Impairment                                                                         |  | 11                        |  | 14                      |  | 25   
|                                                                                   |  |                           | 
|2004                                                                               |  |                           |  |                         |  |      
|Total revenues                                                                     |  | 818                       |  | 1,834                   |  | 2,652
|Operating income                                                                   |  | 55                        |  | 55                      |  | 110  
|Net income                                                                         |  | 43                        |  | 35                      |  | 78   
|                                                                                   |  |                           | 
|Assets                                                                             |  | 617                       |  | 1,616                   |  | 2,233
|Liabilities                                                                        |  | 328                       |  | 1,153                   |  | 1,481
|Shareholders equity and minority interests                                        |  | 289                       |  | 463                     |  | 752  
|                                                                                   |  |                           | 
|Net expenditure in tangible and intangible fixed assets                            |  | 24                        |  | 99                      |  | 123  
|Depreciation                                                                       |  | 31                        |  | 98                      |  | 129  
|Amortization                                                                       |  | 11                        |  | 8                       |  | 19   
|Impairment                                                                         |  | 8                         |  |                        |  | 8    
|                                                                                   |  |                           | 
|2005                                                                               |  |                           |  |                         |  |      
|Total revenues                                                                     |  | 834                       |  | 1,843                   |  | 2,677
|Operating income                                                                   |  | 71                        |  | 39                      |  | 110  
|Operating income, excluding release pension provision and restructuring costs 2005 |  | 57                        |  | 18                      |  | 75   
|Net income                                                                         |  | 59                        |  | 20                      |  | 79   
|                                                                                   |  |                           | 
|Assets                                                                             |  | 638                       |  | 2,181                   |  | 2,819
|Liabilities                                                                        |  | 295                       |  | 1,706                   |  | 2,001
|Shareholders equity and minority interests                                        |  | 343                       |  | 475                     |  | 818  
|                                                                                   |  |                           | 
|Net expenditure in tangible and intangible fixed assets                            |  | 26                        |  | 123                     |  | 149  
|Depreciation                                                                       |  | 30                        |  | 97                      |  | 127  
|Amortization                                                                       |  | 7                         |  | 12                      |  | 19   
|Impairment                                                                         |  | 1                         |  |                        |  | 1    



F-30



---

##### Table of Contents

The spread of revenues, assets and investments per geographical area are shown below (in millions):



|                                               |  |                               |  |                              |  |                          |  |       |  |      |  |     
|---------------------------------------------- |  | ----------------------------- |  | ---------------------------- |  | ------------------------ |  | ----- |  | ---- |  | ----
|                                               |  | revenues pergeographical area |  | geographical spreadof assets |  | geographicalinvestments*
|Countries                                      |  | 2004                          |  | 2005                         |  | 2004                     |  | 2005  |  | 2004 |  | 2005
|                                               |  | Euro                          |  | Euro                         |  | Euro                     |  | Euro  |  | Euro |  | Euro
|United States                                  |  | 925                           |  | 931                          |  | 414                      |  | 1,180 |  | 19   |  | 28  
|Germany                                        |  | 333                           |  | 323                          |  | 347                      |  | 325   |  | 18   |  | 19  
|Netherlands                                    |  | 291                           |  | 289                          |  | 855                      |  | 647   |  | 53   |  | 56  
|France                                         |  | 191                           |  | 195                          |  | 115                      |  | 117   |  | 6    |  | 10  
|United Kingdom                                 |  | 180                           |  | 182                          |  | 100                      |  | 109   |  | 4    |  | 7   
|Rest of Europe                                 |  | 534                           |  | 541                          |  | 305                      |  | 314   |  | 18   |  | 22  
|Countries outside Europe and the United States |  | 198                           |  | 216                          |  | 97                       |  | 127   |  | 5    |  | 7   
|                                               |  |                               |  |                              |  |                          |  |       |  |      |  |     
|Total                                          |  | 2,652                         |  | 2,677                        |  | 2,233                    |  | 2,819 |  | 123  |  | 149 
|                                               |  |                               |  |                              |  |                          |  |       |  |      |  |     



|* | Net investments in intangible and tangible assets.
|- | --------------------------------------------------



|24. | Financial derivative instruments
|--- | --------------------------------

Interest Rate Swaps

Interest rate swaps, future rate agreements and caps are allowable hedge contracts when the transactions reduce interest rate risk.

The Company enters into interest rate swap contracts to manage interest rate risks. At November 30, 2005 the following contracts which effectively converted its
fixed Euro rate debt (see Note 11) into variable rate debt were in effect:



|                    |  |                       |   |  |                                              |  |                               |    
|------------------- |  | --------------------- | - |  | -------------------------------------------- |  | ----------------------------- | ---
|Fixed rate receipts |  | Variable rate payment |   |  | Remaining weighted average maturity in years |  | Notional amount (in millions)
|6.39%               |  | 2.63                  | % |  | 1.81                                         |  | Euro                          | 272

Contracts which convert floating rate debt into fixed rate debt were in effect:



|                                     |  |                                     |  |                               |    
|------------------------------------ |  | ----------------------------------- |  | ----------------------------- | ---
|Weighted average fixed rate payments |  | Remaining average maturity in years |  | Notional amount (in millions)
|%                                    |  |                                     |  |                              
|3.75                                 |  | 0.56                                |  | Pound Sterling                | 11 
|4.70                                 |  | 2.92                                |  | U.S. dollars                  | 180
|2.78                                 |  | 1.86                                |  | Euro                          | 140

The aggregated estimated fair value of above swap contracts was approximately Euro 12.8 million based on the
interest rates at November 30, 2005 (2004: Euro 21.0).

Foreign Exchange Contracts

The Company enters into foreign currency exchange contracts aimed at protecting the operating income and (intercompany) loans held in foreign currencies from currency
fluctuation. During 2005 the Company has entered into forward exchange contracts mainly in currencies which fluctuate vis-à-vis the Euro including the U.S. dollar and Pound Sterling.

Per November 30, 2005, the countervalue in Euro of such contracts in foreign currencies amounted to Euro 237.2 million in respect of the hedge of forecasted
cash flows and Euro 197.0 million in respect of the hedge of the (intercompany) loans. The aggregated market value of the above foreign currency positions would give a value of Euro -9.9 million and Euro 0.2 million at
November 30, 2005.



F-31



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##### Table of Contents

Credit Risk

The
interest rate swap agreements and the foreign exchange contracts have been entered into with major financial institutions which are expected to fully perform under the terms of the agreements.

The only balance sheet item of which the fair value deviates from the carrying value is the Long term debt. The fair value of the long term debt is
approximately Euro 10.4 million higher than the carrying value based on similar terms and remaining maturities (2004: Euro 26.5 million).



|25. | Pension disclosures
|--- | -------------------

With the effect from 2003 the pensions
accounting standard IAS 19 has been applied.



|                                         |  |      |  |     
|---------------------------------------- |  | ---- |  | ----
|                                         |  | 2004 |  | 2005
|                                         |  | %    |  | %   
|The principal actuarial assumptions are: |  |      |  |     
|Discount rate percentage                 |  | 4.87 |  | 4.47
|Expected return on pension assets        |  | 6.62 |  | 6.67
|Expected increase in salaries            |  | 2.70 |  | 2.69
|Expected increase in benefits            |  | 2.05 |  | 2.05



F-32



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##### Table of Contents

|                                                                                  |  |                |  |            |   
|--------------------------------------------------------------------------------- |  | -------------- |  | ---------- | --
|                                                                                  |  | 2004           |  | 2005       |   
|                                                                                  |  | (in thousands) | 
|                                                                                  |  | Euro           |  | Euro       |   
|The amounts charged to the Statement of Operations are as follows:                |  |                |  |            |   
|Service costs                                                                     |  | 42,663         |  | 47,595     |   
|Interest costs                                                                    |  | 65,285         |  | 67,596     |   
|Expected return on pension assets                                                 |  | -54,322        |  | -62,163    |   
|Other                                                                             |  | -249           |  | -67,025    | * 
|                                                                                  |  |                |  |            |   
|Pension costs                                                                     |  | 53,377         |  | -13,997    |   
|                                                                                  |  |                |  |            |   
|                                                                                  |  |               
|Recognition for pension costs in the Statement of Operations:                     |  |                |  |            |   
|Cost of sales                                                                     |  | 22,612         |  | 15,204     |   
|Selling expenses                                                                  |  | 16,357         |  | 2,659      |   
|Research and development expenses                                                 |  | 5,582          |  | -15,059    |   
|General and administrative expenses                                               |  | 8,826          |  | -16,801    |   
|                                                                                  |  |                |  |            |   
|Total                                                                             |  | 53,377         |  | -13,997    |   
|                                                                                  |  |               
|The amounts included in the balance sheet are shown below:                        |  |                |  |            |   
|Present values of funded pension obligations                                      |  | -1,169,973     |  | -1,284,391 |   
|Fair value of plan assets                                                         |  | 896,934        |  | 1,077,013  |   
|                                                                                  |  |                |  |            |   
|                                                                                  |  | -273,039       |  | -207,378   |   
|Present value of unfunded pension obligations                                     |  | -216,981       |  | -256,686   |   
|                                                                                  |  |                |  |            |   
|Status of the funds                                                               |  | -490,020       |  | -464,064   |   
|Actuarial losses not yet included                                                 |  | 83,515         |  | 118,259    |   
|Back service not yet included                                                     |  | 161            |  | 36         |   
|                                                                                  |  |                |  |            |   
|Pension provisions included in the balance sheet                                  |  | -406,344       |  | -345,769   |   
|                                                                                  |  |                |  |            |   
|                                                                                  |  |               
|These pension provisions are stated in the Consolidated Balance Sheet as follows: |  |                |  |            |   
|Pension provisions                                                                |  | -407,246       |  | -346,951   |   
|Other long term assets                                                            |  | 902            |  | 1,182      |   
|                                                                                  |  |                |  |            |   
|Total                                                                             |  | -406,344       |  | -345,769   |   
|                                                                                  |  |                |  |            |   
|                                                                                  |  |               
|Pension obligations at December 1, 2003/2004                                      |  | -1,204,068     |  | -1,386,954 |   
|Service costs                                                                     |  | -42,663        |  | -47,595    |   
|Interest costs                                                                    |  | -65,285        |  | -67,596    |   
|Employee contributions                                                            |  | -12,478        |  | -13,868    |   
|Amendments                                                                        |  | 684            |  | 69,615     | **
|Actuarial losses                                                                  |  | -109,712       |  | -111,102   |   
|Benefits paid                                                                     |  | 33,193         |  | 37,007     |   
|Exchange rate differences                                                         |  | 13,375         |  | -20,584    |   
|                                                                                  |  |                |  |            |   
|Pension obligations at November 30                                                |  | -1,386,954     |  | -1,541,077 |   
|                                                                                  |  |                |  |            |   



|* | This mainly relates to the release of the pension provision of Euro 68.4 million.
|- | ---------------------------------------------------------------------------------

|** | This mainly relates to the change in the pension scheme in the Netherlands which results in the release of the pension provision of Euro 68.4 million, net of the related and
not yet recognized actuarial losses Euro 1.2 million.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-33



---

##### Table of Contents

|                                                   |  |                |  |          
|-------------------------------------------------- |  | -------------- |  | ---------
|                                                   |  | 2004           |  | 2005     
|                                                   |  | (in thousands)
|                                                   |  | Euro           |  | Euro     
|Changes in plan assets:                            |  |                |  |          
|Fair value of plan assets at December 1, 2003/2004 |  | 788,404        |  | 896,934  
|Actual return on investments                       |  | 62,456         |  | 139,101  
|Employer contributions                             |  | 76,221         |  | 48,711   
|Employee contributions                             |  | 12,478         |  | 13,868   
|Benefits paid                                      |  | -33,193        |  | -37,007  
|Exchange rate differences                          |  | -9,432         |  | 15,406   
|                                                   |  |                |  |          
|Fair value of plan assets at November 30           |  | 896,934        |  | 1,077,013
|                                                   |  |                |  |          



|26. | Earnings per share calculations
|--- | -------------------------------



|                                                                           |  |                                          |  |        |  |       
|-------------------------------------------------------------------------- |  | ---------------------------------------- |  | ------ |  | ------
|                                                                           |  | Years ended November 30,                
|                                                                           |  | 2003                                     |  | 2004   |  | 2005  
|                                                                           |  | (in thousands, except per share amounts)
|                                                                           |  | Euro                                     |  | Euro   |  | Euro  
|Net income attributable to holders of ordinary shares                      |  | 57,911                                   |  | 74,525 |  | 76,730
|Weighted average number of ordinary shares outstanding                     |  | 83,409                                   |  | 83,488 |  | 83,698
|Net income per ordinary share in Euro                                      |  | 0.69                                     |  | 0.89   |  | 0.92  
|                                                                           |  |                                          | 
|Net income attributable to holders of ordinary shares                      |  | 57,911                                   |  | 74,525 |  | 76,730
|Interest costs of convertible loans (net of tax)                           |  | 300                                      |  | 322    |  | 308   
|                                                                           |  |                                          |  |        |  |       
|Net income based on full conversion                                        |  | 58,211                                   |  | 74,847 |  | 77,038
|                                                                           |  |                                          | 
|Weighted average number of ordinary shares outstanding                     |  | 83,409                                   |  | 83,488 |  | 83,698
|Adjustment for assumed conversion                                          |  | 729                                      |  | 728    |  | 750   
|Adjustment for options                                                     |  | 30                                       |  | 543    |  | 221   
|                                                                           |  |                                          |  |        |  |       
|Weighted average number of ordinary shares on the basis of full conversion |  | 84,168                                   |  | 84,759 |  | 84,669
|                                                                           |  |                                          | 
|Net income per ordinary share on the basis of full conversion in Euro      |  | 0.69                                     |  | 0.88   |  | 0.91  



F-34



---

##### Table of Contents

|27. | Generally accepted accounting principles in the United States of America
|--- | ------------------------------------------------------------------------

The Companys Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the Netherlands (Dutch GAAP), which vary in certain significant respects from accounting principles generally
accepted in the United States of America (US GAAP). The principal differences between Dutch and US GAAP are presented below together with explanations of certain adjustments that affect consolidated net income and total consolidated
shareholders equity as of and for the years ended November 30.



|                                                                                               |  |                                                     |  |            |  |            |  |           
|---------------------------------------------------------------------------------------------- |  | --------------------------------------------------- |  | ---------- |  | ---------- |  | ----------
|                                                                                               |  | Years ended November 30,                           
|                                                                                               |  | 2003                                                |  | 2004       |  | 2005       |  | 2005      
|                                                                                               |  | (in thousands, except shares and per share amounts)
|                                                                                               |  | Euro                                                |  | Euro       |  | Euro       |  | $*        
|Net income under Dutch GAAP as shown in the accompanying Consolidated Statements of Operations |  | 61,462                                              |  | 78,076     |  | 78,838     |  | 92,950    
|                                                                                               |  |                                                     |  |           
|US GAAP adjustments:                                                                           |  |                                                     |  |            |  |            |  |           
|Goodwill amortization (a)                                                                      |  | -931                                                |  | -2,311     |  | 1,820      |  | 2,146     
|Costs of Imagistics acquisition not included in goodwill (a)                                   |  |                                                    |  |           |  | -2,850     |  | -3,360    
|Release of (addition to) provisions (b)                                                        |  | -5,250                                              |  | -12,423    |  | 2,979      |  | 3,512     
|Pension cost (c)                                                                               |  | -14,992                                             |  | -14,242    |  | -15,954    |  | -18,810   
|Change pension scheme in the Netherlands (c)                                                   |  |                                                    |  |           |  | -68,360    |  | -80,596   
|Derivative financial instruments (d)                                                           |  | 8,260                                               |  | 4,261      |  | -2,651     |  | -3,126    
|Option plan (e)                                                                                |  | 154                                                 |  | -1,256     |  | -1,027     |  | -1,211    
|Product development costs (f)                                                                  |  |                                                    |  | -1,492     |  | 341        |  | 402       
|Sale of lease portfolio (g)                                                                    |  |                                                    |  | -13,880    |  | 1,775      |  | 2,093     
|Realized translation adjustments (h)                                                           |  | -1,789                                              |  |           |  |           |  |          
|Income tax effects on above adjustments (i)                                                    |  | 3,804                                               |  | 22,569     |  | 13,273     |  | 15,649    
|                                                                                               |  |                                                     |  |            |  |            |  |           
|Net income under US GAAP                                                                       |  | 50,718                                              |  | 59,302     |  | 8,184      |  | 9,649     
|                                                                                               |  |                                                     |  |            |  |            |  |           
|                                                                                               |  |                                                     |  |           
|Earnings per ordinary share:                                                                   |  |                                                     |  |            |  |            |  |           
|Basic (j)                                                                                      |  | 0.57                                                |  | 0.67       |  | 0.07       |  | 0.08      
|Diluted (j)                                                                                    |  | 0.56                                                |  | 0.66       |  | 0.08       |  | 0.09      
|                                                                                               |  |                                                     |  |           
|Weighted average number of ordinary shares outstanding:                                        |  |                                                     |  |            |  |            |  |           
|Basic                                                                                          |  | 83,408,783                                          |  | 83,487,576 |  | 83,698,244 |  | 83,698,244
|Diluted                                                                                        |  | 84,167,802                                          |  | 84,758,630 |  | 84,668,853 |  | 84,668,853
|                                                                                               | 
|                                                                                               |  | Statement of Comprehensive Income                  
|                                                                                               |  | 2003                                                |  | 2004       |  | 2005       |  | 2005      
|                                                                                               |  | (in thousands)                                     
|                                                                                               |  | Euro                                                |  | Euro       |  | Euro       |  | $*        
|Net income                                                                                     |  | 50,718                                              |  | 59,302     |  | 8,184      |  | 9,649     
|Foreign currency translation adjustment                                                        |  | -74,671                                             |  | -26,644    |  | 36,745     |  | 43,322    
|Additional minimum liability (c)                                                               |  | 47,573                                              |  | -34,919    |  | 23,237     |  | 27,396    
|Derivative financial instruments (d)                                                           |  | 150                                                 |  | -481       |  | -11,281    |  | -13,300   
|                                                                                               |  |                                                     |  |            |  |            |  |           
|Comprehensive income                                                                           |  | 23,770                                              |  | -2,742     |  | 56,885     |  | 67,067    
|                                                                                               |  |                                                     |  |            |  |            |  |           

---

|* | See Note 0 Summary of significant accounting principles
|- | -------------------------------------------------------



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The reconciliation of the shareholders equity as shown in the accompanying Consolidated Balance Sheets to amounts
determined in accordance with US GAAP is as follows:



|                                                                                               |  |                          |  |           |  |          
|---------------------------------------------------------------------------------------------- |  | ------------------------ |  | --------- |  | ---------
|                                                                                               |  | Years ended November 30,
|                                                                                               |  | 2004                     |  | 2005      |  | 2005     
|                                                                                               |  | (in thousands)          
|                                                                                               |  | Euro                     |  | Euro      |  | $*       
|Shareholders equity under Dutch GAAP as shown in the accompanying Consolidated Balance Sheets |  | 714,070                  |  | 780,832   |  | 920,601  
|US GAAP adjustments:                                                                           |  |                          |  |           |  |          
|Goodwill (a)                                                                                   |  | 195,316                  |  | 194,286   |  | 229,063  
|Provisions (b)                                                                                 |  | 22,173                   |  | 25,152    |  | 29,654   
|Pension provision (c)                                                                          |  | 274,678                  |  | 192,266   |  | 226,682  
|Additional minimum pension liability (c)                                                       |  | -163,816                 |  | -134,691  |  | -158,801 
|Derivative financial instruments (d)                                                           |  | 28,893                   |  | 10,011    |  | 11,803   
|Product development costs (f)                                                                  |  | -1,492                   |  | -1,151    |  | -1,357   
|Sale of lease portfolio (g)                                                                    |  | -13,880                  |  | -12,105   |  | -14,272  
|Income tax effects on above adjustments (i)                                                    |  | -28,527                  |  | -16,192   |  | -19,090  
|                                                                                               |  |                          |  |           |  |          
|Shareholders equity under US GAAP                                                             |  | 1,027,415                |  | 1,038,408 |  | 1,224,283
|                                                                                               |  |                          |  |           |  |          

If the above adjustments were reflected in the Consolidated Balance Sheets, the amounts of the following accounts
would be:



|                        |  |                                          |  |                          |  |          |  |          
|----------------------- |  | ---------------------------------------- |  | ------------------------ |  | -------- |  | ---------
|                        |  |                                          |  | Years ended November 30,
|                        |  |                                          |  | 2004                     |  | 2005     |  | 2005     
|                        |  |                                          |  | (in thousands)          
|                        |  |                                          |  | Euro                     |  | Euro     |  | $*       
|Intangible fixed assets |  | Gross                                    |  | 414,904                  |  | 916,587  |  | 1,080,656
|                        |  | Amortization                             |  | -181,345                 |  | -171,187 |  | -201,829 
|Financial fixed assets  |  | Deferred income taxes                    |  | 106,559                  |  | 105,302  |  | 124,151  
|                        |  | Other                                    |  | 20,095                   |  | 28,265   |  | 33,324   
|Current assets          |  | Prepaid expenses                         |  | 17,025                   |  | 29,250   |  | 34,486   
|Shareholders equity    |  | Other reserves                           |  | 539,799                  |  | 565,309  |  | 666,499  
|                        |  | Accum. translation adjustments           |  | -139,209                 |  | -102,464 |  | -120,805 
|                        |  | Net income                               |  | 59,302                   |  | 8,184    |  | 9,649    
|Long term liabilities   |  | Deferred income taxes                    |  | 35,445                   |  | 67,891   |  | 80,043   
|                        |  | Long term provisions                     |  | 212,208                  |  | 250,507  |  | 295,348  
|Long term debt          |  |                                          |  | 438,409                  |  | 221,985  |  | 261,720  
|Current liabilities     |  | Current portion of long term debt        |  | 27,790                   |  | 653,769  |  | 770,794  
|                        |  | Other incl. additional minimum liability |  | 164,115                  |  | 184,308  |  | 217,299  

---

|* | See Note 0 Summary of significant accounting principles
|- | -------------------------------------------------------



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##### Table of Contents

a) Goodwill

General

Under Dutch GAAP, the excess of the purchase price over the fair value of the net assets of an acquired company is capitalized as
goodwill effective December 1, 2000 and amortized on a straight-line basis over a period of 5 to 20 years. Previously, goodwill was charged directly to shareholders equity.

Under US GAAP, the excess of the purchase price over the fair value of the net assets acquired should be reflected as goodwill. Additionally, upon the adoption of SFAS No. 142, Goodwill and Other
Intangible Assets (SFAS No. 142) effective December 1, 2002, amortization of the goodwill balance ceased and the goodwill balance is tested annually or when indicators exist for impairment. Therefore, the goodwill
amortization recorded under Dutch GAAP is reversed for US GAAP purposes.

In accordance with SFAS No. 142, the Company performed an impairment
analysis on this goodwill balance and noted no impairment in 2005.

The reversal of the 2004 and 2003 goodwill
amortization was offset by additional US GAAP impairment charges.

Acquisition costs Imagistics not included in goodwill

On October 31, 2005, Océ acquired 100% of the shares of Imagistics. The Company accounted for this transaction in accordance with SFAS No. 141,
Business Combinations. The Company identified certain acquisition costs related to the change in control which under US GAAP do not qualify as a liability in the opening balance of Imagistics, and hence as goodwill. Therefore under
US GAAP these costs have been charged to the Statement of Operations in November 2005.

b) Provisions

Under US GAAP the recognition of a provision often is subject to more strict criteria than under Dutch GAAP. For this reason certain elements of a provision are
reversed under US GAAP. For Océ the main differences between Dutch GAAP and US GAAP relate to the following provisions:

Restructuring
provision

Under US GAAP, SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, the measurement of a
liability for one-time termination benefits depends on whether employees are required to render service until they are terminated in order to receive the termination benefits. If this period extends beyond the minimum retention period, the liability
shall be determined at its fair value at termination date and is recognized ratably over the future service period.

Under Dutch GAAP the liability is
measured at its fair value and is fully recognized at the communication date.

Other provisions

The main adjustment relates to a provision for onerous rent contracts. Under Dutch GAAP, a provision for onerous contracts is determined as the unavoidable cost
associated with contractual commitments, reduced by the net positive cash flows, if any, when management has committed to a firm plan. Under US GAAP, SFAS No. 146, Accounting for Costs Associated with Exit or Disposal
Activities, a liability for cost that will continue to be incurred without economic benefit to the Company shall be recognized when the Company ceases use of rights conveyed by the contract.

Under Dutch GAAP a provision is recognized when amongst others it is more likely than not that an outflow of resources embodying economic benefits will be required to
settle the obligation. Under US GAAP, SFAS 5, Accounting for Contingencies, a provision for a loss contingency is required if it is probable (defined as likely) that there is a present obligation resulting from a past event and an
outflow of economic resources is reasonably estimable. The difference in recognition with respect to the probability of the outcome has led to a difference in the recognition of tax contingencies.

c) Pensions

Under US GAAP, pension costs are calculated in
accordance with SFAS 87, Employers Accounting for Pensions. With effect from fiscal year 2003, IAS 19 has been applied in the Dutch GAAP Financial Statements. Upon transition to IAS 19, unrecognized gains and losses were recognized
directly in equity.

Under IAS 19, pension assets, defined benefit pension obligations and expenses are determined in manner similar to US GAAP. However,
under IAS 19, prior service cost, transition obligations and expenses resulting from plan amendments are generally recognized immediately. Under US GAAP, these expenses are generally recognized over a longer period. Under US GAAP and
unlike IAS 19, when the accumulated benefit obligation (ABO) exceeds the fair value of plan assets, a liability at least equal to



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##### Table of Contents

the unfunded ABO must be recognized in the balance sheet. To the extent that the unfunded ABO exceeds the liability already recognized, an additional minimum
liability (AML) must be recognized as a reduction of shareholders equity, net of tax. If the unfunded ABO is less than the liability already recognized, no further liability is recognized.

Additionally, in 2005 agreement was reached in the Netherlands on a significant change in the pension scheme, which means that with effect from January 1, 2006
pension entitlements will be based on career average instead of final pay.

Under IAS 19 this amendment is treated as a curtailment and has been released to
the Statement of Operations. Under US GAAP such a treatment is not allowed, and the amendment will be amortized over the average remaining period of service, which will have a positive effect on the US GAAP results in future years.

The following represent the pension costs that would be recorded under SFAS 87.



|                                    |  |                |  |         |  |        
|----------------------------------- |  | -------------- |  | ------- |  | -------
|Pension cost under US GAAP:         |  | 2003           |  | 2004    |  | 2005   
|                                    |  | (in thousands)
|                                    |  | Euro           |  | Euro    |  | Euro   
|Service cost                        |  | 45,058         |  | 42,855  |  | 47,738 
|Interest cost                       |  | 66,227         |  | 65,441  |  | 67,779 
|Expected return on plan assets      |  | -53,090        |  | -54,721 |  | -62,163
|Amortization of transition costs    |  | -2,948         |  | -142    |  | -32    
|Amortization of prior service costs |  | -152           |  | 100     |  | 140    
|Amortization of losses              |  | 17,623         |  | 14,184  |  | 16,864 
|Other costs                         |  | 323            |  |        |  | -9     
|Curtailment                         |  | -572           |  | -24     |  |       
|                                    |  |                |  |         |  |        
|Net periodic pension cost           |  | 72,469         |  | 67,693  |  | 70,317 
|                                    |  |                |  |         |  |        

The assumptions used for the FAS 87 calculations are identical to those provided
in Note 25.

d) Derivative financial instruments

Under
Dutch GAAP, receivables and liabilities denominated in a foreign currency, including derivative contracts, are carried at cost and converted into Euros at the exchange rates at the end of the period. Unrealized interest gains and losses on interest
rate swaps used in hedging relationships are deferred until settlement or termination.

US GAAP, SFAS 133, Accounting for Derivative
Instruments, as amended, establishes accounting and reporting standards for derivative instruments and hedging activities. SFAS 133 requires that every derivative instrument is carried at fair value with changes in fair value recorded in the
Statement of Operations unless specific hedge criteria are met. When these criteria are met, the changes are recorded in equity (Other Comprehensive Income). Movements in fair values of derivative instruments that do not qualify for hedge accounting
and movements in fair values of derivative instruments and loans designated as fair value hedges are recognized through the Statement of Operations.

e)
Option plan

Under Dutch GAAP, compensation charges for the issuance of stock options are recorded to the extent that the market value of the common
stock exceeds the exercise price on the date of grant. Under US GAAP, certain of Oces option plans do not meet the provisions for fixed plan accounting in accordance with Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees, because they include a cash settlement feature. Therefore, variable accounting is applied using the intrinsic value method. Océ remeasures compensation cost for the variable options until the
options are exercised, cancelled or forfeited.

f) Product development costs

Under Dutch GAAP, product development costs can be capitalized and amortized over their useful lives under certain conditions. Under US GAAP, SFAS 2, Accounting for Research and Development Costs,
product development costs are expensed as incurred. As such, the US GAAP adjustment pertains to the reversal of product development costs capitalized under Dutch GAAP in each year, offset by the reversal of amortization expense that was
recognized under Dutch GAAP. For the years ended November 30, 2003 and before, the Company did not capitalize any product development costs.



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g) Sale lease portfolio

The assets related to existing financial lease contracts transferred to a buyer can be split into finance lease receivables and the equipment residual value. Under US GAAP (FAS 13, Accounting for Leases and related
additional guidance by the SEC), the unguaranteed equipment residual value related to these financial lease contracts do not qualify for sales type leases and off balance sheet treatment. As such, for US GAAP purposes, the gain recognition on
the sale of the equipment residual values as recorded under Dutch GAAP must be deferred until the end of the lease contract.

In fiscal year 2005, part of
the deferred gain on the sale of the equipment residual values is recognized.

h) Realized translation adjustments

During 2003, the Company disposed of Océ South Africa. Under US GAAP, upon disposal of investments, the accumulated translation adjustment related to that
investment is recognized in the Statement of Operations. Under Dutch GAAP this is not required.

i) Income tax effects

These adjustments represent the income tax adjustments on the US GAAP adjustments noted above.

j) Earnings per share



|                                                                                                 |  |                |  |        |  |        |       
|------------------------------------------------------------------------------------------------ |  | -------------- |  | ------ |  | ------ | ------
|                                                                                                 |  | 2003           |  | 2004   |  | 2005   |       
|                                                                                                 |  | (in thousands) | 
|                                                                                                 |  | Euro           |  | Euro   |  | Euro   |       
|Net income attributable to holders of ordinary shares                                            |  | 47,167         |  | 55,751 |  | 6,076  |       
|Weighted average number of ordinary shares outstanding (x 1,000)                                 |  | 83,409         |  | 83,488 |  | 83,698 | shares
|Net income per ordinary share                                                                    |  | 0.57           |  | 0.67   |  | 0.07   | euro  
|                                                                                                 |  |                | 
|Net income attributable to holders of ordinary shares                                            |  | 47,167         |  | 55,751 |  | 6,076  |       
|Interest costs of convertible loans (net)                                                        |  | 300            |  | 322    |  | 308    |       
|                                                                                                 |  |                |  |        |  |        |       
|Net income based on full conversion                                                              |  | 47,467         |  | 56,073 |  | 6,384  |       
|                                                                                                 |  |                | 
|Weighted average number of ordinary shares outstanding (x 1,000)                                 |  | 83,409         |  | 83,488 |  | 83,698 | shares
|Adjustment for assumed conversion (x 1,000)                                                      |  | 729            |  | 728    |  | 750    |       
|Adjustment for options (x 1,000)                                                                 |  | 30             |  | 543    |  | 221    |       
|                                                                                                 |  |                |  |        |  |        |       
|Weighted average number of ordinary shares outstanding on the basis of full conversion (x 1,000) |  | 84,168         |  | 84,759 |  | 84,669 |       
|                                                                                                 |  |                | 
|Net income per ordinary share on the basis of full conversion                                    |  | 0.56           |  | 0.66   |  | 0.08   | euro  

Additionally, the Company has identified the following difference as it pertains to Statement of Operations
classification when comparing Dutch GAAP and US GAAP presentation.

Interest from capital leases

As explained in Note 0 to Consolidated Financial Statements interest from capital leases has been recognized as a component of total revenues. Under US GAAP the
related financial interest expense should be reported as a component of operating income.



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##### Table of Contents

|28. | Subsequent events
|--- | -----------------

On December 1, 2005 Océ in Japan
acquired the population of high volume, wide format machines from Shacoh. The consideration paid for this acquisition was Euro 0.8 million.

On
January 16, 2006 Océ announced a restructuring in the United States. Following on from the acquisition of Imagistics International Inc., approximately 250 jobs will be discontinued in the U.S. The related restructuring costs will amount
to approximately Euro 1.7 million.



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##### Table of Contents

SCHEDULE II

OCÉ N.V. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS AS OF

NOVEMBER 30, 2003, 2004 AND 2005



|                                            |  |                               |  |                            |  |                   |  |             |  |            |  |                        
|------------------------------------------- |  | ----------------------------- |  | -------------------------- |  | ----------------- |  | ----------- |  | ---------- |  | -----------------------
|                                            |  | Balanceat beginning of period |  | Additions chargedto income |  | Release to income |  | Acquisition |  | Deductions |  | Balanceat end of period
|                                            |  | (In thousands)               
|                                            |  | Euro                          |  | Euro                       |  | Euro              |  | Euro        |  | Euro       |  | Euro                   
|2003                                        |  |                               |  |                            |  |                   |  |             |  |            |  |                        
|Allowance for doubtful accounts:            |  |                               |  |                            |  |                   |  |             |  |            |  |                        
|- Accounts receivable                       |  | 65,768                        |  | 21,970                     |  |                  |  | -44         |  | 34,031     |  | 53,663                 
|- Finance lease debtors                     |  | 31,884                        |  | 742                        |  |                  |  |            |  | 3,328      |  | 29,298                 
|Allowance for stock obsolescence            |  | 157,363                       |  | 29,428                     |  |                  |  | -430        |  | 20,532     |  | 165,829                
|Valuation allowance for deferred tax assets |  | 52,448                        |  |                           |  | 9,629             |  |            |  |           |  | 42,819                 
|                                            |  |                               |  |                            |  |                  
|2004                                        |  |                               |  |                            |  |                   |  |             |  |            |  |                        
|Allowance for doubtful accounts:            |  |                               |  |                            |  |                   |  |             |  |            |  |                        
|- Accounts receivable                       |  | 53,663                        |  | 15,524                     |  |                  |  |            |  | 15,205     |  | 53,982                 
|- Finance lease debtors                     |  | 29,298                        |  |                           |  | 1,152             |  |            |  | 9,135      |  | 19,011                 
|Allowance for stock obsolescence            |  | 165,829                       |  | 28,121                     |  |                  |  |            |  | 15,137     |  | 178,813                
|Valuation allowance for deferred tax assets |  | 42,819                        |  |                           |  | 6,215             |  |            |  |           |  | 36,604                 
|                                            |  |                               |  |                            |  |                  
|2005                                        |  |                               |  |                            |  |                   |  |             |  |            |  |                        
|Allowance for doubtful accounts:            |  |                               |  |                            |  |                   |  |             |  |            |  |                        
|- Accounts receivable                       |  | 53,982                        |  | 12,251                     |  | 7,500             |  | 16,216      |  | 17,428     |  | 57,521                 
|- Finance lease debtors                     |  | 19,011                        |  | 749                        |  |                  |  |            |  | 3,894      |  | 15,866                 
|Allowance for stock obsolescence            |  | 178,813                       |  | 15,807                     |  |                  |  | 37,534      |  | 40,040     |  | 192,114                
|Valuation allowance for deferred tax assets |  | 36,604                        |  |                           |  | 408               |  |            |  |           |  | 36,196                 



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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 its behalf.



OCÉ N.V.By:

/s/ R.L. van IperenR.L. van IperenChairman of the Board of Executive Directors


Dated: March 7, 2006